[Federal Register Volume 80, Number 135 (Wednesday, July 15, 2015)]
[Proposed Rules]
[Pages 41686-41966]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-16875]



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Vol. 80

Wednesday,

No. 135

July 15, 2015

Part III





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Parts 405, 410, 411, 414, et al.





Medicare Program; Revisions to Payment Policies Under the Physician Fee 
Schedule and Other Revisions to Part B for CY 2016; Proposed Rule

  Federal Register / Vol. 80 , No. 135 / Wednesday, July 15, 2015 / 
Proposed Rules  

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 405, 410, 411, 414, 425, 495

[CMS-1631-P]
RIN 0938-AS40


Medicare Program; Revisions to Payment Policies Under the 
Physician Fee Schedule and Other Revisions to Part B for CY 2016

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

ACTION: Proposed rule.

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SUMMARY: This major proposed rule addresses changes to the physician 
fee schedule, and other Medicare Part B payment policies to ensure that 
our payment systems are updated to reflect changes in medical practice 
and the relative value of services, as well as changes in the statute.

DATES: Comment date: To be assured consideration, comments must be 
received at one of the addresses provided below, no later than 5 p.m. 
on September 8, 2015.

ADDRESSES: In commenting, please refer to file code CMS-1631-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed):
    1. Electronically. You may submit electronic comments on this 
regulation to 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-1631-P, P.O. Box 8013, 
Baltimore, MD 21244-8013.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-1631-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    4. By hand or courier. If you prefer, you may deliver (by hand or 
courier) your written comments before the close of the comment period 
to either of the following addresses:
    a. For delivery in Washington, DC--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Room 445-G, Hubert 
H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 
20201.
    (Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without federal government 
identification, commenters are encouraged to leave their comments in 
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing 
by stamping in and retaining an extra copy of the comments being 
filed.)
    b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    If you intend to deliver your comments to the Baltimore address, 
please call telephone number (410) 786-7195 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: 
    Donta Henson, (410) 786-1947 for any physician payment issues not 
identified below.
    Gail Addis, (410) 786-4522, for issues related to the refinement 
panel.
    Chava Sheffield, (410) 786-2298, for issues related to practice 
expense methodology, impacts, conversion factors, target, and phase-in 
provisions.
    Jessica Bruton, (410) 786-5991, for issues related to potentially 
misvalued code lists.
    Geri Mondowney, (410) 786-4584, for issues related to geographic 
practice cost indices and malpractice RVUs.
    Ken Marsalek, (410) 786-4502, for issues related to telehealth 
services.
    Ann Marshall, (410) 786-3059, for issues related to advance care 
planning, and for primary care and care management services.
    Michael Soracoe, (410) 786-6312, for issues related to the 
valuation and coding of the global surgical packages.
    Roberta Epps, (410) 786-4503, for issues related to PAMA section 
218(a) policy.
    Regina Walker-Wren, (410) 786-9160, for issues related to the 
``incident to'' proposals.
    Lindsey Baldwin, (410) 786-1694, for issues related to valuation of 
moderate sedation and colonoscopy services and portable x-ray 
transportation fees.
    Emily Yoder, (410) 786-1804, for issues related to valuation of 
radiation treatment services.
    Amy Gruber, (410) 786-1542, for issues related to ambulance payment 
policy.
    Corinne Axelrod, (410) 786-5620, for issues related to rural health 
clinics or federally qualified health centers and payment to 
grandfathered tribal FQHCs.
    Simone Dennis, (410) 786-8409, for issues related to rural health 
clinics HCPCS reporting.
    Edmund Kasaitis (410) 786-0477, for issues related to Part B drugs, 
biologicals, and biosimilars.
    Alesia Hovatter, (410) 786-6861, for issues related to Physician 
Compare.
    Christine Estella, (410) 786-0485, for issues related to the 
physician quality reporting system and the merit-based incentive 
payment system.
    Alexandra Mugge (410) 786-4457, for issues related to EHR Incentive 
Program.
    Sarah Arceo, (410) 786-2356) or Patrice Holtz, (410-786-5663) for 
issues related to EHR Incentive Program-CPC initiative and meaningful 
use aligned reporting.
    Christiane LaBonte, (410) 786-7237, for issues related to 
comprehensive primary care initiative.
    Rabia Khan, (410) 786-9328 or Terri Postma, (410) 786-4169, for 
issues related to Medicare Shared Savings Program.
    Kimberly Spalding Bush, (410) 786-3232, or Sabrina Ahmed (410) 786-
7499, for issues related to value-based Payment Modifier and Physician 
Feedback Program.
    Frederick Grabau, (410) 786-0206, for issues related to changes to 
opt-out regulations.
    Lisa Ohrin Wilson (410) 786-8852, for issues related to physician 
self-referral updates.

SUPPLEMENTARY INFORMATION:
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period on the following Web 
site as soon as possible after they have been received: http://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

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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

I. Executive Summary and Background
    A. Executive Summary
    B. Background
II. Provisions of the Proposed Rule for PFS
    A. Determination of Practice Expense (PE) Relative Value Units 
(RVUs)
    B. Determination of Malpractice Relative Value Units (RVUs)
    C. Potentially Misvalued Services Under the Physician Fee 
Schedule
    D. Refinement Panel
    E. Improving Payment Accuracy for Primary Care and Care 
Management Services
    F. Target for Relative Value Adjustments for Misvalued Services
    G. Phase-In of Significant RVU Reductions
    H. Changes for Computed Tomography (CT) Under the Protecting 
Access to Medicare Act of 2014 (PAMA)
    I. Valuation of Specific Codes
    J. Medicare Telehealth Services
    K. Incident to Proposals: Billing Physician as the Supervising 
Physician and Ancillary Personnel Requirements
    L. Portable X-Ray: Billing of the Transportation Fee
    M. Technical Correction: Waiver of Deductible for Anesthesia 
Services Furnished on the Same Date as a Planned Screening 
Colorectal Cancer Test
III. Other Provisions of the Proposed Regulations
    A. Proposed Provisions Associated With the Ambulance Fee 
Schedule
    B. Chronic Care Management (CCM) Services for Rural Health 
Clinics (RHCs) and Federally Qualified Health Centers (FQHCs)
    C. Healthcare Common Procedure Coding System (HCPCS) Coding for 
Rural Health Clinics (RHCs)
    D. Payment to Grandfathered Tribal FQHCs That Were Provider-
Based Clinics on or Before April 7, 2000
    E. Part B Drugs--Biosimilars
    F. Productivity Adjustment for the Ambulance, Clinical 
Laboratory, and DMEPOS Fee Schedules
    G. Appropriate Use Criteria for Advanced Diagnostic Imaging 
Services
    H. Physician Compare Web site
    I. Physician Payment, Efficiency, and Quality Improvements--
Physician Quality Reporting System
    J. Electronic Clinical Quality Measures (eCQM) and Certification 
Criteria and Electronic Health Record (EHR) Incentive Program--
Comprehensive Primary Care (CPC) Initiative and Medicare Meaningful 
Use Aligned Reporting
    K. Potential Expansion of the Comprehensive Primary Care (CPC) 
Initiative
    L. Medicare Shared Savings Program
    M. Value-Based Payment Modifier and Physician Feedback Program
    N. Physician Self-Referral Updates
    O. Private Contracting/Opt-Out
IV. Collection of Information Requirements
V. Response to Comments
VI. Regulatory Impact Analysis
    Regulations Text

Acronyms

    In addition, because of the many organizations and terms to which 
we refer by acronym in this proposed rule, we are listing these 
acronyms and their corresponding terms in alphabetical order below:
AAA Abdominal aortic aneurysms
ACO Accountable care organization
AMA American Medical Association
ASC Ambulatory surgical center
ATA American Telehealth Association
ATRA American Taxpayer Relief Act (Pub. L. 112-240)
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)
CAD Coronary artery disease
CAH Critical access hospital
CBSA Core-Based Statistical Area
CCM Chronic care management
CEHRT Certified EHR technology
CF Conversion factor
CG-CAHPS Clinician and Group Consumer Assessment of Healthcare 
Providers and Systems
CLFS Clinical Laboratory Fee Schedule
CNM Certified nurse-midwife
CP Clinical psychologist
CPC Comprehensive Primary Care
CPEP Clinical Practice Expert Panel
CPT [Physicians] Current Procedural Terminology (CPT codes, 
descriptions and other data only are copyright 2014 American Medical 
Association. All rights reserved.)
CQM Clinical quality measure
CSW Clinical social worker
CT Computed tomography
CY Calendar year
DFAR Defense Federal Acquisition Regulations
DHS Designated health services
DM Diabetes mellitus
DSMT Diabetes self-management training
eCQM Electronic clinical quality measures
EHR Electronic health record
E/M Evaluation and management
EP Eligible professional
eRx Electronic prescribing
ESRD End-stage renal disease
FAR Federal Acquisition Regulations
FFS Fee-for-service
FQHC Federally qualified health center
FR Federal Register
GAF Geographic adjustment factor
GAO Government Accountability Office
GPCI Geographic practice cost index
GPO Group purchasing organization
GPRO Group practice reporting option
GTR Genetic Testing Registry
HCPCS Healthcare Common Procedure Coding System
HHS [Department of] Health and Human Services
HOPD Hospital outpatient department
HPSA Health professional shortage area
IDTF Independent diagnostic testing facility
IPPS Inpatient Prospective Payment System
IQR Inpatient Quality Reporting
ISO Insurance service office
IWPUT Intensity of work per unit of time
LCD Local coverage determination
MA Medicare Advantage
MAC Medicare Administrative Contractor
MAP Measure Applications Partnership
MAPCP Multi-payer Advanced Primary Care Practice
MAV Measure application validity [process]
MCP Monthly capitation payment
MedPAC Medicare Payment Advisory Commission
MEI Medicare Economic Index
MFP Multi-Factor Productivity
MIPPA Medicare Improvements for Patients and Providers Act (Pub. L. 
110-275)
MMA Medicare Prescription Drug, Improvement and Modernization Act of 
2003 (Pub. L. 108-173, enacted on December 8, 2003)
MP Malpractice
MPPR Multiple procedure payment reduction
MRA Magnetic resonance angiography
MRI Magnetic resonance imaging
MSA Metropolitan Statistical Areas
MSPB Medicare Spending per Beneficiary
MSSP Medicare Shared Savings Program
MU Meaningful use
NCD National coverage determination
NCQDIS National Coalition of Quality Diagnostic Imaging Services
NP Nurse practitioner
NPI National Provider Identifier
NPP Nonphysician practitioner
NQS National Quality Strategy
OACT CMS's Office of the Actuary
OBRA '89 Omnibus Budget Reconciliation Act of 1989 (Pub. L. 101-239)
OBRA '90 Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508)
OES Occupational Employment Statistics
OMB Office of Management and Budget
OPPS Outpatient prospective payment system
OT Occupational therapy
PA Physician assistant
PAMA Protecting Access to Medicare Act of 2014 (Pub. L. 113-93)
PC Professional component
PCIP Primary Care Incentive Payment
PE Practice expense
PE/HR Practice expense per hour
PEAC Practice Expense Advisory Committee
PECOS Provider Enrollment, Chain, and Ownership System
PFS Physician Fee Schedule
PLI Professional Liability Insurance
PMA Premarket approval
PQRS Physician Quality Reporting System
PPIS Physician Practice Expense Information Survey
PT Physical therapy
PY Performance year
QCDR Qualified clinical data registry
QRUR Quality and Resources Use Report
RBRVS Resource-based relative value scale

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RFA Regulatory Flexibility Act
RHC Rural health clinic
RIA Regulatory impact analysis
RUC American Medical Association/Specialty Society Relative (Value) 
Update Committee
RUCA Rural Urban Commuting Area
RVU Relative value unit
SBA Small Business Administration
SGR Sustainable growth rate
SIM State Innovation Model
SLP Speech-language pathology
SMS Socioeconomic Monitoring System
SNF Skilled nursing facility
TAP Technical Advisory Panel
TC Technical component
TIN Tax identification number
UAF Update adjustment factor
UPIN Unique Physician Identification Number
USPSTF United States Preventive Services Task Force
VBP Value-based purchasing
VM Value-Based Payment Modifier

Addenda Available Only Through the Internet on the CMS Web Site

    The PFS Addenda along with other supporting documents and tables 
referenced in this proposed rule are available through the Internet on 
the CMS Web site at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. 
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 2016 PFS proposed rule, refer 
to item CMS-1631-P. Readers who experience any problems accessing any 
of the Addenda or other documents referenced in this rule and posted on 
the CMS Web site identified above should contact Donta Henson at (410) 
786-1947.

CPT (Current Procedural Terminology) Copyright Notice

    Throughout this proposed rule, we use CPT codes and descriptions to 
refer to a variety of services. We note that CPT codes and descriptions 
are copyright 2015 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 proposed rule proposes to revise payment polices under 
the Medicare Physician Fee Schedule (PFS) and make other policy changes 
related to Medicare Part B payment. These proposed changes would be 
applicable to services furnished in CY 2016.
2. Summary of the Major Provisions
    The Social Security Act (the Act) requires us to establish payments 
under the PFS based on national uniform relative value units (RVUs) 
that account for the relative resources used in furnishing a service. 
The Act requires that RVUs be established for three categories of 
resources: Work, practice expense (PE); and malpractice (MP) expense; 
and, that we establish by regulation each year's payment amounts for 
all physicians' services paid under the PFS, incorporating geographic 
adjustments to reflect the variations in the costs of furnishing 
services in different geographic areas. In this major proposed rule, we 
establish RVUs for CY 2016 for the PFS, 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, 
as well as changes in the statute. In addition, this proposed rule 
includes discussions and proposals regarding:
     Potentially Misvalued PFS Codes.
     Telehealth Services.
     Advance Care Planning Services.
     Establishing Values for New, Revised, and Misvalued Codes.
     Target for Relative Value Adjustments for Misvalued 
Services.
     Phase-in of Significant RVU Reductions.
     ``Incident to'' policy.
     Portable X-Ray Transportation Fee.
     Updating the Ambulance Fee Schedule regulations.
     Changes in Geographic Area Delineations for Ambulance 
Payment.
     Chronic Care Management Services for RHCs and FQHCs.
     HCPCS Coding for RHCs.
     Payment to Grandfathered Tribal FQHCs that were Provider-
Based Clinics on or before April 7, 2000.
     Payment for Biosimilars under Medicare Part B.
     Physician Compare Web site.
     Physician Quality Reporting System.
     Medicare Shared Savings Program.
     Electronic Health Record (EHR) Incentive Program.
     Value-Based Payment Modifier and the Physician Feedback 
Program.
3. Summary of Costs and Benefits
    The Act requires that annual adjustments to PFS RVUs may 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. These 
adjustments can affect the distribution of Medicare expenditures across 
specialties. In addition, several proposed changes would affect the 
specialty distribution of Medicare expenditures. When considering the 
combined impact of work, PE, and MP RVU changes, the projected payment 
impacts are small for most specialties; however, the impact would be 
larger for a few specialties.
    We have determined that this major proposed rule is economically 
significant. For a detailed discussion of the economic impacts, see 
section VII. of this proposed rule.

B. Background

    Since January 1, 1992, Medicare has paid for physicians' services 
under section 1848 of the Act, ``Payment for Physicians' Services.'' 
The system relies on national relative values that are established for 
work, PE, and MP, which are adjusted for geographic cost variations. 
These values are multiplied by a conversion factor (CF) to convert the 
RVUs into payment rates. The concepts and methodology underlying the 
PFS were enacted as part of the Omnibus Budget Reconciliation Act of 
1989 (Pub. L. 101-239, enacted on December 19, 1989) (OBRA '89), and 
the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508, enacted 
on November 5, 1990) (OBRA '90). The final rule published on November 
25, 1991 (56 FR 59502) set forth the first fee schedule used for 
payment for physicians' services.
    We note that throughout this major proposed rule, unless otherwise 
noted, the term ``practitioner'' is used to describe both physicians 
and nonphysician practitioners (NPPs) who are permitted to bill 
Medicare under the PFS for services furnished to Medicare 
beneficiaries.
1. Development of the Relative Values
a. Work RVUs
    The work RVUs established for the initial fee schedule, which was 
implemented on January 1, 1992, were developed with extensive input 
from the physician community. A research team at the Harvard School of 
Public Health developed the original work RVUs for most codes under a 
cooperative agreement with the Department of Health and Human Services 
(HHS). In constructing the code-specific vignettes used in determining 
the original physician work

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RVUs, Harvard worked with panels of experts, both inside and outside 
the federal government, and obtained input from numerous physician 
specialty groups.
    As specified in section 1848(c)(1)(A) of the Act, the work 
component of physicians' services means the portion of the resources 
used in furnishing the service that reflects physician time and 
intensity. We establish work RVUs for new, revised and potentially 
misvalued codes based on our review of information that generally 
includes, but is not limited to, recommendations received from the 
American Medical Association/Specialty Society Relative Value Update 
Committee (RUC), the Health Care Professionals Advisory Committee 
(HCPAC), the Medicare Payment Advisory Commission (MedPAC), and other 
public commenters; medical literature and comparative databases; as 
well as a comparison of the work for other codes within the Medicare 
PFS, and consultation with other physicians and health care 
professionals within CMS and the federal government. We also assess the 
methodology and data used to develop the recommendations submitted to 
us by the RUC and other public commenters, and the rationale for their 
recommendations.
b. Practice Expense RVUs
    Initially, only the work RVUs were resource-based, and the PE and 
MP RVUs were based on average allowable charges. Section 121 of the 
Social Security Act Amendments of 1994 (Pub. L. 103-432, enacted on 
October 31, 1994), amended section 1848(c)(2)(C)(ii) of the Act and 
required us to develop resource-based PE RVUs for each physicians' 
service beginning in 1998. We were required to consider general 
categories of expenses (such as office rent and wages of personnel, but 
excluding malpractice expenses) comprising PEs. The PE RVUs continue to 
represent the portion of these resources involved in furnishing PFS 
services.
    Originally, the resource-based method was to be used beginning in 
1998, but section 4505(a) of the Balanced Budget Act of 1997 (Pub. L. 
105-33, enacted on August 5, 1997) (BBA) delayed implementation of the 
resource-based PE RVU system until January 1, 1999. In addition, 
section 4505(b) of the BBA provided for a 4-year transition period from 
the charge-based PE RVUs to the resource-based PE RVUs.
    We established the resource-based PE RVUs for each physicians' 
service in a final rule, published on November 2, 1998 (63 FR 58814), 
effective for services furnished in CY 1999. Based on the requirement 
to transition to a resource-based system for PE over a 4-year period, 
payment rates were not fully based upon resource-based PE RVUs until CY 
2002. This resource-based system was based on two significant sources 
of actual PE data: the Clinical Practice Expert Panel (CPEP) data and 
the AMA's Socioeconomic Monitoring System (SMS) data. (These data 
sources are described in greater detail in the CY 2012 final rule with 
comment period (76 FR 73033).)
    Separate PE RVUs are established for services furnished in facility 
settings, such as a hospital outpatient department (HOPD) or an 
ambulatory surgical center (ASC), and in nonfacility settings, such as 
a physician's office. The nonfacility RVUs reflect all of the direct 
and indirect PEs involved in furnishing a service described by a 
particular HCPCS code. The difference, if any, in these PE RVUs 
generally results in a higher payment in the nonfacility setting 
because in the facility settings some costs are borne by the facility. 
Medicare's payment to the facility (such as the outpatient prospective 
payment system (OPPS) payment to the HOPD) would reflect costs 
typically incurred by the facility. Thus, payment associated with those 
facility resources is not made under the PFS.
    Section 212 of the Balanced Budget Refinement Act of 1999 (Pub. L. 
106-113, enacted on November 29, 1999) (BBRA) directed the Secretary of 
Health and Human Services (the Secretary) to establish a process under 
which we accept and use, to the maximum extent practicable and 
consistent with sound data practices, data collected or developed by 
entities and organizations to supplement the data we normally collect 
in determining the PE component. On May 3, 2000, we published the 
interim final rule (65 FR 25664) that set forth the criteria for the 
submission of these supplemental PE survey data. The criteria were 
modified in response to comments received, and published in the Federal 
Register (65 FR 65376) as part of a November 1, 2000 final rule. The 
PFS final rules published in 2001 and 2003, respectively, (66 FR 55246 
and 68 FR 63196) extended the period during which we would accept these 
supplemental data through March 1, 2005.
    In the 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 for 
CY 2010. 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). In CY 2010, 
we began a 4-year transition to the new PE RVUs using the updated PE/HR 
data, which was completed for CY 2013.
c. Malpractice RVUs
    Section 4505(f) of the BBA amended section 1848(c) of the Act to 
require that we implement resource-based MP RVUs for services furnished 
on or after CY 2000. The resource-based MP RVUs were implemented in the 
PFS final rule with comment period published November 2, 1999 (64 FR 
59380). The MP RVUs are based on commercial and physician-owned 
insurers' malpractice insurance premium data from all the states, the 
District of Columbia, and Puerto Rico. For more information on MP RVUs, 
see section II.C. of this proposed rule.
d. Refinements to the RVUs
    Section 1848(c)(2)(B)(i) of the Act requires that we review RVUs no 
less often than every 5 years. Prior to CY 2013, we conducted periodic 
reviews of work RVUs and PE RVUs independently. We completed five-year 
reviews of work RVUs that were effective for calendar years 1997, 2002, 
2007, and 2012.
    Although refinements to the direct PE inputs initially relied 
heavily on input from the RUC Practice Expense Advisory Committee 
(PEAC), the shifts to the bottom-up PE methodology in CY 2007 and to 
the use of the updated PE/HR data in CY 2010 have resulted in 
significant refinements to the PE RVUs in recent years.
    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 addition to the five-year reviews, beginning for CY 2009, CMS, 
and the 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.

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e. Application of Budget Neutrality to Adjustments of RVUs
    As described in section VI.C. of this proposed rule, in accordance 
with section 1848(c)(2)(B)(ii)(II) of the Act, if revisions to the RVUs 
caused expenditures for the year to change by more than $20 million, we 
make adjustments to ensure that expenditures did not increase or 
decrease by more than $20 million.
2. Calculation of Payments Based on RVUs
    To calculate the payment for each service, the components of the 
fee schedule (work, PE, and MP RVUs) are adjusted by geographic 
practice cost indices (GPCIs) to reflect the variations in the costs of 
furnishing the services. The GPCIs reflect the relative costs of work, 
PE, and MP in an area compared to the national average costs for each 
component. (See section II.D. of this proposed rule for more 
information about GPCIs.)
    RVUs are converted to dollar amounts through the application of a 
CF, which is calculated based on a statutory formula by CMS's 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 MP x GPCI 
MP)] x CF.
3. Separate Fee Schedule Methodology for Anesthesia Services
    Section 1848(b)(2)(B) of the Act specifies that the fee schedule 
amounts for anesthesia services are to be based on a uniform relative 
value guide, with appropriate adjustment of an anesthesia conversion 
factor, in a manner to assure that fee schedule amounts for anesthesia 
services are consistent with those for other services of comparable 
value. Therefore, there is a separate fee schedule methodology for 
anesthesia services. Specifically, we establish a separate conversion 
factor for anesthesia services and we utilize the uniform relative 
value guide, or base units, as well as time units, to calculate the fee 
schedule amounts for anesthesia services. Since anesthesia services are 
not valued using RVUs, a separate methodology for locality adjustments 
is also necessary. This involves an adjustment to the national 
anesthesia CF for each payment locality.
4. Most Recent Changes to the Fee Schedule
    Section 220(d) of the Protecting Access to Medicare Act of 2014 
(PAMA) (Pub. L. 113-93, enacted on April 1, 2014) added a new 
subparagraph (O) to section 1848(c)(2) of the Act to establish an 
annual target for reductions in PFS expenditures resulting from 
adjustments to relative values of misvalued codes. If the estimated net 
reduction in expenditures for a year is equal to or greater than the 
target for that year, the provision specifies that reduced expenditures 
attributable to such adjustments shall be redistributed in a budget-
neutral manner within the PFS. The provision also specifies that the 
amount by which such reduced expenditures exceed the target for a given 
year shall be treated as a reduction in expenditures for the subsequent 
year for purposes of determining whether the target for the subsequent 
year has been met. The provision also specifies that an amount equal to 
the difference between the target and the estimated net reduction, 
called the target recapture amount shall not be taken into account when 
applying the budget neutrality requirements specified in section 
1848(c)(2)(B)(ii)(II) of the Act. The PAMA originally applied the 
target to CYs 2017 through 2020 and set the target amount to 0.5 
percent of the estimated amount of expenditures under the PFS for each 
of those 4 years.
    More recently, section 202 of the Achieving a Better Life 
Experience Act of 2014 (ABLE) (Division B of Pub. L. 113-295, enacted 
December 19, 2014) accelerated the application of the target, amending 
section 1848(c)(2)(O) of the Act to specify that targets would apply 
for CYs 2016, 2017, and 2018 and set a 1 percent target for CY 2016 and 
0.5 percent for CYs 2017 and 2018. The implementation of the target 
legislation is discussed in section II.F. of this proposed rule.
    Section 1848(c)(7) of the Act, as added by section 220(e) of the 
PAMA, specifies that for services that are not new or revised codes, if 
the total RVUs for a service for a year would otherwise be decreased by 
an estimated 20 percent or more as compared to the total RVUs for the 
previous year, the applicable adjustments in work, PE, and MP RVUs 
shall be phased-in over a 2-year period. Although section 220(e) of the 
PAMA required the phase-in of RVU reductions of 20 percent or more to 
begin for 2017, section 202 of the ABLE Act now requires the phase-in 
to begin in CY 2016. The implementation of the phase-in legislation is 
discussed in section II.G. of this proposed rule.
    Section 218(a) of the PAMA adds a new section 1834(p) to the 
statute. Section 1834(p) requires reductions in payment for the 
technical component (TC) (and the TC of the global fee) of the PFS 
service and in the hospital OPPS payment (5 percent in 2016, and 15 
percent in 2017 and subsequent years) for computed tomography (CT) 
services (identified as of January 1, 2014 by HCPCS codes 70450-70498, 
71250-71275, 72125-72133, 72191-72194, 73200-73206, 73700-73706, 74150-
74178, 74261-74263, and 75571-75574, and succeeding codes) furnished 
using equipment that does not meet each of the attributes of the 
National Electrical Manufacturers Association (NEMA) Standard XR-29-
2013, entitled ``Standard Attributes on CT Equipment Related to Dose 
Optimization and Management.'' The implementation of section 218(a) of 
the PAMA is discussed in section II.H. of this proposed rule.
    The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) 
(Pub. L. 114-10, enacted on April 16, 2015) makes several changes to 
the statute, including but not limited to:
    (1) Repealing the sustainable growth rate (SGR) update methodology 
for physicians' services.
    (2) Revising the PFS update for 2015 and subsequent years.
    (3) Establishing a Merit-based Incentive Payment System (MIPS) 
under which eligible professionals (initially including physicians, 
physician assistants, nurse practitioners, clinical nurse specialists, 
and certified registered nurse anesthetists) receive annual payment 
increases or decreases based on their performance in a prior period. 
These and other MACRA provisions are discussions in various sections of 
this proposed rule. Please refer to the table of contents for the 
location of the various MACRA provision discussions.

II. Provisions of the Proposed Rule for PFS

A. Determination of Practice Expense (PE) Relative Value Units (RVUs)

1. Overview
    Practice expense (PE) is the portion of the resources used in 
furnishing a 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. As required by section 1848(c)(2)(C)(ii) of the Act, we use 
a resource-based system for determining PE RVUs for each physicians' 
service. We develop PE RVUs by considering the direct and indirect 
practice resources involved in furnishing each service. Direct expense 
categories include clinical labor, medical supplies, and medical

[[Page 41691]]

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. 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 determine the direct PE for a specific service by adding the 
costs of the direct resources (that is, the clinical staff, medical 
supplies, and medical equipment) typically involved with furnishing 
that 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 generally based on our review of recommendations received 
from the RUC and those provided in response to public comment periods. 
For a detailed explanation of the 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 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). The PPIS is a 
multispecialty, nationally representative, PE survey of both physicians 
and nonphysician practitioners (NPPs) paid under the PFS using a 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 health care professional 
groups. We believe the PPIS is the most comprehensive source of PE 
survey information available. 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 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 transitioned its use over a 4-year period from the previous PE 
RVUs to the PE RVUs developed using the new PPIS data. As provided in 
the CY 2010 PFS final rule with comment period (74 FR 61751), the 
transition to the PPIS data was complete for CY 2013. Therefore, PE 
RVUs from CY 2013 forward are developed based entirely on the PPIS 
data, except as noted in this section.
    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.
    Supplemental survey data on independent labs from the College of 
American Pathologists were implemented for payments beginning 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 beginning 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 these specialties were updated 
to CY 2006 using the MEI to put them on a comparable basis with the 
PPIS data.
    We also 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 the PPIS data 
with Medicare-recognized specialty data.
    Previously, we 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 used 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 work 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).
    For CY 2016, we have incorporated the available utilization data 
for interventional cardiology, which became a recognized Medicare 
specialty during 2014. We are proposing to use a proxy PE/HR value for 
interventional cardiology, as there are no PPIS data for this 
specialty, by crosswalking the PE/HR for from Cardiology, since the 
specialties furnish similar services in the Medicare claims data. The 
proposed change is reflected in the ``PE/HR'' file available on the CMS 
Web site under the supporting data files for the CY 2016 PFS proposed 
rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
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, medical supplies, and medical equipment) typically involved with 
furnishing each of the services. The costs of these resources are 
calculated from the refined direct PE inputs in our PE database. For 
example, if one service has a direct cost sum of $400 from our PE 
database and another service has a direct cost sum of $200, the direct 
portion of the PE RVUs of the first service would be twice as much as 
the direct portion of the PE RVUs for the second service.
(2) Indirect Costs
    Section II.A.2.b. of this proposed rule describes the current data 
sources for specialty-specific indirect costs used in our PE 
calculations. We allocated the

[[Page 41692]]

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 work RVUs. We also incorporated the survey 
data described earlier in the PE/HR discussion. The general approach to 
developing the indirect portion of the PE RVUs is 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. In other words, the initial indirect allocator is calculated 
so that the direct costs equal the average percentage of direct costs 
of those specialties furnishing the service. For example, if the direct 
portion of the PE RVUs for a given service is 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 
calculated so that it equals 75 percent of the total PE RVUs. Thus, in 
this example, the initial indirect allocator would equal 6.00, 
resulting in a total PE RVUs of 8.00 (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 4.00 (since the 4.00 work RVUs are greater than the 1.50 
clinical labor portion) to the initial indirect allocator of 6.00 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 incorporate the specialty-specific indirect PE/HR 
data into the calculation. In our example, if, 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, the indirect portion of the PE RVUs of the first 
service would be equal to that of the second service.
(4) Facility and Nonfacility Costs
    For procedures that can be furnished in a physician's office, as 
well as in a hospital or other 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 in calculating the 
PE RVUs for services furnished in a facility, we do not include 
resources that would generally not be provided by physicians when 
furnishing the service in a facility, the facility PE RVUs are 
generally lower than the nonfacility PE RVUs. Medicare makes a separate 
payment to the facility for its costs of furnishing a service.
(5) 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). The PC and 
TC may be furnished independently or by different providers, or they 
may be furnished together as a ``global'' service. When services have 
separately billable PC and TC components, the payment for the global 
service equals the sum of the payment for the TC and PC. To achieve 
this we use a weighted average of the ratio of indirect to direct costs 
across all the specialties that furnish the global service, TCs, and 
PCs; that is, we apply the same weighted average indirect percentage 
factor to allocate indirect expenses to the global service, PCs, and 
TCs for a service. (The direct PE RVUs for the TC and PC sum to the 
global.)
(6) 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).
(a) 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 calculated from 
the surveys.
(b) 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 aggregate pool of direct PE costs for the 
current year. Under our current methodology, we first multiply the 
current year's conversion factor by the product of the current year's 
PE RVUs and utilization for each service to arrive at the aggregate 
pool of total PE costs (Step 2a). We then calculate the average direct 
percentage of the current pool of PE RVUs (using a weighted average of 
the survey data for the specialties that furnish each service (Step 
2b).) We then multiply the result of 2a by the result of 2b to arrive 
at the aggregate pool of direct PE costs for the current year. For CY 
2016, we are proposing a technical improvement to step 2a of this 
calculation. In place of the step 2a calculation described above, we 
propose to set the aggregate pool of PE costs equal to the product of 
the ratio of the current aggregate PE RVUs to current aggregate work 
RVUs and the proposed aggregate work RVUs. Historically, in allowing 
the current PE RVUs to determine the size of the base PE pool in the PE 
methodology, we have assumed that the relationship of PE RVUs to work 
RVUs is constant from year to year. Since this is not ordinarily the 
case, by not considering the proposed aggregate work RVUs in 
determining the size of the base PE pool, we have introduced some minor 
instability from year to year in the relative shares of work, PE, and 
MP RVUs. While this proposed modification would result in greater 
stability in the relationship among the work and PE RVU components in 
the aggregate, we do not anticipate it will affect the distribution of 
PE RVUs across specialties. The PE RVUs in addendum B of this proposed 
rule with comment period reflect this proposed refinement to the PE 
methodology.
    Step 3: Calculate the aggregate pool of direct PE costs for use in 
ratesetting. This is the product of the aggregate direct costs for all 
services 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 to ensure that the aggregate pool of direct PE 
costs calculated in Step 3 does not vary from the aggregate pool of 
direct PE costs for the current year. Apply the scaling factor to the 
direct costs for each service (as calculated in Step 1).
    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

[[Page 41693]]

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.
(c) 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 service.
    Historically, we have used the specialties that furnish the service 
in the most recent full year of Medicare claims data (crosswalked to 
the current year set of codes) to determine which specialties furnish 
individual procedures. For example, for CY 2015 ratesetting, we used 
the mix of specialties that furnished the services in the CY 2013 
claims data to determine the specialty mix assigned to each code. While 
we believe that there are clear advantages to using the most recent 
available data in making these determinations, we have also found that 
using a single year of data contributes to greater year-to-year 
instability in PE RVUs for individual codes and often creates extreme, 
annual fluctuations for low-volume services, as well as delayed 
fluctuations for some services described by new codes once claims data 
for those codes becomes available.
    We believe that using an average of the three most recent years of 
available data may increase stability of PE RVUs and mitigate code-
level fluctuations for both the full range of PFS codes, and for new 
and low-volume codes in particular. Therefore, we are proposing to 
refine this step of the PE methodology to use an average of the 3 most 
recent years of available Medicare claims data to determine the 
specialty mix assigned to each code. The PE RVUs in Addendum B of the 
CMS Web site reflect this proposed refinement to the PE methodology.
    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 PE 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 
PE allocator is: Indirect percentage (direct PE RVUs/direct percentage) 
+ clinical labor 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 PE percentage (direct PE RVUs/direct percentage) + clinical 
labor PE RVUs.
    (Note: For global services, the indirect PE 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.
     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 RVU, clinical labor PE 
RVU, 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 result of step 2a (as calculated with the proposed 
change) 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 work 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 service, 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 service.)
    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.
(d) 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 proposed aggregate work RVUs scaled by the ratio of 
current aggregate PE and work RVUs, consistent with the proposed 
changes in Steps 2 and 9. This final BN adjustment is required 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 we note that all specialties are included for 
purposes of calculating the final BN adjustment. (See ``Specialties 
excluded from ratesetting calculation'' later in this section.)
    (e) 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.

[[Page 41694]]



       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 prosthetist.
57.....................  Individual certified
                          prosthetist[dash]orthotist.
58.....................  Medical supply company with registered
                          pharmacist.
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.
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.
B2.....................  Pedorthic personnel.
B3.....................  Medical supply company with pedorthic
                          personnel.
------------------------------------------------------------------------

     Crosswalk certain low volume physician specialties: 
Crosswalk the utilization of certain specialties with relatively low 
PFS utilization to the associated specialties.
     Physical therapy utilization: Crosswalk the utilization 
associated with all physical therapy services to the specialty of 
physical therapy.
     Identify professional and technical services not 
identified under the usual TC and 26 modifiers: Flag the services that 
are PC and TC services but do not use TC and 26 modifiers (for example, 
electrocardiograms). This flag associates the PC and TC with the 
associated global code for use in creating the indirect PE RVUs. For 
example, the professional service, CPT code 93010 (Electrocardiogram, 
routine ECG with at least 12 leads; interpretation and report only), is 
associated with the global service, CPT code 93000 (Electrocardiogram, 
routine ECG with at least 12 leads; with interpretation and report).
     Payment modifiers: Payment modifiers are accounted for in 
the creation of the file 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 work time file is used; 
where it is not present, the intraoperative percentage from the payment 
files used by 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 work time.
51...................................  Multiple Procedure.....  50%....................  Intraoperative portion.
52...................................  Reduced Services.......  50%....................  50%.
53...................................  Discontinued Procedure.  50%....................  50%.
54...................................  Intraoperative Care      Preoperative +           Preoperative +
                                        only.                    Intraoperative           Intraoperative
                                                                 Percentages on the       portion.
                                                                 payment files used by
                                                                 Medicare contractors
                                                                 to process Medicare
                                                                 claims.
55...................................  Postoperative Care only  Postoperative            Postoperative portion.
                                                                 Percentage on the
                                                                 payment files used by
                                                                 Medicare contractors
                                                                 to process Medicare
                                                                 claims.
62...................................  Co-surgeons............  62.5%..................  50%.

[[Page 41695]]

 
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 (MPPRs). 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 
BN 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 we use the average allowed charge when simulating RVUs; 
therefore, the RVUs as calculated already reflect the payments as 
adjusted by modifiers, and no volume adjustments are necessary. 
However, a time adjustment of 33 percent is made only for medical 
direction of two to four cases since that is the only situation where a 
single practitioner is involved with multiple beneficiaries 
concurrently, so that counting each service without regard to the 
overlap with other services would overstate the amount of time spent by 
the practitioner furnishing these services.
     Work RVUs: The setup file contains the work RVUs from this 
proposed rule with comment period.
(7) 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)- 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 = variable, see discussion below.
price = price of the particular piece of equipment.
life of equipment = useful life of the particular piece of 
equipment.
maintenance = factor for maintenance; 0.05.
interest rate = variable, see discussion below.

    Usage: We currently use an equipment utilization rate assumption of 
50 percent for most equipment, with the exception of expensive 
diagnostic imaging equipment, for which we use a 90 percent assumption 
as required by section 1848(b)(4)(C) of the Act. We also direct the 
reader to section II.5.b of this proposed rule for a discussion of our 
proposed change in the utilization rate assumption for the linear 
accelerator used in furnishing radiation treatment services.
    Maintenance: This factor for maintenance was proposed and finalized 
during rulemaking for CY 1998 PFS (62 FR 33164). Several stakeholders 
have suggested that this maintenance factor assumption should be 
variable, similar to other assumptions in the equipment cost per minute 
calculation. In CY 2015 rulemaking, we solicited comments regarding the 
availability of reliable data on maintenance costs that vary for 
particular equipment items. We received several comments about variable 
maintenance costs, and in reviewing the information offered in those 
comments, it is clear that the relationship between maintenance costs 
and the price of equipment is not necessarily uniform across equipment. 
However, based on our review of comments, we have been unable to 
identify a systematic way of varying the maintenance cost assumption 
relative to the price or useful life of equipment. Therefore, in order 
to accommodate a variable, as opposed to a standard, maintenance rate 
within the equipment cost per minute calculation, we believe we would 
have to gather and maintain valid data on the maintenance costs for 
each equipment item in the direct PE input database, much like we do 
for price and useful life.
    Given our longstanding difficulties in acquiring accurate pricing 
information for equipment items, we are seeking comment on whether 
adding another item-specific financial variable for equipment costs 
will be likely to increase the accuracy of PE RVUs across the PFS. We 
note that most of the information for maintenance costs we have 
received is for capital equipment, and for the most part, this 
information has been limited to single invoices. Like the invoices for 
the equipment items themselves, we do not believe that very small 
numbers of voluntarily submitted invoices are likely to reflect typical 
costs for all of the same reasons we have discussed in previous 
rulemaking. We note that some commenters submitted high-level summary 
data from informal surveys but we currently have no means to validate 
that data. Therefore, we continue to seek a source of publicly 
available data on actual maintenance costs for medical equipment to 
improve the accuracy of the equipment costs used in developing PE RVUs.
    Interest Rate: In the CY 2013 final rule with comment period (77 FR 
68902), we updated the interest rates used in developing an equipment 
cost per minute calculation. The interest rate was based on the Small 
Business Administration (SBA) maximum interest rates for different 
categories of loan size (equipment cost) and maturity (useful life). 
The interest rates are listed in Table 3. (See 77 FR 68902 for a 
thorough discussion of this issue.)

                   Table 3--SBA Maximum Interest Rates
------------------------------------------------------------------------
                                                                Interest
                Price                        Useful life        rate (%)
------------------------------------------------------------------------
<$25K................................  <7 Years...............      7.50
$25K to $50K.........................  <7 Years...............      6.50
>$50K................................  <7 Years...............      5.50
<$25K................................  7+ Years...............      8.00
$25K to $50K.........................  7+ Years...............      7.00
>$50K................................  7+ Years...............      6.00
------------------------------------------------------------------------


[[Page 41696]]


                                                                                  Table 4--Calculation of PE RVUS Under Methodology for Selected Codes
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                            33533 CABG,
                                                                                                           99213 Office      arterial,    71020 chest x-  71020-TC chest  71020-26 chest    93000 ECG,      93005 ECG,      93010 ECG,
                                              Step                  Source                Formula           visit, est        single            ray           x-ray,          x-ray,         complete,        tracing         report
                                                                                                            nonfacility      facility       nonfacility     nonfacility     nonfacility     nonfacility     nonfacility     nonfacility
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(1) Labor cost (Lab)...............  Step 1...............  AMA..................  .....................           13.32           77.52            5.74            5.74               0             5.1             5.1               0
(2) Supply cost (Sup)..............  Step 1...............  AMA..................  .....................            2.98            7.34            0.53            0.53               0            1.19            1.19               0
(3) Equipment cost (Eqp)...........  Step 1...............  AMA..................  .....................            0.17            0.58            7.08            7.08               0            0.09            0.09               0
(4) Direct cost (Dir)..............  Step 1...............  .....................  =(1)+(2)+(3).........           16.48           85.45           13.36           13.36               0            6.38            6.38               0
(5) Direct adjustment (Dir. Adj.)..  Steps 2-4............  See footnote*........  .....................          0.6003          0.6003          0.6003          0.6003          0.6003          0.6003          0.6003          0.6003
(6) Adjusted Labor.................  Steps 2-4............  =Labor * Dir Adj.....  =(1)*(5).............               8           46.53            3.45            3.45               0            3.06            3.06               0
(7) Adjusted Supplies..............  Steps 2-4............  =Eqp * Dir Adj.......  =(2)*(5).............            1.79            4.41            0.32            0.32               0            0.72            0.72               0
(8) Adjusted Equipment.............  Steps 2-4............  =Sup * Dir Adj.......  =(3)*(5).............            0.10            0.35            4.25            4.25               0            0.05            0.05               0
(9) Adjusted Direct................  Steps 2-4............  .....................  =(6)+(7)+(8).........            9.89           51.29            8.02            8.02               0            3.83            3.83               0
(10) Conversion Factor (CF)........  Step 5...............  PFS..................  .....................         35.9335         35.9335         35.9335         35.9335         35.9335         35.9335         35.9335         35.9335
(11) Adj. labor cost converted.....  Step 5...............  =(Lab * Dir Adj)/CF..  =(6)/(10)............            0.22             1.3             0.1             0.1               0            0.09            0.09               0
(12) Adj. supply cost converted....  Step 5...............  =(Sup * Dir Adj)/CF..  =(7)/(10)............            0.05            0.12            0.01            0.01               0            0.02            0.02               0
(13) Adj. equipment cost converted.  Step 5...............  =(Eqp * Dir Adj)/CF..  =(8)/(10)............               0            0.01            0.12            0.12               0               0               0               0
(14) Adj. direct cost converted....  Step 5...............  .....................  =(11)+(12)+(13)......            0.28            1.43            0.22            0.22               0            0.11            0.11               0
(15) Work RVU......................  Setup File...........  PFS..................  .....................            0.97           33.75            0.22               0            0.22            0.17               0            0.17
(16) Dir_pct.......................  Steps 6,7............  Surveys..............  .....................            0.25            0.17            0.29            0.29            0.29            0.29            0.29            0.29
(17) Ind_pct.......................  Steps 6,7............  Surveys..............  .....................            0.75            0.83            0.71            0.71            0.71            0.71            0.71            0.71
(18) Ind. Alloc. Formula (1st part)  Step 8...............  See Step 8...........  .....................           (14)/           (14)/           (14)/           (14)/           (14)/           (14)/           (14)/           (14)/
                                                                                                               (16)*(17)       (16)*(17)       (16)*(17)       (16)*(17)       (16)*(17)       (16)*(17)       (16)*(17)       (16)*(17)
(19) Ind. Alloc.(1st part).........  Step 8...............  .....................  See 18...............            0.83            6.75            0.54            0.54               0            0.26            0.26               0
(20) Ind. Alloc. Formula (2nd part)  Step 8...............  See Step 8...........  .....................            (15)            (15)         (15+11)            (11)            (15)         (15+11)            (11)            (15)
(21) Ind. Alloc.(2nd part).........  Step 8...............  .....................  See 20...............            0.97           33.75            0.32             0.1            0.22            0.26            0.09            0.17
(22) Indirect Allocator (1st + 2nd)  Step 8...............  .....................  =(19)+(21)...........             1.8           40.50            0.86            0.64            0.22            0.52            0.35            0.17
(23) Indirect Adjustment (Ind.       Steps 9-11...........  See Footnote**.......  .....................          0.3811          0.3811          0.3811          0.3811          0.3811          0.3811          0.3811          0.3811
 Adj.).
(24) Adjusted Indirect Allocator...  Steps 9-11...........  =Ind Alloc * Ind Adj.  .....................            0.69           15.43            0.33            0.24            0.08             0.2            0.13            0.06
(25) Ind. Practice Cost Index        Steps 12-16..........  .....................  .....................            1.07            0.76            0.98            0.98            0.98             0.9             0.9             0.9
 (IPCI).
(26) Adjusted Indirect.............  Step 17..............  = Adj.Ind Alloc * PCI  =(24)*(25)...........            0.73           11.68            0.32            0.24            0.08            0.18            0.12            0.06
(27) Final PE RVU..................  Step 18..............  =(Adj Dir + Adj Ind)   =((14)+(26)) * Other             1.01           13.15            0.54            0.46            0.08            0.28            0.23            0.06
                                                             * Other Adj.           Adj).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
CPT codes and descriptions are copyright 2015 American Medical Association. All Rights Reserved. Applicable FARS/DFARS apply.
Notes: PE RVUs above (row 27), may not match Addendum B due to rounding.
The use of any particular conversion factor (CF) in the table to illustrate the PE Calculation has no effect on the resulting RVUs.
*The direct adj = [current pe rvus * CF * avg dir pct]/[sum direct inputs] = [step2]/[step3]; **The indirect adj =[current pe rvus * avg ind pct]/[sum of ind allocators]=[step9]/[step10]


[[Page 41697]]

c. Changes to Direct PE Inputs for Specific Services
    In this section, we discuss other CY 2016 proposals related to 
particular PE inputs. The proposed direct PE inputs are included in the 
proposed CY 2016 direct PE input database, which is available on the 
CMS Web site under downloads for the CY 2016 PFS proposed rule with 
comment period at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
(1) PE Inputs for Digital Imaging Services
    Prior to CY 2015 rulemaking, the RUC provided a recommendation 
regarding the PE inputs for digital imaging services. Specifically, the 
RUC recommended that we remove supply and equipment items associated 
with film technology from a list of codes since these items are no 
longer typical resource inputs. The RUC also recommended that the 
Picture Archiving and Communication System (PACS) equipment be included 
for these imaging services since these items are now typically used in 
furnishing imaging services. However, since we did not receive any 
invoices for the PACS system, we were unable to determine the 
appropriate pricing to use for the inputs. For CY 2015, we proposed, 
and finalized our proposal, to remove the film supply and equipment 
items, and to create a new equipment item as a proxy for the PACS 
workstation as a direct expense. We used the current price associated 
with ED021 (computer, desktop, w-monitor) to price the new item, ED050 
(PACS Workstation Proxy), pending receipt of invoices to facilitate 
pricing specific to the PACS workstation.
    Subsequent to establishing payment rates for CY 2015, we received 
information from several stakeholders regarding pricing for items 
related to the digital acquisition and storage of images. Some of these 
stakeholders submitted information that included prices for items 
clearly categorized as indirect costs within the established PE 
methodology and equivalent to the storage mechanisms for film. 
Additionally, some of the invoices we received included other products 
(like training and maintenance costs) in addition to the equipment 
items, and there was no distinction on these invoices between the 
prices for the equipment items themselves and the related services. 
However, we did receive invoices from one stakeholder that facilitated 
a proposed price update for the PACS workstation. Therefore, we are 
proposing to update the price for the PACS workstation to $5,557 from 
the current price of $2,501 since the latter price was based on the 
proxy item and the former based on submitted invoices. The PE RVUs in 
Addendum B on the CMS Web site reflect the updated price.
    In addition to the workstation used by the clinical staff acquiring 
the images and furnishing the technical component of the services, a 
stakeholder also submitted more detailed information regarding a 
workstation used by the practitioner interpreting the image in 
furnishing the professional component of many of these services. As we 
stated in the CY 2015 final rule with comment period (79 FR 67563), we 
generally believe that workstations used by these practitioners are 
more accurately considered indirect costs associated with the 
professional component of the service. However, we understand that the 
professional workstations for interpretation of digital images are 
similar in principle to some of the previous film inputs incorporated 
into the global and technical components of the codes. Given that many 
of these services are reported globally in the nonfacility setting, we 
believe it may be appropriate to include these costs as direct inputs 
for the associated HCPCS codes. Based on our established methodology, 
these costs would be incorporated into the PE RVUs of the global and 
technical component of the HCPCS code. We are seeking comment on 
whether including the professional workstation as a direct PE input for 
these codes would be appropriate, given that the resulting PE RVUs 
would be assigned to the global and technical components of the codes.
    Another stakeholder expressed concern about the changes in direct 
PE inputs for CPT code 76377, (3D radiographic procedure with 
computerized image post-processing), that were proposed and finalized 
in CY 2015 rulemaking as part of the film to digital change. Based on a 
recommendation from the RUC, we removed the input called ``computer 
workstation, 3D reconstruction CT-MR'' from the direct PE input 
database and assigned the associated minutes to the proxy for the PACS 
workstation. We are seeking comment from stakeholders, including the 
RUC, about whether or not the PACS workstation used in in imaging codes 
is the same workstation that is used in the postprocessing described by 
CPT code 76377, or if more specific workstation should be incorporated 
in the direct PE input database . . .
(2) Standardization of Clinical Labor Tasks
    As we noted in PFS rulemaking for CY 2015, we continue to work on 
revisions to the direct PE input database to provide the number of 
clinical labor minutes assigned for each task for every code in the 
database instead of only including the number of clinical labor minutes 
for the pre-service, service, and post-service periods for each code. 
In addition to increasing the transparency of the information used to 
set PE RVUs, this improvement would allow us to compare clinical labor 
times for activities associated with services across the PFS, which we 
believe is important to maintaining the relativity of the direct PE 
inputs. This information will facilitate the identification of the 
usual numbers of minutes for clinical labor tasks and the 
identification of exceptions to the usual values. It will also allow 
for greater transparency and consistency in the assignment of equipment 
minutes based on clinical labor times. Finally, we believe that the 
information can be useful in maintaining standard times for particular 
clinical labor tasks that can be applied consistently to many codes as 
they are valued over several years, similar in principle to the use of 
physician pre-service time packages. We believe such standards will 
provide greater consistency among codes that share the same clinical 
labor tasks and could improve relativity of values among codes. For 
example, as medical practice and technologies change over time, changes 
in the standards could be updated at once for all codes with the 
applicable clinical labor tasks, instead of waiting for individual 
codes to be reviewed.
    While this work is not yet complete, we anticipate completing it in 
the near future. In the following paragraphs, we address a series of 
issues related to clinical labor tasks, particularly relevant to 
services currently being reviewed under the misvalued code initiative
(a) Clinical Labor Tasks Associated With Digital Imaging
    In PFS rulemaking for CY 2015, we noted that the RUC recommendation 
regarding inputs for digital imaging services indicated that, as each 
code is reviewed under the misvalued code initiative, the clinical 
labor tasks associated with digital technology (instead of film) would 
need to be addressed. When we reviewed that recommendation, we did not 
have the capability of assigning standard clinical labor times for the 
hundreds of individual codes since the direct PE

[[Page 41698]]

input database did not previously allow for comprehensive adjustments 
for clinical labor times based on particular clinical labor tasks. 
Therefore, consistent with the recommendation, we proposed to remove 
film-based supply and equipment items but maintain clinical labor 
minutes that were assigned based on film technology.
    As noted in the paragraphs above, we continue to improve the direct 
PE input database by specifying the minutes for each code associated 
with each clinical labor task. Once completed, this work would allow 
adjustments to be made to minutes assigned to particular clinical labor 
tasks related to digital technology, consistent with the changes that 
were made to individual supply and equipment items. In the meantime, we 
believe it would be appropriate to establish standard times for 
clinical labor tasks associated with all digital imaging for purposes 
of reviewing individual services at present, and for possible broad-
based standardization once the changes to the database facilitate our 
ability to adjust time for existing services. Therefore, we are seeking 
comment on the appropriate standard minutes for the clinical labor 
tasks associated with services that use digital technology, which are 
listed in Table 5. We note that the application of any standardized 
times we adopt for clinical labor tasks to codes that are not being 
reviewed in this proposed rule would be considered for possible 
inclusion in future notice and comment rulemaking.

    Table 5--Clinical Labor Tasks Associated With Digital Technology
------------------------------------------------------------------------
                 Clinical labor task                    Typical minutes
------------------------------------------------------------------------
Availability of prior images confirmed...............                  2
Patient clinical information and questionnaire                         2
 reviewed by technologist, order from physician
 confirmed and exam protocoled by radiologist........
Technologist QC's * images in PACS, checking for all                   2
 images, reformats, and dose page....................
Review examination with interpreting MD..............                  2
Exam documents scanned into PACS. Exam completed in                    1
 RIS system to generate billing process and to
 populate images into Radiologist work queue.........
------------------------------------------------------------------------
* This clinical labor task is listed as it appears on the ``PE
  worksheets.'' QC refers to quality control, which we understand to
  mean the verification of the image using the PACS workstation.

(b) Pathology Clinical Labor Tasks
    As with the clinical labor tasks associated with digital imaging, 
many of the specialized clinical labor tasks associated with pathology 
services do not have consistent times across those codes. In reviewing 
the recommendations for pathology services, we have not identified 
information that suggests that the inconsistencies reflect the judgment 
that the same tasks take significantly more or less time depending on 
the individual service for which they are performed, especially given 
the specificity with which they are described.
    We have therefore developed proposed standard times that we have 
used in proposing direct PE inputs. These times are based on our review 
and assessment of the current times included for these clinical labor 
tasks in the direct PE input database. We have listed these proposed 
standard times in Table 6. For services reviewed for CY 2016, in cases 
where the RUC-recommended times differed from these standards, we have 
refined the time for those tasks to align with the values in Table 6. 
We seek comment on whether these standard times accurately reflect the 
typical time it takes to perform these clinical labor tasks when 
furnishing pathology services.

    Table 6--Standard Times for Clinical Labor Tasks Associated With
                           Pathology Services
------------------------------------------------------------------------
                                                       Standard clinical
                 Clinical Labor Task                      labor time
------------------------------------------------------------------------
Accession specimen/prepare for examination..........                 4
Assemble and deliver slides with paperwork to                        0.5
 pathologists.......................................
Assemble other light microscopy slides, open nerve                   0.5
 biopsy slides, and clinical history, and present to
 pathologist to prepare clinical pathologic
 interpretation.....................................
Assist pathologist with gross specimen examination..                 3
Clean room/equipment following procedure (including                  1
 any equipment maintenance that must be done after
 the procedure).....................................
Dispose of remaining specimens, spent chemicals/                     1
 other consumables, and hazardous waste.............
Enter patient data, computational prep for antibody                  1
 testing, generate and apply bar codes to slides,
 and enter data for automated slide stainer.........
Instrument start-up, quality control functions,                     13
 calibration, centrifugation, maintaining specimen
 tracking, logs and labeling........................
Load specimen into flow cytometer, run specimen,                     7
 monitor data acquisition and data modeling, and
 unload flow cytometer..............................
Preparation: labeling of blocks and containers and                   0.5
 document location and processor used...............
Prepare automated stainer with solutions and load                    4
 microscopic slides.................................
Prepare specimen containers/preload fixative/label                   0.5
 containers/distribute requisition form(s) to
 physician..........................................
Prepare, pack and transport specimens and records                    1
 for in-house storage and external storage (where
 applicable)........................................
Print out histograms, assemble materials with                        2
 paperwork to pathologists. Review histograms and
 gating with pathologist............................
Receive phone call from referring laboratory/                        5
 facility with scheduled procedure to arrange
 special delivery of specimen procurement kit,
 including muscle biopsy clamp as needed. Review
 with sender instructions for preservation of
 specimen integrity and return arrangements. Contact
 courier and arrange delivery to referring
 laboratory/facility................................
Register the patient in the information system,                      4
 including all demographic and billing information..
Stain air dried slides with modified Wright stain.                   3
 Review slides for malignancy/high cellularity
 (cross contamination)..............................
------------------------------------------------------------------------


[[Page 41699]]

(c) Clinical Labor Task: ``Complete Botox Log''
    In the process of improving the level of detail in the direct PE 
input database by including the minutes assigned for each clinical 
labor task, we noticed that there are several codes with minutes 
assigned for the clinical labor task called ``complete botox log.'' We 
do not believe the completion of such a log is a direct resource cost 
of furnishing a medically reasonable and necessary physician's service 
for a Medicare beneficiary. Therefore, we are proposing to eliminate 
the minutes assigned for the task ``complete botox log'' from the 
direct PE input database. The PE RVUs displayed in Addendum B on the 
CMS Web site were calculated with the modified inputs displayed in the 
CY 2016 direct PE input database.
(3) Clinical Labor Input Inconsistencies
    Subsequent to the publication of the CY 2015 PFS final rule with 
comment period, stakeholders alerted us to several clerical 
inconsistencies in the clinical labor nonfacility intraservice time for 
several vertebroplasty codes with interim final values for CY 2015, 
based on our understanding of RUC recommended values. We are proposing 
to correct these inconsistencies in the CY 2016 proposed direct PE 
input database to reflect the RUC recommended values, without 
refinement, as stated in the CY 2015 PFS final rule with comment 
period. The CY 2015 interim final direct PE inputs for these codes are 
displayed on the CMS Web site under downloads for the CY 2015 PFS final 
rule with comment period at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. For CY 2016, we are proposing the following adjustments. 
For CPT codes 22510 (percutaneous vertebroplasty (bone biopsy included 
when performed), 1 vertebral body, unilateral or bilateral injection, 
inclusive of all imaging guidance; cervicothoracic) and 22511 
(percutaneous vertebroplasty (bone biopsy included when performed), 1 
vertebral body, unilateral or bilateral injection, inclusive of all 
imaging guidance; lumbosacral), a value of 45 minutes for labor code 
L041B (``Radiologic Technologist'') were are proposing to assign for 
the ``assist physician'' task and a value of 5 minutes for labor code 
L037D (``RN/LPN/MTA'') for the ``Check dressings & wound/home care 
instructions/coordinate office visits/prescriptions'' task. For CPT 
code 22514 (percutaneous vertebral augmentation, including cavity 
creation (fracture reduction and bone biopsy included when performed) 
using mechanical device (eg, kyphoplasty), 1 vertebral body, unilateral 
or bilateral cannulation, inclusive of all imaging guidance; lumbar), 
we are proposing to adjust the nonfacility intraservice time to 50 
minutes for L041B, 50 minutes for L051A (``RN''), 38 minutes for a 
second L041B, and 12 minutes for L037D. The PE RVUs displayed in 
Addendum B on the CMS Web site were calculated with the inputs 
displayed in the CY 2016 direct PE input database.
(4) Freezer
    We identified several pathology codes for which equipment minutes 
are assigned to the item EP110 ``Freezer.'' Minutes are only allocated 
to particular equipment items when those items cannot be used in 
conjunction with furnishing services to another patient at the same 
time. We do not believe that minutes should be allocated to items such 
as freezers since the storage of any particular specimen or item in a 
freezer for any given period of time would be unlikely to make the 
freezer unavailable for storing other specimens or items. Instead, we 
propose to classify the freezer as an indirect cost because we believe 
that would be most consistent with the principles underlying the PE 
methodology since freezers can be used for many specimens at once. The 
PE RVUs displayed in Addendum B on the CMS Web site were calculated 
with the modified inputs displayed in the CY 2016 direct PE input 
database.
(5) Updates to Price for Existing Direct Inputs
    In the CY 2011 PFS final rule with comment period (75 FR 73205), we 
finalized a process to act on public requests to update equipment and 
supply price and equipment useful life inputs through annual rulemaking 
beginning with the CY 2012 PFS proposed rule. During 2014, we received 
a request to update the price of supply item ``antigen, mite'' (SH006) 
from $4.10 per test to $59. In reviewing the request, it is evident 
that the requested price update does not apply to the SH006 item but 
instead represents a different item than the one currently included as 
an input in CPT code 86490 (skin test, coccidioidomycosis). Therefore, 
rather than changing the price for SH006 that is included in several 
codes, we are proposing to create a new supply code for Spherusol, 
valued at $590 per 1 ml vial and $59 per test, and to include this new 
item as a supply for 86490 instead of the current input, SH006. We also 
received a request to update the price for EQ340 (Patient Worn 
Telemetry System) used only in CPT code 93229 (External mobile 
cardiovascular telemetry with electrocardiographic recording, 
concurrent computerized real time data analysis and greater than 24 
hours of accessible ECG data storage (retrievable with query) with ECG 
triggered and patient selected events transmitted to a remote attended 
surveillance center for up to 30 days; technical support for connection 
and patient instructions for use, attended surveillance, analysis and 
transmission of daily and emergent data reports as prescribed by a 
physician or other qualified health care.) The requestor noted that we 
had previously proposed and finalized a policy to remove wireless 
communication and delivery costs related to the equipment item that had 
previously been included in the direct PE input database as supply 
items. The requestor asked that we alter the price of the equipment 
from $21,575 to $23,537 to account for the equipment costs specific to 
the patient-worn telemetry system.
    We have considered this request in the context of the unique nature 
of this particular equipment item. This equipment item is unique in 
several ways, including that it is used continuously 24 hours per day 
and 7 days per week for an individual patient over several weeks. It is 
also unique in that the equipment is primarily used outside of a 
healthcare setting. Within our current methodology, we currently 
account for these unique properties by calculating the per minute costs 
with different assumptions than those used for most other equipment by 
increasing the number of hours the equipment is available for use. 
Therefore, we also believe it would be appropriate to incorporate other 
unique aspects of the operating costs of this item in our calculation 
of the equipment cost per minute. We believe the requestor's suggestion 
to do so by increasing the price of the equipment is practicable and 
appropriate. Therefore, we are proposing to change the price for EQ340 
(Patient Worn Telemetry System) to $23,537. The PE RVUs displayed in 
Addendum B on the CMS Web site were calculated with the modified inputs 
displayed in the CY 2016 direct PE input database.
    For CY 2015, we received a request to update the price for supply 
item ``kit, HER-2/neu DNA Probe'' (SL196) from $105 to $144.50. 
Accordingly, we proposed to update the price to $144.50. In the CY 2015 
final rule with comment period, we indicated that we obtained new 
information suggesting that further study of the price of this item was 
necessary before proceeding to update

[[Page 41700]]

the input price. We obtained pricing information readily available on 
the Internet that indicated a price of $94 for this item for a 
particular hospital. Subsequent to the CY 2015 final rule with comment 
period, stakeholders requested that we use the updated price of 
$144.50. One stakeholder suggested that the price of $94 likely 
reflected discounts for volume purchases not received by the typical 
laboratory. We are seeking comment on how to consider the higher-priced 
invoice, which is 53 percent higher than the price listed, relative to 
the price currently in the direct PE database. Specifically, we are 
seeking information on the price of the disposable supply in the 
typical case of the service furnished to a Medicare beneficiary, 
including, based on data, whether the typical Medicare case is 
furnished by an entity likely to receive a volume discount.
(6) Typical Supply and Equipment Inputs for Pathology Services
    In reviewing public comments in response to the CY 2015 PFS final 
rule with comment period, we re-examined issues around the typical 
number of pathology tests furnished at once. In the CY 2013 final rule 
with comment period (77 FR 69074), we noted that the number of blocks 
assumed for a particular code significantly impacts the assumed 
clinical labor, supplies, and equipment for that service. We indicated 
that we had concerns that the assumed number of blocks was inaccurate, 
and that we sought corroborating, independent evidence that the number 
of blocks assumed in the current direct PE input recommendations is 
typical. We note that, given the high volume of many pathology 
services, these assumptions have a significant impact on the PE RVUs 
for all other PFS services. We refer readers to section II.I.5.d where 
we detail our concerns about the lack of information regarding typical 
batch size and typical block size for many pathology services and 
solicit stakeholder input on approaches to obtaining accurate 
information that can facilitate our establishing payment rates that 
best reflect the relative resources involved in furnishing the typical 
service, for both pathology services in particular and more broadly for 
services across the PFS.
d. Developing Nonfacility Rates
    We note that not all PFS services are priced in the nonfacility 
setting, but as medical practice changes, we routinely develop 
nonfacility prices for particular services when they can be furnished 
outside of a facility 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.
(1) Request for Information on Nonfacility Cataract Surgery
    Cataract surgery generally has been performed in an ambulatory 
surgery center (ASC) or a hospital outpatient department (HOPD). 
Therefore, CMS has not assigned nonfacility PE RVUs under the PFS for 
cataract surgery. According to Medicare claims data, there are a 
relatively small number of these services furnished in nonfacility 
settings. Except in unusual circumstances, anesthesia for cataract 
surgery is either local or topical/intracameral. Advancements in 
technology have significantly reduced operating time and improved both 
the safety of the procedure and patient outcomes. We believe that it is 
now possible for cataract surgery to be furnished in an in-office 
surgical suite, especially for routine cases. Cataract surgery patients 
require a sterile surgical suite with certain equipment and supplies 
that we believe could be a part of a nonfacility-based setting that is 
properly constructed and maintained for appropriate infection 
prevention and control.
    We believe that there are potential advantages for all parties to 
furnishing appropriate cataract surgery cases in the nonfacility 
setting. Cataract surgery has been for many years the highest volume 
surgical procedure performed on Medicare beneficiaries. For 
beneficiaries, cataract surgery in the office setting might provide the 
additional convenience of receiving the preoperative, operative, and 
post-operative care in one location. It might also reduce delays 
associated with registration, processing, and discharge protocols 
associated with some facilities. Similarly, it might provide surgeons 
with greater flexibility in scheduling patients at an appropriate site 
of service depending on the individual patient's needs. For example, 
routine cases in patients with no comorbidities could be performed in 
the nonfacility surgical suite, while more complicated cases (for 
example, pseudoexfoliation) could be scheduled in the ASC or HOPD. In 
addition, furnishing cataract surgery in the nonfacility setting could 
result in lower Medicare expenditures for cataract surgery if the 
nonfacility payment rate were lower than the sum of the PFS facility 
payment rate and the payment to either the ASC or HOPD.
    We are seeking comments from ophthalmologists and other 
stakeholders on office-based surgical suite cataract surgery. In 
addition, we are soliciting comments from the RUC and other 
stakeholders on the direct practice expense inputs involved in 
furnishing cataract surgery in the nonfacility setting in conjunction 
with our consideration of information regarding the possibility of 
developing nonfacility PE RVUs for cataract surgery. We understand that 
cataract surgery generally requires some standard equipment and 
supplies (for example; phacoemulsification machine, surgical pack, 
intraocular lenses (IOL), etc.) that would be incorporated as direct PE 
inputs in calculating nonfacility PE RVUs.
(2) Direct PE Inputs for Functional Endoscopic Sinus Surgery Services
    A stakeholder indicated that due to changes in technology and 
technique, several codes that describe endoscopic sinus surgeries can 
now be furnished in the nonfacility setting. According to Medicare 
claims data, there are a relatively small number of these services 
furnished in nonfacility settings. These CPT codes are 31254 (Nasal/
sinus endoscopy, surgical; with ethmoidectomy, partial (anterior)), 
31255 (Nasal/sinus endoscopy, surgical; with ethmoidectomy, total 
(anterior and posterior)), 31256 (Nasal/sinus endoscopy, surgical, with 
maxillary antrostomy;), 31267 (Nasal/sinus endoscopy, surgical, with 
maxillary antrostomy; with removal of tissue from maxillary sinus), 
31276 (Nasal/sinus endoscopy, surgical with frontal sinus exploration, 
with or without removal of tissue from frontal sinus), 31287 (Nasal/
sinus endoscopy, surgical, with sphenoidotomy;), and 31288 (Nasal/sinus 
endoscopy, surgical, with sphenoidotomy; with removal of tissue from 
the sphenoid sinus). We are seeking input from stakeholders, including 
the RUC, about the appropriate direct PE inputs for these services.

B. Determination of Malpractice Relative Value Units (RVUs)

1. Overview
    Section 1848(c) of the Act requires that each service paid under 
the PFS be comprised of three components: work, PE, and malpractice 
(MP) expense. As required by section 1848(c)(2)(C)(iii) of the Act, 
beginning in CY 2000, MP RVUs are resource based. Malpractice RVUs for 
new codes after 1991 were

[[Page 41701]]

extrapolated from similar existing codes or as a percentage of the 
corresponding work RVU. Section 1848(c)(2)(B)(i) of the Act also 
requires that we review, and if necessary adjust, RVUs no less often 
than every 5 years. In the CY 2015 PFS final rule with comment period, 
we implemented the third review and update of MP RVUs. For a discussion 
of the third review and update of MP RVUs see the CY 2015 proposed rule 
(79 FR 40349 through 40355) and final rule with comment period (79 FR 
67591 through 67596).
    As explained in the CY 2011 PFS final rule with comment period (75 
FR 73208), MP RVUs for new and revised codes effective before the next 
five-year review of MP RVUs (for example, effective CY 2016 through CY 
2019, assuming that the next review of MP RVUs occurs for CY 2020) are 
determined either by a direct crosswalk from 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 MP 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 MP RVU for the revised code would be 
increased by 10 percent over the source code MP RVU. Under this 
approach the same risk factor is applied for the new/revised code and 
source code, but the work RVU for the new/revised code is used to 
adjust the MP RVUs for risk.
    For CY 2016, we propose to continue our current approach for 
determining MP RVUs for new/revised codes. For the new and revised 
codes for which we include proposed work values and PE inputs in the 
proposed rule, we will also publish the proposed MP crosswalks used to 
determine their MP RVUs in the proposed rule. The MP crosswalks for 
those new and revised codes will be subject to public comment and 
finalized in the CY 2016 PFS final rule. The MP crosswalks for new and 
revised codes with interim final values established in the CY 2016 
final rule will be implemented for CY 2016 and subject to public 
comment. They will then be finalized in the CY 2017 PFS final rule with 
comment period.
2. Proposed Annual Update of MP RVUs
    In the CY 2012 PFS final rule with comment period (76 FR 73057), we 
finalized a process to consolidate the five-year reviews of physician 
work and PE RVUs with our annual review of potentially misvalued codes. 
We discussed the exclusion of MP RVUs from this process at the time, 
and we stated that, since it is not feasible to obtain updated 
specialty level MP insurance premium data on an annual basis, we 
believe the comprehensive review of MP RVUs should continue to occur at 
5-year intervals. In the CY 2015 PFS proposed rule (79 FR 40349 through 
40355), we stated that there are two main aspects to the update of MP 
RVUs: (1) Recalculation of specialty risk factors based upon updated 
premium data; and (2) recalculation of service level RVUs based upon 
the mix of practitioners providing the service. In the CY 2015 PFS 
final rule with comment period (79 FR 67596), in response to several 
stakeholders' comments, we stated that we would address potential 
changes regarding the frequency of MP RVU updates in a future proposed 
rule. For CY 2016, we are proposing to begin conducting annual MP RVU 
updates to reflect changes in the mix of practitioners providing 
services, and to adjust MP RVUs for risk. Under this approach, the 
specialty-specific risk factors would continue to be updated every five 
years using updated premium data, but would remain unchanged between 
the 5-year reviews. However, in an effort to ensure that MP RVUs are as 
current as possible, our proposal would involve recalibrating all MP 
RVUs on an annual basis to reflect the specialty mix based on updated 
Medicare claims data. Since under this proposal, we would be 
recalculating the MP RVUs annually, we are also proposing to maintain 
the relative pool of MP RVUs from year to year; this will preserve the 
relative weight of MP RVUs to work and PE RVUs. We are proposing to 
calculate the current pool of MP RVUs by using a process parallel to 
the one we use in calculating the pool of PE RVUs. (We direct the 
reader to section II.2.b.(6) for detailed description of that process, 
including a proposed technical revision for 2016.) To determine the 
specialty mix assigned to each code, we are also proposing to use the 
same process used in the PE methodology, described in section 
II.2.b.(6) of this proposed rule. We note that for CY 2016, we are 
proposing to modify the specialty mix assignment methodology to use an 
average of the 3 most recent years of available data instead of a 
single year of data as is our current policy. We anticipate that this 
change will increase the stability of PE and MP RVUs and mitigate code-
level fluctuations for all services paid under the PFS, and for new and 
low-volume codes in particular. We are also proposing to no longer 
apply the dominant specialty for low volume services, because the 
primary rationale for the policy has been mitigated by this proposed 
change in methodology. However, we are not proposing to adjust the 
code-specific overrides established in prior rulemaking for codes where 
the claims data are inconsistent with a specialty that could be 
reasonably expected to furnish the service. We believe that these 
proposed changes will serve to balance the advantages of using annually 
updated information with the need for year-to-year stability in values. 
We seek comment on both aspects of the proposal: updating the specialty 
mix for MP RVUs annually (while continuing to update specialty-specific 
risk factors every 5 years using updated premium data); and using the 
same process to determine the specialty mix assigned to each code as is 
used in the PE methodology, including the proposed modification to use 
the most recent 3 years of claims data. We also seek comment on whether 
this approach will be helpful in addressing some of the concerns 
regarding the calculation of MP RVUs for services with low volume in 
the Medicare population, including the possibility of limiting our use 
of code-specific overrides of the claims data.
    We are also proposing an additional refinement in our process for 
assigning MP RVUs to individual codes. Historically, we have used a 
floor of 0.01 MP RVUs for all nationally-priced PFS codes. This means 
that even when the code-level calculation for the MP RVU falls below 
0.005, we have rounded to 0.01. In general, we believe this approach 
accounts for the minimum MP costs associated with each service 
furnished to a Medicare beneficiary. However, in examining the 
calculation of MP RVUs, we do not believe that this floor should apply 
to add-on codes. Since add-on codes must be reported with another code, 
there is already an MP floor of 0.01 that applies to the base code, and 
therefore, to each individual service. By applying the floor to add-on 
codes, the current methodology practically creates a 0.02 floor for any 
service reported with one add-on code, and 0.03 for those with 2 add-on 
codes, etc. Therefore, we are proposing to maintain the 0.01 MP RVU 
floor for all nationally-priced PFS services that are described by base 
codes, but not for add-on codes. We will continue to calculate, 
display, and make payments that include MP RVUs for

[[Page 41702]]

add-on codes that are calculated to 0.01 or greater, including those 
that round to 0.01. We are only proposing to allow the MP RVUs for add-
on codes to round to 0.00 where the calculated MP RVU is less than 
0.005.
    We will continue to study the appropriate frequency for collecting 
and updating premium data and will address any further proposed changes 
in future rulemaking.
3. MP RVU Update for Anesthesia Services
    In the CY 2015 PFS proposed rule (79 FR 40354 through 40355), we 
did not include an adjustment under the anesthesia fee schedule to 
reflect updated MP premium information, and stated that we intended to 
propose an anesthesia adjustment for MP in the CY 2016 PFS proposed 
rule. We also solicited comments regarding how to best reflect updated 
MP premium amounts under the anesthesiology fee schedule.
    As we previously explained, anesthesia services under the PFS are 
paid based upon a separate fee schedule, so routine updates must be 
calculated in a different way than those for services for which payment 
is calculated based upon work, PE, and MP RVUs. To apply budget 
neutrality and relativity updates to the anesthesiology fee schedule, 
we typically develop proxy RVUs for individual anesthesia services that 
are derived from the total portion of PFS payments made through the 
anesthesia fee schedule. We then update the proxy RVUs as we would the 
RVUs for other PFS services and adjust the anesthesia fee schedule 
conversion factor based on the differences between the original proxy 
RVUs and those adjusted for relativity and budget neutrality.
    We believe that taking the same approach to update the anesthesia 
fee schedule based on new MP premium data is appropriate. However, 
because work RVUs are integral to the MP RVU methodology and anesthesia 
services do not have work RVUs, we decided to seek potential 
alternatives prior to implementing our approach in conjunction with the 
proposed CY 2015 MP RVUs based on updated premium data. One commenter 
supported the delay in proposing to update the MP for anesthesia at the 
same time as updating the rest of the PFS, and another commenter 
suggested using mean anesthesia MP premiums per provider over a 4 or 5 
year period prorated by Medicare utilization to yield the MP expense 
for anesthesia services; no commenters offered alternatives to 
calculating updated MP for anesthesia services. The latter suggestion 
might apply more broadly to the MP methodology for the PFS and does not 
address the methodology as much as the data source.
    We continue to believe that payment rates for anesthesia should 
reflect MP resource costs relative to the rest of the PFS, including 
updates to reflect changes over time. Therefore, for CY 2016, in order 
to appropriately update the MP resource costs for anesthesia, we are 
proposing to make adjustments to the anesthesia conversion factor to 
reflect the updated premium information collected for the five year 
review. To determine the appropriate adjustment, we calculated imputed 
work RVUs and MP RVUs for the anesthesiology fee schedule services 
using the work, PE, and MP shares of the anesthesia fee schedule. 
Again, this is consistent with our longstanding approach to making 
annual adjustments to the PE and work RVU portions of the 
anesthesiology fee schedule. To reflect differences in the complexity 
and risk among the anesthesia fee schedule services, we multiplied the 
service-specific risk factor for each anesthesia fee schedule service 
by the CY 2016 imputed proxy work RVUs and used the product as the 
updated raw proxy MP RVUs for each anesthesia service for CY 2016. We 
then applied the same scaling adjustments to these raw proxy MP RVUs 
that we apply to the remainder of the PFS MP RVUs. Finally, we 
calculated the aggregate difference between the 2015 proxy MP RVUs and 
the proxy MP RVUs calculated for CY 2016. We then adjusted the portion 
of the anesthesia conversion factor attributable to MP proportionately; 
we refer the reader to section VI.C. of this proposed rule for the 
Anesthesia Fee Schedule Conversion Factors for CY 2016. We are inviting 
public comments regarding this proposal.
4. MP RVU Methodology Refinements
    In the CY 2015 PFS final rule with comment period (79 FR 67591 
through 67596), we finalized updated MP RVUs that were calculated based 
on updated MP premium data obtained from state insurance rate filings. 
The methodology used in calculating the finalized CY 2015 review and 
update of resource-based MP RVUs largely paralleled the process used in 
the CY 2010 update. We posted our contractor's report, ``Final Report 
on the CY 2015 Update of Malpractice RVUs'' on the CMS Web site. It is 
also located under the supporting documents section of the CY 2015 PFS 
final rule with comment period located at http://www.cms.gov/PhysicianFeeSched/. A more detailed explanation of the 2015 MP RVU 
update can be found in the CY 2015 PFS proposed rule (79 FR 40349 
through 40355).
    In the CY 2015 PFS proposed rule, we outlined the steps for 
calculating MP RVUs. In the process of calculating MP RVUs for purposes 
of this proposed rule, we have identified a necessary refinement to way 
we have calculated Step 1, which involves computing a preliminary 
national average premium for each specialty, to align the calculations 
within the methodology to the calculations described within the 
aforementioned contractor's report. Specifically, in the calculation of 
the national premium for each specialty (refer to equations 2.3, 2.4, 
2.5 in the aforementioned contractor's report), we calculate a weighted 
sum of premiums across areas and divide it by a weighted sum of MP 
GPCIs across areas. The calculation currently takes the ratio of sums, 
rather than the weighted average of the local premiums to the MP GPCI 
in that area. Instead, we are proposing to update the calculation to 
use a price-adjusted premium (that is, the premium divided by the GPCI) 
in each area, and then taking a weighted average of those adjusted 
premiums. The CY 2016 PFS proposed rule MP RVUs were calculated in this 
manner.
    Additionally, in the calculation of the national average premium 
for each specialty as discussed above, our current methodology used the 
total RVUs in each area as the weight in the numerator (that is, for 
premiums), and total MP RVUs as the weights in the denominator (that 
is, for the MP GPCIs). After further consideration, we believe that the 
use of these RVU weights is problematic. Use of weights that are 
central to the process at hand presents potential circularity since 
both weights incorporate MP RVUs as part of the computation to 
calculate MP RVUs. The use of different weights for the numerator and 
denominator introduces potential inconsistency. Instead, we believe 
that it would be better to use a different measure that is independent 
of MP RVUs and better represents the reason for weighting. 
Specifically, we are proposing to use area population as a share of 
total U.S. population as the weight. The premium data are for all MP 
premium costs, not just those associated with Medicare patients, so we 
believe that the distribution of the population does a better job of 
capturing the role of each area's premium in the ``national'' premium 
for each specialty than our previous Medicare-specific measure. Use of 
population weights also avoids the potential problems of circularity 
and inconsistency.

[[Page 41703]]

    The CY 2016 PFS proposed MP RVUs, as displayed in Addendum B of 
this proposed rule, reflect MP RVUs calculated following our 
established methodology, with the inclusion of the proposals and 
refinements described above.

C. Potentially Misvalued Services Under the Physician Fee Schedule

1. Background
    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. Section 1848(c)(2)(K) of 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) to the 
Act also requires the Secretary to develop a process to validate the 
RVUs of certain potentially misvalued codes under the PFS, using the 
same criteria used to identify potentially misvalued codes, and to make 
appropriate adjustments.
    As discussed in section I.B. of this proposed rule, each year we 
develop appropriate adjustments to the RVUs taking into account 
recommendations provided by the American Medical Association/Specialty 
Society Relative Value Scale Update Committee (RUC), the Medicare 
Payment Advisory Commission (MedPAC), and others. For many years, the 
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 analyses of other data, such as 
claims data, to inform the decision-making process to establish 
relative values for these codes. We may also consider analyses of work 
time, work RVUs, or direct practice expense (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 System (PQRS) 
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 RUC. We also consider 
information provided by other stakeholders. We conduct a 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 requiring us to take into account the results of 
consultations with organizations representing physicians who furnish 
the services. In accordance with section 1848(c) of the Act, we 
determine and make appropriate adjustments to the RVUs. We discuss 
these methodologies as applied to particular codes in section I.B. of 
this proposed rule.
    Section 1848(c)(2)(K)(ii) of the Act augments our efforts by 
directing the Secretary to specifically examine, as determined 
appropriate, potentially misvalued services in the following 
categories:
     Codes that have experienced the fastest growth.
     Codes that have experienced substantial changes in 
practice expenses.
     Codes that describe new technologies or services within an 
appropriate time period (such as 3 years) after the relative values are 
initially established for such codes.
     Codes which are 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 that have not been subject to review since 
implementation of the fee schedule.
     Codes that account for the majority of spending under the 
PFS.
     Codes for services that have experienced a substantial 
change in the hospital length of stay or procedure time.
     Codes for which there may be a change in the typical site 
of service since the code was last valued.
     Codes for which there is a significant difference in 
payment for the same service between different sites of service.
     Codes for which there may be anomalies in relative values 
within a family of codes.
     Codes for services where there may be efficiencies when a 
service is furnished at the same time as other services.
     Codes with high intra-service work per unit of time.
     Codes with high practice expense relative value units.
     Codes with high cost supplies.
     Codes as determined 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. 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) that may include consolidation of individual services 
into bundled codes for payment under the PFS.
2. Progress in Identifying and Reviewing Potentially Misvalued Codes
    To fulfill our statutory mandate, we have identified and reviewed 
numerous potentially misvalued codes as 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. As part of our current process, we identify potentially 
misvalued codes for review, and request recommendations from the RUC 
and other public commenters on revised work RVUs and direct PE inputs 
for those codes. The RUC, through its own processes, also identifies 
potentially misvalued codes for review. Through our public nomination 
process for potentially misvalued codes established in the CY 2012 PFS 
final rule with comment period, 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 process, we have reviewed over 1,560 
potentially misvalued codes to refine work RVUs and direct PE inputs. 
We have assigned appropriate work RVUs and direct PE inputs for these 
services as a result of these reviews. 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

[[Page 41704]]

through 73055). In the CY 2012 final rule with comment period, we 
finalized our policy to consolidate the review 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.
    In the CY 2013 final rule with comment period, we built upon the 
work we began in CY 2009 to review potentially misvalued codes that 
have not been reviewed since the implementation of the PFS (so-called 
``Harvard-valued codes''). In CY 2009, we requested recommendations 
from the RUC to aid in our review of Harvard-valued codes that had not 
yet been reviewed, focusing first on high-volume, low intensity codes 
(73 FR 38589). In the Fourth Five-Year Review, we requested 
recommendations from the RUC to aid in our review of Harvard-valued 
codes with annual utilization of greater than 30,000 (76 FR 32410). In 
the CY 2013 final rule with comment period, we identified as 
potentially misvalued Harvard-valued services with annual allowed 
charges that total at least $10,000,000. In addition to the Harvard-
valued codes, in the CY 2013 final rule with comment period we 
finalized for review a list of potentially misvalued codes that have 
stand-alone PE (codes with physician work and no listed work time, and 
codes with no physician work and listed work time).
    In the CY 2014 final rule with comment period, we finalized for 
review a list of potentially misvalued services. We included on the 
list for review ultrasound guidance codes that had longer procedure 
times than the typical procedure with which the code is billed to 
Medicare. We also finalized our proposal to replace missing post-
operative hospital E/M visit information and work time for 
approximately 100 global surgery codes. In CY 2014, we also considered 
a proposal to limit Medicare PFS payments for services furnished in a 
non-facility setting when the PFS payment would exceed the combined 
Medicare payment made to the practitioner under the PFS and facility 
payment made to either the ASC or hospital outpatient. Based upon 
extensive public comment we did not finalize this proposal.
    In the CY 2015 final rule with comment period, we finalized a list 
of potentially misvalued services. The potentially misvalued codes list 
included the publicly nominated CPT code 41530; two neurostimulator 
implantation codes, CPT 64553 and 64555; four epidural injection codes, 
CPT 62310, 62311, 62318 and 62319; three breast mammography codes, CPT 
77055, 77056 and 77057; an abdominal aortic aneurysm ultrasound 
screening code, HCPCS G0389; a prostate biopsy code, G0416; and an 
obesity behavioral group counseling code, HCPCS G0473. We also 
finalized our ``high expenditure services across specialty'' screen as 
a tool to identify potentially misvalued codes though we did not 
finalize the particular list of codes identified in that rule as 
potentially misvalued. In CY 2015, we also considered and finalized a 
proposal addressing the valuation and coding of global surgical 
packages, which would revalue and transition 10 and 90-day global codes 
to 0-day codes. We also sought comment on approaches to revalue 
services that included moderate sedation as an inherent part of 
furnishing the procedure.
3. Validating RVUs of Potentially Misvalued Codes
    Section 1848(c)(2)(L) of the Act requires the Secretary to 
establish a formal process to validate RVUs under the PFS. The Act 
specifies that the validation process may include validation of work 
elements (such as time, mental effort and professional judgment, 
technical skill and physical effort, and stress due to risk) involved 
with furnishing a service and may include validation of the pre-, post-
, and intra-service components of work. The Secretary is directed, as 
part of the validation, to validate a sampling of the work RVUs of 
codes identified through any of the 16 categories of potentially 
misvalued codes specified in 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 is included in the CY 2011 PFS final rule with comment period 
(75 FR 73217) and the CY 2012 PFS final rule with comment period (73054 
through 73055).
    We contracted with two outside entities to develop validation 
models for RVUs. Given the central role of time in establishing work 
RVUs and the concerns that have been raised about the current time 
values used in rate setting, we contracted with the Urban Institute to 
collect time data from several practices for services selected by the 
contractor in consultation with CMS. Urban Institute has used a variety 
of approaches to develop objective time estimates, depending on the 
type of service. Objective time estimates will be compared to the 
current time values used in the fee schedule. The project team will 
then convene groups of physicians from a range of specialties to review 
the new time data and the potential implications for work and the ratio 
of work to time. Urban Institute has prepared an interim report, 
``Development of a Model for the Valuation of Work Relative Value 
Units,'' which discusses the challenges encountered in collecting 
objective time data and offers some thoughts on how these can be 
overcome. This interim report is posted on the CMS Web site at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Downloads/RVUs-Validation-UrbanInterimReport.pdf. A 
final report will be available once the project is complete.
    The second contract is with the RAND Corporation, which is using 
available data to build a validation model to predict work RVUs and the 
individual components of work RVUs, time and intensity. The model 
design was informed by the statistical methodologies and approach used 
to develop the initial work RVUs and to identify potentially misvalued 
procedures under current CMS and RUC processes. RAND consulted with a 
technical expert panel on model design issues and the test results. The 
RAND report is available on the CMS Web site under downloads for the CY 
2015 PFS Final Rule with Comment Period at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices-Items/CMS-1612-FC.html.
4. CY 2016 Identification of Potentially Misvalued Services for Review
a. Public Nomination of Potentially Misvalued Codes
    In the CY 2012 PFS final rule with comment period, we finalized a 
process for the public to nominate potentially misvalued codes (76 FR 
73058). The public and 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

[[Page 41705]]

include, but are not limited to, 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 work 
time.
     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 work 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) National Database, and the Physician Quality 
Reporting System (PQRS) databases).
     National surveys of work time and intensity from 
professional and management societies and organizations, such as 
hospital associations.
    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 
nominated 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 indicate 
whether we are proposing each nominated code as a potentially misvalued 
code.
    During the comment period on the CY 2015 proposed rule and final 
rule with comment period, we received nominations and supporting 
documentation for three codes to be considered as potentially misvalued 
codes. We evaluated the supporting documentation for each nominated 
code to ascertain whether the submitted information demonstrated that 
the code should be proposed as potentially misvalued.
    CPT Code 36516 (Therapeutic apheresis; with extracorporeal 
selective adsorption or selective filtration and plasma reinfusion) was 
nominated for review as potentially misvalued. The nominator stated 
that CPT code 36516 is misvalued because of incorrect direct and 
indirect PE inputs and an incorrect work RVU. Specifically, the 
nominator stated that the direct supply costs failed to include an $18 
disposable bag and the $37 cost for biohazard waste disposal of the 
post-treatment bag, and the labor costs associated with nursing being 
inaccurate. The nominator also stated that the overhead expenses 
associated with this service were unrealistic and that the current work 
RVU undervalues a physician's time and expertise. We are proposing this 
code as a potentially misvalued code. We note that we established a 
policy in CY 2011 to consider biohazard bags as an indirect expense, 
and not as a direct PE input (75 FR 73192).
    CPT Codes 52441 (Cystourethroscopy with insertion of permanent 
adjustable transprostatic implant; single implant) and 52442 
(Cystourethroscopy with insertion of permanent adjustable 
transprostatic implant; each additional permanent adjustable 
transprostatic implant) were nominated for review as potentially 
misvalued. The nominator stated that the costs of the direct practice 
expense inputs were inaccurate, including the cost of the implant. We 
are proposing these codes as potentially misvalued codes.
b. Electronic Analysis of Implanted Neurostimulator (CPT Codes 95970-
95982)
    All of the inputs for CPT codes 95971 (Electronic analysis of 
implanted neurostimulator pulse generator system (eg, rate, pulse 
amplitude, pulse duration, configuration of wave form, battery status, 
electrode selectability, output modulation, cycling, impedance and 
patient compliance measurements); simple spinal cord, or peripheral 
(ie, peripheral nerve, sacral nerve, neuromuscular) neurostimulator 
pulse generator/transmitter, with intraoperative or subsequent 
programming), 95972 (Electronic analysis of implanted neurostimulator 
pulse generator system (eg, rate, pulse amplitude, pulse duration, 
configuration of wave form, battery status, electrode selectability, 
output modulation, cycling, impedance and patient compliance 
measurements); complex spinal cord, or peripheral (ie, peripheral 
nerve, sacral nerve, neuromuscular) (except cranial nerve) 
neurostimulator pulse generator/transmitter, with intraoperative or 
subsequent programming, up to one hour) and 95973 (Electronic analysis 
of implanted neurostimulator pulse generator system (eg, rate, pulse 
amplitude, pulse duration, configuration of wave form, battery status, 
electrode selectability, output modulation, cycling, impedance and 
patient compliance measurements); complex spinal cord, or peripheral 
(ie, peripheral nerve, sacral nerve, neuromuscular) (except cranial 
nerve) neurostimulator pulse generator/transmitter, with intraoperative 
or subsequent programming, each additional 30 minutes after first hour 
(List separately in addition to code for primary procedure)) were 
reviewed and valued in the CY 2015 final rule with comment period (79 
FR 67670). Due to significant time changes in the base codes, we 
believe the entire family detailed in Table 7 should be considered as 
potentially misvalued and reviewed in a manner consistent with our 
review of CPT codes 95971, 95972 and 95973.

     Table 7--Proposed Potentially Misvalued Codes Identified in the
         Electronic Analysis of Implanted Neurostimulator Family
------------------------------------------------------------------------
             HCPCS                          Short descriptor
------------------------------------------------------------------------
95970.........................  Analyze neurostim no prog.
95974.........................  Cranial neurostim complex.
95975.........................  Cranial neurostim complex.
95978.........................  Analyze neurostim brain/1h.
95979.........................  Analyz neurostim brain addon.
95980.........................  Io anal gast n-stim init.
95981.........................  Io anal gast n-stim subsq.
95982.........................  Io ga n-stim subsq w/reprog.
------------------------------------------------------------------------

c. Review of High Expenditure Services across Specialties with Medicare 
Allowed Charges of $10,000,000 or More
    In the CY 2015 PFS rule, we proposed and finalized the high 
expenditure screen as a tool to identify potentially misvalued codes in 
the statutory category of ``codes that account for the majority of 
spending under the PFS.'' We also identified codes through this screen 
and proposed them as potentially misvalued in the CY 2015 PFS proposed 
rule (79 FR 40337-40338). However, given the resources required for the 
revaluation of codes with 10- and 90-day global periods, we did not 
finalize those codes as potentially misvalued codes in the CY 2015 PFS 
final rule with comment period. We stated that we would re-run the high 
expenditure screen at a future date, and subsequently propose the 
specific set of

[[Page 41706]]

codes that meet the high expenditure criteria as potentially misvalued 
codes (79 FR 67578).
    We believe that our current resources will not necessitate further 
delay in proceeding with the high expenditure screen for CY 2016. We 
have re-run the screen with the same criteria finalized in last year's 
rule. However, in developing this year's proposed list, we excluded all 
codes with 10- and 90-day global periods since we believe these codes 
should be reviewed as part of the global surgery revaluation. We are 
proposing the 118 codes listed in Table 8 as potentially misvalued 
codes, identified using the high expenditure screen under the statutory 
category, ``codes that account for the majority of spending under the 
PFS.''
    To develop this list, we followed the same approach taken last year 
except we excluded 10 and 90- day global periods. Specifically, we 
identified the top 20 codes by specialty (using the specialties used in 
Table 45) in terms of allowed charges. As we did last year, we excluded 
codes that we have reviewed since CY 2010, those with fewer than $10 
million in allowed charges, and those that describe anesthesia or E/M 
services. We excluded E/M services from the list of proposed 
potentially misvalued codes for the same reasons that we excluded them 
in a similar review in CY 2012. These reasons were explained in the CY 
2012 final rule with comment period (76 FR 73062 through 73065).

  Table 8--Proposed Potentially Misvalued Codes Identified Through High
                     Expenditure by Specialty Screen
------------------------------------------------------------------------
             HCPCS                          Short descriptor
------------------------------------------------------------------------
10022.........................  Fna w/image
11100.........................  Biopsy skin lesion
11101.........................  Biopsy skin add-on
11730.........................  Removal of nail plate
20550.........................  Inj tendon sheath/ligament
20552.........................  Inj trigger point 1/2 muscl
20553.........................  Inject trigger points 3/>
22614.........................  Spine fusion extra segment
22840.........................  Insert spine fixation device
22842.........................  Insert spine fixation device
22845.........................  Insert spine fixation device
27370.........................  Injection for knee x-ray
29580.........................  Application of paste boot
31500.........................  Insert emergency airway
31575.........................  Diagnostic laryngoscopy
31579.........................  Diagnostic laryngoscopy
31600.........................  Incision of windpipe
33518.........................  Cabg artery-vein two
36215.........................  Place catheter in artery
36556.........................  Insert non-tunnel cv cath
36569.........................  Insert picc cath
36620.........................  Insertion catheter artery
38221.........................  Bone marrow biopsy
51700.........................  Irrigation of bladder
51702.........................  Insert temp bladder cath
51720.........................  Treatment of bladder lesion
51728.........................  Cystometrogram w/vp
51729.........................  Cystometrogram w/vp&up
51784.........................  Anal/urinary muscle study
51797.........................  Intraabdominal pressure test
51798.........................  Us urine capacity measure
52000.........................  Cystoscopy
55700.........................  Biopsy of prostate
58558.........................  Hysteroscopy biopsy
67820.........................  Revise eyelashes
70491.........................  Ct soft tissue neck w/dye
70543.........................  Mri orbt/fac/nck w/o &w/dye
70544.........................  Mr angiography head w/o dye
70549.........................  Mr angiograph neck w/o&w/dye
71010.........................  Chest x-ray 1 view frontal
71020.........................  Chest x-ray 2vw frontal&latl
71260.........................  Ct thorax w/dye
71270.........................  Ct thorax w/o & w/dye
72195.........................  Mri pelvis w/o dye
72197.........................  Mri pelvis w/o & w/dye
73110.........................  X-ray exam of wrist
73130.........................  X-ray exam of hand
73718.........................  Mri lower extremity w/o dye
73720.........................  Mri lwr extremity w/o&w/dye
74000.........................  X-ray exam of abdomen
74022.........................  X-ray exam series abdomen
74181.........................  Mri abdomen w/o dye
74183.........................  Mri abdomen w/o & w/dye
75635.........................  Ct angio abdominal arteries
75710.........................  Artery x-rays arm/leg
75978.........................  Repair venous blockage
76512.........................  Ophth us b w/non-quant a
76519.........................  Echo exam of eye
76536.........................  Us exam of head and neck
77059.........................  Mri both breasts
77263.........................  Radiation therapy planning
77334.........................  Radiation treatment aid(s)
77470.........................  Special radiation treatment
78306.........................  Bone imaging whole body
78452.........................  Ht muscle image spect mult
88185.........................  Flowcytometry/tc add-on
88189.........................  Flowcytometry/read 16 & >
88321.........................  Microslide consultation
88360.........................  Tumor immunohistochem/manual
88361.........................  Tumor immunohistochem/comput
91110.........................  Gi tract capsule endoscopy
92002.........................  Eye exam new patient
92136.........................  Ophthalmic biometry
92240.........................  Icg angiography
92250.........................  Eye exam with photos
92275.........................  Electroretinography
92557.........................  Comprehensive hearing test
92567.........................  Tympanometry
93280.........................  Pm device progr eval dual
93288.........................  Pm device eval in person
93293.........................  Pm phone r-strip device eval
93294.........................  Pm device interrogate remote
93295.........................  Dev interrog remote 1/2/mlt
93296.........................  Pm/icd remote tech serv
93306.........................  Tte w/doppler complete
93350.........................  Stress tte only
93351.........................  Stress tte complete
93503.........................  Insert/place heart catheter
93613.........................  Electrophys map 3d add-on
93965.........................  Extremity study
94010.........................  Breathing capacity test
94620.........................  Pulmonary stress test/simple
95004.........................  Percut allergy skin tests
95165.........................  Antigen therapy services
95957.........................  Eeg digital analysis
96101.........................  Psycho testing by psych/phys
96116.........................  Neurobehavioral status exam
96118.........................  Neuropsych tst by psych/phys
96360.........................  Hydration iv infusion init
96372.........................  Ther/proph/diag inj sc/im
96374.........................  Ther/proph/diag inj iv push
96375.........................  Tx/pro/dx inj new drug addon
96401.........................  Chemo anti-neopl sq/im
96402.........................  Chemo hormon antineopl sq/im
96409.........................  Chemo iv push sngl drug
96411.........................  Chemo iv push addl drug
96567.........................  Photodynamic tx skin
96910.........................  Photochemotherapy with uv-b
97032.........................  Electrical stimulation
97035.........................  Ultrasound therapy
97110.........................  Therapeutic exercises
97112.........................  Neuromuscular reeducation
97113.........................  Aquatic therapy/exercises
97116.........................  Gait training therapy
97140.........................  Manual therapy 1/regions
97530.........................  Therapeutic activities
97535.........................  Self care mngment training
G0283.........................  Elec stim other than wound
------------------------------------------------------------------------

5. Valuing Services That Include Moderate Sedation as an Inherent Part 
of Furnishing the Procedure
    The CPT manual includes more than 400 diagnostic and therapeutic 
procedures, listed in Appendix G, for which CPT has determined that 
moderate sedation is an inherent part of furnishing the procedure. 
Therefore, only the procedure code is reported when furnishing the 
service, and in developing RVUs for these services, we include the 
resource costs associated with moderate sedation in the valuation of 
these diagnostic and therapeutic procedures. To the extent that 
moderate sedation is inherent in the diagnostic or therapeutic service, 
we believe that the inclusion of moderate sedation in the valuation of 
the procedure is accurate. In the CY 2015 PFS proposed rule (79 FR 
40349), we noted that it appeared that practice patterns for endoscopic 
procedures were changing, with anesthesia increasingly being separately 
reported for these procedures. Due to the changing nature of medical 
practice, we noted that we were considering establishing a uniform 
approach to valuation for all Appendix G services. We continue to seek 
an approach that is based on using the best available objective 
information about the provision of moderate sedation broadly, rather 
than merely addressing this issue on a code-by-code basis using RUC 
survey data when individual procedures

[[Page 41707]]

are revalued. We sought public comment on approaches to address the 
appropriate valuation of these services given that moderate sedation is 
no longer inherent for many of these services. To the extent that 
Appendix G procedure values are adjusted to no longer include moderate 
sedation, we requested suggestions as to how moderate sedation should 
be reported and valued, and how to remove from existing valuations the 
RVUs and inputs related to moderate sedation.
    To establish an approach to valuation for all Appendix G services 
based on the best data about the provision of moderate sedation, we 
need to determine the extent of the misvaluation for each code. We know 
that there are standard packages for the direct PE inputs associated 
with moderate sedation, and we began to develop approaches to estimate 
how much of the work is attributable to moderate sedation. However, we 
believe that we should seek input from the medical community prior to 
proposing changes in values for these services, given the different 
methodologies used to develop work RVUs for the hundreds of services in 
Appendix G. Therefore, we are seeking recommendations from the RUC and 
other interested stakeholders for appropriate valuation of the work 
associated with moderate sedation before formally proposing an approach 
that allows Medicare to adjust payments based on the resource costs 
associated with the moderate sedation or anesthesia services that are 
being furnished.
    The anesthesia procedure codes 00740 (Anesthesia for procedure on 
gastrointestinal tract using an endoscope) and 00810 (Anesthesia for 
procedure on lower intestine using an endoscope) are used for 
anesthesia furnished in conjunction with lower GI procedures. In 
reviewing Medicare claims data, we noted that a separate anesthesia 
service is now reported more than 50 percent of the time that several 
types of colonoscopy procedures are reported. Given the significant 
change in the relative frequency with which anesthesia codes are 
reported with colonoscopy services, we believe the relative values of 
the anesthesia services should be re-examined. Therefore, we are 
proposing to identify CPT codes 00740 and 00810 as potentially 
misvalued. We welcome comments on both of these issues.
6. Improving the Valuation and Coding of the Global Package
a. Proposed Transition of 10-Day and 90-Day Global Packages Into 0-Day 
Global Packages
    In the CY 2015 PFS final rule (79 FR 67582 through 67591) we 
finalized a policy to transition all 10-day and 90-day global codes to 
0-day global codes to improve the accuracy of valuation and payment for 
the various components of global surgical packages, including pre- and 
post-operative visits and performance of the surgical procedure. 
Although we have marginally addressed some of the concerns noted with 
global packages in previous rulemaking, we believe there is still an 
unmet need to address some of the fundamental issues with the 10- and 
90-day post-operative global packages. We believe it is critical that 
the RVUs used to develop PFS payment rates reflect the most accurate 
resource costs associated with PFS services. We believe that valuing 
global codes that package services together without objective, 
auditable data on the resource costs associated with the components of 
the services contained in the packages may significantly skew 
relativity and create unwarranted payment disparities within PFS fee-
for-service payment. We also believe that the resource based valuation 
of individual physicians' services will continue to serve as a critical 
foundation for Medicare payment to physicians. Therefore, we believe it 
is critical that the RVUs under the PFS be based as closely and 
accurately as possible on the actual resources involved in furnishing 
the typical occurrence of specific services.
    We stated our belief that transforming all 10- and 90-day global 
codes to 0-day global codes would:
     Increase the accuracy of PFS payment by setting payment 
rates for individual services based more closely upon the typical 
resources used in furnishing the procedures;
     Avoid potentially duplicative or unwarranted payments when 
a beneficiary receives post-operative care from a different 
practitioner during the global period;
     Eliminate disparities between the payment for E/M services 
in global periods and those furnished individually;
     Maintain the same-day packaging of pre- and post-operative 
physicians' services in the 0-day global; and
     Facilitate availability of more accurate data for new 
payment models and quality research.
b. Impact of the Medicare Access and CHIP Reauthorization Act of 2015
    The Medicare Access and CHIP Reauthorization Act (MACRA) was 
enacted into law on April 16, 2015. Section 523 of the MACRA addresses 
payment for global surgical packages. Section 523(a) adds a new 
paragraph at section 1848(c)(8) of the Act. Section 1848(c)(8)(A)(i) of 
the Act prohibits the Secretary from implementing the policy 
established in the CY 2015 PFS final rule with comment period that 
would have transitioned all 10-day and 90-day global surgery packages 
to 0-day global periods. Section 1848(c)(8)(A)(ii) of the Act provides 
that nothing in the previous clause shall be construed to prevent the 
Secretary from revaluing misvalued codes for specific surgical services 
or assigning values to new or revised codes for surgical services.
    Section 1848(c)(8)(B)(i) of the Act requires CMS to develop through 
rulemaking a process to gather information needed to value surgical 
services from a representative sample of physicians, and requires that 
the data collection shall begin no later than January 1, 2017. The 
collected information must include the number and level of medical 
visits furnished during the global period and other items and services 
related to the surgery, as appropriate. This information must be 
reported on claims at the end of the global period or in another manner 
specified by the Secretary. Section 1848(c)(8)(B)(ii) of the Act 
requires that, every 4 years, we must reassess the value of this 
collected information, and allows us to discontinue the collection if 
the Secretary determines that we have adequate information from other 
sources in order to accurately value global surgical services. Section 
1848(c)(8)(B)(iii) of the Act specifies that the Inspector General will 
audit a sample of the collected information to verify its accuracy. 
Section 1848(c)(8)(C) of the Act requires that, beginning in CY 2019, 
we must use the information collected as appropriate, along with other 
available data, to improve the accuracy of valuation of surgical 
services under the PFS. Section 523(b) of the MACRA adds a new 
paragraph at section 1848(c)(9) of the Act which authorizes the 
Secretary, through rulemaking, to delay up to 5 percent of the PFS 
payment for services for which a physician is required to report 
information under section 1848(c)(8)(B)(i) of the Act until the 
required information is reported.
    Since section 1848(c)(8)(B)(i) of the Act, as added by section 
523(a) of the MACRA, requires us to use rulemaking

[[Page 41708]]

to develop and implement the process to gather information needed to 
value surgical services no later than January 1, 2017, we are seeking 
input from stakeholders on various aspects of this task. We are 
soliciting comments from the public regarding the kinds of auditable, 
objective data (including the number and type of visits and other 
services furnished by the practitioner reporting the procedure code 
during the current post-operative periods) needed to increase the 
accuracy of the values for surgical services. We are also seeking 
comment on the most efficient means of acquiring these data as 
accurately and efficiently as possible. For example, we seek 
information on the extent to which individual practitioners or 
practices may currently maintain their own data on services, including 
those furnished during the post-operative period, and how we might 
collect and objectively evaluate those data for use in increasing the 
accuracy of the values beginning in CY 2019. We will use the 
information from the public comments to help develop a proposed 
approach for the collection of this information in future rulemaking.
    Section 1848(c)(8)(C) of the Act mandates that we use the collected 
data to improve the accuracy of valuation of surgery services beginning 
in 2019. We described in previous rulemaking (79 FR 67582 through 
67591) the limitations and difficulties involved in the appropriate 
valuation of the global packages, especially when the values of the 
component services are not clear. We are seeking public comment on 
potential methods of valuing the individual components of the global 
surgical package, including the procedure itself, and the pre- and 
post-operative care, including the follow-up care during post-operative 
days. We are particularly interested in stakeholder input regarding the 
overall accuracy of the values and descriptions of the component 
services within the global packages. For example, we seek information 
from stakeholders on whether (both qualitatively and quantitatively) 
postoperative visits differ from other E/M services. We are also 
interested in stakeholder input on what other items and services 
related to the surgery, aside from postoperative visits, are furnished 
to beneficiaries during post-operative care. We believe that 
stakeholder input regarding these questions will help determine what 
data should be collected, as well as how to improve the accuracy of the 
valuations. We welcome the full range of public feedback from 
stakeholders to assist us in this process.
    We intend to provide further opportunities for public feedback 
prior to developing a proposal for CY 2017 to collect this required 
data. We also seek comments regarding stakeholder interest in the 
potential for an open door forum, town hall meetings with the public, 
or other avenues for direct communication regarding implementation of 
these provisions of the Act.

D. Refinement Panel

1. Background
    As discussed in the CY 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 composed 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.
    Following enactment of section 1848(c)(2)(K) of the Act, which 
required the Secretary periodically to identify and 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 continued using the 
established refinement panel process with some modifications.
    For CY 2015, in light of the changes we made to the process for 
valuing new, revised and potentially misvalued codes (79 FR 67606), we 
reassessed the role that the refinement panel process plays in the code 
valuation process. We noted that the current refinement panel process 
is tied to the review of interim final values. It provides an 
opportunity for stakeholders to provide new clinical information that 
was not available at the time of the RUC valuation that might affect 
work RVU values that are adopted in the interim final value process. 
For CY 2015 interim final rates, we stated in the CY 2015 PFS final 
rule with comment period that we will use the refinement panel process 
as usual for these codes (79 FR 67609).
2. CY 2016 Refinement Panel Proposal
    Beginning in CY 2016, we are proposing to permanently eliminate the 
refinement panel and instead publish the proposed rates for all interim 
final codes in the PFS proposed rule for the subsequent year. For 
example, we will publish the proposed rates for all CY 2016 interim 
final codes in the CY 2017 PFS proposed rule. With the change in the 
process for valuing codes adopted in the CY 2015 final rule with 
comment period (79 FR 67606), proposed values for most codes that are 
being valued for CY 2016 will be published in the CY 2016 PFS proposed 
rule. As explained in the CY 2015 final rule with comment period, only 
a small number of codes being valued for CY 2016 will be published as 
interim final in the 2016 PFS final rule with comment period and be 
subject to comment. We will evaluate the comments we receive on these 
code values, and both respond to these comments and propose values for 
these codes for CY 2017 in the CY 2017 PFS proposed rule. Therefore, 
stakeholders will have two opportunities to comment and to provide any 
new clinical information that was not available at the time of the RUC 
valuation that might affect work RVU values that are adopted on an 
interim final basis. We believe that this proposed process, which 
includes two opportunities for public notice and comment, offers 
stakeholders a better mechanism and ample opportunity for providing any 
additional data for our consideration, and discussing any concerns with 
our interim final values, than the current refinement process. It also 
provides greater transparency because comments on our rules are made 
available to the public at www.regulations.gov. We welcome comments on 
this proposed change to eliminate the use of refinement panels in our 
process for establishing final values for interim final codes.

E. Improving Payment Accuracy for Primary Care and Care Management 
Services

    We are committed to supporting primary care, and we have 
increasingly recognized care management as one of the critical 
components of primary care that contributes to better health for 
individuals and reduced expenditure growth (77 FR 68978). Accordingly, 
we have prioritized the development and implementation of a series of 
initiatives designed to improve the accuracy of payment for, and 
encourage long-term investment in, care management services.

[[Page 41709]]

    In addition to the Medicare Shared Savings Program, various 
demonstration initiatives including the Pioneer Accountable Care 
Organization (ACO), the patient-centered medical home model in the 
Multi-payer Advanced Primary Care Practice (MAPCP), the Federally 
Qualified Health Center (FQHC) Advanced Primary Care Practice 
demonstration, the Comprehensive Primary Care (CPC) initiative, among 
others (see the CY 2015 PFS final rule (79 FR 67715) for a discussion 
of these), we also have continued to explore potential refinements to 
the PFS that would appropriately value care management within 
Medicare's statutory structure for fee-for-service physician payment 
and quality reporting. The payment for some non-face-to-face care 
management services is bundled into the payment for face-to-face 
evaluation and management (E/M) visits. However, because the current E/
M office/outpatient visit CPT codes were designed with an overall 
orientation toward episodic treatment, we have recognized that these E/
M codes may not reflect all the services and resources involved with 
furnishing certain kinds of care, particularly comprehensive, 
coordinated care management for certain categories of beneficiaries.
    Over several years, we have developed proposals and sought 
stakeholder input regarding potential PFS refinements to improve the 
accuracy of payment for care management services. For example, in the 
CY 2013 PFS final rule with comment period, we adopted a policy to pay 
separately for transitional care management (TCM) involving the 
transition of a beneficiary from care furnished by a treating physician 
during an inpatient stay to care furnished by the beneficiary's primary 
physician in the community (77 FR 68978 through 68993). In the CY 2014 
PFS final rule with comment period, we finalized a policy, beginning in 
CY 2015 (78 FR 74414), to pay separately for chronic care management 
(CCM) services furnished to Medicare beneficiaries with two or more 
chronic conditions. We believe that these new separately billable codes 
more accurately describe, recognize, and make payment for non-face-to-
face care management services furnished by practitioners and clinical 
staff to particular patient populations.
    We view ongoing refinements to payment for care management services 
as part of a broader strategy to incorporate input and information 
gathered from research, initiatives, and demonstrations conducted by 
CMS and other public and private stakeholders, the work of all parties 
involved in the potentially misvalued code initiative, and, more 
generally, from the public at large. Based on input and information 
gathered from these sources, we are considering several potential 
refinements that would continue our efforts to improve the accuracy of 
PFS payments. In this section, we discuss these potential refinements.
1. Improved Payment for the Professional Work of Care Management 
Services
    Although both the TCM and CCM services describe certain aspects of 
professional work, some stakeholders have suggested that neither of 
these new sets of codes nor the inputs used in their valuations 
explicitly account for all of the services and resources associated 
with the more extensive cognitive work that primary care physicians and 
other practitioners perform in planning and thinking critically about 
the individual chronic care needs of particular subsets of Medicare 
beneficiaries. Stakeholders assert that the time and intensity of the 
cognitive efforts are in addition to the work typically required to 
supervise and manage the clinical staff associated with the current TCM 
and CCM codes. Similarly, we continue to receive requests from a few 
stakeholders for CMS to lead efforts to revise the current CPT E/M 
codes or construct a new set of E/M codes. The goal of such efforts 
would be to better describe and value the physician work (time and 
intensity) specific to primary care and other cognitive specialties in 
the context of complex care of patients relative to the time and 
intensity of the procedure-oriented care physicians and practitioners, 
who use the same codes to report E/M services. Some of these 
stakeholders have suggested that in current medical practice, many 
physicians, in addition to the time spent treating acute illnesses, 
spend substantial time working toward optimal outcomes for patients 
with chronic conditions and patients they treat episodically, which can 
involve additional work not reflected in the codes that describe E/M 
services since that work is not typical across the wide range of 
practitioners that report the same codes. According to these groups, 
this work involves medication reconciliation, the assessment and 
integration of numerous data points, effective coordination of care 
among multiple other clinicians, collaboration with team members, 
continuous development and modification of care plans, patient or 
caregiver education, and the communication of test results.
    We agree with stakeholders that it is important for Medicare to use 
codes that accurately describe the services furnished to Medicare 
beneficiaries and to accurately reflect the relative resources involved 
with furnishing those services. Therefore, we are interested in 
receiving public comments on ways to recognize the different resources 
(particularly in cognitive work) involved in delivering broad-based, 
ongoing treatment, beyond those resources already incorporated in the 
codes that describe the broader range of E/M services. The resource 
costs of this work may include the time and intensity related to the 
management of both long-term and, in some cases, episodic conditions. 
In order to appropriately recognize the different resource costs for 
this additional cognitive work within the structure of PFS resource-
based payments, we are particularly interested in codes that could be 
used in addition to, not instead of, the current E/M codes.
    In principle, these codes could be similar to the hundreds of 
existing add-on codes that describe additional resource costs, such as 
additional blocks or slides in pathology services, additional units of 
repair in dermatologic procedures, or additional complexity in 
psychotherapy services. For example, these codes might allow for the 
reporting of the additional time and intensity of the cognitive work 
often undertaken by primary care and other cognitive specialties in 
conjunction with an evaluation and management service, much like add-on 
codes for certain procedures or diagnostic test describe the additional 
resources sometimes involved in furnishing those services. Similar to 
the CCM code, the codes might describe the increased resources used 
over a longer period of time than during one patient visit. For 
example, the add-on codes could describe the professional time in 
excess of 30 minutes and/or a certain set of furnished services, per 
one calendar month for a single patient to coordinate care, provide 
patient or caregiver education, reconcile and manage medications, 
assess and integrate data, or develop and modify care plans. Such 
activity may be particularly relevant for the care of patients with 
multiple or complicated chronic or acute conditions and should 
contribute to optimal patient outcomes, including more coordinated, 
safer care.
    Like CCM, we would require that the patient have an established 
relationship with the billing professional; and additionally, the use 
of an add-on code would require the extended professional resources to 
be reported with another

[[Page 41710]]

separately payable service. However, in contrast to the CCM code, the 
new codes might be reported based on the resources involved in 
professional work, instead of the resource costs in terms of clinical 
staff time. The codes might also apply broadly to patients in a number 
of different circumstances, and would not necessarily make reporting 
the code(s) contingent on particular business models or technologies 
for medical practices. We are interested in stakeholder comments on the 
kinds of services that involve the type of cognitive work described 
above and whether or not the creation of particular codes might improve 
the accuracy of the relative values used for such services on the PFS. 
Finally, we are interested in receiving information from stakeholders 
on the overlap between the kinds of cognitive resource costs discussed 
above and those already accounted for through the currently payable 
codes that describe CCM and other care management services.
    We strongly encourage stakeholders to comment on this topic in 
order to assist us in developing potential proposals to address these 
issues through rulemaking in CY 2016 for implementation in CY 2017. We 
anticipate using this approach, which would parallel our multi-year 
approach for implementing CCM and TCM services, in order to facilitate 
broader input from stakeholders regarding details of implementing such 
codes, including their structure and description, valuation, and any 
requirements for reporting.
2. Establishing Separate Payment for Collaborative Care
    We believe that the care and management for Medicare beneficiaries 
with multiple chronic conditions, a particularly complicated disease or 
acute condition, or common behavioral health conditions often requires 
extensive discussion, information-sharing and planning between a 
primary care physician and a specialist (for example, with a 
neurologist for a patient with Alzheimer's disease plus other chronic 
diseases). We note that for CY 2014, CPT created four codes that 
describe interprofessional telephone/internet consultative services 
(CPT codes 99446-99449). Because Medicare pays for telephone 
consultations with or about a beneficiary as a part of other services 
furnished to the beneficiary, we currently do not make separate payment 
for these services. We note that such interprofessional consultative 
services are distinct from the face-to-face visits previously reported 
to Medicare using the consultation codes, and we refer the reader to 
the CY 2010 PFS final rule for information regarding Medicare payment 
policies for those services (74 FR 61767).
    However, in considering how to improve the accuracy of our payments 
for care coordination particularly for patients requiring more 
extensive care, we are seeking comment on how Medicare might accurately 
account for the resource costs of a more robust interprofessional 
consultation within the current structure of PFS payment. For example, 
we would be interested in stakeholders' perspectives regarding whether 
there are conditions under which it might be appropriate to make 
separate payment for services like those described by these CPT codes. 
We are interested in stakeholder input regarding the parameters of, and 
resources involved in these collaborations between a specialist and 
primary care practitioner, especially in the context of the structure 
and valuation of current E/M services. In particular, we are interested 
in comments about how these collaborations could be distinguished from 
the kind of services included in other E/M services, how these services 
could be described if stakeholders believe the current CPT codes are 
not adequate, and how these services should be valued on the PFS. We 
are also interested in comments on whether we should tie those 
interprofessional consultations to a beneficiary encounter and on 
developing appropriate beneficiary protections to ensure that 
beneficiaries are fully aware of the involvement of the specialist in 
the beneficiary's care and the associated benefits of the collaboration 
between the primary care physician and the specialist physician prior 
to being billed for such services.
    Additionally, we are seeking comment on whether this kind of care 
might benefit from inclusion in a CMMI model that would allow Medicare 
to test its effectiveness with a waiver of beneficiary financial 
liability and/or variation of payment amounts for the consulting and 
the primary care practitioners. Without such protections, beneficiaries 
could be responsible for coinsurance for services of physicians whose 
role in the beneficiary's care is not necessarily understood by the 
beneficiary. Finally, we also are seeking comment on key technology 
supports needed to support collaboration between specialist and primary 
care practitioners in support of high quality care management services, 
on whether we should consider including technology requirements as part 
of any proposed services, and on how such requirements could be 
implemented in a way that minimizes burden on providers. We strongly 
encourage stakeholders to comment on this topic in order to assist us 
in developing potential proposals to address these issues through 
rulemaking in CY 2016 for implementation in CY 2017. We anticipate 
using this approach, which would parallel our multi-year approach for 
implementing CCM and TCM services, in order to facilitate broader input 
from stakeholders regarding details of implementing such codes, 
including their structure and description, valuation, and any 
requirements for reporting.
a. Collaborative Care Models for Beneficiaries With Common Behavioral 
Health Conditions
    In recent years, many randomized controlled trials have established 
an evidence base for an approach to caring for patients with common 
behavioral health conditions called ``Collaborative Care.'' 
Collaborative care typically is provided by a primary care team, 
consisting of a primary care provider and a care manager, who works in 
collaboration with a psychiatric consultant, such as a psychiatrist. 
Care is directed by the primary care team and includes structured care 
management with regular assessments of clinical status using validated 
tools and modification of treatment as appropriate. The psychiatric 
consultant provides regular consultations to the primary care team to 
review the clinical status and care of patients and to make 
recommendations. Several resources have been published that describe 
collaborative care models in greater detail and assess their impact, 
including pieces from the University of Washington (http://aims.uw.edu/
), the Institute for Clinical and Economic Review (http://ctaf.org/reports/integration-behavioral-health-primary-care), and the Cochrane 
Collaboration (http://www.cochrane.org/CD006525/DEPRESSN_collaborative-care-for-people-with-depression-and-anxiety).
    Because this particular kind of collaborative care model has been 
tested and documented in medical literature, we are particularly 
interested in seeking comment on how coding under the PFS might 
facilitate appropriate valuation of the services furnished under such a 
collaborative care model. As these kinds of collaborative models of 
care become more prevalent, we will evaluate potential refinements to 
the PFS to account for the provision of services through such a model. 
We are seeking information to assist us in considering refinements to 
coding and payment to

[[Page 41711]]

address this model in particular. We also would assess application of 
the collaborative care model for other diagnoses and treatment 
modalities. For example, we seek comments on how a code similar to the 
CCM code applicable to multiple diagnoses and treatment plans could be 
used to describe collaborative care services, as well as other 
interprofessional services and could be appropriately valued and 
reported within the resource-based relative value PFS system, and how 
the resources involved in furnishing such services could be 
incorporated into the current set of PFS codes without overlap. We also 
request input on whether requirements similar to those used for CCM 
services should apply to a new collaborative care code, and whether 
such a code could be reported in conjunction with CCM or other E/M 
services. For example, we might consider whether the code should 
describe a minimum amount of time spent by the psychiatric consultant 
for a particular patient per one calendar month and be complemented by 
either the CCM or other care management code to support the care 
management and primary care elements of the collaborative care model. 
As with our discussion on interprofessional consultation in this 
section of the proposed rule, because the patient may not have direct 
contact with the psychiatric consultant, we seek comment on whether 
and, if so, how written consent for the non-face-to-face services 
should be required prior to practitioners reporting any new 
interprofessional consultation code or the care management code.
    We are also seeking comment on appropriate care delivery 
requirements for billing, the appropriateness of CCM technology 
requirements or other technology requirements for these services, 
necessary qualifications for psychiatric consultants, and whether or 
not there are particular conditions for which payment would be more 
appropriate than others; as well as how these services may interact 
with quality reporting, the resource inputs we might use to value the 
services under the PFS (specifically, work RVUs, time, and direct PE 
inputs), and whether or not separate codes should be developed for the 
psychiatric consultant and the care management components of the 
service.
    We are also seeking comment on whether this kind of care model 
should be implemented through a CMMI demonstration that would allow 
Medicare to test its effectiveness with a waiver of beneficiary 
financial liability and/or variation of payment methodology and amounts 
for the psychiatric consultant and the primary care physician. Again, 
we strongly encourage stakeholders to comment on this topic in order to 
assist us in developing potential proposals to address these issues 
through rulemaking in CY 2016 for implementation in CY 2017.
3. CCM and TCM Services
a. Reducing Administrative Burden for CCM and TCM Services
    In CY 2013, we implemented separate payment for TCM services, and 
in CY 2015, we implemented separate payment for CCM services. Both have 
many service elements and billing requirements that the physician or 
nonphysician practitioner must satisfy in order to fully furnish these 
services and to report these codes (77 FR 68989, 79 FR 67728). These 
elements and requirements are relatively extensive and generally exceed 
those for other E/M and similar services. Since the implementation of 
these services, some practitioners have stated that the service 
elements and billing requirements are too burdensome, and suggested 
that they interfere with their ability to provide these care management 
services to their patients who could benefit from them. In light of 
this feedback from the physician and practitioner community, we are 
soliciting comments on steps that we could take to further improve 
beneficiary access to TCM and CCM services. Our aims in implementing 
separate payment for these services are that Medicare practitioners are 
paid appropriately for the services they furnish, and that 
beneficiaries receive comprehensive care management that benefits their 
long term health outcomes. However, we understand that excessive 
requirements on practitioners could possibly undermine the overall 
goals of the payment policies. We are interested in stakeholder input 
in how we can best balance access to these services and practitioner 
burdens such that Medicare beneficiaries may obtain the full benefit of 
these services.
b. Payment for CPT Codes Related to CCM Services
    As we stated in the CY 2015 PFS final rule (79 FR 67719), we 
believe that Medicare beneficiaries with two or more chronic conditions 
as defined under the CCM code can benefit from the care management 
services described by that code, and we want to make this service 
available to all such beneficiaries. As with most services paid under 
the PFS, we recognize that furnishing CCM services to some 
beneficiaries will require more resources and some less; but we value 
and make payment based upon the typical service. Because CY 2015 is the 
first year for which we are making separate payment for CCM services, 
we are seeking information regarding the circumstances under which this 
service is furnished. This information includes the clinical status of 
the beneficiaries receiving the service and the resources involved in 
furnishing the service, such as the number of documented non-face-to-
face minutes furnished by clinical staff in the months the code is 
reported. We would be interested in examining such information in order 
to identify the range of minutes furnished over those months as well as 
the distribution of the number of minutes within the total volume of 
services. We are also seeking objective data regarding the resource 
costs associated with furnishing the services described by this code. 
As we review that information, in addition to our own claims data, we 
will consider any changes in payment and coding that may be warranted 
in the coming years, including the possibility of establishing separate 
payment amounts and making Medicare payment for the related CPT codes, 
such as the complex care coordination codes, CPT codes 99487 and 99489.

F. Target for Relative Value Adjustments for Misvalued Services

    Section 220(d) of the Protecting Access to Medicare Act of 2014 
(PAMA) (Pub. L. 113-93, enacted on April 1, 2014) added a new 
subparagraph at section 1848(c)(2) of the Act to establish an annual 
target for reductions in PFS expenditures resulting from adjustments to 
relative values of misvalued codes. Under section 1848(c)(2)(O)(ii) of 
the Act, if the estimated net reduction in expenditures for a year is 
equal to or greater than the target for the year, reduced expenditures 
attributable to such adjustments shall be redistributed in a budget-
neutral manner within the PFS in accordance with the existing budget 
neutrality requirement under section 1848(c)(2)(B)(ii)(II) of the Act. 
The provision also specifies that the amount by which such reduced 
expenditures exceeds the target for a given year shall be treated as a 
net reduction in expenditures for the succeeding year, for purposes of 
determining whether the target has been met for that subsequent year. 
Section 1848(c)(2)(O)(iv) of the Act defines a target recapture amount 
as the amount by which the target for the year exceeds the estimated 
net reduction in expenditures under the PFS resulting from adjustments 
to RVUs for misvalued codes. Section 1848(c)(2)(O)(iii) of the

[[Page 41712]]

Act specifies that, if the estimated net reduction in PFS expenditures 
for the year is less than the target for the year, an amount equal to 
the target recapture amount shall not be taken into account when 
applying the budget neutrality requirements specified in section 
1848(c)(2)(B)(ii)(II) of the Act. Section 220(d) of the PAMA applied to 
calendar years (CYs) 2017 through 2020 and set the target under section 
1848(c)(2)(O)(v) of the Act at 0.5 percent of the estimated amount of 
expenditures under the PFS for each of those 4 years.
    Section 202 of the Achieving a Better Life Experience Act of 2014 
(ABLE) (Division B of Pub. L. 113-295, enacted December 19, 2014)) 
amended section 1848(c)(2)(O) of the Act to accelerate the application 
of the PFS expenditure reduction target to CYs 2016, 2017, and 2018, 
and to set a 1 percent target for CY 2016 and 0.5 percent for CYs 2017 
and 2018. As a result of these provisions, if the estimated net 
reduction for a given year is less than the target for that year, 
payments under the fee schedule will be reduced.
    In this section, we are proposing a methodology to implement this 
statutory provision in a manner consistent with the broader statutory 
construct of the PFS. In developing this proposed methodology, we have 
identified several aspects of our approach for which we are 
specifically seeking comment. We have organized this discussion by 
identifying and explaining these aspects in particular but we are 
seeking comment on all aspects of our proposal.
1. Distinguishing ``Misvalued Code'' Adjustments From Other RVU 
Adjustments
    The potentially misvalued code initiative has resulted in changes 
in PFS payments in several ways. First, potentially misvalued codes 
have been identified, reviewed, and revalued through notice and comment 
rulemaking. However, in many cases, the identification of particular 
codes as potentially misvalued has led to the review and revaluation of 
related codes, and frequently, to revisions to the underlying coding 
for large sets of related services. Similarly, the review of individual 
codes has initiated reviews and proposals to make broader adjustments 
to values for codes across the PFS, such as when the review of a series 
of imaging codes prompted a RUC recommendation and CMS proposal to 
update the direct PE inputs for imaging services to assume digital 
instead of film costs. This change, originating through the misvalued 
code initiative, resulted in a significant reduction in RVUs for a 
large set of PFS services, even though the majority of affected codes 
were not initially identified through potentially misvalued code 
screens. Finally, due to both the relativity inherent in the PFS 
ratesetting process and the budget neutrality requirements specified in 
section 1848(c)(2)(B)(ii)(II) of the Act, adjustments to the RVUs for 
individual services necessarily result in the shifting of RVUs to broad 
sets of other services across the PFS.
    To implement the PFS expenditure reduction target provisions under 
section 1848(c)(2)(O) of the Act, we must identify a subset of the 
adjustments in RVUs for a year to reflect an estimated ``net 
reduction'' in expenditures. Therefore, we dismissed the possibility of 
including all changes in RVUs for a year in calculating the estimated 
net reduction in PFS expenditures, even though we believe that the 
redistributions in RVUs to other services are an important aspect of 
the potentially misvalued code initiative. Conversely, we similarly 
considered the possibility of limiting the calculation of the estimated 
net reduction in expenditures to reflect RVU adjustments made to the 
codes formally identified as ``potentially misvalued.'' We do not 
believe that calculation would reflect the significant changes in 
payments that have directly resulted from the review and revaluation of 
misvalued codes under section 1848(c)(2) of the Act. We further 
considered whether to include only those codes that underwent a 
comprehensive review (work and PE). As we previously have stated (76 FR 
73057), we believe that a comprehensive review of the work and PE for 
each code leads to the more accurate assignment of RVUs and appropriate 
payments under the PFS than do fragmentary adjustments for only one 
component. However, if we calculated the net reduction in expenditures 
using revisions to RVUs only from comprehensive reviews, the 
calculation would not include changes in PE RVUs that result from 
proposals like the film-to-digital change for imaging services, which 
not only originated from the review of potentially misvalued codes, but 
substantially improved the accuracy of PFS payments faster and more 
efficiently than could have been done through the multiple-year process 
required to complete a comprehensive review of all imaging codes.
    After considering these options, we believe that the best approach 
is to define the reduction in expenditures as a result of adjustments 
to RVUs for misvalued codes to include the estimated pool of all 
services with revised input values. This would limit the pool of RVU 
adjustments used to calculate the net reduction in expenditures to 
those for the services for which individual, comprehensive review or 
broader proposed adjustments have resulted in changes to service-level 
inputs of work RVUs, direct PE inputs, or MP RVUs, as well as services 
directly affected by changes to coding for related services. For 
example, coding changes in certain codes can sometimes necessitate 
revaluations for related codes that have not been reviewed as misvalued 
codes, because the coding changes have also affected the scope of the 
related services. This definition would incorporate all reduced 
expenditures from revaluations for services that are deliberately 
addressed as potentially misvalued codes, as well as those for services 
with broad-based adjustments like film-to-digital and services that are 
redefined through coding changes as a result of the review of misvalued 
codes.
    Because the annual target is calculated by measuring changes from 
one year to the next, we also considered how to account for changes in 
values that are best measured over 3 years, instead of 2 years. Under 
our current process, the overall change in valuation for many misvalued 
codes is measured across values for 3 years: The original value in the 
first year, the interim final value in the second year, and the 
finalized value in the third year. As we describe in section II.I.2. of 
this proposed rule, our misvalued code process has been to establish 
interim final RVUs for the potentially misvalued, new, and revised 
codes in the final rule with comment period for a year. Then, during 
the 60-day period following the publication of the final rule with 
comment period, we accept public comment about those valuations. For 
the final rule with comment period for the subsequent year, we consider 
and respond to public comments received on the interim final values, 
and make any appropriate adjustments to values based on those comments. 
However, the straightforward calculation of the target would only 
compare changes between 2 years and not among 3 years, so the 
contribution of a particular change towards the target for any single 
year would be measured against only the preceding year without regard 
to the overall change that takes place over 3 years.
    For recent years, interim final values for misvalued codes (year 2) 
have generally reflected reductions relative to original values (year 
1), and for most codes, the interim final values (year 2) are 
maintained and finalized (year 3). However, when values for particular

[[Page 41713]]

codes have changed between the interim final (year 2) and final values 
(year 3) based on public comment, the general tendency has been that 
codes increase in the final value (year 3) relative to the interim 
final value (year 2), even in cases where the final value (year 3) 
represents a decrease from the original value (year 1). Therefore, for 
these codes, the year 2 changes compared to year 1 would risk over-
representing the overall reduction, while the year 3 to year 2 changes 
would represent an increase in value. If there were similar targets in 
every PFS year, and a similar number of misvalued code changes made on 
an interim final basis, the incongruence in measuring what is really a 
3-year change in 2-year increments might not be particularly 
problematic since each year's calculation would presumably include a 
similar number of codes measured between years 1 and 2 and years 2 and 
3.
    However, including changes that take place over 3 years is 
particularly problematic for calculating the target for CY 2016 for two 
reasons. First, CY 2015 was the final full year of establishing interim 
final values for all new, revised, and potentially misvalued codes. 
Starting with this proposed rule, we are proposing and finalizing 
values for a significant portion of misvalued codes during one calendar 
year. Therefore, CY 2015 will include a disproportionate number of 
services that would be measured between years 2 and 3 relative to the 
services measured between 1 and 2 years. Second, because there was no 
target for CY 2015, any reductions that occurred on an interim final 
basis for CY 2015 were not counted toward achievement of a target. If 
we were to include any upward adjustments made to these codes based on 
public comment as ``misvalued code'' changes for CY 2016, we would 
effectively be counting the service-level increases for 2016 (year 3) 
relative to 2015 (year 2) against achievement of the target without any 
consideration to the service-level changes relative to 2014 (year 1), 
even in cases where the overall change in valuation was negative.
    Therefore, we are proposing to exclude code-level input changes for 
CY 2015 interim final values from the calculation of the CY 2016 
misvalued code target since the misvalued change occurred over multiple 
years, including years not applicable to the misvalued code target 
provision.
    We note that the impact of interim final values in the calculation 
of targets for future years will be diminished as we transition to 
proposing values for almost all new, revised, and potentially misvalued 
codes in the proposed rule. We anticipate a smaller number of interim 
final values for CY 2016 relative to CY 2015. For calculation of the CY 
2018 target, we anticipate almost no impact based on misvalued code 
adjustments that occur over multiple years.
    The list of codes with proposed changes for CY 2016 included under 
this proposed definition of ``adjustments to RVUs for misvalued codes'' 
is available on the CMS Web site under downloads for the CY 2016 PFS 
proposed rule with comment period at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
2. Calculating ``Net Reduction''
    Once the RVU changes attributable to misvalued codes are 
identified, estimated net reductions would be calculated summing the 
decreases and offsetting any applicable increases in valuation within 
the changes defined as misvalued, as described above. Because the 
provision only explicitly addresses reductions, and we recognize many 
stakeholders will want to maximize the overall magnitude of the 
measured reductions in order to prevent an overall reduction to the PFS 
conversion factor, we considered the possibility of ignoring the 
applicable increases in valuation in the calculation of net reduction. 
However, we believe that the requirement to calculate ``net'' 
reductions implies that we are to take into consideration both 
decreases and increases. Additionally, we believe this approach may be 
the only practical one due to the presence of new and deleted codes on 
an annual basis.
    For example, a service that is described by a single code in a 
given year, like intensity-modulated radiation therapy (IMRT) treatment 
delivery, could be addressed as a misvalued service in a subsequent 
year through a coding revision that splits the service into two codes, 
``simple'' and ``complex.'' If we counted only the reductions in RVUs, 
we would count only the change in value between the single code and the 
new code that describes the ``simple'' treatment delivery code. In this 
scenario, the change in value from the single code to the new 
``complex'' treatment delivery code would be ignored, so that even if 
there were an increase in the payment for IMRT treatment delivery 
service(s) overall, the mere change in coding would contribute 
inappropriately to a ``net reduction in expenditures.'' Therefore, we 
are proposing to net the increases and decreases in values for 
services, including those for which there are coding revisions, in 
calculating the estimated net reduction in expenditures as a result of 
adjustments to RVUs for misvalued codes.
3. Measuring the Adjustments
    The most straightforward method to estimating the net reduction in 
expenditures due to adjustments to RVUs for misvalued codes is to 
compare the total RVUs of the relevant set of codes (by volume) in the 
current year to the update year, and divide that by the total RVUs for 
all codes (by volume) for the current year. This approach is intuitive 
and relatively easy to replicate.
    However, this method is imprecise for several reasons. First, and 
most significantly, the code-level PE RVUs in the update year include 
either increases due to the redistribution of RVUs from other services 
or reductions due to increases in PE for other services. Second, 
because relativity for work RVUs is maintained through annual 
adjustments to the CF, the precise value of a work RVU in any given 
year is adjusted based on the total number of work RVUs in that year. 
Finally, relativity for the MP RVUs is maintained by both 
redistribution of MP RVUs and adjustments to the CF, when necessary 
(under our proposed methodology this is true annually; based on our 
established methodology the redistribution of the MP RVUs only takes 
place once every 5 years and the CF is adjusted otherwise). Therefore, 
to make a more precise assessment of the net reduction in expenditures 
that are the result of adjustments to the RVUs for misvalued codes, we 
would need to compare, for the included codes, the update year's total 
work RVUs (by volume), direct PE RVUs (by volume), indirect PE RVUs (by 
volume), and MP RVUs (by volume) to the same RVUs in the current year, 
prior to the application of any scaling factors or adjustments. This 
would make for a direct comparison between years.
    However, this approach would mean that the calculation of the net 
reduction in expenditures would occur within various steps of the PFS 
ratesetting methodology. While we believe that this approach would be 
transparent and external stakeholders could replicate this method, it 
may be difficult and time-consuming for stakeholders to do so. We also 
noted that when we modeled the interaction of the phase-in legislation 
and the calculation of the target using this approach during the 
development of this proposal, there were methodological challenges in 
making these calculations. When we simulated the two approaches using

[[Page 41714]]

information from prior PFS years, we found that both approaches 
generally resulted in similar estimated net reductions. After 
considering these options, we are proposing to use the approach of 
comparing the total RVUs (by volume) for the relevant set of codes in 
the current year to the update year, and divide that result by the 
total RVUs (by volume) for the current year. We seek comment on whether 
comparing the update year's work RVUs, direct PE RVUs, indirect PE 
RVUs, and MP RVUs for the relevant set of codes (by volume) prior to 
the application of any scaling factors or adjustments to those of the 
current year would be a preferable methodology for determining the 
estimated net reduction.
4. Estimating the Target for CY 2016
    CY 2016 represents a transition year in our new process of 
proposing values for new, revised and misvalued codes in the proposed 
rule, rather than establishing them as interim final in the final rule 
with comment period. For CY 2016, we will propose values for which we 
had the RUC's recommendations by our deadline of February 10th, and 
will establish interim final values for any codes received after the 
February 10th deadline but in time for us to value for the final rule. 
For CY 2016, there will still be a significant number of codes valued 
not in the proposed rule but in the final rule with comment period. In 
future years (with the exception of entirely new services), all codes, 
even those for which we do not receive RUC recommendations in time for 
the proposed rule, will be in the proposed rule for the subsequent year 
and not in the final rule with comment period. Therefore, for CY 2016, 
unlike for the targets for CY 2017 and CY 2018, because we will not be 
able to calculate a realistic estimate of the target amount at the time 
the proposed rule is published, we will not incorporate the impact of 
the target into the calculation of the proposed PFS payment rates. 
However, because we would apply any required budget neutrality 
adjustment related to this provision to the conversion factor, the 
proposed RVUs for individual services in this proposed rule would be 
the same, regardless of the estimate of the target. We also refer 
readers to the regulatory impact analysis section of this proposed rule 
for an interim estimate of the estimated net reduction in expenditures 
relative to the 1 percent target for CY 2016, based solely on the 
proposed changes in this rule.

G. Phase-in of Significant RVU Reductions

    Section 1848(c)(7) of the Act, as added by section 220(e) of the 
PAMA, also specifies that for services that are not new or revised 
codes, if the total RVUs for a service for a year would otherwise be 
decreased by an estimated 20 percent or more as compared to the total 
RVUs for the previous year, the applicable adjustments in work, PE, and 
MP RVUs shall be phased-in over a 2-year period. Although section 
220(e) of the PAMA required the phase-in to begin for 2017, section 202 
of the ABLE Act amended section 1848(c)(7) of the Act to require that 
the phase-in begin for CY 2016.
    In this section, we are proposing a methodology to implement this 
statutory provision. In developing this proposed methodology, we have 
identified several aspects of our approach for which we are 
specifically seeking comment, given the challenges inherent in 
implementing this provision in a manner consistent with the broader 
statutory construct of the PFS. We have organized this discussion by 
identifying and explaining these aspects in particular but we are 
seeking comment on all aspects of our proposal.
1. Identifying Services that are Not New or Revised Codes
    As described in this proposed rule, the statute specifies that 
services described by new or revised codes are not subject to the 
phase-in of RVUs. We believe this exclusion recognizes the reality that 
there is no practical way to phase-in over 2 years changes to RVUs that 
occur as a result of a coding change for a particular service because 
there is no relevant reference code or value on which to base the 
transition. To determine which services are described by new or revised 
codes for purposes of the phase-in provision, we are proposing to apply 
the phase-in to all services that are described by the same, unrevised 
code in both the current and update year, and to exclude codes that 
describe different services in the current and update year. This 
approach would exclude services described by new codes or existing 
codes for which the descriptors were altered substantially for the 
update year to change the services that are reported using the code. We 
would also exclude as new and revised codes those codes that describe a 
different set of services in the update year when compared to the 
current year by virtue of changes in other, related codes, or codes 
that are part of a family with significant coding revisions. For 
example, significant coding revisions within a family of codes can 
change the relationships among codes to the extent that it changes the 
way that all services in the group are reported, even if some 
individual codes retain the same number or, in some cases, the same 
descriptor. Excluding codes from the phase-in when there are 
significant revisions to the code family would also help to maintain 
the appropriate rank order among codes in the family, avoiding years 
for which RVU changes for some codes in a family are in transition 
while others were fully implemented. This proposed application of the 
phase-in would also be consistent with previous RVU transitions, 
especially for PE RVUs, for which we only applied transition values to 
those codes that described the same service in both the current and the 
update years. We would also exclude from the phase-in as new and 
revised codes those codes with changes to the global period, since the 
code in the current year would not describe the same units of service 
as the code in the update year.
2. Estimating the 20 Percent Threshold
    Because the phase-in of RVUs falls within the budget neutrality 
requirements specified in section 1848(c)(2)(B)(ii)(II) of the Act, we 
are proposing to estimate total RVUs for a service prior to the budget-
neutrality redistributions that result from implementing phase-in 
values. We recognize that the result of this approach could mean that 
some codes may not qualify for the phase-in despite a reduction in RVUs 
that is ultimately slightly greater than 20 percent due to budget 
neutrality adjustments that are made after identifying the codes that 
meet the threshold in order to reflect the phase-in values for other 
codes. We believe the only alternative to this approach is not 
practicable, since it would be circular, resulting in cyclical 
iteration.
3. RVUs in the First Year of the Phase-In
    Section 1848(c)(7) of the Act states that the applicable 
adjustments in work, PE, and MP RVUs shall be phased-in over a 2-year 
period when the RVU reduction for a code is estimated to be equal to or 
greater than 20 percent. We believe that there are two reasonable ways 
to determine the portion of the reduction to be phase-in for the first 
year. Most recent RVU transitions have distributed the values evenly 
across several years. For example, for a 2-year transition we would 
estimate the fully implemented value and set a rate

[[Page 41715]]

approximately 50 percent between the value for the current year and the 
value for the update year. We believe that this is the most intuitive 
approach to the phase-in and is likely the expectation for many 
stakeholders. However, we believe that the 50 percent phase-in in the 
first year has a significant drawback. For instance, since the statute 
establishes a 20 percent threshold as the trigger for phasing in the 
change in RVUs, under the 50 percent phase-in approach, a service that 
is estimated to be reduced by a total of 19 percent for an update year 
would be reduced by a full 19 percent in that update year, while a 
service that is estimated to be reduced by 20 percent in an update year 
would only be reduced 10 percent in that update year.
    The logical alternative approach is to consider a 19 percent 
reduction as the maximum 1-year reduction for any service not described 
by a new or revised code. This approach would be to reduce the service 
by the maximum allowed amount (that is, 19 percent) in the first year, 
and then phase in the remainder of the reduction in the second year. 
Under this approach, the code that is reduced by 19 percent in a year 
and the code that would otherwise have been reduced by 20 percent would 
both be reduced by 19 percent in the first year, and the latter code 
would see an additional 1 percent reduction in the second year of the 
phase-in. For most services, this would likely mean that the majority 
of the reduction would take place in the first year of the phase-in. 
However, for services with the most drastic reductions (greater than 40 
percent), the majority of the reduction would take place in the second 
year of the phase-in.
    After considering both of these options, we are proposing to 
consider the 19 percent reduction as the maximum 1-year reduction and 
to phase-in any remaining reduction greater than 19 percent in the 
second year of the phase-in. We believe that this approach is more 
equitable for codes with significant reductions but that are less than 
20 percent. We are seeking comment on this proposal.
4. Applicable Adjustments to RVUs
    The phase-in provision instructs that the applicable adjustments in 
work, PE, and MP RVUs be phased-in over 2 years for any service that 
would otherwise be decreased by an estimated amount equal to or greater 
than 20 percent as compared to the total RVUs for the previous year. 
However, for several thousand services, we develop separate RVUs for 
facility and nonfacility sites of service. For nearly one thousand 
other services, we develop separate RVUs for the professional and 
technical components of the service and sum those RVUs to allow for 
global billing. Therefore, for individual practitioners furnishing 
particular services to Medicare beneficiaries, the relevant changes in 
RVUs for a particular code are based on the total RVUs for a code for a 
particular setting (facility/nonfacility) or for a particular component 
(professional/technical). We believe the most straightforward and fair 
approach to addressing both the site of service differential and the 
codes with professional and technical components is to consider the 
RVUs for the different sites of service and components independently 
for purposes of identifying when and how the phase-in applies. We are 
proposing, therefore, to estimate whether a particular code meets the 
20 percent threshold for change in total RVUs by taking into account 
the total RVUs that apply to a particular setting or to a particular 
component. This would mean that if the change in total facility RVUs 
for a code met the threshold, then that change would be phased-in over 
2 years, even if the change for the total nonfacility RVUs for the same 
code would not be phased-in over 2 years. Similarly, if the change in 
the total RVUs for the technical component of a service meets the 20 
percent threshold, then that change would be phased-in over 2 years, 
even if the change for the professional component did not meet the 
threshold. (Because the global is the sum of the professional and 
technical components, the portion of the global attributable to the 
technical component would then be phased-in, while the portion 
attributable to the professional component would not be.)
    However, we note that we create the site of service differential 
exclusively by developing independent PE RVUs for each service in the 
nonfacility and facility settings. That is, for these codes, we use the 
same work RVUs and MP RVUs in both settings and vary only the PE RVUs 
to implement the difference in resources depending on the setting. 
Similarly, we use the work RVUs assigned to the professional component 
codes as the work RVUs for the service when billed globally. Like the 
codes with the site of service differential, the PE RVUs for each 
component are developed independently. The resulting PE RVUs are then 
summed for use as the PE RVUs for the code, billed globally. Since 
variation of PE RVUs is the only constant across all individual codes, 
codes with site of service differentials, and codes with professional 
and technical components, we are proposing to apply all adjustments for 
the phase-in to the PE RVUs.
    We considered alternatives to this approach. For example, for codes 
with a site of service differential, we considered applying a phase-in 
for codes in both settings (and all components) whenever the total RVUs 
in either setting reached the 20 percent threshold. However, there are 
cases where the total RVUs for a code in one setting (or one component) 
may reach the 20 percent reduction threshold, while the total RVUs for 
the other setting (or other component) are increasing. In those cases, 
applying phase-in values for work or MP RVUs would mean applying an 
additional increase in total RVUs for particular services. We also 
considered basing the phase-in of the RVUs for the component codes 
billed globally and for the codes with site of service differentials 
developing an overall, blended set of overall PE RVUs using a weighted 
average of site of service volume in the Medicare claims data. We would 
then compare the global or blended value in the prior year versus the 
global or blended value in the current year and apply the phase-in to 
the value for the current year before re-allocating the new value to 
the respective RVUs in each setting. We did not pursue this approach 
for several reasons. First, the resulting phase-in amounts would not 
relate logically to the values paid to any individual practitioner, 
except those who bill the PC/TC codes globally. Second, the approach 
would be so administratively complicated that it would likely be 
difficult to replicate or predict.
    Therefore, we have concluded that applying the adjustments to the 
PE RVUs for individual codes in order to effect the appropriate phase-
in amount is the most straightforward and fair approach to mitigate the 
impact of significant reductions of total RVUs for services furnished 
by individual practitioners. The list of codes subject to the phase-in, 
and the RVUs that result from this proposed methodology, is available 
on the CMS Web site under downloads for the CY 2016 PFS proposed rule 
with comment period at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.

[[Page 41716]]

H. Changes for Computed Tomography (CT) Under the Protecting Access to 
Medicare Act of 2014 (PAMA) (CY 2016 only)

1. Section 218(a) of the Protecting Access to Medicare Act of 2014 
(PAMA)
    Section 218(a) of PAMA is entitled ``Quality Incentives To Promote 
Patient Safety and Public Health in Computed Tomography Diagnostic 
Imaging.'' It amends the statute by reducing payment for the technical 
component (TC) (and the TC of the global fee) of the PFS service and 
the hospital outpatient prospective payment system (OPPS) payment (5 
percent in 2016 and 15 percent in 2017 and subsequent years) for 
computed tomography (CT) services identified by CPT codes 70450-70498, 
71250-71275, 72125-72133, 72191-72194, 73200-73206, 73700-73706, 74150-
74178, 74261-74263, and 75571-75574 furnished using equipment that does 
not meet each of the attributes of the National Electrical 
Manufacturers Association (NEMA) Standard XR-29-2013, entitled 
``Standard Attributes on CT Equipment Related to Dose Optimization and 
Management.''
    The statutory provision requires that information be provided and 
attested to by a supplier and a hospital outpatient department that 
indicates whether an applicable CT service was furnished that was not 
consistent with the NEMA CT equipment standard, and that such 
information may be included on a claim and may be a modifier. The 
statutory provision also provides that such information shall be 
verified, as appropriate, as part of the periodic accreditation of 
suppliers under section 1834(e) of the Act and hospitals under section 
1865(a) of the Act. Any reduced expenditures resulting from this 
provision are not budget neutral. To implement this provision, we will 
create modifier ``CT'' (Computed tomography services furnished using 
equipment that does not meet each of the attributes of the National 
Electrical Manufacturers Association (NEMA) XR-29-2013 standard). 
Beginning in 2016, claims for CT scans described by above-listed CPT 
codes (and any successor codes) that are furnished on non-NEMA Standard 
XR-29-2013-compliant CT scans must include modifier ``CT'' and that 
modifier will result in the applicable payment reduction for the 
service.

I. Valuation of Specific Codes

1. Background
    Establishing valuations for newly created and revised CPT codes is 
a routine part of maintaining the PFS. Since inception of the PFS, it 
has also been a priority to revalue services regularly to assure that 
the payment rates reflect the changing trends in the practice of 
medicine and current prices for inputs used in the PE calculations. 
Initially, this was accomplished primarily through the five-year review 
process, which resulted in revised work RVUs for CY 1997, CY 2002, CY 
2007, and CY 2012, and revised PE RVUs in CY 2001, CY 2006, and CY 
2011. Under the five-year review process, revisions in RVUs were 
proposed in a proposed rule and finalized in a final rule. In addition 
to the five-year reviews, in each year beginning with CY 2009, CMS and 
the RUC have identified a number of potentially misvalued codes using 
various identification screens, as discussed in section II.C. of this 
proposed rule. Each year, when we received RUC recommendations, our 
process has been to establish interim final RVUs for the potentially 
misvalued codes, new codes, and any other codes for which there were 
coding changes in the final rule with comment period for a year. Then, 
during the 60-day period following the publication of the final rule 
with comment period, we accept public comment about those valuations. 
For services furnished during the calendar year following the 
publication of interim final rates, we pay for services based upon the 
interim final values established in the final rule with comment period. 
In the final rule with comment period for the subsequent year, we 
consider and respond to public comments received on the interim final 
values, and make any appropriate adjustments to values based on those 
comments. We then typically finalize the values for the codes.
2. Process for Valuing New, Revised, and Potentially Misvalued Codes
    In the CY 2015 PFS final rule with comment period, we finalized a 
new process for establishing values for new, revised and potentially 
misvalued codes. Under the new process, we include proposed values for 
these services in the proposed rule, rather than establishing them as 
interim final in the final rule with comment period. CY 2016 represents 
a transition year for this new process. For CY 2016, we are proposing 
new values in the proposed rule for the codes for which we received 
complete RUC recommendations by February 10, 2015. For recommendations 
regarding any new or revised codes received after the February 10, 2015 
deadline, including updated recommendations for codes included in this 
proposed rule, we will establish interim final values in the final rule 
with comment period, consistent with previous practice. We note that we 
will consider all comments received in response to proposed values for 
codes in this rule, including alternative recommendations to those used 
in developing the proposed rule. In other words, if the RUC or other 
interested stakeholders submit public comments that include new 
recommendations for codes for which we propose values as part of this 
proposed rule, we would consider those recommendations in developing 
final values for the codes in the CY 2016 PFS final rule with comment.
    Beginning with valuations for CY 2017, the new process will be 
applicable to all codes. That is, beginning with rulemaking for CY 
2017, we will propose values for the vast majority of new, revised, and 
potentially misvalued codes and consider public comments before 
establishing final values for the codes; use G-codes as necessary to 
facilitate continued payment for certain services for which we do not 
receive recommendations in time to propose values; and adopt interim 
final values in the case of wholly new services for which there are no 
predecessor codes or values and for which we do not receive 
recommendations in time to propose values.
    For CY 2016, we received RUC recommendations prior to February 10, 
2015 for many new, revised and potentially misvalued codes and have 
included proposed values for these codes in this proposed rule. 
However, the RUC recommendations included CPT tracking codes instead of 
the actual 2016 CPT codes that will first be made available to the 
public subsequent to the publication of this proposed rule. Because CPT 
procedure codes are 5 alpha-numeric characters but CPT tracking codes 
typically have 6 or 7 alpha-numeric characters and CMS systems only 
utilize 5-character HCPCS codes, we have developed and used alternative 
5-character placeholder codes for this proposed rule. For the 
convenience of stakeholders and commenters with access to the CPT 
tracking codes, we have displayed a crosswalk from the 5-character 
placeholder codes to the CPT tracking codes on our Web site under 
downloads for the CY 2016 PFS proposed rule at http://www.cms.gov/PhysicianFeeSched/downloads/. The final CPT codes will be included in 
the CY 2016 final rule with comment period.
3. Methodology for Establishing Work RVUs
    We conducted a review of each code identified in this section and 
reviewed the current work RVU (if any), RUC-

[[Page 41717]]

recommended work RVUs, intensity, time to furnish the preservice, 
intraservice, and postservice activities, as well as other components 
of the service that contribute to the value. Our review of recommended 
work RVUs and time generally includes, but is not limited to, a review 
of information provided by the RUC, HCPAC, 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 health care professionals within CMS and the federal 
government, as well as Medicare claims data. We also assessed the 
methodology and data used to develop the recommendations submitted to 
us by the RUC and other public commenters and the rationale for the 
recommendations. In the CY 2011 PFS final rule with comment period (75 
FR 73328 through 73329), we discussed a variety of methodologies and 
approaches used to develop work RVUs, including survey data, building 
blocks, crosswalk to key reference or similar codes, and magnitude 
estimation. More information on these issues is available in that rule. 
When referring to a survey, unless otherwise noted, we mean the surveys 
conducted by specialty societies as part of the formal RUC process. 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 used in the building block approach may include preservice, 
intraservice, or postservice time and post-procedure visits. When 
referring to a bundled CPT code, the building block components could be 
the CPT codes that make up the bundled code and the inputs associated 
with those codes. 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 PFS 
without explicitly valuing the components of that work.
    The PFS incorporates cross-specialty and cross-organ system 
relativity. Valuing services requires an assessment of relative value 
and takes into account the clinical intensity and time required to 
furnish a service. In selecting which methodological approach will best 
determine the appropriate value for a service, we consider the current 
and recommended 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 preservice time 
recommendations for new and revised CPT codes, the RUC created 
standardized preservice time packages. The packages include preservice 
evaluation time, preservice positioning time, and preservice scrub, 
dress and wait time. Currently there are six preservice 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 three preservice 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 
value services appropriately when they have common billing patterns. 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 preservice evaluation and postservice time. We 
believe that at least one-third of the work time in both the preservice 
evaluation and postservice period is duplicative of work furnished 
during the E/M visit. Accordingly, in cases where we believe that the 
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. Preservice evaluation time and postservice time both have a 
long-established intensity of work per unit of time (IWPUT) of 0.0224, 
which means that 1 minute of preservice evaluation or postservice time 
equates to 0.0224 of a work RVU. Therefore, in many cases when we 
remove 2 minutes of preservice time and 2 minutes of postservice time 
from a procedure to account for the overlap with the same day E/M 
service, we also remove a work RVU of 0.09 (4 minutes x 0.0224 IWPUT) 
if we do not believe the overlap in time has already been accounted for 
in the work RVU. The 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.
    Table 11 contains a list of proposed work RVUs for all codes with 
RUC recommendations received by February 10, 2015. Proposed work RVUs 
that vary from those recommended by the RUC or for which we do not have 
RUC recommendations are addressed in the portions of this section that 
are dedicated to particular codes.
    The work RVUs and other payment information for all CY 2016 payable 
codes are available in Addendum B, including codes for which we have 
proposed changes in this proposed rule subject to public comment. 
Addendum B is available on the CMS Web site under downloads for the CY 
2016 PFS proposed rule at http://www.cms.gov/PhysicianFeeSched/downloads/. The proposed time values for all CY 2016 codes are listed 
in a file called ``CY 2016 PFS Work Time,'' available on the CMS Web 
site under downloads for the CY 2016 PFS proposed rule at http://www.cms.gov/PhysicianFeeSched/downloads/.
4. Methodology for Establishing the Direct PE Inputs Used to Develop PE 
RVUs
a. Background
    On an annual basis, the RUC provides CMS with recommendations 
regarding PE inputs for new, revised, and potentially misvalued codes. 
We review the RUC-recommended direct PE inputs on a code-by-code basis. 
Like our review of recommended work RVUs, our review of recommended 
direct PE inputs generally includes, but is not limited to, a review of 
information provided by the RUC, HCPAC, 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 health care professionals within CMS and the federal 
government, as well as Medicare claims data. We also assess the 
methodology and data used to develop the recommendations submitted to 
us by the RUC and other public commenters and the rationale for the 
recommendations. When we determine that the RUC recommendations 
appropriately estimate the direct PE inputs (clinical labor, disposable 
supplies, and medical equipment) required for the typical service, 
consistent with the principles of relativity, and reflect our payment 
policies, we use those direct PE inputs to value a service. If not, we 
refine the recommended PE inputs to better reflect our estimate of the 
PE resources required for the service. We also confirm whether CPT 
codes should have facility and/or nonfacility direct PE inputs and 
refine the inputs accordingly.
    Our review and refinement of RUC-recommended direct PE input 
includes many refinements that are common

[[Page 41718]]

across codes as well as refinements that are specific to particular 
services. Table 13 details our refinements of the RUC's direct PE 
recommendations at the code-specific level. In this proposed rule, we 
address several refinements that are common across codes, and 
refinements to particular codes are addressed in the portions of this 
section that are dedicated to particular codes. We note that for each 
refinement, we indicate the impact on direct costs for that service. We 
point out that, on average, in any case where the impact on the direct 
cost for a particular refinement is $0.32 or less, the refinement has 
no impact on the final PE RVUs. This calculation considers both the 
impact on the direct portion of the PE RVU as well as the impact on the 
indirect allocator for the average service. We also note that nearly 
half of the refinements listed in Table 13 result in changes under the 
$0.32 threshold and are unlikely to result in a change to the final 
RVUs.
    We also note that the proposed direct PE inputs for CY 2016 are 
displayed in the proposed CY 2016 direct PE input database, available 
on the CMS Web site under the downloads for the CY 2016 proposed rule 
at www.cms.gov/PhysicianFeeSched/. The inputs displayed there have also 
been used in developing the CY 2016 PE RVUs as displayed in Addendum B 
of this proposed rule.
b. Common Refinements
(1) Changes in Work Time
    Some direct PE inputs are directly affected by revisions in work 
time. Specifically, changes in the intraservice portions of the work 
time and changes in the number or level of postoperative visits 
associated with the global periods result in corresponding changes to 
direct PE inputs. Although the direct PE input recommendations 
generally correspond to the work time values associated with services, 
we believe that in some cases inadvertent discrepancies between work 
time values and direct PE inputs should be refined in the establishment 
of proposed direct PE inputs. In other cases, CMS refinement of 
recommended proposed work times prompts necessary adjustments in the 
direct PE inputs.
(2) Equipment Time
    Prior to CY 2010, the 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 RUC provide 
equipment times along with the other direct PE recommendations, and we 
provided the RUC with general guidelines regarding appropriate 
equipment time inputs. We continue to appreciate the RUC's willingness 
to provide us with these additional inputs as part of its PE 
recommendations.
    In general, the equipment time inputs correspond to the service 
period portion of the clinical labor times. We have clarified this 
principle, indicating that we consider equipment time as the time 
within the intraservice period when a clinician is using the piece of 
equipment plus any additional time that the piece of equipment is not 
available for use for another patient due to its use during the 
designated procedure. For those services for which we allocate cleaning 
time to portable equipment items, because the portable equipment does 
not need to be cleaned in the room where the service is furnished, we 
do not include that cleaning time for the remaining equipment items as 
those items and the room are both available for use for other patients 
during that time. In addition, when a piece of equipment is typically 
used during follow-up post-operative visits included in the global 
period for a service, the equipment time would 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 staff 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. We also note that we believe these same assumptions 
would apply to inexpensive equipment items that are used in conjunction 
with and located in a room with non-portable highly technical equipment 
items. Some stakeholders have objected to this rationale for our 
refinement of equipment minutes on this basis. We refer readers to our 
extensive discussion in response to those objections in the CY 2012 PFS 
final rule with comment period (76 FR 73182) and the CY 2015 PFS final 
rule with comment period (79 FR 67639).
(3) Standard Tasks and Minutes for Clinical Labor Tasks
    In general, the preservice, intraservice period, and postservice 
clinical labor minutes associated with clinical labor inputs in the 
direct PE input database reflect the sum of particular tasks described 
in the information that accompanies the RUC-recommended direct PE 
inputs, commonly called the ``PE worksheets.'' For most of these 
described tasks, there are a standardized number of minutes, depending 
on the type of procedure, its typical setting, its global period, and 
the other procedures with which it is typically reported. The RUC 
sometimes recommends a number of minutes either greater than or less 
than the time typically allotted for certain tasks. In those cases, CMS 
staff reviews the deviations from the standards and any rationale 
provided for the deviations. When we do not accept the RUC-recommended 
exceptions, we refine the proposed direct PE inputs to match the 
standard times for those tasks. In addition, in cases when a service is 
typically billed with an E/M service, we remove the pre-service 
clinical labor tasks to avoid duplicative inputs and to reflect the 
resource costs of furnishing the typical service.
    In general, clinical labor tasks fall into one of the categories on 
the PE worksheets. In cases where tasks cannot be attributed to an 
existing category, the tasks are labeled ``other clinical activity.'' 
We believe that continual addition of new and distinct clinical labor 
tasks each time a code is reviewed under the misvalued code initiative 
is likely to degrade relativity between newly reviewed services and 
those with already existing inputs. To mitigate the potential negative 
impact of these additions, our staff reviews these tasks to determine 
whether they are fully distinct from existing clinical labor tasks, 
typically included for other clinically similar services under the PFS, 
and thoroughly explained in the recommendation. For those tasks that do 
not meet these criteria, we do not accept these newly recommended 
clinical labor tasks; two examples of such tasks encountered during our 
review of the recommendations include ``Enter data into laboratory 
information system, multiparameter analyses and field data entry, 
complete quality assurance documentation'' and ``Consult with 
pathologist regarding representation needed, block selection and 
appropriate technique.''
    In conducting our review of the RUC recommendations for CY 2016, we 
noted that several of the recommended times for clinical labor tasks 
associated with pathology services differed across codes, both within 
the CY 2016 recommendations and in comparison to codes currently in the 
direct PE database. We refer readers to Table 6 in section II.A.3. of 
this proposed rule where we outline our proposed standard times for 
clinical labor tasks associated with pathology services.

[[Page 41719]]

(4) Recommended Items That Are Not Direct PE Inputs
    In some cases, the PE worksheets included with the RUC 
recommendations include items that are not clinical labor, disposable 
supplies, or medical equipment that cannot be allocated to individual 
services or patients. Two examples of such items are ``emergency 
service container/safety kit'' and ``service contract.'' We have 
addressed these kinds of recommendations in previous rulemaking (78 FR 
74242), and we do not use these recommended items as direct PE inputs 
in the calculation of PE RVUs.
(5) Moderate Sedation Inputs
    In the CY 2012 PFS final rule (76 FR 73043 through 73049), we 
finalized a standard package of direct PE inputs for services where 
moderate sedation is considered inherent in the procedure. In the CY 
2015 final rule with comment period, we finalized a refinement to the 
standard package to include a stretcher for the same length of time as 
the other equipment items in the standard package. We are proposing to 
refine the RUC's direct PE recommendations to conform to these 
policies. This includes the removal of a power table where it was 
included during the intraservice period, as the stretcher takes the 
place of the table. These refinements are reflected in the final CY 
2016 PFS direct PE input database and detailed in Table 13.
(6) New Supply and Equipment Items
    The RUC generally recommends the use of supply and equipment items 
that already exist in the direct PE input database for new, revised, 
and potentially misvalued codes. Some recommendations include supply or 
equipment items that are not currently in the direct PE input database. 
In these cases, the RUC has historically recommended a new item be 
created and has facilitated our pricing of that item by working with 
the specialty societies to provide copies of sales invoices to us. We 
received invoices for several new supply and equipment items for CY 
2016. We have accepted the majority of these items and added them to 
the direct PE input database. Tables 9 and 10 detail the invoices 
received for new and existing items in the direct PE database. As 
discussed in section II.A. of this proposed rule, we encourage 
stakeholders to review the prices associated with these new and 
existing items to determine whether these prices appear to be accurate. 
Where prices appear inaccurate, we encourage stakeholders to provide 
invoices or other information to improve the accuracy of pricing for 
these items in the direct PE database. We remind stakeholders that due 
to the relativity inherent in the development of RVUs, reductions in 
existing prices for any items in the direct PE database increase the 
pool of direct PE RVUs available to all other PFS services. Tables 9 
and 10 also include the number of invoices received as well as the 
number of nonfacility allowed services for procedures that use these 
equipment items. We provide the nonfacility allowed services so that 
stakeholders will note the impact the particular price might have on PE 
relativity, as well as to identify items that are used frequently, 
since we believe that stakeholders are more likely to have better 
pricing information for items used more frequently. We are concerned 
that a single invoice may not be reflective of typical costs and 
encourage stakeholders to provide additional invoices so that we might 
identify and use accurate prices in the development of PE RVUs.
    In some cases, we do not accept the price listed on the invoice 
that accompanies the recommendation because we identify publicly 
available alternative prices or information that suggests a different 
price is more accurate. In these cases, we include this in the 
discussion of these codes. In other cases, we cannot adequately price a 
newly recommended item due to inadequate information. Sometimes, no 
supporting information regarding the price of the item has been 
included in the recommendation. In other cases, the supporting 
information does not demonstrate that the item has been purchased at 
the listed price (for example, vendor price quotes instead of paid 
invoices). In cases where the information provided on the item allows 
us to identify clinically appropriate proxy items, we might use 
existing items as proxies for the newly recommended items. In other 
cases, we have included the item in the direct PE input database 
without any associated price. Although including the item without an 
associated price means that the item does not contribute to the 
calculation of the proposed PE RVU for particular services, it 
facilitates our ability to incorporate a price once we obtain 
information and are able to do so.
(7) Service Period Clinical Labor Time in the Facility Setting
    Several of the PE worksheets included in the RUC recommendations 
contained clinical labor minutes assigned to the service period in the 
facility setting. Our proposed inputs do not include these minutes 
because the cost of clinical labor during the service period for a 
procedure in the facility setting is not considered a resource cost to 
the practitioner since Medicare makes separate payment to the facility 
for these costs.
(8) Duplicative Inputs
    Several of the PE worksheets included in the RUC recommendations 
contained time for the equipment item ``xenon light source'' (EQ167). 
Because there appear to be two special light sources already present 
(the fiberoptic headlight and the endoscope itself) in the services for 
which this equipment item was recommended, we are not proposing to 
include the time for this equipment item from these services, and are 
seeking comment on whether there is a rationale for including this 
additional light source as a direct PE input for these procedures.
5. Methodology for Establishing Malpractice RVUs
    As discussed in section II.B. of this proposed rule, our 
malpractice methodology uses a crosswalk to establish risk factors for 
new services until utilization data becomes available. Table 15 lists 
the CY 2016 HCPCS codes and their respective source codes used to set 
the proposed CY 2016 MP RVUs. The MP RVUs for these services are 
reflected in Addendum B on the CMS Web site at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.

                                                   Table 9--Invoices Received for New Direct PE Inputs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                  Estimated non-facility
                                                                                                                     Number of     allowed services for
             CPT/HCPCS Codes                       Item name            CMS Code            Average price             invoices   HCPCS codes using  this
                                                                                                                                           item
--------------------------------------------------------------------------------------------------------------------------------------------------------
31626...................................  Gold Fiducial Marker.......       SB053  135............................            1                        6

[[Page 41720]]

 
3160A, 3160B, 3160C.....................  endoscope, ultrasound             ES045  0..............................            0                      212
                                           radial probe.
3725A...................................  IVUS catheter..............       SD304  1025...........................            3                      795
3725A...................................  IVUS Catheter Sterile Cover       SD305  120............................            3                      795
3725A, 3725B............................  IVUS system................       ES047  134,025........................            3                    2,948
44385, 44386, 45330, 45331, 45332,        Video Sigmoidoscope........       ES043  215,00.........................            1                   18,058
 45333, 45334, 45335, 45338, 45340,
 45346.
44401, 45346, 45388.....................  catheter, RF ablation,            SC103  1,780..........................            1                    3,543
                                           endoscopic.
44401, 45346............................  radiofrequency generator,         EQ369  108,291.67.....................            1                      174
                                           endoscopy.
45350, 45398............................  hemorrhoidal banding system       SA115  223.50.........................            4                        3
5039D, 5039M............................  Nephroureteral Catheter....       SD306  117.90.........................            1                       70
657XG...................................  suture, nylon, 10-0........       SC104  12.17..........................            2
657XG...................................  intrastromal corneal ring..       SA120  1,145..........................            7
657XG...................................  patient/laser interface           SD307  172.50.........................            1
                                           (single--use, disposable).
657XG...................................  femtosecond laser..........       ES048  293,000........................            2
657XG...................................  incision programming              ES049  10,012.50......................            1
                                           software.
692XX...................................  earwash bottle disposable         SD308  1.72...........................            1
                                           tips.
77385, 77386, 77402, 77407, 77412.......  Power Conditioner..........       ER102  26,400.........................            2                2,198,441
7778A, 7778B, 7778C, 7778D, 7778E.......  brachytherapy treatment           ES052  175,000........................            1                   24,936
                                           vault.
88104, 88106, 88108.....................  fixative spray for cytospin       SL503  1.53...........................            1                   62,552
88108...................................  Shannon cyto funnel,              SD298  2.27...........................            1                   48,740
                                           cytospin.
88108...................................  slide, microscope coated          SL504  0.39...........................            1                   48,740
                                           cytospin (single circle).
88182...................................  Protease...................       SL506  0.43...........................            1                      568
88346, 8835X............................  Immunofluorescent mounting        SD309  3.50...........................            1                  114,211
                                           media.
88346, 8835X............................  Zeus medium................       SL518  0.85...........................            2                  114,211
88346, 8835X............................  Hydrophobic PAP Pen........       SK120  1.76...........................            1                  114,211
                                                                                   (100 uses).....................
88360, 88361............................  Antibody Estrogen Receptor        SL493  13.89..........................            3                  116,718
                                           monoclonal.
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                                Table 10--Invoices Received for Existing Direct PE Inputs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                  Estimated non-facility
                                                                                     Current    Updated    Percent    Number of    allowed services for
             CPT/HCPCS Codes                         Item name           CMS  Code    price      price      change    invoices   HCPCS codes using  this
                                                                                                                                           item
--------------------------------------------------------------------------------------------------------------------------------------------------------
31300, 31320, 31360, 31365, 31367, 31368,  endosheath..................      SD070       9.50      17.25         82           1                   65,318
 31370, 31375, 31380, 31382, 31390,
 31395, 31628, 31632, 31750, 31755,
 31800, 41120, 41130, 41135, 41140,
 41145, 41150, 41153, 41155, 41500,
 41510, 41512, 41530, 42120, 42842,
 42844, 42845, 42870, 42890, 42892,
 42894, 42950, 42953, 42955, 43215,
 43247, 58555, 58558, 58562, 58563,
 60605, 92511, 92612.
41530, 43228, 43229, 43270, 64633, 64634,  radiofrequency generator          EQ214     32,900     10,000        -70           1                  265,270
 64635, 64636.                              (NEURO).
88341, 88342, 88343, 88344, 88360, 88361.  Benchmark ULTRA automated         EP112    134,000    150,000         12           1                3,279,993
                                            slide preparation system.
8835X....................................  antibody IgA FITC...........      SL012      71.40      41.18        -42           1                   93,520
95018....................................  benzylpenicilloyl polylysine      SH103      72.45      83.00         15           1                   60,683
                                            (eg, PrePen) 0.25ml uou.

[[Page 41721]]

 
95923....................................  kit, electrode,                   SA014      11.99       4.01        -67           3                   96,189
                                            iontophoresis.
--------------------------------------------------------------------------------------------------------------------------------------------------------

6. CY 2016 Valuation of Specific Codes

              Table 11--CY 2016 Proposed Work RVUs for New, Revised and Potentially Misvalued Codes
----------------------------------------------------------------------------------------------------------------
                                                                                                    CMS time
     HCPCS             Descriptor           Current work RVU     RUC work RVU    CMS work RVU      refinement
----------------------------------------------------------------------------------------------------------------
11750.........  Removal of nail.........  2.5.................            1.99            1.58  No.
20240.........  Biopsy of bone, open      3.28................            3.73            2.61  No.
                 procedure.
27280.........  Arthrodesis, open,        14.64...............           20              20     No.
                 sacroiliac joint
                 including obtaining
                 bone graft.
3160A.........  Bronchoscopy, rigid or    NEW.................            5               4.71  No.
                 flexible, including
                 fluoroscopic guidance,
                 when performed; with
                 endobronchial
                 ultrasound (EBUS)
                 guided transtracheal
                 and/or transbronchial
                 sampling (eg,
                 aspiration[s]/
                 biopsy[ies]), one or
                 two mediastinal and/or
                 hilar lymph node stat.
3160B.........  Bronchoscopy, rigid or    NEW.................            5.5             5.21  No.
                 flexible, including
                 fluoroscopic guidance,
                 when performed; with
                 endobronchial
                 ultrasound (EBUS)
                 guided transtracheal
                 and/or transbronchial
                 sampling (eg,
                 aspiration[s]/
                 biopsy[ies]), 3 or more
                 mediastinal and/or
                 hilar lymph node stati.
3160C.........  Bronchoscopy, rigid or    NEW.................            1.7             1.4   No.
                 flexible, including
                 fluoroscopic guidance,
                 when performed; with
                 transendoscopic
                 endobronchial
                 ultrasound (EBUS)
                 during bronchoscopic
                 diagnostic or
                 therapeutic
                 intervention(s) for
                 peripheral lesion(s)
                 (List separately in
                 addition to.
31622.........  Diagnostic examination    2.78................            2.78            2.78  No.
                 of lung airways using
                 an endoscope.
31625.........  Biopsy of lung airways    3.36................            3.36            3.36  No.
                 using an endoscope.
31626.........  Insertion of radiation    4.16................            4.16            4.16  No.
                 therapy markers into
                 lung airways using an
                 endoscope.
31628.........  Biopsy of one lobe of     3.8.................            3.8             3.8   No.
                 lung using an endoscope.
31629.........  Needle biopsy of          4.09................            4               4     No.
                 windpipe cartilage,
                 airway, and/or lung
                 using an endoscope.
31632.........  Biopsy of lung using an   1.03................            1.03            1.03  No.
                 endoscope.
31633.........  Needle biopsy of lung     1.32................            1.32            1.32  No.
                 using an endoscope.
3347A.........  Transcatheter pulmonary   NEW.................           25              25     No.
                 valve implantation,
                 percutaneous approach,
                 including pre-stenting
                 of the valve delivery
                 site, when performed.
37215.........  Transcatheter placement   19.68...............           18              18     No.
                 of intravascular
                 stent(s), cervical
                 carotid artery,
                 percutaneous; with
                 distal embolic
                 protection.
3725A.........  Intravascular ultrasound  NEW.................            1.8             1.8   No.
                 (noncoronary vessel)
                 during diagnostic
                 evaluation and/or
                 therapeutic
                 intervention, including
                 radiological
                 supervision and
                 interpretation; initial
                 non-coronary vessel
                 (List separately in
                 addition to code for
                 primary procedure).
3725B.........  Intravascular ultrasound  NEW.................            1.44            1.44  No.
                 (noncoronary vessel)
                 during diagnostic
                 evaluation and/or
                 therapeutic
                 intervention, including
                 radiological
                 supervision and
                 interpretation; each
                 additional noncoronary
                 vessel (List separately
                 in addition to code for
                 primary procedure.
38570.........  Removal of abdominal      9.34................            9.34            8.49  No.
                 cavity lymph nodes
                 using an endoscope.
38571.........  Removal of total lymph    14.76...............           12              12     No.
                 nodes of both sides of
                 pelvis using an
                 endoscope.
38572.........  Removal of total lymph    16.94...............           15.6            15.6   No.
                 nodes of both sides of
                 pelvis and abdominal
                 lymph node biopsy using
                 an endoscope.
3940A.........  Mediastinoscopy;          NEW.................            5.44            5.44  No.
                 includes biopsy(ies) of
                 mediastinal mass (eg,
                 lymphoma), when
                 performed.
3940B.........  Mediastinoscopy; with     NEW.................            7.5             7.25  No.
                 lymph node biopsy(ies)
                 (eg, lung cancer
                 staging).
43775.........  Stomach reduction         C...................           21.4            20.38  No.
                 procedure with partial
                 removal of stomach
                 using an endoscope.
44380.........  Ileoscopy, through        1.05................            0.97            0.9   No.
                 stoma; diagnostic,
                 including collection of
                 specimen(s) by brushing
                 or washing, when
                 performed.
44381.........  Ileoscopy, through        N/A.................            1.48            1.48  Yes
                 stoma; with
                 transendoscopic balloon
                 dilation.
44382.........  Ileoscopy, through        1.27................            1.27            1.2   No.
                 stoma; with biopsy,
                 single or multiple.
44384.........  Ileoscopy, through        N/A.................            3.11            2.88  No.
                 stoma; with placement
                 of endoscopic stent
                 (includes pre- and post-
                 dilation and guide wire
                 passage, when
                 performed).

[[Page 41722]]

 
44385.........  Endoscopic evaluation of  1.82................            1.3             1.23  No.
                 small intestinal pouch
                 (eg, Kock pouch, ileal
                 reservoir [S or J]);
                 diagnostic, including
                 collection of
                 specimen(s) by brushing
                 or washing, when
                 performed.
44386.........  Endoscopic evaluation of  2.12................            1.6             1.53  No.
                 small intestinal pouch
                 (eg, Kock pouch, ileal
                 reservoir [S or J]);
                 with biopsy, single or
                 multiple.
44388.........  Colonoscopy through       2.82................            2.82            2.75  No.
                 stoma; diagnostic,
                 including collection of
                 specimen(s) by brushing
                 or washing, when
                 performed (separate
                 procedure).
44389.........  Colonoscopy through       3.13................            3.12            3.05  No.
                 stoma; with biopsy,
                 single or multiple.
44390.........  Colonoscopy through       3.82................            3.82            3.77  No.
                 stoma; with removal of
                 foreign body.
44391.........  Colonoscopy through       4.31................            4.22            4.22  No.
                 stoma; with control of
                 bleeding, any method.
44392.........  Colonoscopy through       3.81................            3.63            3.63  No.
                 stoma; with removal of
                 tumor(s), polyp(s), or
                 other lesion(s) by hot
                 biopsy forceps or
                 bipolar cautery.
44394.........  Colonoscopy through       4.42................            4.13            4.13  No.
                 stoma; with removal of
                 tumor(s), polyp(s), or
                 other lesion(s) by
                 snare technique.
44401.........  Colonoscopy through       N/A.................            4.44            4.44  No.
                 stoma; with ablation of
                 tumor(s), polyp(s), or
                 other lesion (includes
                 pre-and post-dilation
                 and guide wire passage,
                 when performed).
44402.........  Colonoscopy through       N/A.................            4.96            4.73  No.
                 stoma; with endoscopic
                 stent placement
                 (including pre- and
                 post-dilation and
                 guidewire passage, when
                 performed).
44403.........  Colonoscopy through       N/A.................            5.81            5.53  No.
                 stoma; with endoscopic
                 mucosal resection.
44404.........  Colonoscopy through       N/A.................            3.13            3.05  No.
                 stoma; with directed
                 submucosal
                 injection(s), any
                 substance.
44405.........  Colonoscopy through       N/A.................            3.33            3.33  No.
                 stoma; with
                 transendoscopic balloon
                 dilation.
44406.........  Colonoscopy through       N/A.................            4.41            4.13  No.
                 stoma; with endoscopic
                 ultrasound examination,
                 limited to the sigmoid,
                 descending, transverse,
                 or ascending colon and
                 cecum and adjacent
                 structures.
44407.........  Colonoscopy through       N/A.................            5.06            5.06  No.
                 stoma; with
                 transendoscopic
                 ultrasound guided
                 intramural or
                 transmural fine needle
                 aspiration/biopsy(s),
                 includes endoscopic
                 ultrasound examination
                 limited to the sigmoid,
                 descending, transverse,
                 or ascending colon and
                 cecum and adjace.
44408.........  Colonoscopy through       N/A.................            4.24            4.24  No.
                 stoma; with
                 decompression (for
                 pathologic distention)
                 (eg, volvulus,
                 megacolon), including
                 placement of
                 decompression tube,
                 when performed.
45330.........  Sigmoidoscopy, flexible;  0.96................            0.84            0.77  No.
                 diagnostic, including
                 collection of
                 specimen(s) by brushing
                 or washing when
                 performed.
45331.........  Sigmoidoscopy, flexible;  1.15................            1.14            1.07  No.
                 with biopsy, single or
                 multiple.
45332.........  Sigmoidoscopy, flexible;  1.79................            1.85            1.79  No.
                 with removal of foreign
                 body.
45333.........  Sigmoidoscopy, flexible;  1.79................            1.65            1.65  No.
                 with removal of
                 tumor(s), polyp(s), or
                 other lesion(s) by hot
                 biopsy forceps.
45334.........  Sigmoidoscopy, flexible;  2.73................            2.1             2.1   No.
                 with control of
                 bleeding, any method.
45335.........  Sigmoidoscopy, flexible;  1.46................            1.15            1.07  No.
                 with directed
                 submucosal
                 injection(s), any
                 substance.
45337.........  Sigmoidoscopy, flexible;  2.36................            2.2             2.2   No.
                 with decompression (for
                 pathologic distention)
                 (eg, volvulus,
                 megacolon), including
                 placement of
                 decompression tube,
                 when performed.
45338.........  Sigmoidoscopy, flexible;  2.34................            2.15            2.15  No.
                 with removal of
                 tumor(s), polyp(s), or
                 other lesion(s) by
                 snare technique.
45340.........  Sigmoidoscopy, flexible;  1.89................            1.35            1.35  No.
                 with transendoscopic
                 balloon dilation.
45341.........  Sigmoidoscopy, flexible;  2.6.................            2.43            2.15  No.
                 with endoscopic
                 ultrasound examination.
45342.........  Sigmoidoscopy, flexible;  4.05................            3.08            3.08  No.
                 with transendoscopic
                 ultrasound guided
                 intramural or
                 transmural fine needle
                 aspiration/biopsy(s).
45346.........  Sigmoidoscopy, flexible;  N/A.................            2.97            2.84  No.
                 with ablation of
                 tumor(s), polyp(s), or
                 other lesion(s)
                 (includes pre- and post-
                 dilation and guide wire
                 passage, when
                 performed).
45347.........  Sigmoidoscopy, flexible;  N/A.................            2.98            2.75  No.
                 with placement of
                 endoscopic stent
                 (includes pre- and post-
                 dilation and guide wire
                 passage, when
                 performed).
45349.........  Sigmoidoscopy, flexible;  N/A.................            3.83            3.55  No.
                 with endoscopic mucosal
                 resection.
45350.........  Sigmoidoscopy,            N/A.................            1.78            1.78  No.
                 flexible;with banding
                 (eg, hemorrhoids).
45378.........  Colonoscopy, flexible;    3.69................            3.36            3.29  No.
                 diagnostic, including
                 collection of
                 specimen(s) by brushing
                 or washing, when
                 performed, (separate
                 procedure).
45379.........  Colonoscopy, flexible;    4.68................            4.37            4.31  No.
                 with removal of foreign
                 body.
45380.........  Colonoscopy, flexible,    4.43................            3.66            3.59  No.
                 proximal to splenic
                 flexure; with biopsy,
                 single or multiple.
45381.........  Colonoscopy, flexible;    4.19................            3.67            3.59  No.
                 with directed
                 submucosal
                 injection(s), any
                 substance.
45382.........  Colonoscopy, flexible;    5.68................            4.76            4.76  No.
                 with control of
                 bleeding, any method.

[[Page 41723]]

 
45384.........  Colonoscopy, flexible;    4.69................            4.17            4.17  No.
                 with removal of
                 tumor(s), polyp(s), or
                 other lesion(s) by hot
                 biopsy forceps or
                 bipolar cautery.
45385.........  Colonoscopy, flexible;    5.3.................            4.67            4.67  No.
                 with removal of
                 tumor(s), polyp(s), or
                 other lesion(s) by
                 snare technique.
45386.........  Colonoscopy, flexible;    4.57................            3.87            3.87  No.
                 with transendoscopic
                 balloon dilation.
45388.........  Colonoscopy, flexible;    N/A.................            4.98            4.98  No.
                 with ablation of
                 tumor(s), polyp(s), or
                 other lesion(s)
                 (includes pre- and post-
                 dilation and guide wire
                 passage, when
                 performed).
45389.........  Colonoscopy, flexible;    N/A.................            5.5             5.27  No.
                 with endoscopic stent
                 placement (includes pre-
                  and post-dilation and
                 guide wire passage,
                 when performed).
45390.........  Colonoscopy, flexible;    N/A.................            6.35            6.07  No.
                 with endoscopic mucosal
                 resection.
45391.........  Colonoscopy, flexible;    5.09................            4.95            4.67  No.
                 with endoscopic
                 ultrasound examination
                 limited to the rectum,
                 sigmoid, descending,
                 transverse, or
                 ascending colon and
                 cecum, and adjacent
                 structures.
45392.........  Colonoscopy, flexible;    6.54................            5.6             5.6   No.
                 with transendoscopic
                 ultrasound guided
                 intramural or
                 transmural fine needle
                 aspiration/biopsy(s),
                 includes endoscopic
                 ultrasound examination
                 limited to the rectum,
                 sigmoid, descending,
                 transverse, or
                 ascending colon and
                 cecum, and a.
45393.........  Colonoscopy, flexible;    N/A.................            4.78            4.78  No.
                 with decompression (for
                 pathologic distention)
                 (eg, volvulus,
                 megacolon), including
                 placement of
                 decompression tube,
                 when performed.
45398.........  Colonoscopy, flexible;    N/A.................            4.3             4.3   No.
                 with banding, (eg,
                 hemorrhoids).
46500.........  Injection of hemorrhoids  1.69................            1.69            1.42  No.
46601.........  Anoscopy; diagnostic,     N/A.................            1.6             1.6   No.
                 with high-resolution
                 magnification.
46607.........  Anoscopy; with high-      N/A.................            2.2             2.2   No.
                 resolution
                 magnification (hra),
                 with biopsy, single or
                 multiple.
47135.........  Transplantation of donor  83.64...............           91.78           90     No.
                 liver to anatomic
                 position.
50390.........  Aspiration and/or         1.96................            1.96            1.96  No.
                 injection kidney cyst,
                 accessed through the
                 skin.
5039A.........  Injection procedure for   NEW.................            3.15            3.15  No.
                 antegrade nephrostogram
                 and/or ureterogram,
                 complete diagnostic
                 procedure including
                 imaging guidance (eg,
                 ultrasound and
                 fluoroscopy) and all
                 associated radiological
                 supervision and
                 interpretation; new
                 access.
5039B.........  Injection procedure for   NEW.................            1.42            1.1   No.
                 antegrade nephrostogram
                 and/or ureterogram,
                 complete diagnostic
                 procedure including
                 imaging guidance (eg,
                 ultrasound and
                 fluoroscopy) and all
                 associated radiological
                 supervision and
                 interpretation;
                 existing access.
5039C.........  Placement of nephrostomy  NEW.................            4.7             4.25  No.
                 catheter, percutaneous,
                 including diagnostic
                 nephrostogram and/or
                 ureterogram when
                 performed, imaging
                 guidance (eg,
                 ultrasound and/or
                 fluoroscopy) and all
                 associated radiological
                 supervision and
                 interpretation.
5039D.........  Placement of              NEW.................            5.75            5.3   No.
                 nephroureteral
                 catheter, percutaneous,
                 including diagnostic
                 nephrostogram and/or
                 ureterogram when
                 performed, imaging
                 guidance (eg,
                 ultrasound and/or
                 fluoroscopy) and all
                 associated radiological
                 supervision and
                 interpretation, new
                 access.
5039E.........  Exchange nephrostomy      NEW.................            2               1.82  No.
                 catheter, percutaneous,
                 including diagnostic
                 nephrostogram and/or
                 ureterogram when
                 performed, imaging
                 guidance (eg,
                 ultrasound and/or
                 fluoroscopy) and all
                 associated radiological
                 supervision and
                 interpretation.
5039M.........  Convert nephrostomy       NEW.................            4.2             4     No.
                 catheter to
                 nephroureteral
                 catheter, percutaneous,
                 including diagnostic
                 nephrostogram and/or
                 ureterogram when
                 performed, imaging
                 guidance (eg,
                 ultrasound and/or
                 fluoroscopy) and all
                 associated radiological
                 supervision and
                 interpretation.
5069G.........  Placement of ureteral     NEW.................            4.6             4.21  No.
                 stent, percutaneous,
                 including diagnostic
                 nephrostogram and/or
                 ureterogram when
                 performed, imaging
                 guidance (eg,
                 ultrasound and/or
                 fluoroscopy) and all
                 associated radiological
                 supervision and
                 interpretation; pre-
                 existing nephrostomy.
5069H.........  Placement of ureteral     NEW.................            6               5.5   No.
                 stent, percutaneous,
                 including diagnostic
                 nephrostogram and/or
                 ureterogram when
                 performed, imaging
                 guidance (eg,
                 ultrasound and/or
                 fluoroscopy) and all
                 associated radiological
                 supervision and
                 interpretation; new
                 access, without
                 separate.
5069I.........  Placement of ureteral     NEW.................            7.55            7.05  No.
                 stent, percutaneous,
                 including diagnostic
                 nephrostogram and/or
                 ureterogram when
                 performed, imaging
                 guidance (eg,
                 ultrasound and/or
                 fluoroscopy) and all
                 associated radiological
                 supervision and
                 interpretation; new
                 access, with separate.
5443A.........  Repair of traumatic       NEW.................           11.5            11.5   No.
                 corporeal tear(s).
5443B.........  Replantation, penis,      NEW.................           24.5            22.1   No.
                 complete amputation
                 including urethral
                 repair.

[[Page 41724]]

 
63045.........  Laminectomy, facetectomy  17.95...............           17.95           17.95  No.
                 and foraminotomy;
                 cervical.
63046.........  Laminectomy, facetectomy  17.25...............           17.25           17.25  No.
                 and foraminotomy;
                 thoracic.
657XG.........  Implantation of           NEW.................            5.93            5.39  No.
                 intrastromal corneal
                 ring segments.
68801.........  Dilation of tear-         1...................            1               0.82  No.
                 drainage opening.
68810.........  Insertion of probe into   2.15................            1.54            1.54  No.
                 the tear duct.
68811.........  Insertion of probe into   2.45................            2.03            1.74  No.
                 the tear duct under
                 anesthesia.
68815.........  Probing of nasal-tear     3.3.................            3               2.7   No.
                 duct with insertion of
                 tube or stent.
68816.........  Probing of nasal-tear     3.06................            2.35            2.1   No.
                 duct with balloon
                 catheter dilation.
71100.........  Radiologic examination,   0.22................            0.22            0.22  No.
                 ribs, unilateral; 2
                 views.
72070.........  Radiologic examination,   0.22................            0.22            0.22  No.
                 spine; thoracic, 2
                 views.
7208A.........  Entire spine x ray, one   NEW.................            0.3             0.26  No.
                 view.
7208B.........  Entire spine x-ray; 2 or  NEW.................            0.35            0.31  No.
                 3 views.
7208C.........  Entire spine x-ray; 4 or  NEW.................            0.39            0.35  No.
                 5 views.
7208D.........  Entire spine x-ray; min   NEW.................            0.45            0.41  No.
                 6 views.
73060.........  Radiologic examination;   0.17................            0.16            0.16  No.
                 humerus, minimum of 2
                 views.
73560.........  Radiologic examination,   0.17................            0.16            0.16  No.
                 knee; 1 or 2 views.
73562.........  Radiologic examination,   0.18................            0.18            0.18  No.
                 knee; 3 views.
73564.........  Radiologic examination,   0.22................            0.22            0.22  No.
                 knee; complete, 4 or
                 more views.
73565.........  Radiologic examination,   0.17................            0.16            0.16  No.
                 knee; both knees,
                 standing,
                 anteroposterior.
73590.........  Radiologic examination;   0.17................            0.16            0.16  No.
                 tibia and fibula, 2
                 views.
73600.........  Radiologic examination,   0.16................            0.16            0.16  No.
                 ankle; 2 views.
76999.........  Ultrasound procedure....  C...................            C               C     N/A
77387.........  Guidance for              N/A.................            0.58            0.58  No.
                 localization of target
                 volume for delivery of
                 radiation treatment
                 delivery, includes
                 intrafraction tracking
                 when performed.
7778B.........  Remote afterloading high  NEW.................            1.4             1.4   No.
                 dose rate radionuclide
                 skin surface
                 brachytherapy, includes
                 basic dosimetry, when
                 performed; lesion
                 diameter over 2.0 cm
                 and 2 or more channels,
                 or multiple lesions.
7778C.........  Remote afterloading high  NEW.................            1.95            1.95  No.
                 dose rate radionuclide
                 interstitial or
                 intracavitary
                 brachytherapy, includes
                 basic dosimetry, when
                 performed; 1 channel.
7778D.........  Remote afterloading high  NEW.................            3.8             3.8   No.
                 dose rate radionuclide
                 interstitial or
                 intracavitary
                 brachytherapy, includes
                 basic dosimetry, when
                 performed; 2-12
                 channels.
7778E.........  Remote afterloading high  NEW.................            5.4             5.4   No.
                 dose rate radionuclide
                 interstitial or
                 intracavitary
                 brachytherapy, includes
                 basic dosimetry, when
                 performed; over 12
                 channels.
88346.........  Antibody evaluation.....  0.86................            0.74            0.56  No.
8835X.........  Immunofluorescence, per   NEW.................            0.7             0.53  No.
                 specimen; each
                 additional single
                 antibody stain
                 procedure (List
                 separately in addition
                 to code for primary
                 procedure).
88367.........  Morphometric analysis,    0.73................            0.86            0.73  No.
                 in situ hybridization
                 (quantitative or semi-
                 quantitative), using
                 computer-assisted
                 technology, per
                 specimen: initial
                 single probe stain
                 procedure.
88368.........  Morphometric analysis,    0.88................            0.88            0.88  No.
                 in situ hybridization
                 (quantitative or semi-
                 quantitative) manual,
                 per specimen; initial
                 single probe stain
                 procedure.
91299.........  Procedure for             C...................            C               C     N/A
                 gastrointestinal
                 diagnosis.
9254A.........  Caloric vestibular test   NEW.................            0.8             0.6   No.
                 with recording,
                 bilateral; bithermal
                 (ie, one warm and one
                 cool irrigation in each
                 ear for a total of four
                 irrigations).
9254B.........  Caloric vestibular test   NEW.................            0.55            0.3   No.
                 with recording,
                 bilateral; monothermal
                 (ie, one irrigation in
                 each ear for a total of
                 two irrigations).
99174.........  Instrument-based ocular   N...................            0               N     No.
                 screening (eg,
                 photoscreening,
                 automated-refraction),
                 bilateral.
9917X.........  Instrument-based ocular   NEW.................            0               N     No.
                 screening (eg,
                 photoscreening,
                 automated-refraction),
                 bilateral; with on-site
                 analysis.
G0104.........  Colorectal cancer         0.96................            0.84            0.77  No.
                 screening; flexible
                 sigmoidoscopy.
G0105.........  Colorectal cancer         3.36................            3.36            3.29  No.
                 screening; colonoscopy
                 on individual at high
                 risk.
G0121.........  Colorectal cancer         3.36................            3.36            3.29  No.
                 screening; colonoscopy
                 on individual not
                 meeting criteria for
                 high risk.
----------------------------------------------------------------------------------------------------------------


[[Page 41725]]


  Table 12--CY 2016 Proposed Codes With Direct PE Input Recommendations
                       Accepted Without Refinement
------------------------------------------------------------------------
              HCPCS                             Descriptor
------------------------------------------------------------------------
20245...........................  Bone biopsy excisional.
20697...........................  Comp ext fixate strut change.
27280...........................  Fusion of sacroiliac joint.
3160A...........................  Bronch ebus 141 gmt. 141 ng 1/2 node.
3160B...........................  Bronch ebus 141 gmt. 141 ng 3/> node.
3160C...........................  Bronch ebus ivntj perph les.
31622...........................  Dx bronchoscope/wash.
31625...........................  Bronchoscopy w/biopsy(s).
31626...........................  Bronchoscopy w/markers.
31628...........................  Bronchoscopy/lung bx each.
31629...........................  Bronchoscopy/needle bx each.
31632...........................  Bronchoscopy/lung bx addl.
31633...........................  Bronchoscopy/needle bx addl.
3347A...........................  Implant tcat pulm vlv perq.
37215...........................  Transcath stent cca w/eps.
3725A...........................  Intrvasc us noncoronary 1st.
3725B...........................  Intrvasc us noncoronary addl.
38570...........................  Laparoscopy lymph node biop.
38571...........................  Laparoscopy lymphadenectomy.
3940A...........................  Mediastinoscpy w/medstnl bx.
3940B...........................  Mediastinoscpy w/lmph nod bx.
44384...........................  Small bowel endoscopy.
44402...........................  Colonoscopy w/stent plcmt.
44403...........................  Colonoscopy w/resection.
44406...........................  Colonoscopy w/ultrasound.
44407...........................  Colonoscopy w/ndl aspir/bx.
44408...........................  Colonoscopy w/decompression.
45337...........................  Sigmoidoscopy & decompress.
45341...........................  Sigmoidoscopy w/ultrasound.
45342...........................  Sigmoidoscopy w/us guide bx.
45347...........................  Sigmoidoscopy w/plcmt stent.
45349...........................  Sigmoidoscopy w/resection.
45389...........................  Colonoscopy w/stent plcmt.
45390...........................  Colonoscopy w/resection.
45391...........................  Colonoscopy w/endoscope us.
45392...........................  Colonoscopy w/endoscopic fnb.
45393...........................  Colonoscopy w/decompression.
47135...........................  Transplantation of liver.
5443B...........................  Replantation of penis.
63045...........................  Remove spine lamina 1 crvl.
63046...........................  Remove spine lamina 1 thrc.
68811...........................  Probe nasolacrimal duct.
68815...........................  Probe nasolacrimal duct.
692XX...........................  Remove impacted ear wax uni.
76948...........................  Echo guide ova aspiration.
7778A...........................  Hdr rdncl skn surf brachytx.
7778B...........................  Hdr rdncl skn surf brachytx.
7778C...........................  Hdr rdncl ntrstl/icav brchtx.
7778D...........................  Hdr rdncl ntrstl/icav brchtx.
7778E...........................  Hdr rdncl ntrstl/icav brchtx.
88346...........................  Immunofluorescent study.
8835X...........................  Immunofluor antb addl stain.
9254A...........................  Caloric vstblr test w/rec.
9254B...........................  Caloric vstblr test w/rec.
9935A...........................  Prolong clincl staff svc.
9935B...........................  Prolong clincl staff svc add.
------------------------------------------------------------------------


                             Table 13--CY 2016 Proposed Codes With Direct PE Input Recommendations Accepted With Refinements
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  RUC
                                                                           Labor activity    recommendation      CMS                             Direct
 HCPCS code      HCPCS code      Input code      Input code       NF/F         (where          or current     refinement         Comment          costs
                 description                    description                 applicable)      value  (min or    (min or                           change
                                                                                                  qty)           qty)                              ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
10021......  Fna w/o image.....  EF015.....  mayo stand.......  NF       .................               24           28  Refined equipment     ........
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EF023.....  table, exam......  NF       .................               29           28  Refined equipment     ........
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037D.....  RN/LPN/MTA.......  NF       Greet patient,                   1            0  Typically billed        (0.37)
                                                                          provide gowning,                                 with an E/M or
                                                                          ensure                                           other evaluation
                                                                          appropriate                                      service.
                                                                          medical records
                                                                          are available.
11750......  Removal of nail     EF015.....  mayo stand.......  NF       .................               27           45  Refined equipment         0.02
              bed.                                                                                                         time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EF031.....  table, power.....  NF       .................               54           62  Refined equipment         0.13
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ137.....  instrument pack,   NF       .................               34           45  Refined equipment         0.03
                                              basic ($500-                                                                 time to conform to
                                              $1,499).                                                                     established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ168.....  light, exam......  NF       .................               54           62  Refined equipment         0.03
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037D.....  RN/LPN/MTA.......  NF       Provide pre-                     0            2  Refined time to           0.74
                                                                          service                                          standard time for
                                                                          education/obtain                                 this clinical labor
                                                                          consent.                                         task.
                                 SG067.....  penrose drain      NF       .................                1            0  Removed supply not      (0.50)
                                              (0.25in x 4in).                                                              typically used in
                                                                                                                           this service.
11760......  Repair of nail bed  EF014.....  light, surgical..  NF       .................               45           43  Refined equipment       (0.02)
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EF015.....  mayo stand.......  NF       .................               45           43  Refined equipment     ........
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.

[[Page 41726]]

 
                                 EF031.....  table, power.....  NF       .................               72           70  Refined equipment       (0.03)
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ137.....  instrument pack,   NF       .................               52           47  Refined equipment       (0.01)
                                              basic ($500-                                                                 time to conform to
                                              $1,499).                                                                     established
                                                                                                                           policies for
                                                                                                                           instrument packs.
                                 EQ168.....  light, exam......  NF       .................               72           70  Refined equipment       (0.01)
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037D.....  RN/LPN/MTA.......  F        Discharge day                    6            0  Aligned clinical        (2.22)
                                                                          management.                                      labor discharge day
                                                                                                                           management time
                                                                                                                           with the work time
                                                                                                                           discharge day code.
                                 L037D.....  RN/LPN/MTA.......  NF       Complete pre-                    5            0  Emergency procedure,    (1.85)
                                                                          service                                          input would not
                                                                          diagnostic &                                     typically be used.
                                                                          referral forms.
                                 L037D.....  RN/LPN/MTA.......  NF       Coordinate pre-                  3            0  Emergency procedure,    (1.11)
                                                                          surgery services.                                input would not
                                                                                                                           typically be used.
                                 L037D.....  RN/LPN/MTA.......  NF       Provide pre-                     5            0  Duplication with        (1.85)
                                                                          service                                          other clinical
                                                                          education/obtain                                 labor task.
                                                                          consent.
12005......  Rpr s/n/a/gen/      EF023.....  table, exam......  NF       .................               40           44  Refined equipment         0.01
              trk12.6-20.0cm.                                                                                              time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ110.....  electrocautery-    NF       .................               40           44  Refined equipment         0.01
                                              hyfrecator, up                                                               time to conform to
                                              to 45 watts.                                                                 established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ168.....  light, exam......  NF       .................               40           44  Refined equipment         0.02
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037D.....  RN/LPN/MTA.......  F        Discharge day                    6            0  Aligned clinical        (2.22)
                                                                          management.                                      labor discharge day
                                                                                                                           management time
                                                                                                                           with the work time
                                                                                                                           discharge day code.
                                 L037D.....  RN/LPN/MTA.......  NF       Check dressings &                7            3  Refined time to         (1.48)
                                                                          wound/home care                                  standard time for
                                                                          instructions/                                    this clinical labor
                                                                          coordinate                                       task.
                                                                          office visits/
                                                                          prescriptions.
12006......  Rpr s/n/a/gen/      EF031.....  table, power.....  NF       .................               45           49  Refined equipment         0.07
              trk20.1-30.0cm.                                                                                              time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ110.....  electrocautery-    NF       .................               45           49  Refined equipment         0.01
                                              hyfrecator, up                                                               time to conform to
                                              to 45 watts.                                                                 established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ168.....  light, exam......  NF       .................               45           49  Refined equipment         0.02
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037D.....  RN/LPN/MTA.......  F        Discharge day                    6            0  Aligned clinical        (2.22)
                                                                          management.                                      labor discharge day
                                                                                                                           management time
                                                                                                                           with the work time
                                                                                                                           discharge day code.
                                 L037D.....  RN/LPN/MTA.......  NF       Check dressings &                7            3  Refined time to         (1.48)
                                                                          wound/home care                                  standard time for
                                                                          instructions/                                    this clinical labor
                                                                          coordinate                                       task.
                                                                          office visits/
                                                                          prescriptions.
12007......  Rpr s/n/ax/gen/     EF031.....  table, power.....  NF       .................               50           54  Refined equipment         0.07
              trnk >30.0 cm.                                                                                               time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.

[[Page 41727]]

 
                                 EQ110.....  electrocautery-    NF       .................               50           54  Refined equipment         0.01
                                              hyfrecator, up                                                               time to conform to
                                              to 45 watts.                                                                 established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ168.....  light, exam......  NF       .................               50           54  Refined equipment         0.02
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037D.....  RN/LPN/MTA.......  F        Discharge day                    6            0  Aligned clinical        (2.22)
                                                                          management.                                      labor discharge day
                                                                                                                           management time
                                                                                                                           with the work time
                                                                                                                           discharge day code.
                                 L037D.....  RN/LPN/MTA.......  NF       Check dressings &                7            3  Refined time to         (1.48)
                                                                          wound/home care                                  standard time for
                                                                          instructions/                                    this clinical labor
                                                                          coordinate                                       task.
                                                                          office visits/
                                                                          prescriptions.
12013......  Rpr f/e/e/n/l/m     EF031.....  table, power.....  NF       .................               27           33  Refined equipment         0.10
              2.6-5.0 cm.                                                                                                  time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ110.....  electrocautery-    NF       .................               27           33  Refined equipment         0.02
                                              hyfrecator, up                                                               time to conform to
                                              to 45 watts.                                                                 established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ168.....  light, exam......  NF       .................               27           33  Refined equipment         0.03
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037D.....  RN/LPN/MTA.......  F        Discharge day                    6            0  Aligned clinical        (2.22)
                                                                          management.                                      labor discharge day
                                                                                                                           management time
                                                                                                                           with the work time
                                                                                                                           discharge day code.
                                 L037D.....  RN/LPN/MTA.......  NF       Check dressings &                5            3  Refined time to         (0.74)
                                                                          wound/home care                                  standard time for
                                                                          instructions/                                    this clinical labor
                                                                          coordinate                                       task.
                                                                          office visits/
                                                                          prescriptions.
12014......  Rpr f/e/e/n/l/m     EF031.....  table, power.....  NF       .................               32           38  Refined equipment         0.10
              5.1-7.5 cm.                                                                                                  time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ110.....  electrocautery-    NF       .................               32           38  Refined equipment         0.02
                                              hyfrecator, up                                                               time to conform to
                                              to 45 watts.                                                                 established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ168.....  light, exam......  NF       .................               32           38  Refined equipment         0.03
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037D.....  RN/LPN/MTA.......  F        Discharge day                    6            0  Aligned clinical        (2.22)
                                                                          management.                                      labor discharge day
                                                                                                                           management time
                                                                                                                           with the work time
                                                                                                                           discharge day code.
                                 L037D.....  RN/LPN/MTA.......  NF       Check dressings &                5            3  Refined time to         (0.74)
                                                                          wound/home care                                  standard time for
                                                                          instructions/                                    this clinical labor
                                                                          coordinate                                       task.
                                                                          office visits/
                                                                          prescriptions.
12015......  Rpr f/e/e/n/l/m     EF031.....  table, power.....  NF       .................               37           43  Refined equipment         0.10
              7.6-12.5 cm.                                                                                                 time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ110.....  electrocautery-    NF       .................               37           43  Refined equipment         0.02
                                              hyfrecator, up                                                               time to conform to
                                              to 45 watts.                                                                 established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ168.....  light, exam......  NF       .................               37           43  Refined equipment         0.03
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.

[[Page 41728]]

 
                                 L037D.....  RN/LPN/MTA.......  F        Discharge day                    6            0  Aligned clinical        (2.22)
                                                                          management.                                      labor discharge day
                                                                                                                           management time
                                                                                                                           with the work time
                                                                                                                           discharge day code.
                                 L037D.....  RN/LPN/MTA.......  NF       Check dressings &                5            3  Refined time to         (0.74)
                                                                          wound/home care                                  standard time for
                                                                          instructions/                                    this clinical labor
                                                                          coordinate                                       task.
                                                                          office visits/
                                                                          prescriptions.
12016......  Rpr fe/e/en/l/m     EF031.....  table, power.....  NF       .................               42           48  Refined equipment         0.10
              12.6-20.0 cm.                                                                                                time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ110.....  electrocautery-    NF       .................               42           48  Refined equipment         0.02
                                              hyfrecator, up                                                               time to conform to
                                              to 45 watts.                                                                 established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ168.....  light, exam......  NF       .................               42           48  Refined equipment         0.03
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037D.....  RN/LPN/MTA.......  F        Discharge day                    6            0  Aligned clinical        (2.22)
                                                                          management.                                      labor discharge day
                                                                                                                           management time
                                                                                                                           with the work time
                                                                                                                           discharge day code.
                                 L037D.....  RN/LPN/MTA.......  NF       Check dressings &                5            3  Refined time to         (0.74)
                                                                          wound/home care                                  standard time for
                                                                          instructions/                                    this clinical labor
                                                                          coordinate                                       task.
                                                                          office visits/
                                                                          prescriptions.
12041......  Intmd rpr n-hf/     ED004.....  camera, digital    F        .................                0           27  Input added to            0.10
              genit 2.5cm/<.                  (6 mexapixel).                                                               maintain
                                                                                                                           consistency with
                                                                                                                           all other codes
                                                                                                                           within family.
                                 ED004.....  camera, digital    NF       .................               60           27  Refined equipment       (0.12)
                                              (6 mexapixel).                                                               time to conform to
                                                                                                                           office visit
                                                                                                                           duration.
                                 EF014.....  light, surgical..  NF       .................               33           42  Refined equipment         0.09
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EF015.....  mayo stand.......  NF       .................               33           42  Refined equipment         0.01
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EF023.....  table, exam......  NF       .................               60           27  Refined equipment       (0.10)
                                                                                                                           time to conform to
                                                                                                                           office visit
                                                                                                                           duration.
                                 EF031.....  table, power.....  NF       .................               33           42  Refined equipment         0.15
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ110.....  electrocautery-    NF       .................               33           42  Refined equipment         0.02
                                              hyfrecator, up                                                               time to conform to
                                              to 45 watts.                                                                 established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ137.....  instrument pack,   NF       .................                0           46  Equipment item            0.11
                                              basic ($500-                                                                 replaces another
                                              $1,499).                                                                     item (EQ138); see
                                                                                                                           preamble.
                                 EQ138.....  instrument pack,   NF       .................               40            0  Equipment item          (0.28)
                                              medium ($1,500                                                               replaced by another
                                              and up).                                                                     item (EQ137); see
                                                                                                                           preamble.
                                 EQ168.....  light, exam......  NF       .................               60           27  Refined equipment       (0.14)
                                                                                                                           time to conform to
                                                                                                                           office visit
                                                                                                                           duration.
                                 L037D.....  RN/LPN/MTA.......  F        Discharge day                    6            0  Aligned clinical        (2.22)
                                                                          management.                                      labor discharge day
                                                                                                                           management time
                                                                                                                           with the work time
                                                                                                                           discharge day code.
                                 L037D.....  RN/LPN/MTA.......  F        Provide pre-                     2            0  Intraservice direct     (0.74)
                                                                          service                                          PE inputs are not
                                                                          education/obtain                                 included in the
                                                                          consent.                                         facility setting;
                                                                                                                           See preamble text.

[[Page 41729]]

 
                                 L037D.....  RN/LPN/MTA.......  NF       Complete pre-                    5            0  Emergency procedure,    (1.85)
                                                                          service                                          input would not
                                                                          diagnostic &                                     typically be used.
                                                                          referral forms.
                                 L037D.....  RN/LPN/MTA.......  NF       Coordinate pre-                  3            0  Emergency procedure,    (1.11)
                                                                          surgery services.                                input would not
                                                                                                                           typically be used.
                                 L037D.....  RN/LPN/MTA.......  NF       Follow-up phone                  3            0  Emergency procedure,    (1.11)
                                                                          calls and                                        input would not
                                                                          prescriptions.                                   typically be used.
12054......  Intmd rpr face/mm   ED004.....  camera, digital    NF       .................               90           27  Refined equipment       (0.24)
              7.6-12.5cm.                     (6 mexapixel).                                                               time to conform to
                                                                                                                           office visit
                                                                                                                           duration.
                                 EF014.....  light, surgical..  NF       .................               63           71  Refined equipment         0.08
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EF015.....  mayo stand.......  NF       .................               63           71  Refined equipment         0.01
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EF023.....  table, exam......  NF       .................               90           27  Refined equipment       (0.19)
                                                                                                                           time to conform to
                                                                                                                           office visit
                                                                                                                           duration.
                                 EF031.....  table, power.....  NF       .................               63           71  Refined equipment         0.13
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ110.....  electrocautery-    NF       .................               63           71  Refined equipment         0.02
                                              hyfrecator, up                                                               time to conform to
                                              to 45 watts.                                                                 established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ138.....  instrument pack,   NF       .................               75           80  Refined equipment         0.03
                                              medium ($1,500                                                               time to conform to
                                              and up).                                                                     established
                                                                                                                           policies for
                                                                                                                           instrument packs.
                                 EQ168.....  light, exam......  NF       .................               90           27  Refined equipment       (0.27)
                                                                                                                           time to conform to
                                                                                                                           office visit
                                                                                                                           duration.
                                 L037D.....  RN/LPN/MTA.......  F        Discharge day                    6            0  Aligned clinical        (2.22)
                                                                          management.                                      labor discharge day
                                                                                                                           management time
                                                                                                                           with the work time
                                                                                                                           discharge day code.
                                 L037D.....  RN/LPN/MTA.......  F        Provide pre-                     2            0  Intraservice direct     (0.74)
                                                                          service                                          PE inputs are not
                                                                          education/obtain                                 included in the
                                                                          consent.                                         facility setting;
                                                                                                                           See preamble text.
                                 L037D.....  RN/LPN/MTA.......  NF       Complete pre-                    5            0  Emergency procedure,    (1.85)
                                                                          service                                          input would not
                                                                          diagnostic &                                     typically be used.
                                                                          referral forms.
                                 L037D.....  RN/LPN/MTA.......  NF       Coordinate pre-                  3            0  Emergency procedure,    (1.11)
                                                                          surgery services.                                input would not
                                                                                                                           typically be used.
                                 L037D.....  RN/LPN/MTA.......  NF       Follow-up phone                  3            0  Emergency procedure,    (1.11)
                                                                          calls and                                        input would not
                                                                          prescriptions.                                   typically be used.
12055......  Intmd rpr face/mm   ED004.....  camera, digital    NF       .................              136           63  Refined equipment       (0.27)
              12.6-20 cm.                     (6 mexapixel).                                                               time to conform to
                                                                                                                           office visit
                                                                                                                           duration.
                                 EF014.....  light, surgical..  NF       .................               73           81  Refined equipment         0.08
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EF015.....  mayo stand.......  NF       .................               73           81  Refined equipment         0.01
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EF023.....  table, exam......  NF       .................              136           63  Refined equipment       (0.22)
                                                                                                                           time to conform to
                                                                                                                           office visit
                                                                                                                           duration.
                                 EF031.....  table, power.....  NF       .................               73           81  Refined equipment         0.13
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.

[[Page 41730]]

 
                                 EQ110.....  electrocautery-    NF       .................               73           81  Refined equipment         0.02
                                              hyfrecator, up                                                               time to conform to
                                              to 45 watts.                                                                 established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ138.....  instrument pack,   NF       .................               85           90  Refined equipment         0.03
                                              medium ($1,500                                                               time to conform to
                                              and up).                                                                     established
                                                                                                                           policies for
                                                                                                                           instrument packs.
                                 EQ168.....  light, exam......  NF       .................              136           63  Refined equipment       (0.32)
                                                                                                                           time to conform to
                                                                                                                           office visit
                                                                                                                           duration.
                                 L037D.....  RN/LPN/MTA.......  F        Provide pre-                     2            0  Intraservice direct     (0.74)
                                                                          service                                          PE inputs are not
                                                                          education/obtain                                 included in the
                                                                          consent.                                         facility setting;
                                                                                                                           See preamble text.
                                 L037D.....  RN/LPN/MTA.......  NF       Complete pre-                    5            0  Emergency procedure,    (1.85)
                                                                          service                                          input would not
                                                                          diagnostic &                                     typically be used.
                                                                          referral forms.
                                 L037D.....  RN/LPN/MTA.......  NF       Coordinate pre-                  3            0  Emergency procedure,    (1.11)
                                                                          surgery services.                                input would not
                                                                                                                           typically be used.
                                 L037D.....  RN/LPN/MTA.......  NF       Follow-up phone                  3            0  Emergency procedure,    (1.11)
                                                                          calls and                                        input would not
                                                                          prescriptions.                                   typically be used.
                                 SA054.....  pack, post-op      F        .................                2            1  No rationale was        (4.91)
                                              incision care                                                                provided for
                                              (suture).                                                                    quantity change
                                                                                                                           relative to current
                                                                                                                           value; maintaining
                                                                                                                           current value.
12057......  Intmd rpr face/mm   ED004.....  camera, digital    NF       .................              166           63  Refined equipment       (0.39)
              >30.0 cm.                       (6 mexapixel).                                                               time to conform to
                                                                                                                           office visit
                                                                                                                           duration.
                                 EF014.....  light, surgical..  NF       .................              103          111  Refined equipment         0.08
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EF015.....  mayo stand.......  NF       .................              103          111  Refined equipment         0.01
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EF023.....  table, exam......  NF       .................              166           63  Refined equipment       (0.31)
                                                                                                                           time to conform to
                                                                                                                           office visit
                                                                                                                           duration.
                                 EF031.....  table, power.....  NF       .................              103          111  Refined equipment         0.13
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ110.....  electrocautery-    NF       .................              103          111  Refined equipment         0.02
                                              hyfrecator, up                                                               time to conform to
                                              to 45 watts.                                                                 established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ138.....  instrument pack,   NF       .................              115          120  Refined equipment         0.03
                                              medium ($1,500                                                               time to conform to
                                              and up).                                                                     established
                                                                                                                           policies for
                                                                                                                           instrument packs.
                                 EQ168.....  light, exam......  NF       .................              166           63  Refined equipment       (0.45)
                                                                                                                           time to conform to
                                                                                                                           office visit
                                                                                                                           duration.
                                 L037D.....  RN/LPN/MTA.......  F        Provide pre-                     2            0  Intraservice direct     (0.74)
                                                                          service                                          PE inputs are not
                                                                          education/obtain                                 included in the
                                                                          consent.                                         facility setting;
                                                                                                                           See preamble text.
                                 L037D.....  RN/LPN/MTA.......  NF       Complete pre-                    5            0  Emergency procedure,    (1.85)
                                                                          service                                          input would not
                                                                          diagnostic &                                     typically be used.
                                                                          referral forms.
                                 L037D.....  RN/LPN/MTA.......  NF       Coordinate pre-                  3            0  Emergency procedure,    (1.11)
                                                                          surgery services.                                input would not
                                                                                                                           typically be used.
                                 L037D.....  RN/LPN/MTA.......  NF       Follow-up phone                  3            0  Emergency procedure,    (1.11)
                                                                          calls and                                        input would not
                                                                          prescriptions.                                   typically be used.
                                 SA054.....  pack, post-op      F        .................                2            1  No rationale was        (4.91)
                                              incision care                                                                provided for
                                              (suture).                                                                    quantity change
                                                                                                                           relative to current
                                                                                                                           value; maintaining
                                                                                                                           current value.

[[Page 41731]]

 
                                 SA054.....  pack, post-op      NF       .................                2            1  No rationale was        (4.91)
                                              incision care                                                                provided for
                                              (suture).                                                                    quantity change
                                                                                                                           relative to current
                                                                                                                           value; maintaining
                                                                                                                           current value.
20240......  Bone biopsy         L037D.....  RN/LPN/MTA.......  F        Dischrg gmt. same                6            0  Aligned clinical        (2.22)
              excisional.                                                 day (0.5 x                                       labor discharge day
                                                                          99238) (enter 6                                  management time
                                                                          min).                                            with the work time
                                                                                                                           discharge day code.
30300......  Remove nasal        EF008.....  chair with         NF       .................               59           67  Refined equipment         0.09
              foreign body.                   headrest, exam,                                                              time to conform to
                                              reclining.                                                                   established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EF015.....  mayo stand.......  NF       .................               22           40  Refined equipment         0.02
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ137.....  instrument pack,   NF       .................               29           47  Refined equipment         0.04
                                              basic ($500-                                                                 time to conform to
                                              $1,499).                                                                     established
                                                                                                                           policies for
                                                                                                                           instrument packs.
                                 EQ167.....  light source,      F        .................               27            0  Redundant when used     (0.72)
                                              xenon.                                                                       together with
                                                                                                                           EQ170; see preamble.
                                 EQ167.....  light source,      NF       .................               59            0  Redundant when used     (1.57)
                                              xenon.                                                                       together with
                                                                                                                           EQ170; see preamble.
                                 EQ170.....  light, fiberoptic  NF       .................               59           67  Refined equipment         0.06
                                              headlight w-                                                                 time to conform to
                                              source.                                                                      established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ234.....  suction and        NF       .................               59           67  Refined equipment         0.07
                                              pressure                                                                     time to conform to
                                              cabinet, ENT                                                                 established
                                              (SMR).                                                                       policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 ES013.....  endoscope, rigid,  NF       .................               71           74  Refined equipment         0.02
                                              sinoscopy.                                                                   time to conform to
                                                                                                                           established
                                                                                                                           policies for scopes.
                                 ES031.....  video system,      NF       .................               59           67  Refined equipment         1.03
                                              endoscopy                                                                    time to conform to
                                              (processor,                                                                  established
                                              digital capture,                                                             policies for non-
                                              monitor,                                                                     highly technical
                                              printer, cart).                                                              equipment.
                                 L037D.....  RN/LPN/MTA.......  F        Discharge day                    6            0  Aligned clinical        (2.22)
                                                                          management.                                      labor discharge day
                                                                                                                           management time
                                                                                                                           with the work time
                                                                                                                           discharge day code.
                                 SA041.....  pack, basic        NF       .................                1            0  Supply item replaced   (11.67)
                                              injection.                                                                   by another item
                                                                                                                           (component parts);
                                                                                                                           see preamble.
                                 SB001.....  cap, surgical....  NF       .................                0            1  Supply item replaces      0.21
                                                                                                                           another item
                                                                                                                           (SA041); see
                                                                                                                           preamble.
                                 SB012.....  drape, sterile,    NF       .................                0            1  Supply item replaces      1.69
                                              for Mayo stand.                                                              another item
                                                                                                                           (SA041); see
                                                                                                                           preamble.
                                 SB024.....  gloves, sterile..  NF       .................                0            2  Supply item replaces      1.68
                                                                                                                           another item
                                                                                                                           (SA041); see
                                                                                                                           preamble.
                                 SB027.....  gown, staff,       NF       .................                0            2  Supply item replaces      2.37
                                              impervious.                                                                  another item
                                                                                                                           (SA041); see
                                                                                                                           preamble.
                                 SB033.....  mask, surgical...  NF       .................                0            1  Supply item replaces      0.20
                                                                                                                           another item
                                                                                                                           (SA041); see
                                                                                                                           preamble.
                                 SB044.....  underpad 2ft x     NF       .................                0            1  Supply item replaces      0.23
                                              3ft (Chux).                                                                  another item
                                                                                                                           (SA041); see
                                                                                                                           preamble.
                                 SG009.....  applicator,        NF       .................                0            3  Supply item replaces      0.42
                                              sponge-tipped.                                                               another item
                                                                                                                           (SA041); see
                                                                                                                           preamble.
                                 SG055.....  gauze, sterile     NF       .................                0            2  Supply item replaces      0.32
                                              4in x 4in.                                                                   another item
                                                                                                                           (SA041); see
                                                                                                                           preamble.
                                 SM010.....  cleaning brush,    F        .................                2            1  Refined supply          (4.99)
                                              endoscope.                                                                   quantity to what is
                                                                                                                           typical for the
                                                                                                                           procedure.

[[Page 41732]]

 
                                 SM010.....  cleaning brush,    NF       .................                4            2  Refined supply          (9.98)
                                              endoscope.                                                                   quantity to what is
                                                                                                                           typical for the
                                                                                                                           procedure.
30903......  Control of          EF008.....  chair with         NF       .................               54          110  Refined equipment         0.60
              nosebleed.                      headrest, exam,                                                              time to conform to
                                              reclining.                                                                   established
                                                                                                                           policies for
                                                                                                                           equipment with 4x
                                                                                                                           monitoring time.
                                 EQ110.....  electrocautery-    NF       .................               54           50  Refined equipment       (0.01)
                                              hyfrecator, up                                                               time to conform to
                                              to 45 watts.                                                                 established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ137.....  instrument pack,   NF       .................               61           54  Refined equipment       (0.02)
                                              basic ($500-                                                                 time to conform to
                                              $1,499).                                                                     established
                                                                                                                           policies for
                                                                                                                           instrument packs.
                                 EQ170.....  light, fiberoptic  NF       .................               54           50  Refined equipment       (0.03)
                                              headlight w-                                                                 time to conform to
                                              source.                                                                      established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ234.....  suction and        NF       .................               54          110  Refined equipment         0.52
                                              pressure                                                                     time to conform to
                                              cabinet, ENT                                                                 established
                                              (SMR).                                                                       policies for
                                                                                                                           equipment with 4x
                                                                                                                           monitoring time.
                                 L037D.....  RN/LPN/MTA.......  F        Dischrg gmt. same                6            0  Aligned clinical        (2.22)
                                                                          day (0.5 x                                       labor discharge day
                                                                          99238) (enter 6                                  management time
                                                                          min).                                            with the work time
                                                                                                                           discharge day code.
30905......  Control of          EF008.....  chair with         NF       .................               72          128  Refined equipment         0.60
              nosebleed.                      headrest, exam,                                                              time to conform to
                                              reclining.                                                                   established
                                                                                                                           policies for
                                                                                                                           equipment with 4x
                                                                                                                           monitoring time.
                                 EQ110.....  electrocautery-    NF       .................               72           68  Refined equipment       (0.01)
                                              hyfrecator, up                                                               time to conform to
                                              to 45 watts.                                                                 established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ137.....  instrument pack,   NF       .................               79           72  Refined equipment       (0.02)
                                              basic ($500-                                                                 time to conform to
                                              $1,499).                                                                     established
                                                                                                                           policies for
                                                                                                                           instrument packs.
                                 EQ170.....  light, fiberoptic  NF       .................               72           68  Refined equipment       (0.03)
                                              headlight w-                                                                 time to conform to
                                              source.                                                                      established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ234.....  suction and        NF       .................               72          128  Refined equipment         0.52
                                              pressure                                                                     time to conform to
                                              cabinet, ENT                                                                 established
                                              (SMR).                                                                       policies for
                                                                                                                           equipment with 4x
                                                                                                                           monitoring time.
                                 L037D.....  RN/LPN/MTA.......  F        Dischrg gmt. same                6            0  Aligned clinical        (2.22)
                                                                          day (0.5 x                                       labor discharge day
                                                                          99238) (enter 6                                  management time
                                                                          min).                                            with the work time
                                                                                                                           discharge day code.
30906......  Repeat control of   EF008.....  chair with         NF       .................               84          140  Refined equipment         0.60
              nosebleed.                      headrest, exam,                                                              time to conform to
                                              reclining.                                                                   established
                                                                                                                           policies for
                                                                                                                           equipment with 4x
                                                                                                                           monitoring time.
                                 EQ110.....  electrocautery-    NF       .................               84           80  Refined equipment       (0.01)
                                              hyfrecator, up                                                               time to conform to
                                              to 45 watts.                                                                 established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ137.....  instrument pack,   NF       .................               91           84  Refined equipment       (0.02)
                                              basic ($500-                                                                 time to conform to
                                              $1,499).                                                                     established
                                                                                                                           policies for
                                                                                                                           instrument packs.
                                 EQ170.....  light, fiberoptic  NF       .................               84           80  Refined equipment       (0.03)
                                              headlight w-                                                                 time to conform to
                                              source.                                                                      established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ234.....  suction and        NF       .................               84          140  Refined equipment         0.52
                                              pressure                                                                     time to conform to
                                              cabinet, ENT                                                                 established
                                              (SMR).                                                                       policies for
                                                                                                                           equipment with 4x
                                                                                                                           monitoring time.
31295......  Sinus endo w/       EF008.....  chair with         NF       .................               50          103  Refined equipment         0.57
              balloon dil.                    headrest, exam,                                                              time to conform to
                                              reclining.                                                                   established
                                                                                                                           policies for
                                                                                                                           equipment with 4x
                                                                                                                           monitoring time.

[[Page 41733]]

 
                                 EF015.....  mayo stand.......  NF       .................               32           43  Refined equipment         0.01
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ137.....  instrument pack,   NF       .................               42           47  Refined equipment         0.01
                                              basic ($500-                                                                 time to conform to
                                              $1,499).                                                                     established
                                                                                                                           policies for
                                                                                                                           instrument packs.
                                 EQ167.....  light source,      NF       .................               50            0  Redundant when used     (1.33)
                                              xenon.                                                                       together with
                                                                                                                           EQ170; see preamble.
                                 EQ170.....  light, fiberoptic  NF       .................               50           43  Refined equipment       (0.06)
                                              headlight w-                                                                 time to conform to
                                              source.                                                                      established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ234.....  suction and        NF       .................               50          103  Refined equipment         0.49
                                              pressure                                                                     time to conform to
                                              cabinet, ENT                                                                 established
                                              (SMR).                                                                       policies for
                                                                                                                           equipment with 4x
                                                                                                                           monitoring time.
                                 ES013.....  endoscope, rigid,  NF       .................               44           47  Refined equipment         0.02
                                              sinoscopy.                                                                   time to conform to
                                                                                                                           established
                                                                                                                           policies for scopes.
                                 ES031.....  video system,      NF       .................               50           43  Refined equipment       (0.90)
                                              endoscopy                                                                    time to conform to
                                              (processor,                                                                  established
                                              digital capture,                                                             policies for non-
                                              monitor,                                                                     highly technical
                                              printer, cart).                                                              equipment.
                                 L037D.....  RN/LPN/MTA.......  F        Dischrg gmt. same                6            0  Aligned clinical        (2.22)
                                                                          day (0.5 x                                       labor discharge day
                                                                          99238) (enter 6                                  management time
                                                                          min).                                            with the work time
                                                                                                                           discharge day code.
                                 L037D.....  RN/LPN/MTA.......  NF       Complete pre-                    5            0  See preamble text...    (1.85)
                                                                          service
                                                                          diagnostic &
                                                                          referral forms.
                                 L037D.....  RN/LPN/MTA.......  NF       Provide pre-                     7            3  Refined time to         (1.48)
                                                                          service                                          standard time for
                                                                          education/obtain                                 this clinical labor
                                                                          consent.                                         task.
                                 L037D.....  RN/LPN/MTA.......  NF       Sedate/Apply                     5            2  Refined time to         (1.11)
                                                                          anesthesia.                                      standard time for
                                                                                                                           this clinical labor
                                                                                                                           task.
                                 SJ037.....  oxymetazoline      NF       .................                3            1  Refined supply          (3.66)
                                              nasal spray                                                                  quantity to what is
                                              (Afrin) (15ml                                                                typical for the
                                              uou).                                                                        procedure.
31296......  Sinus endo w/       EF008.....  chair with         NF       .................               60          113  Refined equipment         0.57
              balloon dil.                    headrest, exam,                                                              time to conform to
                                              reclining.                                                                   established
                                                                                                                           policies for
                                                                                                                           equipment with 4x
                                                                                                                           monitoring time.
                                 EF015.....  mayo stand.......  NF       .................               60           53  Refined equipment       (0.01)
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ137.....  instrument pack,   NF       .................               52           57  Refined equipment         0.01
                                              basic ($500-                                                                 time to conform to
                                              $1,499).                                                                     established
                                                                                                                           policies for
                                                                                                                           instrument packs.
                                 EQ167.....  light source,      NF       .................               60            0  Redundant when used     (1.60)
                                              xenon.                                                                       together with
                                                                                                                           EQ170; see preamble.
                                 EQ170.....  light, fiberoptic  NF       .................               60           53  Refined equipment       (0.06)
                                              headlight w-                                                                 time to conform to
                                              source.                                                                      established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ234.....  suction and        NF       .................               60          113  Refined equipment         0.49
                                              pressure                                                                     time to conform to
                                              cabinet, ENT                                                                 established
                                              (SMR).                                                                       policies for
                                                                                                                           equipment with 4x
                                                                                                                           monitoring time.
                                 ES013.....  endoscope, rigid,  NF       .................               54           57  Refined equipment         0.02
                                              sinoscopy.                                                                   time to conform to
                                                                                                                           established
                                                                                                                           policies for scopes.
                                 ES031.....  video system,      NF       .................               60           53  Refined equipment       (0.90)
                                              endoscopy                                                                    time to conform to
                                              (processor,                                                                  established
                                              digital capture,                                                             policies for non-
                                              monitor,                                                                     highly technical
                                              printer, cart).                                                              equipment.

[[Page 41734]]

 
                                 L037D.....  RN/LPN/MTA.......  F        Dischrg gmt. same                6            0  Aligned clinical        (2.22)
                                                                          day (0.5 x                                       labor discharge day
                                                                          99238) (enter 6                                  management time
                                                                          min).                                            with the work time
                                                                                                                           discharge day code.
                                 L037D.....  RN/LPN/MTA.......  NF       Complete pre-                    5            0  See preamble text...    (1.85)
                                                                          service
                                                                          diagnostic &
                                                                          referral forms.
                                 L037D.....  RN/LPN/MTA.......  NF       Provide pre-                     7            3  Refined time to         (1.48)
                                                                          service                                          standard time for
                                                                          education/obtain                                 this clinical labor
                                                                          consent.                                         task.
                                 L037D.....  RN/LPN/MTA.......  NF       Sedate/Apply                     5            2  Refined time to         (1.11)
                                                                          anesthesia.                                      standard time for
                                                                                                                           this clinical labor
                                                                                                                           task.
                                 SJ037.....  oxymetazoline      NF       .................                3            1  Refined supply          (3.66)
                                              nasal spray                                                                  quantity to what is
                                              (Afrin) (15ml                                                                typical for the
                                              uou).                                                                        procedure.
31297......  Sinus endo w/       EF008.....  chair with         NF       .................               58          111  Refined equipment         0.57
              balloon dil.                    headrest, exam,                                                              time to conform to
                                              reclining.                                                                   established
                                                                                                                           policies for
                                                                                                                           equipment with 4x
                                                                                                                           monitoring time.
                                 EF015.....  mayo stand.......  NF       .................               40           51  Refined equipment         0.01
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ137.....  instrument pack,   NF       .................               47           55  Refined equipment         0.02
                                              basic ($500-                                                                 time to conform to
                                              $1,499).                                                                     established
                                                                                                                           policies for
                                                                                                                           instrument packs.
                                 EQ167.....  light source,      NF       .................               58            0  Redundant when used     (1.55)
                                              xenon.                                                                       together with
                                                                                                                           EQ170; see preamble.
                                 EQ170.....  light, fiberoptic  NF       .................               58           51  Refined equipment       (0.06)
                                              headlight w-                                                                 time to conform to
                                              source.                                                                      established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ234.....  suction and        NF       .................               58          111  Refined equipment         0.49
                                              pressure                                                                     time to conform to
                                              cabinet, ENT                                                                 established
                                              (SMR).                                                                       policies for
                                                                                                                           equipment with 4x
                                                                                                                           monitoring time.
                                 ES013.....  endoscope, rigid,  NF       .................               52           55  Refined equipment         0.02
                                              sinoscopy.                                                                   time to conform to
                                                                                                                           established
                                                                                                                           policies for scopes.
                                 ES031.....  video system,      NF       .................               58           51  Refined equipment       (0.90)
                                              endoscopy                                                                    time to conform to
                                              (processor,                                                                  established
                                              digital capture,                                                             policies for non-
                                              monitor,                                                                     highly technical
                                              printer, cart).                                                              equipment.
                                 L037D.....  RN/LPN/MTA.......  F        Dischrg gmt. same                6            0  Aligned clinical        (2.22)
                                                                          day (0.5 x                                       labor discharge day
                                                                          99238) (enter 6                                  management time
                                                                          min).                                            with the work time
                                                                                                                           discharge day code.
                                 L037D.....  RN/LPN/MTA.......  NF       Complete pre-                    5            0  See preamble text...    (1.85)
                                                                          service
                                                                          diagnostic &
                                                                          referral forms.
                                 L037D.....  RN/LPN/MTA.......  NF       Provide pre-                     7            3  Refined time to         (1.48)
                                                                          service                                          standard time for
                                                                          education/obtain                                 this clinical labor
                                                                          consent.                                         task.
                                 L037D.....  RN/LPN/MTA.......  NF       Sedate/Apply                     5            2  Refined time to         (1.11)
                                                                          anesthesia.                                      standard time for
                                                                                                                           this clinical labor
                                                                                                                           task.
                                 SJ037.....  oxymetazoline      NF       .................                3            1  Refined supply          (3.66)
                                              nasal spray                                                                  quantity to what is
                                              (Afrin) (15ml                                                                typical for the
                                              uou).                                                                        procedure.
38572......  Laparoscopy         SA051.....  pack, pelvic exam  F        .................                1            0  Removed supply not      (1.17)
              lymphadenectomy.                                                                                             typically used in
                                                                                                                           this service.
40804......  Removal foreign     EF008.....  chair with         NF       .................               74           82  Refined equipment         0.09
              body mouth.                     headrest, exam,                                                              time to conform to
                                              reclining.                                                                   established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ110.....  electrocautery-    NF       .................               29           39  Refined equipment         0.03
                                              hyfrecator, up                                                               time to conform to
                                              to 45 watts.                                                                 established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.

[[Page 41735]]

 
                                 EQ137.....  instrument pack,   NF       .................               36           38  Refined equipment           --
                                              basic ($500-                                                                 time to conform to
                                              $1,499).                                                                     established
                                                                                                                           policies for
                                                                                                                           instrument packs.
                                 EQ170.....  light, fiberoptic  NF       .................               74           82  Refined equipment         0.06
                                              headlight w-                                                                 time to conform to
                                              source.                                                                      established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ234.....  suction and        F        .................               27            0  Equipment usage not     (0.25)
                                              pressure                                                                     typical for a
                                              cabinet, ENT                                                                 follow-up office
                                              (SMR).                                                                       visit.
                                 EQ234.....  suction and        NF       .................               61           39  Refined equipment       (0.20)
                                              pressure                                                                     time to conform to
                                              cabinet, ENT                                                                 established
                                              (SMR).                                                                       policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037D.....  RN/LPN/MTA.......  F        Dischrg gmt. same                6            0  Aligned clinical        (2.22)
                                                                          day (0.5 x                                       labor discharge day
                                                                          99238) (enter 6                                  management time
                                                                          min).                                            with the work time
                                                                                                                           discharge day code.
                                 SD009.....  canister, suction  NF       .................                2            1  Refined supply          (3.91)
                                                                                                                           quantity to what is
                                                                                                                           typical for the
                                                                                                                           procedure.
42809......  Remove pharynx      EF008.....  chair with         NF       .................               58           74  Refined equipment         0.17
              foreign body.                   headrest, exam,                                                              time to conform to
                                              reclining.                                                                   established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EF015.....  mayo stand.......  NF       .................               26           47  Refined equipment         0.02
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ137.....  instrument pack,   NF       .................               60           51  Refined equipment       (0.02)
                                              basic ($500-                                                                 time to conform to
                                              $1,499).                                                                     established
                                                                                                                           policies for
                                                                                                                           instrument packs.
                                 EQ170.....  light, fiberoptic  NF       .................               58           74  Refined equipment         0.13
                                              headlight w-                                                                 time to conform to
                                              source.                                                                      established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ234.....  suction and        F        .................               27            0  Equipment usage not     (0.25)
                                              pressure                                                                     typical for a
                                              cabinet, ENT                                                                 follow-up office
                                              (SMR).                                                                       visit.
                                 EQ234.....  suction and        NF       .................               58           47  Refined equipment       (0.10)
                                              pressure                                                                     time to conform to
                                              cabinet, ENT                                                                 established
                                              (SMR).                                                                       policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 ES020.....  fiberscope,        NF       .................              115          128  Refined equipment         0.47
                                              flexible,                                                                    time to conform to
                                              rhinolaryngoscop                                                             established
                                              y.                                                                           policies for scopes.
                                 L037D.....  RN/LPN/MTA.......  F        Dischrg gmt. same                6            0  Aligned clinical        (2.22)
                                                                          day (0.5 x                                       labor discharge day
                                                                          99238) (enter 6                                  management time
                                                                          min).                                            with the work time
                                                                                                                           discharge day code.
                                 SA048.....  pack, minimum      F        .................                2            1  Refined supply          (1.14)
                                              multi-specialty                                                              quantity to what is
                                              visit.                                                                       typical for the
                                                                                                                           procedure.
44380......  Small bowel         EF018.....  stretcher........  NF       .................               73           77  Standard time for         0.02
              endoscopy br/wa.                                                                                             moderate sedation
                                                                                                                           equipment.
                                 EF027.....  table,             NF       .................               29           77  Standard time for         0.07
                                              instrument,                                                                  moderate sedation
                                              mobile.                                                                      equipment.
                                 EF031.....  table, power.....  NF       .................               29            0  Equipment removed       (0.47)
                                                                                                                           due to redundancy
                                                                                                                           when used together
                                                                                                                           with equipment item
                                                                                                                           EF018, stretcher.
                                 EQ011.....  ECG, 3-channel     NF       .................               52           77  Standard time for         0.35
                                              (with SpO2,                                                                  moderate sedation
                                              NIBP, temp,                                                                  equipment.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               52           77  Standard time for         0.16
                                                                                                                           moderate sedation
                                                                                                                           equipment.
44381......  Small bowel         EF018.....  stretcher........  NF       .................               83           87  Standard equipment        0.02
              endoscopy br/wa.                                                                                             and time for
                                                                                                                           moderate sedation.
                                 EF027.....  table,             NF       .................               39           87  Standard equipment        0.07
                                              instrument,                                                                  and time for
                                              mobile.                                                                      moderate sedation.
                                 EQ011.....  ECG, 3-channel     NF       .................               62           87  Standard equipment        0.35
                                              (with SpO2,                                                                  and time for
                                              NIBP, temp,                                                                  moderate sedation.
                                              resp).

[[Page 41736]]

 
                                 EQ032.....  IV infusion pump.  NF       .................               62           87  Standard equipment        0.16
                                                                                                                           and time for
                                                                                                                           moderate sedation.
44382......  Small bowel         EF018.....  stretcher........  NF       .................               78           82  Standard time for         0.02
              endoscopy.                                                                                                   moderate sedation
                                                                                                                           equipment.
                                 EF027.....  table,             NF       .................               34           82  Standard time for         0.07
                                              instrument,                                                                  moderate sedation
                                              mobile.                                                                      equipment.
                                 EF031.....  table, power.....  NF       .................               34            0  Equipment removed       (0.56)
                                                                                                                           due to redundancy
                                                                                                                           when used together
                                                                                                                           with equipment item
                                                                                                                           EF018, stretcher.
                                 EQ011.....  ECG, 3-channel     NF       .................               57           82  Standard time for         0.35
                                              (with SpO2,                                                                  moderate sedation
                                              NIBP, temp,                                                                  equipment.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               57           82  Standard time for         0.16
                                                                                                                           moderate sedation
                                                                                                                           equipment.
44385......  Endoscopy of bowel  EF027.....  table,             NF       .................               29           77  Standard time for         0.07
              pouch.                          instrument,                                                                  moderate sedation
                                              mobile.                                                                      equipment.
                                 EF031.....  table, power.....  NF       .................               29            0  Equipment removed       (0.47)
                                                                                                                           due to redundancy
                                                                                                                           when used together
                                                                                                                           with equipment item
                                                                                                                           EF018, stretcher.
                                 EQ011.....  ECG, 3-channel     NF       .................               52           77  Refined equipment         0.35
                                              (with SpO2,                                                                  time to conform to
                                              NIBP, temp,                                                                  established
                                              resp).                                                                       policies for
                                                                                                                           equipment with 4x
                                                                                                                           monitoring time.
                                 EQ032.....  IV infusion pump.  NF       .................               52           77  Standard time for         0.16
                                                                                                                           moderate sedation
                                                                                                                           equipment.
44386......  Endoscopy bowel     EF027.....  table,             NF       .................               31           79  Standard time for         0.07
              pouch/biop.                     instrument,                                                                  moderate sedation
                                              mobile.                                                                      equipment.
                                 EF031.....  table, power.....  NF       .................               31            0  Equipment removed       (0.51)
                                                                                                                           due to redundancy
                                                                                                                           when used together
                                                                                                                           with equipment item
                                                                                                                           EF018, stretcher.
                                 EQ011.....  ECG, 3-channel     NF       .................               54           79  Standard time for         0.35
                                              (with SpO2,                                                                  moderate sedation
                                              NIBP, temp,                                                                  equipment.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               54           79  Standard time for         0.16
                                                                                                                           moderate sedation
                                                                                                                           equipment.
44388......  Colonoscopy thru    EF027.....  table,             NF       .................               57           87  Standard time for         0.04
              stoma spx.                      instrument,                                                                  moderate sedation
                                              mobile.                                                                      equipment.
                                 EF031.....  table, power.....  NF       .................               39            0  Equipment removed       (0.64)
                                                                                                                           due to redundancy
                                                                                                                           when used together
                                                                                                                           with equipment item
                                                                                                                           EF018, stretcher.
                                 EQ011.....  ECG, 3-channel     NF       .................               57           87  Standard time for         0.42
                                              (with SpO2,                                                                  moderate sedation
                                              NIBP, temp,                                                                  equipment.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               57           87  Standard time for         0.19
                                                                                                                           moderate sedation
                                                                                                                           equipment.
44389......  Colonoscopy with    EF027.....  table,             NF       .................               62           92  Standard time for         0.04
              biopsy.                         instrument,                                                                  moderate sedation
                                              mobile.                                                                      equipment.
                                 EF031.....  table, power.....  NF       .................               44            0  Equipment removed       (0.72)
                                                                                                                           due to redundancy
                                                                                                                           when used together
                                                                                                                           with equipment item
                                                                                                                           EF018, stretcher.
                                 EQ011.....  ECG, 3-channel     NF       .................               62           92  Standard time for         0.42
                                              (with SpO2,                                                                  moderate sedation
                                              NIBP, temp,                                                                  equipment.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               62           92  Standard time for         0.19
                                                                                                                           moderate sedation
                                                                                                                           equipment.
44390......  Colonoscopy for     EF027.....  table,             NF       .................               67           97  Standard time for         0.04
              foreign body.                   instrument,                                                                  moderate sedation
                                              mobile.                                                                      equipment.
                                 EF031.....  table, power.....  NF       .................               49            0  Equipment removed       (0.80)
                                                                                                                           due to redundancy
                                                                                                                           when used together
                                                                                                                           with equipment item
                                                                                                                           EF018, stretcher.

[[Page 41737]]

 
                                 EQ011.....  ECG, 3-channel     NF       .................               67           97  Standard time for         0.42
                                              (with SpO2,                                                                  moderate sedation
                                              NIBP, temp,                                                                  equipment.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               67           97  Standard time for         0.19
                                                                                                                           moderate sedation
                                                                                                                           equipment.
44391......  Colonoscopy for     EF027.....  table,             NF       .................               72          102  Standard time for         0.04
              bleeding.                       instrument,                                                                  moderate sedation
                                              mobile.                                                                      equipment.
                                 EF031.....  table, power.....  NF       .................               54            0  Equipment removed       (0.88)
                                                                                                                           due to redundancy
                                                                                                                           when used together
                                                                                                                           with equipment item
                                                                                                                           EF018, stretcher.
                                 EQ011.....  ECG, 3-channel     NF       .................               72          102  Standard time for         0.42
                                              (with SpO2,                                                                  moderate sedation
                                              NIBP, temp,                                                                  equipment.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               72          102  Standard time for         0.19
                                                                                                                           moderate sedation
                                                                                                                           equipment.
44392......  Colonoscopy &       EF027.....  table,             NF       .................               62           92  Standard time for         0.04
              polypectomy.                    instrument,                                                                  moderate sedation
                                              mobile.                                                                      equipment.
                                 EF031.....  table, power.....  NF       .................               44            0  Equipment removed       (0.72)
                                                                                                                           due to redundancy
                                                                                                                           when used together
                                                                                                                           with equipment item
                                                                                                                           EF018, stretcher.
                                 EQ011.....  ECG, 3-channel     NF       .................               62           92  Standard time for         0.42
                                              (with SpO2,                                                                  moderate sedation
                                              NIBP, temp,                                                                  equipment.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               62           92  Standard time for         0.19
                                                                                                                           moderate sedation
                                                                                                                           equipment.
44394......  Colonoscopy w/      EF027.....  table,             NF       .................               62           92  Standard time for         0.04
              snare.                          instrument,                                                                  moderate sedation
                                              mobile.                                                                      equipment.
                                 EF031.....  table, power.....  NF       .................               44            0  Equipment removed       (0.72)
                                                                                                                           due to redundancy
                                                                                                                           when used together
                                                                                                                           with equipment item
                                                                                                                           EF018, stretcher.
                                 EQ011.....  ECG, 3-channel     NF       .................               62           92  Standard time for         0.42
                                              (with SpO2,                                                                  moderate sedation
                                              NIBP, temp,                                                                  equipment.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               62           92  Standard time for         0.19
                                                                                                                           moderate sedation
                                                                                                                           equipment.
44401......  Colonoscopy with    EF027.....  table,             NF       .................               62           92  Standard equipment        0.04
              ablation.                       instrument,                                                                  and time for
                                              mobile.                                                                      moderate sedation.
                                 EF031.....  table, power.....  NF       .................               44            0  Refined equipment       (0.72)
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ011.....  ECG, 3-channel     NF       .................               62           92  Standard equipment        0.42
                                              (with SpO2,                                                                  and time for
                                              NIBP, temp,                                                                  moderate sedation.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               62           92  Standard equipment        0.19
                                                                                                                           and time for
                                                                                                                           moderate sedation.
44404......  Colonoscopy w/      EF027.....  table,             NF       .................               62           92  Standard equipment        0.04
              injection.                      instrument,                                                                  and time for
                                              mobile.                                                                      moderate sedation.
                                 EQ011.....  ECG, 3-channel     NF       .................               62           92  Standard equipment        0.42
                                              (with SpO2,                                                                  and time for
                                              NIBP, temp,                                                                  moderate sedation.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               62           92  Standard equipment        0.19
                                                                                                                           and time for
                                                                                                                           moderate sedation.
44405......  Colonoscopy w/      EF027.....  table,             NF       .................               40          100  Standard equipment        0.08
              dilation.                       instrument,                                                                  and time for
                                              mobile.                                                                      moderate sedation.
                                 EQ011.....  ECG, 3-channel     NF       .................               50          100  Standard equipment        0.70
                                              (with SpO2,                                                                  and time for
                                              NIBP, temp,                                                                  moderate sedation.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               50          100  Standard equipment        0.32
                                                                                                                           and time for
                                                                                                                           moderate sedation.
45330......  Diagnostic          EF027.....  table,             NF       .................               12            0  No moderate sedation    (0.02)
              sigmoidoscopy.                  instrument,
                                              mobile.

[[Page 41738]]

 
                                 EQ011.....  ECG, 3-channel     NF       .................               18            0  No moderate sedation    (0.25)
                                              (with SpO2,
                                              NIBP, temp,
                                              resp).
                                 EQ235.....  suction machine    NF       .................               12           22  Increased to reflect      0.02
                                              (Gomco).                                                                     Intra-Service
                                                                                                                           clinical labor
                                                                                                                           tasks.
                                 ES031.....  video system,      NF       .................               12           22  Increased to reflect      1.29
                                              endoscopy                                                                    Intra-Service
                                              (processor,                                                                  clinical labor
                                              digital capture,                                                             tasks.
                                              monitor,
                                              printer, cart).
                                 ES043.....  Video Sigmoid-     NF       .................               42           49  Refined equipment         0.49
                                              oscope.                                                                      time to conform to
                                                                                                                           established
                                                                                                                           policies for scopes.
45331......  Sigmoidoscopy and   EF027.....  table,             NF       .................               12            0  No moderate sedation    (0.02)
              biopsy.                         instrument,
                                              mobile.
                                 EQ011.....  ECG, 3-channel     NF       .................               33            0  No moderate sedation    (0.46)
                                              (with SpO2,
                                              NIBP, temp,
                                              resp).
                                 EQ235.....  suction machine    NF       .................               12           27  Matches time spent        0.03
                                              (Gomco).                                                                     using endoscope
                                                                                                                           system.
                                 ES031.....  video system,      NF       .................               12           27  Increased to reflect      1.93
                                              endoscopy                                                                    Intra-Service
                                              (processor,                                                                  clinical labor
                                              digital capture,                                                             tasks.
                                              monitor,
                                              printer, cart).
                                 ES043.....  Video Sigmoid-     NF       .................               42           54  Refined equipment         0.83
                                              oscope.                                                                      time to conform to
                                                                                                                           established
                                                                                                                           policies for scopes.
45332......  Sigmoidoscopy w/fb  EF027.....  table,             NF       .................               34           82  Standard time for         0.07
              removal.                        instrument,                                                                  moderate sedation
                                              mobile.                                                                      equipment.
                                 EF031.....  table, power.....  NF       .................               34            0  Equipment removed       (0.56)
                                                                                                                           due to redundancy
                                                                                                                           when used together
                                                                                                                           with equipment item
                                                                                                                           EF018, stretcher.
                                 EQ011.....  ECG, 3-channel     NF       .................               57           82  Standard time for         0.35
                                              (with SpO2,                                                                  moderate sedation
                                              NIBP, temp,                                                                  equipment.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               57           82  Standard time for         0.16
                                                                                                                           moderate sedation
                                                                                                                           equipment.
45333......  Sigmoidoscopy &     EF027.....  table,             NF       .................               29           77  Standard time for         0.07
              polypectomy.                    instrument,                                                                  moderate sedation
                                              mobile.                                                                      equipment.
                                 EF031.....  table, power.....  NF       .................               29            0  Equipment removed       (0.47)
                                                                                                                           due to redundancy
                                                                                                                           when used together
                                                                                                                           with equipment item
                                                                                                                           EF018, stretcher.
                                 EQ011.....  ECG, 3-channel     NF       .................               52           77  Standard time for         0.35
                                              (with SpO2,                                                                  moderate sedation
                                              NIBP, temp,                                                                  equipment.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               52           77  Standard time for         0.16
                                                                                                                           moderate sedation
                                                                                                                           equipment.
45334......  Sigmoidoscopy for   EF027.....  table,             NF       .................               34           82  Standard time for         0.07
              bleeding.                       instrument,                                                                  moderate sedation
                                              mobile.                                                                      equipment.
                                 EF031.....  table, power.....  NF       .................               34            0  Equipment removed       (0.56)
                                                                                                                           due to redundancy
                                                                                                                           when used together
                                                                                                                           with equipment item
                                                                                                                           EF018, stretcher.
                                 EQ011.....  ECG, 3-channel     NF       .................               57           82  Standard time for         0.35
                                              (with SpO2,                                                                  moderate sedation
                                              NIBP, temp,                                                                  equipment.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               57           82  Standard time for         0.16
                                                                                                                           moderate sedation
                                                                                                                           equipment.
45335......  Sigmoidoscopy w/    EF027.....  table,             NF       .................               29           77  Standard time for         0.07
              submuc inj.                     instrument,                                                                  moderate sedation
                                              mobile.                                                                      equipment.
                                 EF031.....  table, power.....  NF       .................               29            0  Equipment removed       (0.47)
                                                                                                                           due to redundancy
                                                                                                                           when used together
                                                                                                                           with equipment item
                                                                                                                           EF018, stretcher.

[[Page 41739]]

 
                                 EQ011.....  ECG, 3-channel     NF       .................               52           77  Standard time for         0.35
                                              (with SpO2,                                                                  moderate sedation
                                              NIBP, temp,                                                                  equipment.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               52           77  Standard time for         0.16
                                                                                                                           moderate sedation
                                                                                                                           equipment.
45338......  Sigmoidoscopy w/    EF027.....  table,             NF       .................               29           77  Standard time for         0.07
              tumr remove.                    instrument,                                                                  moderate sedation
                                              mobile.                                                                      equipment.
                                 EQ011.....  ECG, 3-channel     NF       .................               52           77  Standard time for         0.35
                                              (with SpO2,                                                                  moderate sedation
                                              NIBP, temp,                                                                  equipment.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               52           77  Standard time for         0.16
                                                                                                                           moderate sedation
                                                                                                                           equipment.
45340......  Sig w/tndsc         EF027.....  table,             NF       .................               34           82  Standard time for         0.07
              balloon dilation.               instrument,                                                                  moderate sedation
                                              mobile.                                                                      equipment.
                                 EQ011.....  ECG, 3-channel     NF       .................               57           82  Standard time for         0.35
                                              (with SpO2,                                                                  moderate sedation
                                              NIBP, temp,                                                                  equipment.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               57           82  Standard time for         0.16
                                                                                                                           moderate sedation
                                                                                                                           equipment.
45346......  Sigmoidoscopy w/    EF027.....  table,             NF       .................               34           82  Standard equipment        0.07
              ablation.                       instrument,                                                                  and time for
                                              mobile.                                                                      moderate sedation.
                                 EQ011.....  ECG, 3-channel     NF       .................               57           82  Standard equipment        0.35
                                              (with SpO2,                                                                  and time for
                                              NIBP, temp,                                                                  moderate sedation.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               57           82  Standard equipment        0.16
                                                                                                                           and time for
                                                                                                                           moderate sedation.
45350......  Sgmdsc w/band       EF027.....  table,             NF       .................               94           82  Standard equipment      (0.02)
              ligation.                       instrument,                                                                  and time for
                                              mobile.                                                                      moderate sedation.
                                 EQ011.....  ECG, 3-channel     NF       .................               94           82  Standard equipment      (0.17)
                                              (with SpO2,                                                                  and time for
                                              NIBP, temp,                                                                  moderate sedation.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               94           82  Standard equipment      (0.08)
                                                                                                                           and time for
                                                                                                                           moderate sedation.
                                 SH074.....  water, sterile     NF       .................                1            0  This input is not       (2.09)
                                              for irrigation                                                               contained within
                                              (250-1000ml uou).                                                            any other code in
                                                                                                                           this family;
                                                                                                                           maintaining
                                                                                                                           consistency with
                                                                                                                           all other codes
                                                                                                                           within family.
                                 SK087.....  water, distilled.  NF       .................                0            5  This input is not         0.07
                                                                                                                           contained within
                                                                                                                           any other code in
                                                                                                                           this family;
                                                                                                                           maintaining
                                                                                                                           consistency with
                                                                                                                           all other codes
                                                                                                                           within family.
45378......  Diagnostic          EF027.....  table,             NF       .................               57           87  Standard time for         0.04
              colonoscopy.                    instrument,                                                                  moderate sedation
                                              mobile.                                                                      equipment.
                                 EF031.....  table, power.....  NF       .................               39            0  Equipment removed       (0.64)
                                                                                                                           due to redundancy
                                                                                                                           when used together
                                                                                                                           with equipment item
                                                                                                                           EF018, stretcher.
                                 EQ011.....  ECG, 3-channel     NF       .................               57           87  Standard time for         0.42
                                              (with SpO2,                                                                  moderate sedation
                                              NIBP, temp,                                                                  equipment.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               57           87  Standard time for         0.19
                                                                                                                           moderate sedation
                                                                                                                           equipment.
                                 EQ235.....  suction machine    NF       .................               72           39  Matches time spent      (0.07)
                                              (Gomco).                                                                     using endoscope
                                                                                                                           system.
45379......  Colonoscopy w/fb    EF027.....  table,             NF       .................               67           97  Standard time for         0.04
              removal.                        instrument,                                                                  moderate sedation
                                              mobile.                                                                      equipment.
                                 EF031.....  table, power.....  NF       .................               49            0  Equipment removed       (0.80)
                                                                                                                           due to redundancy
                                                                                                                           when used together
                                                                                                                           with equipment item
                                                                                                                           EF018, stretcher.
                                 EQ011.....  ECG, 3-channel     NF       .................               67           97  Standard time for         0.42
                                              (with SpO2,                                                                  moderate sedation
                                              NIBP, temp,                                                                  equipment.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               67           97  Standard time for         0.19
                                                                                                                           moderate sedation
                                                                                                                           equipment.

[[Page 41740]]

 
                                 EQ235.....  suction machine    NF       .................               92           49  Matches time spent      (0.08)
                                              (Gomco).                                                                     using endoscope
                                                                                                                           system.
45380......  Colonoscopy and     EF027.....  table,             NF       .................               60           90  Standard time for         0.04
              biopsy.                         instrument,                                                                  moderate sedation
                                              mobile.                                                                      equipment.
                                 EF031.....  table, power.....  NF       .................               42            0  Equipment removed       (0.69)
                                                                                                                           due to redundancy
                                                                                                                           when used together
                                                                                                                           with equipment item
                                                                                                                           EF018, stretcher.
                                 EQ011.....  ECG, 3-channel     NF       .................               60           90  Standard time for         0.42
                                              (with SpO2,                                                                  moderate sedation
                                              NIBP, temp,                                                                  equipment.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               60           90  Standard time for         0.19
                                                                                                                           moderate sedation
                                                                                                                           equipment.
                                 EQ235.....  suction machine    NF       .................               78           42  Matches time spent      (0.07)
                                              (Gomco).                                                                     using endoscope
                                                                                                                           system.
45381......  Colonoscopy         EF027.....  table,             NF       .................               60           90  Standard time for         0.04
              submucous njx.                  instrument,                                                                  moderate sedation
                                              mobile.                                                                      equipment.
                                 EF031.....  table, power.....  NF       .................               42            0  Equipment removed       (0.69)
                                                                                                                           due to redundancy
                                                                                                                           when used together
                                                                                                                           with equipment item
                                                                                                                           EF018, stretcher.
                                 EQ011.....  ECG, 3-channel     NF       .................               60           90  Standard time for         0.42
                                              (with SpO2,                                                                  moderate sedation
                                              NIBP, temp,                                                                  equipment.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               60           90  Standard time for         0.19
                                                                                                                           moderate sedation
                                                                                                                           equipment.
                                 EQ235.....  suction machine    NF       .................               78           42  Matches time spent      (0.07)
                                              (Gomco).                                                                     using endoscope
                                                                                                                           system.
45382......  Colonoscopy w/      EF027.....  table,             NF       .................               72          102  Standard time for         0.04
              control bleed.                  instrument,                                                                  moderate sedation
                                              mobile.                                                                      equipment.
                                 EF031.....  table, power.....  NF       .................               54            0  Equipment removed       (0.88)
                                                                                                                           due to redundancy
                                                                                                                           when used together
                                                                                                                           with equipment item
                                                                                                                           EF018, stretcher.
                                 EQ011.....  ECG, 3-channel     NF       .................               72          102  Standard time for         0.42
                                              (with SpO2,                                                                  moderate sedation
                                              NIBP, temp,                                                                  equipment.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               72          102  Standard time for         0.19
                                                                                                                           moderate sedation
                                                                                                                           equipment.
                                 EQ235.....  suction machine    NF       .................              102           54  Matches time spent      (0.09)
                                              (Gomco).                                                                     using endoscope
                                                                                                                           system.
45384......  Colonoscopy w/      EF027.....  table,             NF       .................               60           90  Standard time for         0.04
              lesion removal.                 instrument,                                                                  moderate sedation
                                              mobile.                                                                      equipment.
                                 EF031.....  table, power.....  NF       .................               42            0  Equipment removed       (0.69)
                                                                                                                           due to redundancy
                                                                                                                           when used together
                                                                                                                           with equipment item
                                                                                                                           EF018, stretcher.
                                 EQ011.....  ECG, 3-channel     NF       .................               60           90  Standard time for         0.42
                                              (with SpO2,                                                                  moderate sedation
                                              NIBP, temp,                                                                  equipment.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               60           90  Standard time for         0.19
                                                                                                                           moderate sedation
                                                                                                                           equipment.
                                 EQ235.....  suction machine    NF       .................               78           42  Matches time spent      (0.07)
                                              (Gomco).                                                                     using endoscope
                                                                                                                           system.
45385......  Colonoscopy w/      EF027.....  table,             NF       .................               62           92  Standard time for         0.04
              lesion removal.                 instrument,                                                                  moderate sedation
                                              mobile.                                                                      equipment.
                                 EF031.....  table, power.....  NF       .................               44            0  Equipment removed       (0.72)
                                                                                                                           due to redundancy
                                                                                                                           when used together
                                                                                                                           with equipment item
                                                                                                                           EF018, stretcher.
                                 EQ011.....  ECG, 3-channel     NF       .................               62           92  Standard time for         0.42
                                              (with SpO2,                                                                  moderate sedation
                                              NIBP, temp,                                                                  equipment.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               62           92  Standard time for         0.19
                                                                                                                           moderate sedation
                                                                                                                           equipment.
                                 EQ235.....  suction machine    NF       .................               82           44  Matches time spent      (0.07)
                                              (Gomco).                                                                     using endoscope
                                                                                                                           system.
45386......  Colonoscopy w/      EF027.....  table,             NF       .................               67           97  Standard time for         0.04
              balloon dilat.                  instrument,                                                                  moderate sedation
                                              mobile.                                                                      equipment.

[[Page 41741]]

 
                                 EF031.....  table, power.....  NF       .................               49            0  Equipment removed       (0.80)
                                                                                                                           due to redundancy
                                                                                                                           when used together
                                                                                                                           with equipment item
                                                                                                                           EF018, stretcher.
                                 EQ011.....  ECG, 3-channel     NF       .................               67           97  Standard time for         0.42
                                              (with SpO2,                                                                  moderate sedation
                                              NIBP, temp,                                                                  equipment.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               67           97  Standard time for         0.19
                                                                                                                           moderate sedation
                                                                                                                           equipment.
                                 EQ235.....  suction machine    NF       .................               92           49  Matches time spent      (0.08)
                                              (Gomco).                                                                     using endoscope
                                                                                                                           system.
45388......  Colonoscopy w/      EF027.....  table,             NF       .................               67           97  Standard equipment        0.04
              ablation.                       instrument,                                                                  and time for
                                              mobile.                                                                      moderate sedation.
                                 EF031.....  table, power.....  NF       .................               49            0  Refined equipment       (0.80)
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ011.....  ECG, 3-channel     NF       .................               67           97  Standard equipment        0.42
                                              (with SpO2,                                                                  and time for
                                              NIBP, temp,                                                                  moderate sedation.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               67           97  Standard equipment        0.19
                                                                                                                           and time for
                                                                                                                           moderate sedation.
                                 EQ235.....  suction machine    NF       .................               92           49  Matches time spent      (0.08)
                                              (Gomco).                                                                     using endoscope
                                                                                                                           system.
45398......  Colonoscopy w/band  EF027.....  table,             NF       .................               52           82  Standard equipment        0.04
              ligation.                       instrument,                                                                  and time for
                                              mobile.                                                                      moderate sedation.
                                 EF031.....  table, power.....  NF       .................               34            0  Refined equipment       (0.56)
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ011.....  ECG, 3-channel     NF       .................               52           82  Standard equipment        0.42
                                              (with SpO2,                                                                  and time for
                                              NIBP, temp,                                                                  moderate sedation.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................               52           82  Standard equipment        0.19
                                                                                                                           and time for
                                                                                                                           moderate sedation.
                                 EQ235.....  suction machine    NF       .................               62           34  Matches time spent      (0.06)
                                              (Gomco).                                                                     using endoscope
                                                                                                                           system.
46500......  Injection into      EF014.....  light, surgical..  NF       .................               73           60  Refined equipment       (0.13)
              hemorrhoid(s).                                                                                               time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EF031.....  table, power.....  NF       .................               73           60  Refined equipment       (0.21)
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ235.....  suction machine    NF       .................               73           60  Refined equipment       (0.03)
                                              (Gomco).                                                                     time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 ES002.....  anoscope with      NF       .................               78           60  Refined equipment       (0.07)
                                              light source.                                                                time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037D.....  RN/LPN/MTA.......  F        Cleaning scope at                5            0  Included in clinical    (1.85)
                                                                          POV.                                             labor task ``Clean
                                                                                                                           room, equipment,
                                                                                                                           and supplies''
                                                                                                                           included in post-
                                                                                                                           operative visit.
                                 L037D.....  RN/LPN/MTA.......  F        Complete pre-                    3            0  Standard 0 day          (1.11)
                                                                          service                                          global pre-service
                                                                          diagnostic and                                   times; exception
                                                                          referral forms.                                  not accepted as
                                                                                                                           service is rarely
                                                                                                                           furnished in the
                                                                                                                           facility.
                                 L037D.....  RN/LPN/MTA.......  F        Coordinate pre-                  3            0  Standard 0 day          (1.11)
                                                                          surgery services.                                global pre-service
                                                                                                                           times; exception
                                                                                                                           not accepted as
                                                                                                                           service is rarely
                                                                                                                           furnished in the
                                                                                                                           facility.
                                 L037D.....  RN/LPN/MTA.......  F        Follow-up phone                  3            0  Standard 0 day          (1.11)
                                                                          calls and                                        global pre-service
                                                                          prescriptions.                                   times; exception
                                                                                                                           not accepted as
                                                                                                                           service is rarely
                                                                                                                           furnished in the
                                                                                                                           facility.

[[Page 41742]]

 
                                 L037D.....  RN/LPN/MTA.......  F        Schedule space                   3            0  Standard 0 day          (1.11)
                                                                          and equipment in                                 global pre-service
                                                                          facility.                                        times; exception
                                                                                                                           not accepted as
                                                                                                                           service is rarely
                                                                                                                           furnished in the
                                                                                                                           facility.
                                 L037D.....  RN/LPN/MTA.......  F        Setup scope at                   5            0  Included in clinical    (1.85)
                                                                          POV.                                             labor task
                                                                                                                           ``Prepare room,
                                                                                                                           equipment,
                                                                                                                           supplies'' included
                                                                                                                           in post-operative
                                                                                                                           visit.
                                 L037D.....  RN/LPN/MTA.......  NF       Clean scope......                5            0  Included in clinical    (1.85)
                                                                                                                           labor task ``Clean
                                                                                                                           room, equipment,
                                                                                                                           and supplies''.
                                 L037D.....  RN/LPN/MTA.......  NF       Cleaning scope at                5            0  Included in clinical    (1.85)
                                                                          POV.                                             labor task ``Clean
                                                                                                                           room, equipment,
                                                                                                                           and supplies''
                                                                                                                           included in post-
                                                                                                                           operative visit.
                                 L037D.....  RN/LPN/MTA.......  NF       Follow-up phone                  3            0  Typically billed        (1.11)
                                                                          calls and                                        with an E/M or
                                                                          prescriptions.                                   other evaluation
                                                                                                                           service.
                                 L037D.....  RN/LPN/MTA.......  NF       Setup scope (non                 5            0  Included in clinical    (1.85)
                                                                          facility setting                                 labor task
                                                                          only).                                           ``Prepare room,
                                                                                                                           equipment,
                                                                                                                           supplies''.
                                 L037D.....  RN/LPN/MTA.......  NF       Setup scope at                   5            0  Included in clinical    (1.85)
                                                                          POV.                                             labor task ``Clean
                                                                                                                           room, equipment,
                                                                                                                           and supplies''
                                                                                                                           included in post-
                                                                                                                           operative visit.
                                 SA042.....  pack, cleaning     NF       .................                2            0  Removed supply         (34.12)
                                              and                                                                          associated with
                                              disinfecting,                                                                equipment item not
                                              endoscope.                                                                   typically used in
                                                                                                                           this service.
46601......  Diagnostic          EF031.....  table, power.....  NF       .................               41           33  Refined equipment       (0.13)
              anoscopy.                                                                                                    time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
46607......  Diagnostic          EF031.....  table, power.....  NF       .................               49           38  Refined equipment       (0.18)
              anoscopy & biopsy.                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
5039A......  Njx px nfrosgrm &/  ED050.....  PACS Workstation   NF       .................               58           67  Refined equipment         0.20
              urtrgrm.                        Proxy.                                                                       time to conform to
                                                                                                                           clinical labor time.
                                 EF027.....  table,             NF       .................              284          277  Standard equipment      (0.01)
                                              instrument,                                                                  and time for
                                              mobile.                                                                      moderate sedation.
                                 EL011.....  room, angiography  NF       .................               44            0  Equipment item        (231.21)
                                                                                                                           replaced by another
                                                                                                                           item; see preamble.
                                 EL014.....  room,              NF       .................                0           44  Equipment item           61.30
                                              radiographic-                                                                replaces another
                                              fluoroscopic.                                                                item; see preamble.
                                 EQ011.....  ECG, 3-channel     NF       .................              284          277  Standard equipment      (0.10)
                                              (with SpO2,                                                                  and time for
                                              NIBP, temp,                                                                  moderate sedation.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................              284          277  Standard equipment      (0.04)
                                                                                                                           and time for
                                                                                                                           moderate sedation.
                                 EQ168.....  light, exam......  NF       .................               44           62  Refined equipment         0.08
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037D.....  RN/LPN/MTA.......  NF       Monitor pt                       0           45  Clinical labor type      16.65
                                                                          following                                        replaces another
                                                                          service/check                                    clinical labor
                                                                          tubes, monitors,                                 type; see preamble.
                                                                          drains (not
                                                                          related to
                                                                          moderate
                                                                          sedation).
                                 L051A.....  RN...............  NF       Monitor pt                      45            0  Clinical labor type    (22.95)
                                                                          following                                        replaced by another
                                                                          service/check                                    labor type; see
                                                                          tubes, monitors,                                 preamble.
                                                                          drains (not
                                                                          related to
                                                                          moderate
                                                                          sedation).
                                 SA019.....  kit, iv starter..  NF       .................                1            0  Duplicative; a          (1.60)
                                                                                                                           similar item is
                                                                                                                           already included in
                                                                                                                           this service.

[[Page 41743]]

 
                                 SA042.....  pack, cleaning     NF       .................                1            0  Removed supply         (17.06)
                                              and                                                                          associated with
                                              disinfecting,                                                                equipment item not
                                              endoscope.                                                                   typically used in
                                                                                                                           this service.
                                 SB022.....  gloves, non-       NF       .................                2            0  Duplicative; items      (0.17)
                                              sterile.                                                                     included in pack,
                                                                                                                           minimum multi-
                                                                                                                           specialty visit
                                                                                                                           (SA048).
                                 SB024.....  gloves, sterile..  NF       .................                2            1  Duplicative; items      (0.84)
                                                                                                                           included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
                                 SB028.....  gown, surgical,    NF       .................                2            1  Duplicative; items      (4.67)
                                              sterile.                                                                     included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
                                 SC049.....  stop cock, 3-way.  NF       .................                1            0  Duplicative; items      (1.18)
                                                                                                                           included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
5039B......  Njx px nfrosgrm &/  ED050.....  PACS Workstation   NF       .................               21           45  Refined equipment         0.53
              urtrgrm.                        Proxy.                                                                       time to conform to
                                                                                                                           clinical labor time
                                                                                                                           (Full intraservice
                                                                                                                           period minus
                                                                                                                           monitoring time).
                                 EF027.....  table,             NF       .................               22           40  Refined equipment         0.03
                                              instrument,                                                                  time to conform to
                                              mobile.                                                                      established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EL011.....  room, angiography  NF       .................               22            0  Equipment item        (115.60)
                                                                                                                           replaced by another
                                                                                                                           item; see preamble.
                                 EL014.....  room,              NF       .................                0           22  Equipment item           30.65
                                              radiographic-                                                                replaces another
                                              fluoroscopic.                                                                item; see preamble.
                                 EQ168.....  light, exam......  NF       .................               22           40  Refined equipment         0.08
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037D.....  RN/LPN/MTA.......  NF       Assist physician                15            0  Removed clinical        (5.55)
                                                                          in performing                                    labor associated
                                                                          procedure.                                       with moderate
                                                                                                                           sedation; moderate
                                                                                                                           sedation not
                                                                                                                           typical for this
                                                                                                                           procedure.
                                 SA042.....  pack, cleaning     NF       .................                1            0  Removed supply         (17.06)
                                              and                                                                          associated with
                                              disinfecting,                                                                equipment item not
                                              endoscope.                                                                   typically used in
                                                                                                                           this service.
                                 SB001.....  cap, surgical....  NF       .................                4            3  Aligned supply          (0.21)
                                                                                                                           quantities with
                                                                                                                           changes to number
                                                                                                                           of clinical labor
                                                                                                                           staff.
                                 SB022.....  gloves, non-       NF       .................                2            0  Duplicative; items      (0.17)
                                              sterile.                                                                     included in pack,
                                                                                                                           minimum multi-
                                                                                                                           specialty visit
                                                                                                                           (SA048).
                                 SB033.....  mask, surgical...  NF       .................                2            1  Aligned supply          (0.20)
                                                                                                                           quantities with
                                                                                                                           changes to number
                                                                                                                           of clinical labor
                                                                                                                           staff.
                                 SB039.....  shoe covers,       NF       .................                4            3  Aligned supply          (0.34)
                                              surgical.                                                                    quantities with
                                                                                                                           changes to number
                                                                                                                           of clinical labor
                                                                                                                           staff.
5039C......  Plmt nephrostomy    ED050.....  PACS Workstation   NF       .................               71           80  Refined equipment         0.20
              catheter.                       Proxy.                                                                       time to conform to
                                                                                                                           clinical labor time.
                                 EF027.....  table,             NF       .................              300          290  Standard equipment      (0.01)
                                              instrument,                                                                  and time for
                                              mobile.                                                                      moderate sedation.
                                 EL011.....  room, angiography  NF       .................               60            0  Equipment item        (315.28)
                                                                                                                           replaced by another
                                                                                                                           item; see preamble.
                                 EL014.....  room,              NF       .................                0           60  Equipment item           83.59
                                              radiographic-                                                                replaces another
                                              fluoroscopic.                                                                item; see preamble.
                                 EQ011.....  ECG, 3-channel     NF       .................              300          290  Standard equipment      (0.14)
                                              (with SpO2,                                                                  and time for
                                              NIBP, temp,                                                                  moderate sedation.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................              300          290  Standard equipment      (0.06)
                                                                                                                           and time for
                                                                                                                           moderate sedation.
                                 EQ168.....  light, exam......  NF       .................               60           75  Refined equipment         0.06
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.

[[Page 41744]]

 
                                 L037D.....  RN/LPN/MTA.......  NF       Monitor pt                       0           45  Clinical labor type      16.65
                                                                          following                                        replaces another
                                                                          service/check                                    clinical labor
                                                                          tubes, monitors,                                 type; see preamble.
                                                                          drains (not
                                                                          related to
                                                                          moderate
                                                                          sedation).
                                 L041B.....  Radiologic         NF       Clean room/                      6            3  Refined time to         (1.23)
                                              Technologist.               equipment by                                     standard time for
                                                                          physician staff.                                 this clinical labor
                                                                                                                           task.
                                 L051A.....  RN...............  NF       Monitor pt.                     45            0  Clinical labor type    (22.95)
                                                                          following                                        replaced by another
                                                                          service/check                                    labor type; see
                                                                          tubes, monitors,                                 preamble.
                                                                          drains (not
                                                                          related to
                                                                          moderate
                                                                          sedation).
                                 SA019.....  kit, iv starter..  NF       .................                1            0  Duplicative; items      (1.60)
                                                                                                                           included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
                                 SA042.....  pack, cleaning     NF       .................                1            0  Removed supply         (17.06)
                                              and                                                                          associated with
                                              disinfecting,                                                                equipment item not
                                              endoscope.                                                                   typically used in
                                                                                                                           this service.
                                 SB022.....  gloves, non-       NF       .................                2            0  Duplicative; items      (0.17)
                                              sterile.                                                                     included in pack,
                                                                                                                           minimum multi-
                                                                                                                           specialty visit
                                                                                                                           (SA048).
                                 SB024.....  gloves, sterile..  NF       .................                2            1  Duplicative; items      (0.84)
                                                                                                                           included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
                                 SB028.....  gown, surgical,    NF       .................                2            1  Duplicative; items      (4.67)
                                              sterile.                                                                     included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
                                 SC049.....  stop cock, 3-way.  NF       .................                1            0  Duplicative; items      (1.18)
                                                                                                                           included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
5039D......  Plmt                ED050.....  PACS Workstation   NF       .................               83           92  Refined equipment         0.20
              nephroureteral                  Proxy.                                                                       time to conform to
              catheter.                                                                                                    clinical labor time.
                                 EF027.....  table,             NF       .................              312          302  Standard equipment      (0.01)
                                              instrument,                                                                  and time for
                                              mobile.                                                                      moderate sedation.
                                 EL011.....  room, angiography  NF       .................               72            0  Equipment item        (378.34)
                                                                                                                           replaced by another
                                                                                                                           item; see preamble.
                                 EL014.....  room,              NF       .................                0           72  Equipment item          100.30
                                              radiographic-                                                                replaces another
                                              fluoroscopic.                                                                item; see preamble.
                                 EQ011.....  ECG, 3-channel     NF       .................              312          302  Standard equipment      (0.14)
                                              (with SpO2,                                                                  and time for
                                              NIBP, temp,                                                                  moderate sedation.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................              312          302  Standard equipment      (0.06)
                                                                                                                           and time for
                                                                                                                           moderate sedation.
                                 EQ168.....  light, exam......  NF       .................               72           87  Refined equipment         0.06
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037D.....  RN/LPN/MTA.......  NF       Monitor pt.                      0           45  Clinical labor type      16.65
                                                                          following                                        replaces another
                                                                          service/check                                    clinical labor
                                                                          tubes, monitors,                                 type; see preamble.
                                                                          drains (not
                                                                          related to
                                                                          moderate
                                                                          sedation).
                                 L041B.....  Radiologic         NF       Clean room/                      6            3  Refined time to         (1.23)
                                              Technologist.               equipment by                                     standard time for
                                                                          physician staff.                                 this clinical labor
                                                                                                                           task.
                                 L051A.....  RN...............  NF       Monitor pt.                     45            0  Clinical labor type    (22.95)
                                                                          following                                        replaced by another
                                                                          service/check                                    labor type; see
                                                                          tubes, monitors,                                 preamble.
                                                                          drains (not
                                                                          related to
                                                                          moderate
                                                                          sedation).
                                 SA019.....  kit, iv starter..  NF       .................                1            0  Duplicative; a          (1.60)
                                                                                                                           similar item is
                                                                                                                           already included in
                                                                                                                           this service.

[[Page 41745]]

 
                                 SA042.....  pack, cleaning     NF       .................                1            0  Removed supply         (17.06)
                                              and                                                                          associated with
                                              disinfecting,                                                                equipment item not
                                              endoscope.                                                                   typically used in
                                                                                                                           this service.
                                 SB022.....  gloves, non-       NF       .................                2            0  Duplicative; items      (0.17)
                                              sterile.                                                                     included in pack,
                                                                                                                           minimum multi-
                                                                                                                           specialty visit
                                                                                                                           (SA048).
                                 SB024.....  gloves, sterile..  NF       .................                2            1  Duplicative; items      (0.84)
                                                                                                                           included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
                                 SB028.....  gown, surgical,    NF       .................                2            1  Duplicative; items      (4.67)
                                              sterile.                                                                     included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
                                 SC049.....  stop cock, 3-way.  NF       .................                1            0  Duplicative; items      (1.18)
                                                                                                                           included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
                                 SD306.....  Nephroureteral     NF       .................                1            0  Supply not mentioned  (117.90)
                                              Catheter.                                                                    in SOR work
                                                                                                                           description.
5039E......  Exchange            ED050.....  PACS Workstation   NF       .................               21           50  Refined equipment         0.64
              nephrostomy cath.               Proxy.                                                                       time to conform to
                                                                                                                           clinical labor time.
                                 EF027.....  table,             NF       .................               90           45  Refined equipment       (0.06)
                                              instrument,                                                                  time to conform to
                                              mobile.                                                                      established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EL011.....  room, angiography  NF       .................               30            0  Equipment item        (157.64)
                                                                                                                           replaced by another
                                                                                                                           item; see preamble.
                                 EL014.....  room,              NF       .................                0           30  Equipment item           41.79
                                              radiographic-                                                                replaces another
                                              fluoroscopic.                                                                item; see preamble.
                                 EQ168.....  light, exam......  NF       .................               30           45  Refined equipment         0.06
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037D.....  RN/LPN/MTA.......  NF       Assist physician                20            0  Clinical labor type     (7.40)
                                                                          in performing                                    replaced by another
                                                                          procedure.                                       labor type; see
                                                                                                                           preamble.
                                 L041B.....  Radiologic         NF       Clean room/                      6            3  Refined time to         (1.23)
                                              Technologist.               equipment by                                     standard time for
                                                                          physician staff.                                 this clinical labor
                                                                                                                           task.
                                 SA031.....  kit, suture        NF       .................                1            0  Redundant when used     (1.05)
                                              removal.                                                                     together with
                                                                                                                           supply catheter
                                                                                                                           percutaneous
                                                                                                                           fastener (Percu--
                                                                                                                           Stay) (SD146).
                                 SA042.....  pack, cleaning     NF       .................                1            0  Removed supply         (17.06)
                                              and                                                                          associated with
                                              disinfecting,                                                                equipment item not
                                              endoscope.                                                                   typically used in
                                                                                                                           this service.
                                 SB001.....  cap, surgical....  NF       .................                4            3  Aligned supply          (0.21)
                                                                                                                           quantities with
                                                                                                                           changes to number
                                                                                                                           of clinical labor
                                                                                                                           staff.
                                 SB022.....  gloves, non-       NF       .................                2            0  Duplicative; items      (0.17)
                                              sterile.                                                                     included in pack,
                                                                                                                           minimum multi-
                                                                                                                           specialty visit
                                                                                                                           (SA048).
                                 SB033.....  mask, surgical...  NF       .................                2            1  Aligned supply          (0.20)
                                                                                                                           quantities with
                                                                                                                           changes to number
                                                                                                                           of clinical labor
                                                                                                                           staff.
                                 SB039.....  shoe covers,       NF       .................                4            3  Aligned supply          (0.34)
                                              surgical.                                                                    quantities with
                                                                                                                           changes to number
                                                                                                                           of clinical labor
                                                                                                                           staff.
5039M......  Convert             ED050.....  PACS Workstation   NF       .................               68           77  Refined equipment         0.20
              nephrostomy                     Proxy.                                                                       time to conform to
              catheter.                                                                                                    clinical labor time.
                                 EF027.....  table,             NF       .................              297          287  Standard equipment      (0.01)
                                              instrument,                                                                  and time for
                                              mobile.                                                                      moderate sedation.
                                 EL011.....  room, angiography  NF       .................               57            0  Equipment item        (299.52)
                                                                                                                           replaced by another
                                                                                                                           item; see preamble.
                                 EL014.....  room,              NF       .................                0           57  Equipment item           79.41
                                              radiographic-                                                                replaces another
                                              fluoroscopic.                                                                item; see preamble.
                                 EQ011.....  ECG, 3-channel     NF       .................              297          287  Standard equipment      (0.14)
                                              (with SpO2,                                                                  and time for
                                              NIBP, temp,                                                                  moderate sedation.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................              297          287  Standard equipment      (0.06)
                                                                                                                           and time for
                                                                                                                           moderate sedation.

[[Page 41746]]

 
                                 EQ168.....  light, exam......  NF       .................               57           72  Refined equipment         0.06
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037D.....  RN/LPN/MTA.......  NF       Monitor pt                       0           45  Clinical labor type      16.65
                                                                          following                                        replaces another
                                                                          service/check                                    clinical labor
                                                                          tubes, monitors,                                 type; see preamble.
                                                                          drains (not
                                                                          related to
                                                                          moderate
                                                                          sedation).
                                 L041B.....  Radiologic         NF       Clean room/                      6            3  Refined time to         (1.23)
                                              Technologist.               equipment by                                     standard time for
                                                                          physician staff.                                 this clinical labor
                                                                                                                           task.
                                 L051A.....  RN...............  NF       Monitor pt                      45            0  Clinical labor type    (22.95)
                                                                          following                                        replaced by another
                                                                          service/check                                    labor type; see
                                                                          tubes, monitors,                                 preamble.
                                                                          drains (not
                                                                          related to
                                                                          moderate
                                                                          sedation).
                                 SA019.....  kit, iv starter..  NF       .................                1            0  Duplicative; items      (1.60)
                                                                                                                           included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
                                 SA031.....  kit, suture        NF       .................                1            0  Redundant when used     (1.05)
                                              removal.                                                                     together with
                                                                                                                           supply catheter
                                                                                                                           percutaneous
                                                                                                                           fastener (Percu--
                                                                                                                           Stay) (SD146).
                                 SA042.....  pack, cleaning     NF       .................                1            0  Removed supply         (17.06)
                                              and                                                                          associated with
                                              disinfecting,                                                                equipment item not
                                              endoscope.                                                                   typically used in
                                                                                                                           this service.
                                 SB022.....  gloves, non-       NF       .................                2            0  Duplicative; items      (0.17)
                                              sterile.                                                                     included in pack,
                                                                                                                           minimum multi-
                                                                                                                           specialty visit
                                                                                                                           (SA048).
                                 SB024.....  gloves, sterile..  NF       .................                2            1  Duplicative; items      (0.84)
                                                                                                                           included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
                                 SB028.....  gown, surgical,    NF       .................                2            1  Duplicative; items      (4.67)
                                              sterile.                                                                     included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
                                 SC049.....  stop cock, 3-way.  NF       .................                1            0  Duplicative; items      (1.18)
                                                                                                                           included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
5069G......  Plmt ureteral       ED050.....  PACS Workstation   NF       .................               68           77  Refined equipment         0.20
              stent prq.                      Proxy.                                                                       time to conform to
                                                                                                                           clinical labor time.
                                 EF027.....  table,             NF       .................              297          287  Standard equipment      (0.01)
                                              instrument,                                                                  and time for
                                              mobile.                                                                      moderate sedation.
                                 EL011.....  room, angiography  NF       .................               57            0  Equipment item        (299.52)
                                                                                                                           replaced by another
                                                                                                                           item; see preamble.
                                 EL014.....  room,              NF       .................                0           57  Equipment item           79.41
                                              radiographic-                                                                replaces another
                                              fluoroscopic.                                                                item; see preamble.
                                 EQ011.....  ECG, 3-channel     NF       .................              297          287  Standard equipment      (0.14)
                                              (with SpO2,                                                                  and time for
                                              NIBP, temp,                                                                  moderate sedation.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................              297          287  Standard equipment      (0.06)
                                                                                                                           and time for
                                                                                                                           moderate sedation.
                                 EQ168.....  light, exam......  NF       .................               57           72  Refined equipment         0.06
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037D.....  RN/LPN/MTA.......  NF       Monitor pt.                      0           45  Clinical labor type      16.65
                                                                          following                                        replaces another
                                                                          service/check                                    clinical labor
                                                                          tubes, monitors,                                 type; see preamble.
                                                                          drains (not
                                                                          related to
                                                                          moderate
                                                                          sedation).
                                 L041B.....  Radiologic         NF       Clean room/                      6            3  Refined time to         (1.23)
                                              Technologist.               equipment by                                     standard time for
                                                                          physician staff.                                 this clinical labor
                                                                                                                           task.

[[Page 41747]]

 
                                 L051A.....  RN...............  NF       Monitor pt.                     45            0  Clinical labor type    (22.95)
                                                                          following                                        replaced by another
                                                                          service/check                                    labor type; see
                                                                          tubes, monitors,                                 preamble.
                                                                          drains (not
                                                                          related to
                                                                          moderate
                                                                          sedation).
                                 SA019.....  kit, iv starter..  NF       .................                1            0  Duplicative; items      (1.60)
                                                                                                                           included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
                                 SA031.....  kit, suture        NF       .................                1            0  Redundant when used     (1.05)
                                              removal.                                                                     together with
                                                                                                                           supply catheter
                                                                                                                           percutaneous
                                                                                                                           fastener (Percu--
                                                                                                                           Stay) (SD146).
                                 SA042.....  pack, cleaning     NF       .................                1            0  Removed supply         (17.06)
                                              and                                                                          associated with
                                              disinfecting,                                                                equipment item not
                                              endoscope.                                                                   typically used in
                                                                                                                           this service.
                                 SB022.....  gloves, non-       NF       .................                2            0  Duplicative; items      (0.17)
                                              sterile.                                                                     included in pack,
                                                                                                                           minimum multi-
                                                                                                                           specialty visit
                                                                                                                           (SA048).
                                 SB024.....  gloves, sterile..  NF       .................                2            1  Duplicative; items      (0.84)
                                                                                                                           included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
                                 SB028.....  gown, surgical,    NF       .................                2            1  Duplicative; items      (4.67)
                                              sterile.                                                                     included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
                                 SC049.....  stop cock, 3-way.  NF       .................                1            0  Duplicative; items      (1.18)
                                                                                                                           included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
5069H......  Plmt ureteral       ED050.....  PACS Workstation   NF       .................               85           94  Refined equipment         0.20
              stent prq.                      Proxy.                                                                       time to conform to
                                                                                                                           clinical labor time.
                                 EF027.....  table,             NF       .................              314          304  Standard equipment      (0.01)
                                              instrument,                                                                  and time for
                                              mobile.                                                                      moderate sedation.
                                 EL011.....  room, angiography  NF       .................               74            0  Equipment item        (388.85)
                                                                                                                           replaced by another
                                                                                                                           item; see preamble.
                                 EL014.....  room,              NF       .................                0           74  Equipment item          103.09
                                              radiographic-                                                                replaces another
                                              fluoroscopic.                                                                item; see preamble.
                                 EQ011.....  ECG, 3-channel     NF       .................              314          304  Standard equipment      (0.14)
                                              (with SpO2,                                                                  and time for
                                              NIBP, temp,                                                                  moderate sedation.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................              314          304  Standard equipment      (0.06)
                                                                                                                           and time for
                                                                                                                           moderate sedation.
                                 EQ168.....  light, exam......  NF       .................               74           89  Refined equipment         0.06
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037D.....  RN/LPN/MTA.......  NF       Monitor pt.                      0           45  Clinical labor type      16.65
                                                                          following                                        replaces another
                                                                          service/check                                    clinical labor
                                                                          tubes, monitors,                                 type; see preamble.
                                                                          drains (not
                                                                          related to
                                                                          moderate
                                                                          sedation).
                                 L041B.....  Radiologic         NF       Acquire images                  47           46  Rounding error in CL    (0.41)
                                              Technologist.               (75%).                                           time calculation.
                                 L041B.....  Radiologic         NF       Clean room/                      6            3  Refined time to         (1.23)
                                              Technologist.               equipment by                                     standard time for
                                                                          physician staff.                                 this clinical labor
                                                                                                                           task.
                                 L051A.....  RN...............  NF       Monitor pt.                     45            0  Clinical labor type    (22.95)
                                                                          following                                        replaced by another
                                                                          service/check                                    labor type; see
                                                                          tubes, monitors,                                 preamble.
                                                                          drains (not
                                                                          related to
                                                                          moderate
                                                                          sedation).
                                 SA019.....  kit, iv starter..  NF       .................                1            0  Duplicative; items      (1.60)
                                                                                                                           included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
                                 SA042.....  pack, cleaning     NF       .................                1            0  Removed supply         (17.06)
                                              and                                                                          associated with
                                              disinfecting,                                                                equipment item not
                                              endoscope.                                                                   typically used in
                                                                                                                           this service.

[[Page 41748]]

 
                                 SB022.....  gloves, non-       NF       .................                2            0  Duplicative; items      (0.17)
                                              sterile.                                                                     included in pack,
                                                                                                                           minimum multi-
                                                                                                                           specialty visit
                                                                                                                           (SA048).
                                 SB024.....  gloves, sterile..  NF       .................                2            1  Duplicative; items      (0.84)
                                                                                                                           included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
                                 SB028.....  gown, surgical,    NF       .................                2            1  Duplicative; a          (4.67)
                                              sterile.                                                                     similar item is
                                                                                                                           already included in
                                                                                                                           this service.
                                 SC049.....  stop cock, 3-way.  NF       .................                1            0  Duplicative; items      (1.18)
                                                                                                                           included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
5069I......  Plmt ureteral       ED050.....  PACS Workstation   NF       .................               98          107  Refined equipment         0.20
              stent prq.                      Proxy.                                                                       time to conform to
                                                                                                                           clinical labor time.
                                 EF027.....  table,             NF       .................              327          317  Standard equipment      (0.01)
                                              instrument,                                                                  and time for
                                              mobile.                                                                      moderate sedation.
                                 EL011.....  room, angiography  NF       .................               87            0  Equipment item        (457.16)
                                                                                                                           replaced by another
                                                                                                                           item; see preamble.
                                 EL014.....  room,              NF       .................                0           87  Equipment item          121.20
                                              radiographic-                                                                replaces another
                                              fluoroscopic.                                                                item; see preamble.
                                 EQ011.....  ECG, 3-channel     NF       .................              327          317  Standard equipment      (0.14)
                                              (with SpO2,                                                                  and time for
                                              NIBP, temp,                                                                  moderate sedation.
                                              resp).
                                 EQ032.....  IV infusion pump.  NF       .................              327          317  Standard equipment      (0.06)
                                                                                                                           and time for
                                                                                                                           moderate sedation.
                                 EQ168.....  light, exam......  NF       .................               87          102  Refined equipment         0.06
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037D.....  RN/LPN/MTA.......  NF       Monitor pt.                      0           45  Clinical labor type      16.65
                                                                          following                                        replaces another
                                                                          service/check                                    clinical labor
                                                                          tubes, monitors,                                 type; see preamble.
                                                                          drains (not
                                                                          related to
                                                                          moderate
                                                                          sedation).
                                 L041B.....  Radiologic         NF       Clean room/                      6            3  Refined time to         (1.23)
                                              Technologist.               equipment by                                     standard time for
                                                                          physician staff.                                 this clinical labor
                                                                                                                           task.
                                 L051A.....  RN...............  NF       Monitor pt.                     45            0  Clinical labor type    (22.95)
                                                                          following                                        replaced by another
                                                                          service/check                                    labor type; see
                                                                          tubes, monitors,                                 preamble.
                                                                          drains (not
                                                                          related to
                                                                          moderate
                                                                          sedation).
                                 SA019.....  kit, iv starter..  NF       .................                1            0  Duplicative; items      (1.60)
                                                                                                                           included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
                                 SA042.....  pack, cleaning     NF       .................                1            0  Removed supply         (17.06)
                                              and                                                                          associated with
                                              disinfecting,                                                                equipment item not
                                              endoscope.                                                                   typically used in
                                                                                                                           this service.
                                 SB022.....  gloves, non-       NF       .................                2            0  Duplicative; items      (0.17)
                                              sterile.                                                                     included in pack,
                                                                                                                           minimum multi-
                                                                                                                           specialty visit
                                                                                                                           (SA048).
                                 SB024.....  gloves, sterile..  NF       .................                2            1  Duplicative; items      (0.84)
                                                                                                                           included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
                                 SB028.....  gown, surgical,    NF       .................                2            1  Duplicative; items      (4.67)
                                              sterile.                                                                     included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
                                 SC049.....  stop cock, 3-way.  NF       .................                1            0  Duplicative; items      (1.18)
                                                                                                                           included in pack,
                                                                                                                           moderate sedation
                                                                                                                           (SA044).
5443A......  Repair corporeal    EF031.....  table, power.....  F        .................              144          135  Refined equipment       (0.15)
              tear.                                                                                                        time to conform to
                                                                                                                           clinical labor time.
                                 EF031.....  table, power.....  NF       .................              144          135  Refined equipment       (0.15)
                                                                                                                           time to conform to
                                                                                                                           clinical labor time.

[[Page 41749]]

 
                                 EQ168.....  light, exam......  F        .................              144          135  Refined equipment       (0.04)
                                                                                                                           time to conform to
                                                                                                                           clinical labor time.
                                 EQ168.....  light, exam......  NF       .................              144          135  Refined equipment       (0.04)
                                                                                                                           time to conform to
                                                                                                                           clinical labor time.
657XG......  Impltj ntrstrml     L038A.....  COMT/COT/RN/CST..  F        Discharge day                    6            0  Aligned clinical        (2.28)
              crnl rng seg.                                               management same                                  labor discharge day
                                                                          day 99238 -6                                     management time
                                                                          minutes.                                         with the work time
                                                                                                                           discharge day code.
68801......  Dilate tear duct    L038A.....  COMT/COT/RN/CST..  F        Discharge day                    6            0  Aligned clinical        (2.28)
              opening.                                                    management same                                  labor discharge day
                                                                          day 99238 -6                                     management time
                                                                          minutes.                                         with the work time
                                                                                                                           discharge day code.
68810......  Probe nasolacrimal  L038A.....  COMT/COT/RN/CST..  F        Discharge day                    6            0  Aligned clinical        (2.28)
              duct.                                                       management same                                  labor discharge day
                                                                          day 99238 -6                                     management time
                                                                          minutes.                                         with the work time
                                                                                                                           discharge day code.
68816......  Probe nl duct w/    EL006.....  lane, screening    NF       .................               16           47  Refined equipment         2.77
              balloon.                        (oph).                                                                       time to conform to
                                                                                                                           clinical labor time.
69200......  Clear outer ear     EF008.....  chair with         NF       .................               22           27  Refined equipment         0.05
              canal.                          headrest, exam,                                                              time to conform to
                                              reclining.                                                                   established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EF015.....  mayo stand.......  NF       .................               19           27  Refined equipment         0.01
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ137.....  instrument pack,   NF       .................               26           31  Refined equipment         0.01
                                              basic ($500-                                                                 time to conform to
                                              $1,499).                                                                     established
                                                                                                                           policies for
                                                                                                                           instrument packs.
                                 EQ170.....  light, fiberoptic  NF       .................               22           27  Refined equipment         0.04
                                              headlight w-                                                                 time to conform to
                                              source.                                                                      established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ183.....  microscope,        NF       .................               22           27  Refined equipment         0.14
                                              operating.                                                                   time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ234.....  suction and        NF       .................               22           27  Refined equipment         0.05
                                              pressure                                                                     time to conform to
                                              cabinet, ENT                                                                 established
                                              (SMR).                                                                       policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037D.....  RN/LPN/MTA.......  F        Dischrg gmt. same                6            0  Aligned clinical        (2.22)
                                                                          day (0.5 x                                       labor discharge day
                                                                          99238) (enter 6                                  management time
                                                                          min).                                            with the work time
                                                                                                                           discharge day code.
                                 SH047.....  lidocaine 1%-2%    NF       .................                5            0  Supply item replaced    (0.18)
                                              inj (Xylocaine).                                                             by another item
                                                                                                                           (SH050); see
                                                                                                                           preamble.
                                 SH050.....  lidocaine 4%       NF       .................                0            3  Supply item replaces      0.46
                                              soln, topical                                                                another item
                                              (Xylocaine).                                                                 (SH047); see
                                                                                                                           preamble.
69220......  Clean out mastoid   EF008.....  chair with         NF       .................               20           25  Refined equipment         0.05
              cavity.                         headrest, exam,                                                              time to conform to
                                              reclining.                                                                   established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EF015.....  mayo stand.......  NF       .................               17           25  Refined equipment         0.01
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ137.....  instrument pack,   NF       .................                0           29  Equipment item            0.07
                                              basic ($500-                                                                 replaces another
                                              $1,499).                                                                     item (EQ138); see
                                                                                                                           preamble.
                                 EQ138.....  instrument pack,   NF       .................               29            0  Equipment item          (0.20)
                                              medium ($1,500                                                               replaced by another
                                              and up).                                                                     item (EQ137); see
                                                                                                                           preamble.
                                 EQ183.....  microscope,        NF       .................               20           25  Refined equipment         0.14
                                              operating.                                                                   time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.

[[Page 41750]]

 
                                 EQ234.....  suction and        NF       .................               20           25  Refined equipment         0.05
                                              pressure                                                                     time to conform to
                                              cabinet, ENT                                                                 established
                                              (SMR).                                                                       policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037D.....  RN/LPN/MTA.......  F        Dischrg day gmt.                 6            0  Aligned clinical        (2.22)
                                                                          (0.5 x 99238)                                    labor discharge day
                                                                          (enter 6 min).                                   management time
                                                                                                                           with the work time
                                                                                                                           discharge day code.
                                 L037D.....  RN/LPN/MTA.......  NF       Clean surgical                  15           10  Refined time to         (1.85)
                                                                          instrument                                       standard time for
                                                                          package.                                         this clinical labor
                                                                                                                           task.
                                 L037D.....  RN/LPN/MTA.......  NF       Provide pre-                     0            2  Refined time to           0.74
                                                                          service                                          standard time for
                                                                          education/obtain                                 this clinical labor
                                                                          consent.                                         task.
7208A......  X-ray exam entire   ED050.....  PACS Workstation   NF       .................               21           25  Refined equipment         0.09
              spi 1 vw.                       Proxy.                                                                       time to conform to
                                                                                                                           clinical labor time.
7208B......  X-ray exam entire   ED050.....  PACS Workstation   NF       .................               36           40  Refined equipment         0.09
              spi 2/3 vw.                     Proxy.                                                                       time to conform to
                                                                                                                           clinical labor time.
7208C......  X-ray exam entire   ED050.....  PACS Workstation   NF       .................               44           48  Refined equipment         0.09
              spi 4/5 vw.                     Proxy.                                                                       time to conform to
                                                                                                                           clinical labor time.
7208D......  X-ray exam entire   ED050.....  PACS Workstation   NF       .................               53           57  Refined equipment         0.09
              spi 6/ vw.                      Proxy.                                                                       time to conform to
                                                                                                                           clinical labor time.
73565......  X-ray exam of       L041B.....  Radiologic         NF       Greet patient and                0            3  Input added to            1.23
              knees.                          Technologist.               provide gowning.                                 maintain
                                                                                                                           consistency with
                                                                                                                           all other codes
                                                                                                                           within family.
77385......  Ntsty modul rad tx  EQ139.....  intercom (incl.    NF       .................               27            0  Indirect Practice       (0.10)
              dlvr smpl.                      master, pt                                                                   Expense; not
                                              substation,                                                                  individually
                                              power, wiring).                                                              allocable to a
                                                                                                                           particular patient
                                                                                                                           for a particular
                                                                                                                           service.
                                 ER040.....  laser, diode, for  NF       .................               29           27  Refined equipment       (0.12)
                                              patient                                                                      time to conform to
                                              positioning                                                                  established
                                              (Probe).                                                                     policies for highly
                                                                                                                           technical equipment.
                                 ER056.....  radiation          NF       .................               29           27  Refined equipment       (3.15)
                                              treatment vault.                                                             time to conform to
                                                                                                                           established
                                                                                                                           policies for highly
                                                                                                                           technical equipment.
                                 ER065.....  water chiller      NF       .................               29           27  Refined equipment       (0.13)
                                              (radiation                                                                   time to conform to
                                              treatment).                                                                  established
                                                                                                                           policies for highly
                                                                                                                           technical equipment.
                                 ER089.....  IMRT accelerator.  NF       .................               29           27  Refined equipment      (16.14)
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for highly
                                                                                                                           technical equipment.
                                 ER102.....  Power conditioner  NF       .................               29           27  Refined equipment       (0.17)
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for highly
                                                                                                                           technical equipment.
77386......  Ntsty modul rad tx  EQ139.....  intercom (incl.    NF       .................               42            0  Indirect Practice       (0.15)
              dlvr cplx.                      master, pt                                                                   Expense; not
                                              substation,                                                                  individually
                                              power, wiring).                                                              allocable to a
                                                                                                                           particular patient
                                                                                                                           for a particular
                                                                                                                           service.
                                 ER040.....  laser, diode, for  NF       .................               44           42  Refined equipment       (0.12)
                                              patient                                                                      time to conform to
                                              positioning                                                                  established
                                              (Probe).                                                                     policies for highly
                                                                                                                           technical equipment.
                                 ER056.....  radiation          NF       .................               44           42  Refined equipment       (3.15)
                                              treatment vault.                                                             time to conform to
                                                                                                                           established
                                                                                                                           policies for highly
                                                                                                                           technical equipment.
                                 ER065.....  water chiller      NF       .................               44           42  Refined equipment       (0.13)
                                              (radiation                                                                   time to conform to
                                              treatment).                                                                  established
                                                                                                                           policies for highly
                                                                                                                           technical equipment.
                                 ER089.....  IMRT accelerator.  NF       .................               44           42  Refined equipment      (16.14)
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for highly
                                                                                                                           technical equipment.

[[Page 41751]]

 
                                 ER102.....  Power conditioner  NF       .................               44           42  Refined equipment       (0.17)
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for highly
                                                                                                                           technical equipment.
                                 L050C.....  Radiation          NF       Check dressings &                2            1  Refined to conform      (0.50)
                                              Therapist.                  wound/home care                                  with identical
                                                                          instructions/                                    labor activity in
                                                                          coordinate                                       other codes in the
                                                                          office visits/                                   family.
                                                                          prescriptions.
77402......  Radiation           EQ139.....  intercom (incl.    NF       .................               12            0  Indirect Practice       (0.04)
              treatment                       master, pt                                                                   Expense; not
              delivery.                       substation,                                                                  individually
                                              power, wiring).                                                              allocable to a
                                                                                                                           particular patient
                                                                                                                           for a particular
                                                                                                                           service.
                                 ER040.....  laser, diode, for  NF       .................               14           12  Refined equipment       (0.12)
                                              patient                                                                      time to conform to
                                              positioning                                                                  established
                                              (Probe).                                                                     policies for highly
                                                                                                                           technical equipment.
                                 ER056.....  radiation          NF       .................               14           12  Refined equipment       (3.15)
                                              treatment vault.                                                             time to conform to
                                                                                                                           established
                                                                                                                           policies for highly
                                                                                                                           technical equipment.
                                 ER065.....  water chiller      NF       .................               14           12  Refined equipment       (0.13)
                                              (radiation                                                                   time to conform to
                                              treatment).                                                                  established
                                                                                                                           policies for highly
                                                                                                                           technical equipment.
                                 ER089.....  IMRT accelerator.  NF       .................               14           12  Refined equipment      (16.14)
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for highly
                                                                                                                           technical equipment.
                                 ER102.....  Power conditioner  NF       .................               14           12  Refined equipment       (0.17)
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for highly
                                                                                                                           technical equipment.
77407......  Radiation           EQ139.....  intercom (incl.    NF       .................               17            0  Indirect Practice       (0.06)
              treatment                       master, pt                                                                   Expense; not
              delivery.                       substation,                                                                  individually
                                              power, wiring).                                                              allocable to a
                                                                                                                           particular patient
                                                                                                                           for a particular
                                                                                                                           service.
                                 ER040.....  laser, diode, for  NF       .................               19           17  Refined equipment       (0.12)
                                              patient                                                                      time to conform to
                                              positioning                                                                  established
                                              (Probe).                                                                     policies for highly
                                                                                                                           technical equipment.
                                 ER056.....  radiation          NF       .................               19           17  Refined equipment       (3.15)
                                              treatment vault.                                                             time to conform to
                                                                                                                           established
                                                                                                                           policies for highly
                                                                                                                           technical equipment.
                                 ER065.....  water chiller      NF       .................               19           17  Refined equipment       (0.13)
                                              (radiation                                                                   time to conform to
                                              treatment).                                                                  established
                                                                                                                           policies for highly
                                                                                                                           technical equipment.
                                 ER089.....  IMRT accelerator.  NF       .................               19           17  Refined equipment      (16.14)
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for highly
                                                                                                                           technical equipment.
                                 ER102.....  Power conditioner  NF       .................               19           17  Refined equipment       (0.17)
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for highly
                                                                                                                           technical equipment.
77412......  Radiation           EQ139.....  intercom (incl.    NF       .................               21            0  Indirect Practice       (0.08)
              treatment                       master, pt                                                                   Expense; not
              delivery.                       substation,                                                                  individually
                                              power, wiring).                                                              allocable to a
                                                                                                                           particular patient
                                                                                                                           for a particular
                                                                                                                           service.
                                 ER040.....  laser, diode, for  NF       .................               23           21  Refined equipment       (0.12)
                                              patient                                                                      time to conform to
                                              positioning                                                                  established
                                              (Probe).                                                                     policies for highly
                                                                                                                           technical equipment.
                                 ER056.....  radiation          NF       .................               23           21  Refined equipment       (3.15)
                                              treatment vault.                                                             time to conform to
                                                                                                                           established
                                                                                                                           policies for highly
                                                                                                                           technical equipment.
                                 ER065.....  water chiller      NF       .................               23           21  Refined equipment       (0.13)
                                              (radiation                                                                   time to conform to
                                              treatment).                                                                  established
                                                                                                                           policies for highly
                                                                                                                           technical equipment.

[[Page 41752]]

 
                                 ER089.....  IMRT accelerator.  NF       .................               23           21  Refined equipment      (16.14)
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for highly
                                                                                                                           technical equipment.
                                 ER102.....  Power conditioner  NF       .................               23           21  Refined equipment       (0.17)
                                                                                                                           time to conform to
                                                                                                                           established
                                                                                                                           policies for highly
                                                                                                                           technical equipment.
88104......  Cytopath fl nongyn  EP024.....  microscope,        NF       .................               60           56  Refined to conform      (0.15)
              smears.                         compound.                                                                    with identical
                                                                                                                           labor activity in
                                                                                                                           other codes in the
                                                                                                                           family.
                                 L033A.....  Lab Technician...  NF       Order, restock,                0.5            0  Indirect Practice       (0.17)
                                                                          and distribute                                   Expense; not
                                                                          specimen                                         individually
                                                                          containers with                                  allocable to a
                                                                          requisition                                      particular patient
                                                                          forms..                                          for a particular
                                                                                                                           service.
88106......  Cytopath fl nongyn  L033A.....  Lab Technician...  NF       Order, restock,                0.5            0  Indirect Practice       (0.17)
              filter.                                                     and distribute                                   Expense; not
                                                                          specimen                                         individually
                                                                          containers with                                  allocable to a
                                                                          requisition                                      particular patient
                                                                          forms..                                          for a particular
                                                                                                                           service.
88108......  Cytopath            L033A.....  Lab Technician...  NF       Order, restock,                0.5            0  Indirect Practice       (0.17)
              concentrate tech.                                           and distribute                                   Expense; not
                                                                          specimen                                         individually
                                                                          containers with                                  allocable to a
                                                                          requisition                                      particular patient
                                                                          forms..                                          for a particular
                                                                                                                           service.
88160......  Cytopath smear      EP038.....  solvent recycling  NF       .................                1            0  Refined equipment       (0.05)
              other source.                   system.                                                                      time to conform to
                                                                                                                           clinical labor time.
                                 L035A.....  Lab Tech/          NF       Prepare automated                6            4  Refined time to         (0.70)
                                              Histotechnologis            stainer with                                     standard time for
                                              t.                          solutions and                                    this clinical labor
                                                                          load microscopic                                 task.
                                                                          slides. Set and
                                                                          confirm stainer
                                                                          program. Set and
                                                                          confirm stainer
                                                                          program.
                                 L035A.....  Lab Tech/          NF       Stain air dried                  5            0  See preamble text...    (1.75)
                                              Histotechnologis            slides with
                                              t.                          modified Wright
                                                                          stain. Review
                                                                          slides for
                                                                          malignancy/high
                                                                          cellularity
                                                                          (cross
                                                                          contamination).
88161......  Cytopath smear      EP038.....  solvent recycling  NF       .................                1            0  Refined equipment       (0.05)
              other source.                   system.                                                                      time to conform to
                                                                                                                           clinical labor time.
             Cytopath smear      L035A.....  Lab Tech/          NF       Prepare automated                6            4  Refined time to         (0.70)
              other source.                   Histotechnologis            stainer with                                     standard time for
                                              t.                          solutions and                                    this clinical labor
                                                                          load microscopic                                 task.
                                                                          slides. Set and
                                                                          confirm stainer
                                                                          program. Set and
                                                                          confirm stainer
                                                                          program.
             Cytopath smear      L035A.....  Lab Tech/          NF       Stain air dried                  5            3  Refined time to         (0.70)
              other source.                   Histotechnologis            slides with                                      standard time for
                                              t.                          modified Wright                                  this clinical labor
                                                                          stain. Review                                    task.
                                                                          slides for
                                                                          malignancy/high
                                                                          cellularity
                                                                          (cross
                                                                          contamination).
88162......  Cytopath smear      EP038.....  solvent recycling  NF       .................                1            0  Refined equipment       (0.05)
              other source.                   system.                                                                      time to conform to
                                                                                                                           clinical labor time.

[[Page 41753]]

 
             Cytopath smear      L035A.....  Lab Tech/          NF       Other Clinical                   6            4  Refined time to         (0.70)
              other source.                   Histotechnologis            Activity (please                                 standard time for
                                              t.                          specify):                                        this clinical labor
                                                                          Prepare                                          task.
                                                                          automated
                                                                          stainer with
                                                                          solutions and
                                                                          load microscopic
                                                                          slides.
88182......  Cell marker study.  L033A.....  Lab Technician...  NF       Accession                        6            4  Refined time to         (0.66)
                                                                          specimen/prepare                                 standard time for
                                                                          for examination.                                 this clinical labor
                                                                                                                           task.
             Cell marker study.  L033A.....  Lab Technician...  NF       Clean room/                      2            1  Refined time to         (0.33)
                                                                          equipment                                        standard time for
                                                                          following                                        this clinical labor
                                                                          procedure                                        task.
                                                                          (including any
                                                                          equipment
                                                                          maintenance that
                                                                          must be done
                                                                          after the
                                                                          procedure).
                                 L033A.....  Lab Technician...  NF       Dispose of                       2            1  Refined time to         (0.33)
                                                                          remaining                                        standard time for
                                                                          specimens, spent                                 this clinical labor
                                                                          chemicals/other                                  task.
                                                                          consumables, and
                                                                          hazardous waste.
                                 L033A.....  Lab Technician...  NF       Prepare, pack and                2            1  Refined time to         (0.33)
                                                                          transport                                        standard time for
                                                                          specimens and                                    this clinical labor
                                                                          records for in-                                  task.
                                                                          house storage
                                                                          and external
                                                                          storage (where
                                                                          applicable).
                                 L045A.....  Cytotechnologist.  NF       Clean room/                      2            1  Refined time to         (0.45)
                                                                          equipment                                        standard time for
                                                                          following                                        this clinical labor
                                                                          procedure                                        task.
                                                                          (including any
                                                                          equipment
                                                                          maintenance that
                                                                          must be done
                                                                          after the
                                                                          procedure).
                                 L045A.....  Cytotechnologist.  NF       Enter data into                  2            0  Refined time to         (0.90)
                                                                          laboratory                                       standard time for
                                                                          information                                      this clinical labor
                                                                          system,                                          task.
                                                                          multiparameter
                                                                          analyses and
                                                                          field data en.
                                 L045A.....  Cytotechnologist.  NF       Print out                        5            2  Refined time to         (1.35)
                                                                          histograms,                                      standard time for
                                                                          assemble                                         this clinical labor
                                                                          materials with                                   task.
                                                                          paperwork to
                                                                          pathologists
                                                                          Review
                                                                          histograms and
                                                                          gating with
                                                                          pathologist.
88184......  Flowcytometry/tc 1  ED031.....  printer, dye       NF       .................                5            1  Refined equipment       (0.04)
              marker.                         sublimation                                                                  time to conform to
                                              (photo, color).                                                              clinical labor time.
                                 L033A.....  Lab Technician...  NF       Clean room/                      2            1  Refined time to         (0.33)
                                                                          equipment                                        standard time for
                                                                          following                                        this clinical labor
                                                                          procedure                                        task.
                                                                          (including any
                                                                          equipment
                                                                          maintenance that
                                                                          must be done
                                                                          after the
                                                                          procedure).

[[Page 41754]]

 
                                 L033A.....  Lab Technician...  NF       Enter data into                  4            0  Refined time to         (1.32)
                                                                          laboratory                                       standard time for
                                                                          information                                      this clinical labor
                                                                          system,                                          task.
                                                                          multiparameter
                                                                          analyses and
                                                                          field data en.
                                 L045A.....  Cytotechnologist.  NF       Instrument start-               15           13  Refined to conform      (0.90)
                                                                          up, quality                                      with identical
                                                                          control                                          labor activity in
                                                                          functions,                                       other codes in the
                                                                          calibration,                                     family.
                                                                          centrifugation,
                                                                          maintaining
                                                                          specimen
                                                                          tracking, logs
                                                                          and labeling.
                                 L045A.....  Cytotechnologist.  NF       Other Clinical                  10            7  Refined to conform      (1.35)
                                                                          Activity (please                                 with identical
                                                                          specify) Load                                    labor activity in
                                                                          specimen into                                    other codes in the
                                                                          flow cytometer,                                  family.
                                                                          run specimen,
                                                                          monitor data
                                                                          acquisition, and.
                                 L045A.....  Cytotechnologist.  NF       Print out                        5            2  Refined time to         (1.35)
                                                                          histograms,                                      standard time for
                                                                          assemble                                         this clinical labor
                                                                          materials with                                   task.
                                                                          paperwork to
                                                                          pathologists
                                                                          Review
                                                                          histograms and
                                                                          gating with
                                                                          pathologist.
88185......  Flowcytometry/tc    ED031.....  printer, dye       NF       .................                2            1  Refined equipment       (0.01)
              add-on.                         sublimation                                                                  time to conform to
                                              (photo, color).                                                              clinical labor time.
                                 L033A.....  Lab Technician...  NF       Enter data into                  1            0  Refined time to         (0.33)
                                                                          laboratory                                       standard time for
                                                                          information                                      this clinical labor
                                                                          system,                                          task.
                                                                          multiparameter
                                                                          analyses and
                                                                          field data en.
88321......  Microslide          L033A.....  Lab Technician...  NF       Accession                        4            0  Duplication with        (1.32)
              consultation.                                               specimen/prepare                                 other clinical
                                                                          for examination.                                 labor task.
                                 L033A.....  Lab Technician...  NF       Register the                    13            5  See preamble text...    (2.64)
                                                                          patient in the
                                                                          information
                                                                          system,
                                                                          including all
                                                                          demographic and
                                                                          billing
                                                                          information. In
                                                                          addition to
                                                                          stand.
                                 L037B.....  Histotechnologist  NF       Phone calls for                  0            3  Input added to            1.11
                                                                          clarifications                                   maintain
                                                                          and/or                                           consistency with
                                                                          additional                                       all other codes
                                                                          materials.                                       within family.
88323......  Microslide          L033A.....  Lab Technician...  NF       Register the                    13            5  Non-standard            (2.64)
              consultation.                                               patient in the                                   refinement, see
                                                                          information                                      preamble text.
                                                                          system,
                                                                          including all
                                                                          demographic and
                                                                          billing
                                                                          information. In
                                                                          addition to
                                                                          stand.
                                 L037B.....  Histotechnologist  NF       Assemble and                     1            0  Duplication with        (0.37)
                                                                          deliver slides                                   other clinical
                                                                          with paperwork                                   labor task.
                                                                          to pathologists.
                                 L037B.....  Histotechnologist  NF       Clean equipment                  1            0  Duplication with        (0.37)
                                                                          while performing                                 other clinical
                                                                          service.                                         labor task.
                                 SL063.....  eosin y..........  NF       .................                8            0  Redundant when used     (6.41)
                                                                                                                           together with SL135.

[[Page 41755]]

 
                                 SL135.....  stain,             NF       .................               32            8  Refined supply          (1.06)
                                              hematoxylin.                                                                 quantity to what is
                                                                                                                           typical for the
                                                                                                                           procedure.
88325......  ..................  EP019.....  hood, ventilator   NF       .................                1            0  See preamble text...        --
                                              with blower.
                                 EP033.....  slide              NF       .................                6            0  See preamble text...    (0.57)
                                              coverslipper,
                                              robotic.
                                 EP034.....  slide dryer......  NF       .................                1            0  See preamble text...        --
                                 EP035.....  slide etcher-      NF       .................                1            0  See preamble text...    (0.05)
                                              labeler.
                                 EP036.....  slide stainer,     NF       .................               12            0  See preamble text...    (0.55)
                                              automated, high-
                                              volume
                                              throughput.
                                 EP038.....  solvent recycling  NF       .................                4            0  See preamble text...    (0.18)
                                              system.
                                 EP043.....  water bath,        NF       .................                6            0  See preamble text...    (0.01)
                                              general purpose
                                              (lab).
                                 ER041.....  microtome........  NF       .................                6            0  See preamble text...    (0.26)
                                 L033A.....  Lab Technician...  NF       Prepare room.                   10            0  Indirect Practice       (3.30)
                                                                          Filter and                                       Expense; not
                                                                          replenish stains                                 individually
                                                                          and supplies.                                    allocable to a
                                                                          (including OCT                                   particular patient
                                                                          blocks, set up                                   for a particular
                                                                          grossing station                                 service.
                                                                          with colored
                                                                          stain.
                                 L033A.....  Lab Technician...  NF       Accession                        4            0  Duplication with        (1.32)
                                                                          specimen/prepare                                 other clinical
                                                                          for examination.                                 labor task.
                                 L033A.....  Lab Technician...  NF       Dispose of                       1            0  See preamble text...    (0.33)
                                                                          remaining
                                                                          specimens, spent
                                                                          chemicals/other
                                                                          consumables, and
                                                                          hazardous waste.
                                 L033A.....  Lab Technician...  NF       Register the                    13            5  See preamble text...    (2.64)
                                                                          patient in the
                                                                          information
                                                                          system,
                                                                          including all
                                                                          demographic and
                                                                          billing
                                                                          information. In
                                                                          addition to
                                                                          stand.
                                 L033A.....  Lab Technician...  NF       prepare, pack and                2            0  See preamble text...    (0.66)
                                                                          transport
                                                                          specimens and
                                                                          records for in-
                                                                          house storage
                                                                          and external
                                                                          storage.
                                 L037B.....  Histotechnologist  NF       Clean equipment                  1            0  Duplication with        (0.37)
                                                                          while performing                                 other clinical
                                                                          service.                                         labor task.
                                 L037B.....  Histotechnologist  NF       Complete workload                1            0  See preamble text...    (0.37)
                                                                          recording logs.
                                                                          Collate slides
                                                                          and paperwork.
                                                                          Deliver to
                                                                          pathologist.
                                 L037B.....  Histotechnologist  NF       Prepare automated                1            0  See preamble text...    (0.37)
                                                                          coverslipper,
                                                                          remove slides
                                                                          from stainer and
                                                                          place on
                                                                          coverslipper.

[[Page 41756]]

 
                                 L037B.....  Histotechnologist  NF       Prepare automated                1            0  See preamble text...    (0.37)
                                                                          stainer with
                                                                          solutions and
                                                                          load microscopic
                                                                          slides. Set and
                                                                          confirm stainer
                                                                          program. Set and
                                                                          confirm stainer
                                                                          program.
                                 L037B.....  Histotechnologist  NF       Slide preparation                4            0  See preamble text...    (1.48)
                                                                          sectioning and
                                                                          recuts, quality
                                                                          control
                                                                          function,
                                                                          maintaining
                                                                          specimen
                                                                          tracking, logs
                                                                          and labeling.
                                 SB023.....  gloves, non-       NF       .................                2            0  See preamble text...    (0.38)
                                              sterile, nitrile.
                                 SB027.....  gown, staff,       NF       .................              0.1            0  See preamble text...    (0.12)
                                              impervious.
                                 SF004.....  blade, microtome.  NF       .................              0.2            0  See preamble text...    (0.34)
                                 SL020.....  bleach...........  NF       .................               10            0  See preamble text...    (0.01)
                                 SL030.....  cover slip, glass  NF       .................                2            0  See preamble text...    (0.16)
                                 SL063.....  eosin y..........  NF       .................                8            0  See preamble text...    (6.41)
                                 SL078.....  histology          NF       .................              0.2            0  See preamble text...    (0.29)
                                              freezing spray
                                              (Freeze-It).
                                 SL085.....  label for          NF       .................               20           10  See preamble text...    (0.26)
                                              microscope
                                              slides.
                                 SL095.....  mounting media     NF       .................                2            0  See preamble text...    (0.07)
                                              (Histomount).
                                 SL122.....  slide, microscope  NF       .................                2            0  See preamble text...    (0.11)
                                 SL135.....  stain,             NF       .................               32            0  See preamble text...    (1.41)
                                              hematoxylin.
                                 SL151.....  xylenes solvent..  NF       .................               60            0  See preamble text...    (0.72)
                                 SL189.....  ethanol, 100%....  NF       .................               60            0  See preamble text...    (0.20)
                                 SL190.....  ethanol, 70%.....  NF       .................                8            0  See preamble text...    (0.03)
                                 SL248.....  ethanol, 95%.....  NF       .................               36            0  See preamble text...    (0.12)
                                 SM027.....  wipes, lens        NF       .................                2            0  See preamble text...    (0.03)
                                              cleaning (per
                                              wipe) (Kimwipe).
88329......  Path consult        L037B.....  Histotechnologist  NF       Assist                          10            3  Refined time to         (2.59)
              introp.                                                     pathologist with                                 standard time for
                                                                          gross specimen                                   this clinical labor
                                                                          examination.                                     task.
                                 L037B.....  Histotechnologist  NF       Clean room/                      5            1  Refined time to         (1.48)
                                                                          equipment                                        standard time for
                                                                          following                                        this clinical labor
                                                                          procedure                                        task.
                                                                          (including any
                                                                          equipment
                                                                          maintenance that
                                                                          must be done
                                                                          after the
                                                                          procedure).
88331......  Path consult        L033A.....  Lab Technician...  NF       Prepare room.                   10            0  Indirect Practice         1.48
              intraop 1 bloc.                                             Filter and                                       Expense; not
                                                                          replenish stains                                 individually
                                                                          and supplies.                                    allocable to a
                                                                          (including OCT                                   particular patient
                                                                          blocks, set up                                   for a particular
                                                                          grossing station                                 service.
                                                                          with colored
                                                                          stai.
                                 L037B.....  Histotechnologist  NF       Accession                        0            4  Input added to            1.48
                                                                          specimen/prepare                                 maintain
                                                                          for examination.                                 consistency with
                                                                                                                           all other codes
                                                                                                                           within family.
                                 L037B.....  Histotechnologist  NF       Assemble and                     2          0.5  Refined time to         (0.56)
                                                                          deliver slides                                   standard time for
                                                                          with paperwork                                   this clinical labor
                                                                          to pathologists.                                 task.
                                 L037B.....  Histotechnologist  NF       Assist                          10            3  Refined time to         (2.59)
                                                                          pathologist with                                 standard time for
                                                                          gross specimen                                   this clinical labor
                                                                          examination.                                     task.

[[Page 41757]]

 
                                 L037B.....  Histotechnologist  NF       Clean room/                     10            1  Refined time to         (3.33)
                                                                          equipment                                        standard time for
                                                                          following                                        this clinical labor
                                                                          procedure                                        task.
                                                                          (including any
                                                                          equipment
                                                                          maintenance that
                                                                          must be done
                                                                          after the
                                                                          procedure).
                                 SL134.....  stain, frozen      NF       .................                0            1  Supply item replaces      0.57
                                              section, H&E                                                                 another item
                                              (1ml per slide).                                                             (SL231); see
                                                                                                                           preamble.
                                 SL231.....  kit, stain, H&E..  NF       .................              0.1            0  Supply item replaced    (9.80)
                                                                                                                           by another item
                                                                                                                           (SL134); see
                                                                                                                           preamble.
88332......  Path consult        L037B.....  Histotechnologist  NF       Assemble and                     2          0.5  Refined time to         (0.56)
              intraop addl.                                               deliver slides                                   standard time for
                                                                          with paperwork                                   this clinical labor
                                                                          to pathologists.                                 task.
                                 L037B.....  Histotechnologist  NF       Assist                           2            3  Refined time to           0.37
                                                                          pathologist with                                 standard time for
                                                                          gross specimen                                   this clinical labor
                                                                          examination.                                     task.
                                 L037B.....  Histotechnologist  NF       Clean room/                      0            1  Input added to            0.37
                                                                          equipment                                        maintain
                                                                          following                                        consistency with
                                                                          procedure                                        all other codes
                                                                          (including any                                   within family.
                                                                          equipment
                                                                          maintenance that
                                                                          must be done
                                                                          after the
                                                                          procedure).
                                 SF047.....  scalpel, safety,   NF       .................                0            1  Input added to            2.14
                                              surgical, with                                                               maintain
                                              blade (#10-20).                                                              consistency with
                                                                                                                           all other codes
                                                                                                                           within family.
                                 SL134.....  stain, frozen      NF       .................                0            1  Supply item replaces      0.57
                                              section, H&E                                                                 another item
                                              (1ml per slide).                                                             (SL231); see
                                                                                                                           preamble.
                                 SL231.....  kit, stain, H&E..  NF       .................              0.1            0  Supply item replaced    (9.80)
                                                                                                                           by another item
                                                                                                                           (SL134); see
                                                                                                                           preamble.
88333......  Intraop cyto path   L033A.....  Lab Technician...  NF       Prepare room.                   10            0  Indirect Practice       (3.30)
              consult 1.                                                  Filter and                                       Expense; not
                                                                          replenish stains                                 individually
                                                                          and supplies.                                    allocable to a
                                                                          (including OCT                                   particular patient
                                                                          blocks, set up                                   for a particular
                                                                          grossing station                                 service.
                                                                          with colored
                                                                          stai.
                                 L037B.....  Histotechnologist  NF       Accession                        0            4  Input added to            1.48
                                                                          specimen/prepare                                 maintain
                                                                          for examination.                                 consistency with
                                                                                                                           all other codes
                                                                                                                           within family.
                                 L037B.....  Histotechnologist  NF       Assemble and                     2          0.5  Refined time to         (1.48)
                                                                          deliver slides                                   standard time for
                                                                          with paperwork                                   this clinical labor
                                                                          to pathologists.                                 task.
                                 L037B.....  Histotechnologist  NF       Assist                           7            3  Refined time to         (1.48)
                                                                          pathologist with                                 standard time for
                                                                          gross specimen                                   this clinical labor
                                                                          examination                                      task.
                                                                          (including
                                                                          performance of
                                                                          intraoperative
                                                                          frozen sections).
                                 L037B.....  Histotechnologist  NF       Clean room/                      5            1  Refined time to         (1.48)
                                                                          equipment                                        standard time for
                                                                          following                                        this clinical labor
                                                                          procedure                                        task.
                                                                          (including any
                                                                          equipment
                                                                          maintenance that
                                                                          must be done
                                                                          after the
                                                                          procedure).

[[Page 41758]]

 
                                 SL122.....  slide, microscope  NF       .................               10            4  Refined supply          (0.33)
                                                                                                                           quantity to what is
                                                                                                                           typical for the
                                                                                                                           procedure.
                                 SL231.....  kit, stain, H&E..  NF       .................              0.1            0  Removed supply not      (9.80)
                                                                                                                           typically used in
                                                                                                                           this service.
88334......  Intraop cyto path   L037B.....  Histotechnologist  NF       Assemble and                     2          0.5  Refined time to         (0.56)
              consult 2.                                                  deliver slides                                   standard time for
                                                                          with paperwork                                   this clinical labor
                                                                          to pathologists.                                 task.
                                 L037B.....  Histotechnologist  NF       Assist                           5            3  Refined time to         (0.74)
                                                                          pathologist with                                 standard time for
                                                                          gross specimen                                   this clinical labor
                                                                          examination                                      task.
                                                                          (including
                                                                          performance of
                                                                          intraoperative
                                                                          frozen sections).
                                 L037B.....  Histotechnologist  NF       Clean room/                      0            1  Input added to            0.37
                                                                          equipment                                        maintain
                                                                          following                                        consistency with
                                                                          procedure                                        all other codes
                                                                          (including any                                   within family.
                                                                          equipment
                                                                          maintenance that
                                                                          must be done
                                                                          after the
                                                                          procedure).
                                 SL122.....  slide, microscope  NF       .................               10            4  Refined supply          (0.33)
                                                                                                                           quantity to what is
                                                                                                                           typical for the
                                                                                                                           procedure.
                                 SL231.....  kit, stain, H&E..  NF       .................              0.1            0  Removed supply not      (9.80)
                                                                                                                           typically used in
                                                                                                                           this service.
88355......  Analysis skeletal   EP046.....  freezer,           NF       .................               30            0  Indirect Practice       (1.32)
              muscle.                         ultradeep (-70                                                               Expense; not
                                              degrees).                                                                    individually
                                                                                                                           allocable to a
                                                                                                                           particular patient
                                                                                                                           for a particular
                                                                                                                           service.
                                 L033A.....  Lab Technician...  NF       Accession                        6            4  Refined time to         (0.66)
                                                                          specimen/prepare                                 standard time for
                                                                          for examination.                                 this clinical labor
                                                                                                                           task.
                                 L033A.....  Lab Technician...  NF       Assemble and                     2          0.5  Refined time to         (0.50)
                                                                          deliver slides                                   standard time for
                                                                          with paperwork                                   this clinical labor
                                                                          to pathologists.                                 task.
                                 L033A.....  Lab Technician...  NF       Clean room,                      2            1  Refined time to         (0.33)
                                                                          equipment                                        standard time for
                                                                          following                                        this clinical labor
                                                                          procedure                                        task.
                                                                          including any
                                                                          equipment
                                                                          maintenance that
                                                                          must be done
                                                                          after the
                                                                          procedure.
                                 L033A.....  Lab Technician...  NF       Dispose of                       2            1  Refined time to         (0.33)
                                                                          remaining                                        standard time for
                                                                          specimens, spent                                 this clinical labor
                                                                          chemicals/other                                  task.
                                                                          consumables, and
                                                                          hazardous waste.
                                 L033A.....  Lab Technician...  NF       Prepare specimen                 9          0.5  Refined time to         (2.81)
                                                                          containers/                                      standard time for
                                                                          preload fixative/                                this clinical labor
                                                                          label containers/                                task.
                                                                          distribute
                                                                          requisition
                                                                          form(s) to
                                                                          physician.
                                 L033A.....  Lab Technician...  NF       Prepare specimen                 5            0  Refined time to         (1.65)
                                                                          for -70 degree                                   standard time for
                                                                          storage, log                                     this clinical labor
                                                                          specimen and                                     task.
                                                                          place in freezer
                                                                          for retrieval
                                                                          and performance
                                                                          of quantitative.

[[Page 41759]]

 
                                 L033A.....  Lab Technician...  NF       Prepare, pack and                4            1  Refined time to         (0.99)
                                                                          transport                                        standard time for
                                                                          specimens and                                    this clinical labor
                                                                          records for                                      task.
                                                                          storage.
                                 L033A.....  Lab Technician...  NF       Receive phone                    7            5  See preamble text...    (0.66)
                                                                          call from
                                                                          referring
                                                                          laboratory/
                                                                          facility with
                                                                          scheduled
                                                                          procedure to
                                                                          arrange special
                                                                          delivery of
                                                                          specimen p.
                                 L037B.....  Histotechnologist  NF       Assist                           7            3  Refined time to         (1.48)
                                                                          pathologist with                                 standard time for
                                                                          gross                                            this clinical labor
                                                                          examination.                                     task.
88360......  Tumor               EP024.....  microscope,        NF       .................               36           25  See preamble text...    (0.41)
              immunohistochem/                compound.
              manual.
                                 L033A.....  Lab Technician...  NF       Recycle xylene                   1            0  Non-standard            (0.33)
                                                                          from tissue                                      clinical labor task.
                                                                          processor and
                                                                          stainer.
                                 L037B.....  Histotechnologist  NF       Enter patient                    5            1  Refined time to         (1.48)
                                                                          data,                                            standard time for
                                                                          computational                                    this clinical labor
                                                                          prep for                                         task.
                                                                          antibody
                                                                          testing,
                                                                          generate and
                                                                          apply bar codes
                                                                          to slides, and
                                                                          enter data for.
                                 L037B.....  Histotechnologist  NF       Verify results                   1            0  Refined time to         (0.37)
                                                                          and complete                                     standard time for
                                                                          work load                                        this clinical labor
                                                                          recording logs.                                  task.
88361......  Tumor               L033A.....  Lab Technician...  NF       Recycle xylene                   1            0  Non-standard            (0.33)
              immunohistochem/                                            from tissue                                      clinical labor task.
              comput.                                                     processor and
                                                                          stainer.
                                 L037B.....  Histotechnologist  NF       Enter patient                    5            1  Refined time to         (1.48)
                                                                          data,                                            standard time for
                                                                          computational                                    this clinical labor
                                                                          prep for                                         task.
                                                                          antibody
                                                                          testing,
                                                                          generate and
                                                                          apply bar codes
                                                                          to slides, and
                                                                          enter data for.
                                 L037B.....  Histotechnologist  NF       Verify results                   1            0  Refined time to         (0.37)
                                                                          and complete                                     standard time for
                                                                          work load                                        this clinical labor
                                                                          recording logs.                                  task.
88362......  Nerve teasing       L033A.....  Lab Technician...  NF       Assemble and                     2          0.5  Refined time to         (0.50)
              preparations.                                               deliver cedar                                    standard time for
                                                                          mounted slides                                   this clinical labor
                                                                          with paperwork                                   task.
                                                                          to pathologists.
                                 L033A.....  Lab Technician...  NF       Assemble other                   5          0.5  Refined time to         (1.49)
                                                                          light microscopy                                 standard time for
                                                                          slides, epon                                     this clinical labor
                                                                          nerve biopsy                                     task.
                                                                          slides, and
                                                                          clinical
                                                                          history, and
                                                                          present to
                                                                          pathologist to
                                                                          pr.

[[Page 41760]]

 
                                 L033A.....  Lab Technician...  NF       Clean room/                      7            1  Refined time to         (1.98)
                                                                          equipment                                        standard time for
                                                                          following                                        this clinical labor
                                                                          procedure                                        task.
                                                                          (including
                                                                          dissecting
                                                                          microscope and
                                                                          dissection work
                                                                          area. Cedar oil
                                                                          specific c.
                                 L033A.....  Electrodiagnostic  NF       Preparation:                     2          0.5  Refined time to         (0.50)
                                              Technologist.               labeling of                                      standard time for
                                                                          blocks and                                       this clinical labor
                                                                          containers and                                   task.
                                                                          document
                                                                          location and
                                                                          processor used.
                                 L037B.....  Histotechnologist  NF       Accession                       10            4  Refined time to         (2.22)
                                                                          specimen and                                     standard time for
                                                                          prepare for                                      this clinical labor
                                                                          examination.                                     task.
                                 L037B.....  Histotechnologist  NF       Assist                          10            5  Non-standard            (1.85)
                                                                          pathologist with                                 refinement, see
                                                                          gross specimen                                   preamble text.
                                                                          examination
                                                                          including the
                                                                          following; A ;
                                                                          Selection of
                                                                          fresh unfixed
                                                                          tissue samp.
                                 L037B.....  Histotechnologist  NF       Consult with                     7            0  Task would not be       (2.59)
                                                                          pathologist                                      required for the
                                                                          regarding                                        typical procedure.
                                                                          representation
                                                                          needed, block
                                                                          selection and
                                                                          appropriate
                                                                          technique.
                                 L037B.....  Histotechnologist  NF       Dispose of                       2            1  Refined time to         (0.37)
                                                                          remaining                                        standard time for
                                                                          specimens, spent                                 this clinical labor
                                                                          chemicals/other                                  task.
                                                                          consumables, and
                                                                          hazardous waste.
                                 L037B.....  Histotechnologist  NF       Manage any                       2            0  Refined time to         (0.74)
                                                                          relevant                                         standard time for
                                                                          utilization                                      this clinical labor
                                                                          review/quality                                   task.
                                                                          assurance
                                                                          activities and
                                                                          regulatory
                                                                          compliance
                                                                          documentation.
                                 L037B.....  Histotechnologist  NF       Prepare specimen                12          0.5  Refined time to         (4.26)
                                                                          containers                                       standard time for
                                                                          preload fixative                                 this clinical labor
                                                                          label containers                                 task.
                                                                          distribute
                                                                          requisition
                                                                          form(s) to
                                                                          physician.
                                 L037B.....  Histotechnologist  NF       Prepare, pack and               10            0  Refined time to         (3.70)
                                                                          transport cedar                                  standard time for
                                                                          oiled glass                                      this clinical labor
                                                                          slides and                                       task.
                                                                          records for in-
                                                                          house special
                                                                          storage (need to
                                                                          be stored flat).
                                 L037B.....  Histotechnologist  NF       Prepare, pack and                2            1  Refined time to         (0.37)
                                                                          transport                                        standard time for
                                                                          specimens and                                    this clinical labor
                                                                          records for in-                                  task.
                                                                          house storage
                                                                          and external
                                                                          storage (where
                                                                          applicable).

[[Page 41761]]

 
                                 L037B.....  Histotechnologist  NF       Storage remaining                5            0  Refined time to         (1.85)
                                                                          specimen.                                        standard time for
                                                                          (Osmicated nerve                                 this clinical labor
                                                                          strands,                                         task.
                                                                          potential for
                                                                          additional
                                                                          teased
                                                                          specimens).
92511......  Nasopharyngoscopy.  EF008.....  chair with         NF       .................               19           26  Refined equipment         0.08
                                              headrest, exam,                                                              time to conform to
                                              reclining.                                                                   established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ167.....  light source,      NF       .................               19            0  Redundant when used     (0.51)
                                              xenon.                                                                       together with
                                                                                                                           EQ170; see preamble.
                                 EQ170.....  light, fiberoptic  NF       .................               19           26  Refined equipment         0.06
                                              headlight w-                                                                 time to conform to
                                              source.                                                                      established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 ES020.....  fiberscope,        NF       .................               46           53  Refined equipment         0.26
                                              flexible,                                                                    time to conform to
                                              rhinolaryngoscop                                                             established
                                              y.                                                                           policies for scopes.
                                 ES031.....  video system,      NF       .................               19           26  Refined equipment         0.90
                                              endoscopy                                                                    time to conform to
                                              (processor,                                                                  established
                                              digital capture,                                                             policies for non-
                                              monitor,                                                                     highly technical
                                              printer, cart).                                                              equipment.
                                 L037D.....  RN/LPN/MTA.......  F        Dischrge Day                     6            0  Aligned clinical        (2.22)
                                                                          mgmt. (0.5 x                                     labor discharge day
                                                                          99238) (enter 6                                  management time
                                                                          min).                                            with the work time
                                                                                                                           discharge day code.
                                 SB006.....  drape, non-        NF       .................                1            0  Removed supply not      (0.22)
                                              sterile, sheet                                                               typically used in
                                              40in x 60in.                                                                 this service.
                                 SB027.....  gown, staff,       NF       .................                2            0  Removed supply not      (2.37)
                                              impervious.                                                                  typically used in
                                                                                                                           this service.
                                 SB033.....  mask, surgical...  NF       .................                2            0  Removed supply not      (0.39)
                                                                                                                           typically used in
                                                                                                                           this service.
                                 SD070.....  endosheath.......  NF       .................                1            0  Removed supply not     (17.25)
                                                                                                                           typically used in
                                                                                                                           this service.
95812......  Eeg 41-60 minutes.  EF003.....  bedroom furniture  NF       .................              124           99  Refined equipment       (0.15)
                                              (hospital bed,                                                               time to conform to
                                              table, reclining                                                             established
                                              chair).                                                                      policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ017.....  EEG, digital,      NF       .................              133           99  Refined equipment       (4.99)
                                              prolonged                                                                    time to conform to
                                              testing system                                                               established
                                              (computer w-                                                                 policies for non-
                                              remote camera).                                                              highly technical
                                                                                                                           equipment.
                                 L047B.....  REEGT............  NF       Assist physician                79           50  Refined clinical       (13.63)
                                                                          in performing                                    labor time to match
                                                                          procedure.                                       physician
                                                                                                                           intraservice time.
                                 L047B.....  REEGT............  NF       Enter patient                    2            0  Refined to conform      (0.94)
                                                                          information into                                 with identical
                                                                          laboratory log                                   labor activity in
                                                                          book.                                            other codes in the
                                                                                                                           family.
                                 L047B.....  REEGT............  NF       Provide pre-                     2            0  Duplication with        (0.94)
                                                                          service                                          other clinical
                                                                          education/obtain                                 labor task.
                                                                          consent.
                                 L047B.....  REEGT............  NF       Transfer data to                 4            2  Refined time to         (0.94)
                                                                          reading station                                  standard time for
                                                                          & archive data.                                  this clinical labor
                                                                                                                           task.
95813......  Eeg over 1 hour...  EF003.....  bedroom furniture  NF       .................              147          129  Refined equipment       (0.11)
                                              (hospital bed,                                                               time to conform to
                                              table, reclining                                                             established
                                              chair).                                                                      policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ017.....  EEG, digital,      NF       .................              156          129  Refined equipment       (3.96)
                                              prolonged                                                                    time to conform to
                                              testing system                                                               established
                                              (computer w-                                                                 policies for non-
                                              remote camera).                                                              highly technical
                                                                                                                           equipment.
                                 L047B.....  REEGT............  NF       Assist physician               102           80  Refined clinical       (10.34)
                                                                          in performing                                    labor time to match
                                                                          procedure.                                       physician
                                                                                                                           intraservice time.

[[Page 41762]]

 
                                 L047B.....  REEGT............  NF       Enter patient                    2            0  Refined to conform      (0.94)
                                                                          information into                                 with identical
                                                                          laboratory log                                   labor activity in
                                                                          book.                                            other codes in the
                                                                                                                           family.
                                 L047B.....  REEGT............  NF       Provide pre-                     2            0  Duplication with        (0.94)
                                                                          service                                          other clinical
                                                                          education/obtain                                 labor task.
                                                                          consent.
                                 L047B.....  REEGT............  NF       Transfer data to                 4            2  Refined time to         (0.94)
                                                                          reading station                                  standard time for
                                                                          & archive data.                                  this clinical labor
                                                                                                                           task.
95863......  Muscle test 3       EF023.....  table, exam......  NF       .................               52           55  Refined equipment         0.01
              limbs.                                                                                                       time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ024.....  EMG-NCV-EP         NF       .................               52           55  Refined equipment         0.44
                                              system, 8                                                                    time to conform to
                                              channel.                                                                     established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037A.....  Electrodiagnostic  NF       Clean room/                      0            3  Refined to conform        1.11
                                              Technologist.               equipment by                                     with identical
                                                                          physician staff.                                 labor activity in
                                                                                                                           other codes in the
                                                                                                                           family.
95864......  Muscle test 4       EF023.....  table, exam......  NF       .................               62           65  Refined equipment         0.01
              limbs.                                                                                                       time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ024.....  EMG-NCV-EP         NF       .................               62           65  Refined equipment         0.44
                                              system, 8                                                                    time to conform to
                                              channel.                                                                     established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037A.....  Electrodiagnostic  NF       Other Clinical                   6            0  Refined to conform      (2.22)
                                              Technologist.               Activity--specif                                 with identical
                                                                          y:Prepare                                        labor activity in
                                                                          technician                                       other codes in the
                                                                          report,                                          family.
                                                                          summarize
                                                                          clinical and
                                                                          electrodiagnosti
                                                                          c data, and
                                                                          interpre.
95869......  Muscle test thor    EF023.....  table, exam......  NF       .................               27           30  Refined equipment         0.01
              paraspinal.                                                                                                  time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ024.....  EMG-NCV-EP         NF       .................               27           30  Refined equipment         0.44
                                              system, 8                                                                    time to conform to
                                              channel.                                                                     established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037A.....  Electrodiagnostic  NF       Clean room/                      0            3  Refined to conform        1.11
                                              Technologist.               equipment by                                     with identical
                                                                          physician staff.                                 labor activity in
                                                                                                                           other codes in the
                                                                                                                           family.
95870......  Muscle test         EF023.....  table, exam......  NF       .................               27           30  Refined equipment         0.01
              nonparaspinal.                                                                                               time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ024.....  EMG-NCV-EP         NF       .................               27           30  Refined equipment         0.44
                                              system, 8                                                                    time to conform to
                                              channel.                                                                     established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037A.....  Electrodiagnostic  NF       Clean room/                      0            3  Refined to conform        1.11
                                              Technologist.               equipment by                                     with identical
                                                                          physician staff.                                 labor activity in
                                                                                                                           other codes in the
                                                                                                                           family.
                                 SD275.....  Disposable         NF       .................                6            1  Refined supply         (13.75)
                                              electrode pack.                                                              quantity to what is
                                                                                                                           typical for the
                                                                                                                           procedure.
95923......  Autonomic nrv syst  EF023.....  table, exam......  NF       .................               51           43  Refined equipment       (0.02)
              funj test.                                                                                                   time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ035.....  QSART acquisition  NF       .................               46           43  Refined equipment       (0.33)
                                              system (Q-Sweat).                                                            time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.

[[Page 41763]]

 
                                 EQ124.....  stimulator,        NF       .................               46           43  Refined equipment       (0.01)
                                              constant                                                                     time to conform to
                                              current, w-                                                                  established
                                              stimulating and                                                              policies for non-
                                              grounding                                                                    highly technical
                                              electrodes                                                                   equipment.
                                              (Grass
                                              Telefactor).
                                 EQ171.....  light, infra-red,  NF       .................               46           43  Refined equipment     ........
                                              ceiling mount.                                                               time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L037A.....  Electrodiagnostic  NF       Clean room/                      5            0  Typically billed        (1.85)
                                              Technologist.               equipment by                                     with an E/M or
                                                                          physician staff.                                 other evaluation
                                                                                                                           service.
                                 L037A.....  Electrodiagnostic  NF       Complete                         5            0  Typically billed        (1.85)
                                              Technologist.               diagnostic                                       with an E/M or
                                                                          forms, lab & X-                                  other evaluation
                                                                          ray requisitions.                                service.
                                 L037A.....  Electrodiagnostic  NF       Complete pre-                    5            2  Refined to conform      (1.11)
                                              Technologist.               service                                          with identical
                                                                          diagnostic &                                     labor activity in
                                                                          referral forms.                                  other codes in the
                                                                                                                           family.
                                 L037A.....  Electrodiagnostic  NF       Prepare room,                    0            2  Refined time to           0.74
                                              Technologist.               equipment,                                       standard time for
                                                                          supplies.                                        this clinical labor
                                                                                                                           task.
                                 SA014.....  kit, electrode,    NF       .................                4            3  See preamble text...    (4.01)
                                              iontophoresis.
                                 SA048.....  pack, minimum      NF       .................                1            0  Typically billed        (1.14)
                                              multi-specialty                                                              with an E/M or
                                              visit.                                                                       other evaluation
                                                                                                                           service.
95928......  C motor evoked      EF023.....  table, exam......  NF       .................               65           45  Refined equipment       (0.06)
              uppr limbs.                                                                                                  time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ024.....  EMG-NCV-EP         NF       .................               65           45  Refined equipment       (2.95)
                                              system, 8                                                                    time to conform to
                                              channel.                                                                     established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ178.....  magnetic           NF       .................               65           45  Refined equipment       (0.16)
                                              stimulator hand                                                              time to conform to
                                              coil (70-90mm).                                                              established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ180.....  magnetic           NF       .................               65           45  Refined equipment       (1.43)
                                              stimulator                                                                   time to conform to
                                              system (BiStim).                                                             established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L047B.....  REEGT............  NF       Assist physician                60           40  Refined clinical        (9.40)
                                                                          in performing                                    labor time to match
                                                                          procedure.                                       physician
                                                                                                                           intraservice time.
                                 L047B.....  REEGT............  NF       Other Clinical                   3            0  Duplication with        (1.41)
                                                                          Activity--specif                                 other clinical
                                                                          y: Review                                        labor task.
                                                                          requisition.
                                                                          Assess for
                                                                          special needs.
                                                                          Give patient
                                                                          instructions for
                                                                          test prepa.
                                 SA048.....  pack, minimum      NF       .................                1            0  Typically billed        (1.14)
                                              multi-specialty                                                              with an E/M or
                                              visit.                                                                       other evaluation
                                                                                                                           service.
95929......  C motor evoked lwr  EF023.....  table, exam......  NF       .................               65           45  Refined equipment       (0.06)
              limbs.                                                                                                       time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ024.....  EMG-NCV-EP         NF       .................               65           45  Refined equipment       (2.95)
                                              system, 8                                                                    time to conform to
                                              channel.                                                                     established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ179.....  magnetic           NF       .................               65           45  Refined equipment       (0.24)
                                              stimulator leg                                                               time to conform to
                                              coil (110mm).                                                                established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ180.....  magnetic           NF       .................               65           45  Refined equipment       (1.43)
                                              stimulator                                                                   time to conform to
                                              system (BiStim).                                                             established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.

[[Page 41764]]

 
                                 L047B.....  REEGT............  NF       Assist physician                60           40  Refined clinical        (9.40)
                                                                          in performing                                    labor time to match
                                                                          procedure.                                       physician
                                                                                                                           intraservice time.
                                 L047B.....  REEGT............  NF       Other Clinical                   3            0  Duplication with        (1.41)
                                                                          Activity--specif                                 other clinical
                                                                          y:Review                                         labor task.
                                                                          requisition.
                                                                          Assess for
                                                                          special needs.
                                                                          Give patient
                                                                          instructions for
                                                                          test prepa.
95933......  Blink reflex test.  L037A.....  Electrodiagnostic  NF       Clean room/                      5            3  Refined time to         (0.74)
                                              Technologist.               equipment by                                     standard time for
                                                                          physician staff.                                 this clinical labor
                                                                                                                           task.
                                 L037A.....  Electrodiagnostic  NF       Prepare room,                    0            2  Refined time to           0.74
                                              Technologist.               equipment,                                       standard time for
                                                                          supplies.                                        this clinical labor
                                                                                                                           task.
95956......  Eeg monitor         EF003.....  bedroom furniture  NF       .................              772          769  Refined equipment       (0.02)
              technol attended.               (hospital bed,                                                               time to conform to
                                              table, reclining                                                             established
                                              chair).                                                                      policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 EQ017.....  EEG, digital,      NF       .................              772          769  Refined equipment       (0.44)
                                              prolonged                                                                    time to conform to
                                              testing system                                                               established
                                              (computer w-                                                                 policies for non-
                                              remote camera).                                                              highly technical
                                                                                                                           equipment.
                                 EQ047.....  air compressor,    NF       .................               52           49  Refined equipment     ........
                                              safety.                                                                      time to conform to
                                                                                                                           established
                                                                                                                           policies for non-
                                                                                                                           highly technical
                                                                                                                           equipment.
                                 L047B.....  REEGT............  NF       Other Clinical                   3            0  Duplication with        (1.41)
                                                                          Activity--specif                                 other clinical
                                                                          y: Coordinate                                    labor task.
                                                                          pretesting
                                                                          services/review
                                                                          test/exam
                                                                          results.
                                 L047B.....  REEGT............  NF       Provide pre-                     2            0  Duplication with        (0.94)
                                                                          service                                          other clinical
                                                                          education/obtain                                 labor task.
                                                                          consent.
--------------------------------------------------------------------------------------------------------------------------------------------------------


   Table 14--Crosswalk for Establishing CY 2016 New, Revised, and Potentially Misvalued Codes Malpractice RVUs
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
   CY 2016 New, Revised or Potentially MMalpractice Risk Factor Crosswalk Code
----------------------------------------------------------------------------------------------------------------
11750........................  Removal of nail bed.....  11750........................  Removal of nail bed.
20240........................  Bone biopsy excisional..  20240........................  Bone biopsy excisional.
27280........................  Fusion of sacroiliac      27280........................  Fusion of sacroiliac
                                joint.                                                   joint.
31622........................  Dx bronchoscope/wash....  31622........................  Dx bronchoscope/wash.
3160A........................  Bronch ebus sampling 1/2  31620........................  Endobronchial us add-on.
                                node.
3160B........................  Bronch ebus samplng 3/>   31620........................  Endobronchial us add-on.
                                node.
31625........................  Bronchoscopy w/biopsy(s)  31625........................  Bronchoscopy w/
                                                                                         biopsy(s).
31626........................  Bronchoscopy w/markers..  31626........................  Bronchoscopy w/markers.
31628........................  Bronchoscopy/lung bx      31628........................  Bronchoscopy/lung bx
                                each.                                                    each.
31629........................  Bronchoscopy/needle bx    31629........................  Bronchoscopy/needle bx
                                each.                                                    each.
3160C........................  Bronch ebus ivntj perph   31620........................  Endobronchial us add-on.
                                les.
31632........................  Bronchoscopy/lung bx      31632........................  Bronchoscopy/lung bx
                                addl.                                                    addl.
31633........................  Bronchoscopy/needle bx    31633........................  Bronchoscopy/needle bx
                                addl.                                                    addl.
3347A........................  Implant tcat pulm vlv     93581........................  Transcath closure of
                                perq.                                                    vsd.
3725A........................  Intrvasc us noncoronary   37250........................  Iv us first vessel add-
                                1st.                                                     on.
3725B........................  Intrvasc us noncoronary   37251........................  Iv us each add vessel
                                addl.                                                    add-on.
38570........................  Laparoscopy lymph node    38570........................  Laparoscopy lymph node
                                biop.                                                    biop.
38571........................  Laparoscopy               38571........................  Laparoscopy
                                lymphadenectomy.                                         lymphadenectomy.
38572........................  Laparoscopy               38572........................  Laparoscopy
                                lymphadenectomy.                                         lymphadenectomy.
3940A........................  Mediastinoscpy w/medstnl  33924........................  Remove pulmonary shunt.
                                bx.
3940B........................  Mediastinoscpy w/lmph     32606........................  Thoracoscopy w/bx med
                                nod bx.                                                  space.
44380........................  Small bowel endoscopy br/ 44380........................  Small bowel endoscopy br/
                                wa.                                                      wa.
44381........................  Small bowel endoscopy br/ 45340........................  Sig w/tndsc balloon
                                wa.                                                      dilation.
44382........................  Small bowel endoscopy...  44382........................  Small bowel endoscopy.

[[Page 41765]]

 
44384........................  Small bowel endoscopy...  44383........................  Ileoscopy w/stent.
44385........................  Endoscopy of bowel pouch  44385........................  Endoscopy of bowel
                                                                                         pouch.
44386........................  Endoscopy bowel pouch/    44386........................  Endoscopy bowel pouch/
                                biop.                                                    biop.
44388........................  Colonoscopy thru stoma    44388........................  Colonoscopy thru stoma
                                spx.                                                     spx.
44389........................  Colonoscopy with biopsy.  44389........................  Colonoscopy with biopsy.
44390........................  Colonoscopy for foreign   44390........................  Colonoscopy for foreign
                                body.                                                    body.
44391........................  Colonoscopy for bleeding  44391........................  Colonoscopy for
                                                                                         bleeding.
44392........................  Colonoscopy &             44392........................  Colonoscopy &
                                polypectomy.                                             polypectomy.
44394........................  Colonoscopy w/snare.....  44394........................  Colonoscopy w/snare.
44401........................  Colonoscopy with          44393........................  Colonoscopy lesion
                                ablation.                                                removal.
44402........................  Colonoscopy w/stent       44397........................  Colonoscopy w/stent.
                                plcmt.
44403........................  Colonoscopy w/resection.  44392........................  Colonoscopy &
                                                                                         polypectomy.
44404........................  Colonoscopy w/injection.  44389........................  Colonoscopy with biopsy.
44405........................  Colonoscopy w/dilation..  44390........................  Colonoscopy for foreign
                                                                                         body.
44406........................  Colonoscopy w/ultrasound  44394........................  Colonoscopy w/snare.
45330........................  Diagnostic sigmoidoscopy  45330........................  Diagnostic
                                                                                         sigmoidoscopy.
45331........................  Sigmoidoscopy and biopsy  45331........................  Sigmoidoscopy and
                                                                                         biopsy.
45332........................  Sigmoidoscopy w/fb        45332........................  Sigmoidoscopy w/fb
                                removal.                                                 removal.
45333........................  Sigmoidoscopy &           45333........................  Sigmoidoscopy &
                                polypectomy.                                             polypectomy.
45334........................  Sigmoidoscopy for         45334........................  Sigmoidoscopy for
                                bleeding.                                                bleeding.
45335........................  Sigmoidoscopy w/submuc    45335........................  Sigmoidoscopy w/submuc
                                inj.                                                     inj.
45337........................  Sigmoidoscopy &           45337........................  Sigmoidoscopy &
                                decompress.                                              decompress.
45338........................  Sigmoidoscopy w/tumr      45338........................  Sigmoidoscopy w/tumr
                                remove.                                                  remove.
45340........................  Sig w/tndsc balloon       45340........................  Sig w/tndsc balloon
                                dilation.                                                dilation.
45341........................  Sigmoidoscopy w/          45341........................  Sigmoidoscopy w/
                                ultrasound.                                              ultrasound.
45342........................  Sigmoidoscopy w/us guide  45342........................  Sigmoidoscopy w/us guide
                                bx.                                                      bx.
45346........................  Sigmoidoscopy w/ablation  45339........................  Sigmoidoscopy w/ablate
                                                                                         tumr.
45347........................  Sigmoidoscopy w/plcmt     45345........................  Sigmoidoscopy w/stent.
                                stent.
45349........................  Sigmoidoscopy w/          45338........................  Sigmoidoscopy w/tumr
                                resection.                                               remove.
45350........................  Sgmdsc w/band ligation..  45334........................  Sigmoidoscopy for
                                                                                         bleeding.
45378........................  Diagnostic colonoscopy..  45378........................  Diagnostic colonoscopy.
45379........................  Colonoscopy w/fb removal  45379........................  Colonoscopy w/fb
                                                                                         removal.
45380........................  Colonoscopy and biopsy..  45380........................  Colonoscopy and biopsy.
45381........................  Colonoscopy submucous     45381........................  Colonoscopy submucous
                                njx.                                                     njx.
45382........................  Colonoscopy w/control     45382........................  Colonoscopy w/control
                                bleed.                                                   bleed.
45384........................  Colonoscopy w/lesion      45384........................  Colonoscopy w/lesion
                                removal.                                                 removal.
45385........................  Colonoscopy w/lesion      45385........................  Colonoscopy w/lesion
                                removal.                                                 removal.
45386........................  Colonoscopy w/balloon     45386........................  Colonoscopy w/balloon
                                dilat.                                                   dilat.
45388........................  Colonoscopy w/ablation..  45383........................  Lesion removal
                                                                                         colonoscopy.
45389........................  Colonoscopy w/stent       45387........................  Colonoscopy w/stent.
                                plcmt.
45390........................  Colonoscopy w/resection.  45385........................  Colonoscopy w/lesion
                                                                                         removal.
45391........................  Colonoscopy w/endoscope   45391........................  Colonoscopy w/endoscope
                                us.                                                      us.
45392........................  Colonoscopy w/endoscopic  45392........................  Colonoscopy w/endoscopic
                                fnb.                                                     fnb.
45393........................  Colonoscopy w/            45382........................  Colonoscopy w/control
                                decompression.                                           bleed.
45398........................  Colonoscopy w/band        45382........................  Colonoscopy w/control
                                ligation.                                                bleed.
46500........................  Injection into            46500........................  Injection into
                                hemorrhoid(s).                                           hemorrhoid(s).
47135........................  Transplantation of liver  47135........................  Transplantation of
                                                                                         liver.
5039A........................  Njx px nfrosgrm &/        50390........................  Drainage of kidney
                                urtrgrm.                                                 lesion.
5039B........................  Njx px nfrosgrm &/        50394........................  Injection for kidney x-
                                urtrgrm.                                                 ray.
5039C........................  Plmt nephrostomy          50392........................  Insert kidney drain.
                                catheter.
5039D........................  Plmt nephroureteral       50393........................  Insert ureteral tube.
                                catheter.
5039M........................  Convert nephrostomy       50393........................  Insert ureteral tube.
                                catheter.
5039E........................  Exchange nephrostomy      50398........................  Change kidney tube.
                                cath.
5069G........................  Plmt ureteral stent prq.  50398........................  Change kidney tube.
5069H........................  Plmt ureteral stent prq.  50393........................  Insert ureteral tube.
5069I........................  Plmt ureteral stent prq.  50393........................  Insert ureteral tube.
5443A........................  Repair corporeal tear...  54406........................  Remove muti-comp penis
                                                                                         pros.
5443B........................  Replantation of penis...  53448........................  Remov/replc ur sphinctr
                                                                                         comp.
657XG........................  Impltj ntrstrml crnl rng  65426........................  Removal of eye lesion.
                                seg.
7208A........................  X-ray exam entire spi 1   72050........................  X-ray exam neck spine 4/
                                vw.                                                      5vws.
7208B........................  X-ray exam entire spi 2/  72052........................  X-ray exam neck spine 6/
                                3 vw.                                                    >vws.
7208C........................  X-ray exam entire spi 4/  72052........................  X-ray exam neck spine 6/
                                5 vw.                                                    > vws.
7208D........................  X-ray exam entire spi 6/  72052........................  X-ray exam neck spine 6/
                                > vw.                                                    > vws.
73560........................  X-ray exam of knee 1 or   73560........................  X-ray exam of knee 1 or
                                2.                                                       2.
73562........................  X-ray exam of knee 3....  73562........................  X-ray exam of knee 3.
73564........................  X-ray exam knee 4 or      73564........................  X-ray exam knee 4 or
                                more.                                                    more.
73565........................  X-ray exam of knees.....  73565........................  X-ray exam of knees.
73590........................  X-ray exam of lower leg.  73590........................  X-ray exam of lower leg.
73600........................  X-ray exam of ankle.....  73600........................  X-ray exam of ankle.
77402........................  Radiation treatment       G6003........................  Radiation treatment
                                delivery.                                                delivery.
77407........................  Radiation treatment       G6007........................  Radiation treatment
                                delivery.                                                delivery.
77412........................  Radiation treatment       G6011........................  Radiation treatment
                                delivery.                                                delivery.
77385........................  Ntsty modul rad tx dlvr   G6015........................  Radiation tx delivery
                                smpl.                                                    imrt.

[[Page 41766]]

 
77386........................  Ntsty modul rad tx dlvr   G6015........................  Radiation treatment
                                cplx.                                                    delivery.
77387........................  Guidance for radiaj tx    77014........................  Ct scan for therapy
                                dlvr.                                                    guide.
76948........................  Echo guide ova            76948........................  Echo guide ova
                                aspiration.                                              aspiration.
7778A........................  Hdr rdncl skn surf        77785........................  Hdr brachytx 1 channel.
                                brachytx.
7778B........................  Hdr rdncl skn surf        77786........................  Hdr brachytx 2-12
                                brachytx.                                                channel.
7778C........................  Hdr rdncl ntrstl/icav     77785........................  Hdr brachytx 1 channel.
                                brchtx.
7778D........................  Hdr rdncl ntrstl/icav     77786........................  Hdr brachytx 2-12
                                brchtx.                                                  channel.
7778E........................  Hdr rdncl ntrstl/icav     77787........................  Hdr brachytx over 12
                                brchtx.                                                  chan.
88346........................  Immunofluorescent study.  88346........................  Immunofluorescent study.
8835X........................  Immunofluor antb addl     88346........................  Immunofluorescent study.
                                stain.
88367........................  Insitu hybridization      88367........................  Insitu hybridization
                                auto.                                                    auto.
88368........................  Insitu hybridization      88368........................  Insitu hybridization
                                manual.                                                  manual.
91200........................  Liver elastography......  91200........................  Liver elastography.
9254A........................  Caloric vestibular test   92540........................  Basic vestibular
                                with recording.                                          evaluation.
9254B........................  Caloric vestibular test   92540........................  Basic vestibular
                                with recording.                                          evaluation.
99497........................  Advncd care plan 30 min.  99214........................  Office/outpatient visit
                                                                                         est.
99498........................  Advncd care plan addl 30  99214........................  Office/outpatient visit
                                min.                                                     est.
----------------------------------------------------------------------------------------------------------------
Note: For any codes not included in Table 14, we are proposing to use the utilization crosswalk, when a
  crosswalk exists, in order to calculate the malpractice risk factor for these services, as discussed in the
  preamble text.

a. Lower GI Endoscopy Services
    CPT revised the lower gastrointestinal endoscopy code set for CY 
2015 following identification of some of the codes as potentially 
misvalued and the affected specialty society's contention that this 
code set did not allow for accurate reporting of services based upon 
current medical practice. The RUC subsequently provided recommendations 
to us for valuing these services. In the CY 2015 PFS final rule with 
comment period, we delayed valuing the lower GI codes and indicated 
that we would propose values for these codes in the CY 2016 proposed 
rule, citing the new process for including proposed values for new, 
revised and potentially misvalued codes in the proposed rule as one of 
the reasons for the delay.
(1) Gastrointestinal (GI) Endoscopy (CPT Codes 43775, 44380-46607 and 
HCPCS Codes G0104, G0105, and G0121)
    In the CY 2014 PFS final rule with comment period, we indicated 
that we used what we called an ``incremental difference methodology'' 
in valuing the upper GI codes for that year. We explained that the RUC 
made extensive use of a methodology that uses the incremental 
difference in codes to determine values for many of these services. 
This methodology uses a base code or other comparable code and 
considers what the difference should be between that code and another 
code by comparing the differentials to those for other sets of similar 
codes. As with the esophagoscopy subfamily, many of the procedures 
described within the colonoscopy subfamily have identical counterparts 
in the esophagogastroduodenoscopy (EGD) subfamily. For instance, the 
base colonoscopy CPT code 45378 is described as ``Colonoscopy, 
flexible; diagnostic, including collection of specimen(s) by brushing 
or washing when performed, (separate procedure).'' The base EGD CPT 
code 43235 is described as ``Esophagogastroduodenoscopy, flexible, 
transoral; diagnostic, with collection of specimen(s) by brushing or 
washing, when performed.'' In valuing other codes within both 
subfamilies, the RUC frequently used the difference between these two 
base codes as an increment for measuring the difference in work 
involved in doing a similar procedure utilizing colonoscopy versus 
utilizing EGD. For example, the EGD CPT code 43239 includes a biopsy in 
addition to the base diagnostic EGD CPT code 43235. The RUC valued this 
by adding the incremental difference in the base colonoscopy code over 
the base EGD CPT code to the value it recommended for the esophagoscopy 
biopsy, CPT code 43202. With some variations, the RUC used this 
incremental difference methodology extensively in valuing subfamilies 
of codes. We have made use of similar methodologies in establishing 
work RVUs for codes in this family.
    We agreed with several of the RUC recommendations for codes in this 
family. Where we did not agree, we consistently applied the incremental 
difference methodology. Table I7 reflects how we applied this 
methodology and the values we are proposing. To calculate the base RVU 
for the colonoscopy subfamily, we looked at the current intraservice 
time for CPT code 45378, which is 30 minutes, and the current work RVU, 
which is 3.69. The RUC recommended an intraservice time of 25 minutes 
and 3.36 RVUs. We then compared that service to the base EGD CPT code 
43235 for which the RUC recommended a work RVU of 2.26, giving an 
increment between EGD and colonoscopy of 1.10 RVUs. We added that 
increment to our proposed work RVU for CPT 43235 of 2.19 to arrive at 
our proposed work RVU for the base colonoscopy CPT code 45378 of 3.29. 
We use this value as the base code in the incremental methodology for 
establishing the work value for the other base codes in the colonoscopy 
subfamilies which were then used to value the other codes in that 
subfamily.

                                             Table 15--Application of the Incremental Difference Methodology
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Current                                                                              Increment    Calculated
      HCPCS             Descriptor            WRVU      RUC  WRVU       Base procedure       Base  RVU         Increment           value         WRVU
--------------------------------------------------------------------------------------------------------------------------------------------------------
44380...........  Ileoscopy, through             1.05         0.97  Colonoscopy...........         3.29  Colonoscopy to               -2.39          0.9
                   stoma; diagnostic,                                                                     Ileoscopy.
                   including collection
                   of specimen(s) by
                   brushing or washing,
                   when performed.

[[Page 41767]]

 
44382...........  Ileoscopy, through             1.27         1.27  Ileoscopy.............          0.9  Biopsy...............          0.3          1.2
                   stoma; with biopsy,
                   single or multiple.
44384...........  Ileoscopy, through               NA         3.11  Ileoscopy.............          0.9  Stent................         1.98         2.88
                   stoma; with placement
                   of endoscopic stent
                   (includes pre- and
                   post-dilation and
                   guide wire passage,
                   when performed).
44385...........  Endoscopic evaluation          1.82          1.3  Colonoscopy...........         3.29  Colonoscopy to endo.         -2.06         1.23
                   of small intestinal                                                                    eval.
                   pouch (eg, Kock
                   pouch, ileal
                   reservoir [S or J]);
                   diagnostic, including
                   collection of
                   specimen(s) by
                   brushing or washing,
                   when performed.
44386...........  Endoscopic evaluation          2.12          1.6  Endo. Eval............         1.23  Biopsy...............          0.3         1.53
                   of small intestinal
                   pouch (eg, Kock
                   pouch, ileal
                   reservoir [S or J]);
                   with biopsy, single
                   or multiple.
44388...........  Colonoscopy through            2.82         2.82  Colonoscopy...........         3.29  Colonoscopy to               -0.54         2.75
                   stoma; diagnostic,                                                                     Colonoscopy through
                   including collection                                                                   stoma.
                   of specimen(s) by
                   brushing or washing,
                   when performed
                   (separate procedure).
44389...........  Colonoscopy through            3.13         3.12  Colonoscopy through            2.75  Biopsy...............          0.3         3.05
                   stoma; with biopsy,                               stoma.
                   single or multiple.
44390...........  Colonoscopy through            3.82         3.82  Colonoscopy through            2.75  Foreign body.........         1.02         3.77
                   stoma; with removal                               stoma.
                   of foreign body.
44402...........  Colonoscopy through             4.7         4.96  Colonoscopy through            2.75  Stent................         1.98         4.73
                   stoma; with                                       stoma.
                   endoscopic stent
                   placement (including
                   pre- and post-
                   dilation and
                   guidewire passage,
                   when performed).
44403...........  Colonoscopy through              NA         5.81  Colonoscopy through            2.75  Endoscopic mucosal            2.78         5.53
                   stoma; with                                       stoma.                               resection.
                   endoscopic mucosal
                   resection.
44404...........  Colonoscopy through              NA         3.13  Colonoscopy through            2.75  Submucosal injection.          0.3         3.05
                   stoma; with directed                              stoma.
                   submucosal
                   injection(s), any
                   substance.
45330...........  Sigmoidoscopy,                 0.96         0.84  Colonoscopy...........         3.29  Colonoscopy to               -2.52         0.77
                   flexible; diagnostic,                                                                  Sigmoidoscopy.
                   including collection
                   of specimen(s) by
                   brushing or washing
                   when performed.
45331...........  Sigmoidoscopy,                 1.15         1.14  Sigmoidoscopy.........         0.77  Biopsy...............          0.3         1.07
                   flexible; with
                   biopsy, single or
                   multiple.
45332...........  Sigmoidoscopy,                 1.79         1.85  Sigmoidoscopy.........         0.77  Foreign body.........         1.02         1.79
                   flexible; with
                   removal of foreign
                   body.
45335...........  Sigmoidoscopy,                 1.46         1.15  Sigmoidoscopy.........         0.77  Submucosal injection.          0.3         1.07
                   flexible; with
                   directed submucosal
                   injection(s), any
                   substance.
45341...........  Sigmoidoscopy,                  2.6         2.43  Sigmoidoscopy.........         0.77  Endoscopic ultrasound         1.38         2.15
                   flexible; with
                   endoscopic ultrasound
                   examination.

[[Page 41768]]

 
45346...........  Sigmoidoscopy,                   NA         2.97  Sigmoidoscopy.........         0.77  Ablation.............         2.07         2.84
                   flexible; with
                   ablation of tumor(s),
                   polyp(s), or other
                   lesion(s) (includes
                   pre- and post-
                   dilation and guide
                   wire passage, when
                   performed).
45347...........  Sigmoidoscopy,                   NA         2.98  Sigmoidoscopy.........         0.77  Stent................         1.98         2.75
                   flexible; with
                   placement of
                   endoscopic stent
                   (includes pre- and
                   post-dilation and
                   guide wire passage,
                   when performed).
45349...........  Sigmoidoscopy,                   NA         3.83  Sigmoidoscopy.........         0.77  Endoscopic mucosal            2.78         3.55
                   flexible; with                                                                         resection.
                   endoscopic mucosal
                   resection.
45378...........  Colonoscopy, flexible;         3.69         3.36  Colonoscopy...........         3.29
                   diagnostic, including
                   collection of
                   specimen(s) by
                   brushing or washing,
                   when performed,
                   (separate procedure).
45379...........  Colonoscopy, flexible;         4.68         4.37  Colonoscopy...........         3.29  Foreign body.........         1.02         4.31
                   with removal of
                   foreign body.
45380...........  Colonoscopy, flexible,         4.43         3.66  Colonoscopy...........         3.29  Biopsy...............          0.3         3.59
                   proximal to splenic
                   flexure; with biopsy,
                   single or multiple.
45381...........  Colonoscopy, flexible;         4.19         3.67  Colonoscopy...........         3.29  Submucosal injection.          0.3         3.59
                   with directed
                   submucosal
                   injection(s), any
                   substance.
45389...........  Colonoscopy, flexible;           NA          5.5  Colonoscopy...........         3.29  Stent................         1.98         5.27
                   with endoscopic stent
                   placement (includes
                   pre- and post-
                   dilation and guide
                   wire passage, when
                   performed).
45390...........  Colonoscopy, flexible;           NA         6.35  Colonoscopy...........         3.29  Endoscopic mucosal            2.78         6.07
                   with endoscopic                                                                        resection.
                   mucosal resection.
45391...........  Colonoscopy, flexible;         5.09         4.95  Colonoscopy...........         3.29  Endoscopic ultrasound         1.38         4.67
                   with endoscopic
                   ultrasound
                   examination limited
                   to the rectum,
                   sigmoid, descending,
                   transverse, or
                   ascending colon and
                   cecum, and adjacent
                   structures.
--------------------------------------------------------------------------------------------------------------------------------------------------------

(2) Laparoscopic Sleeve Gastrectomy (CPT Code 43775)
    Prior to CY 2013, CPT code 43775 described a non-covered service. 
For CY 2013, this service was covered as part of the bariatric surgery 
National Coverage Determination (NCD) and has been contractor-priced 
since 2013. We are now proposing to establish national pricing for CPT 
code 43775. To establish a work RVU, we are crosswalking this code to 
CPT code 37217 (Transcatheter placement of an intravascular stent(s), 
intrathoracic common carotid artery or innominate artery by retrograde 
treatment, via open ipsilateral cervical carotid artery exposure, 
including angioplasty, when performed, and radiological supervision and 
interpretation), due to their identical intraservice times, similar 
total times, and similar levels of intensity. Therefore, we are 
proposing a work RVU of 20.38 for CPT code 43775.
(3) Incomplete Colonoscopy (CPT codes 44388, 45378, G0105, and G0121)
    Prior to CY 2015, according to CPT instruction, an incomplete 
colonoscopy was defined as a colonoscopy that did not evaluate the 
colon past the splenic flexure (the distal third of the colon). In 
accordance with that definition, the Medicare Claims Processing Manual 
(pub. 100-04, chapter 12, section 30.1.B., available at http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Internet-Only-Manuals-IOMs-Items) states that physicians should report an incomplete 
colonoscopy with 45378 and append modifier -53, which is paid at the 
same rate as a sigmoidoscopy.
    In CY 2015, the CPT instruction changed the definition of an 
incomplete colonoscopy to a colonoscopy that does not evaluate the 
entire colon. The 2015 CPT Manual states, ``When performing a 
diagnostic or screening endoscopic procedure on a patient who is 
scheduled and prepared for a total colonoscopy, if the physician is 
unable to advance the colonoscope to the

[[Page 41769]]

cecum or colon-small intestine anastomosis due to unforeseen 
circumstances, report 45378 (colonoscopy) or 44388 (colonoscopy through 
stoma) with modifier -53 and provide appropriate documentation.''
    Given that the new definition of an incomplete colonoscopy also 
includes colonoscopies where the colonoscope is advanced past the 
splenic flexure but not to the cecum, we are proposing to establish new 
values for the incomplete colonoscopies, reported with the -53 
modifier. At present, we crosswalk the RVUs for the incomplete 
colonoscopies from the values of the corresponding sigmoidoscopy. Given 
that the new CPT instructions will reduce the number of reported 
complete colonoscopies and increase the number of colonoscopies that 
proceeded further toward completion reported with the -53 modifier, we 
believe CPT code 45378 reported with the -53 modifier will now describe 
a more resource-intensive group of services than were previously 
reported. Therefore, we are proposing to develop RVUs for these codes 
reported with the -53 modifier by using one-half the value of the 
inputs for the corresponding codes reported without the -53 modifier.
    In addition to this proposed change in input values, we are also 
seeking comment on how to address the disparity of resource costs among 
the broader range of services now described by the colonoscopy codes 
billed with the -53 modifier. We believe that it may be appropriate for 
practitioners to report the sigmoidoscopy CPT code 45330 under 
circumstances when a beneficiary is scheduled and prepared for a total 
colonoscopy (diagnostic colonoscopy, screening colonoscopy or 
colonoscopy through stoma), but the practitioner is unable to advance 
the colonoscope beyond the splenic flexure. We are seeking comment and 
recommendations on that possibility, as well as more generally, the 
typical resource costs of these incomplete colonoscopy services under 
CPT's new definition. Finally, we are seeking information regarding the 
number of colonoscopies that will be considered incomplete under CPT's 
new definition relative to the old definition, as well as the number of 
incomplete colonoscopies where the practitioner is unable to advance 
the colonoscope beyond the splenicflexure. This information will help 
us determine whether or not differential payment is required, and if it 
is, how to make the appropriate utilization assumptions within our 
ratesetting process.
(4) Malpractice (MP) Crosswalk
    We examined the RUC's recommended MP crosswalk for this family of 
codes. The MP crosswalks are used to identify the presumed mix of 
specialties that furnish particular services until there is Medicare 
claims data for the new codes. We direct the reader to section II.B.1. 
of this proposed rule for further explanation regarding these 
crosswalks. In reviewing the recommended MP crosswalks for CPT codes 
43775, 44407, 44408, 46601, and 46607, we noted that the RUC-
recommended MP crosswalk codes are inconsistent with our analysis of 
the specialties likely to furnish the service based on the description 
of the services and our review of the RUC-recommended utilization 
crosswalk. The inconsistency between the RUC's recommended MP and 
utilization crosswalks is not altogether unusual. However when there 
are discrepancies between the MP and utilization crosswalk 
recommendations, they generally reflect the RUC's expectation that due 
to changes in coding, there will be a different mix of specialties 
reporting a new code than might be reflected in the claims data for the 
code previously used to report that service. This often occurs when the 
new coding structure for a particular family of services is either more 
or less specific than the old set of codes. In most of these cases, we 
could identify a rationale for why the RUC's recommended MP crosswalks 
for these codes were likely to be more accurate than the RUC's 
recommended utilization crosswalk. But in the case of these codes, the 
reason for the discrepancies were neither apparent nor explained as 
part of the recommendation. Since the specialty mix in the claims data 
is used to determine the specialty mix for each HCPCS code for the 
purposes of calculating MP RVUs, and that data will be used to set the 
MP RVUs once it is available, we believe using a specialty mix derived 
from the claims data of the predecessor codes is more likely to be 
accurate than the RUC-recommended MP crosswalk as well as more likely 
to result in stable MP RVUs for these services over several years. 
Therefore, until claims data under the new set of codes is available, 
we are proposing to use the specialty mix of the source code(s) in the 
RUC-recommended utilization crosswalk in order to calculate the 
malpractice risk factor for these services instead of the RUC-
recommended MP crosswalk. Once claims data are available, those data 
will be incorporated into the calculation of MP RVUs for these services 
under the MP RVU methodology.
b. Radiation Treatment and Related Image Guidance Services
    For CY 2015, the CPT Editorial Panel revised the set of codes that 
describe radiation treatment delivery services based in part on the CMS 
identification of these services as potentially misvalued in CY 2012. 
We identified these codes as potentially misvalued under a screen 
called ``Services with Stand-Alone PE Procedure Time.'' We proposed 
this screen following our discovery of significant discrepancies 
between the RUC-recommended 60 minute procedure time assumptions for 
intensity modulated radiation therapy (IMRT) and information available 
to the public suggesting that the procedure typically took between 5 
and 30 minutes per treatment.
    The CPT Editorial Panel's revisions included the addition and 
deletion of several codes and the development of new guidelines and 
coding instructions. Four treatment delivery codes (77402, 77403, 
77404, and 77406) were condensed into 77402 (Radiation Treatment 
Delivery, Simple), three treatment delivery codes (77407, 77408, 77409) 
were condensed into 77407 (Radiation treatment delivery, intermediate), 
and four treatment codes (77412, 77413, 77414, 77416) were condensed 
into 77412 (Radiation treatment delivery, complex). Intensity Modulated 
Radiation Therapy (IMRT) treatment delivery, previously reported under 
a single code, was split into two codes, 77385 (IMRT treatment 
delivery, simple) and 77386 (IMRT treatment delivery, complex). The CPT 
Editorial Panel also created a new image guidance code, 77387 (Guidance 
for localization of target volume for delivery of treatment, includes 
intrafraction tracking when performed) to replace 77014 (computed 
tomography guidance for placement of radiation therapy fields), 77421 
(stereoscopic X-ray guidance for localization of target volume for the 
delivery of radiation therapy,) and 76950 (ultrasonic guidance for 
placement of radiation therapy fields) when any of these services were 
furnished in conjunction with radiation treatment delivery.
    In response to stakeholder concerns regarding the magnitude of the 
coding changes and in light of the process changes we adopted for 
valuing new and revised codes, we did not implement interim final 
values for the new codes and delayed implementing the new code set 
until 2016. To address the valuation of the new code set through 
proposed rulemaking, and

[[Page 41770]]

continue making payment based the previous valuations even though CPT 
deleted the prior radiation treatment delivery codes for CY 2015, we 
created G-codes that mimic the predecessor CPT codes (79 FR 67667).
    We propose to establish values for the new codes based on RUC 
recommendations, subject to standard CMS refinements that appear in 
Table 15 in section II.B.4. of this proposed rule. We also note that 
because the invoices used to price the capital equipment included ``on-
board imaging,'' the cost of that equipment is already reflected in the 
price per minute associated with the capital equipment. Therefore, we 
have not included it as a separate item in the proposed direct PE 
inputs for these codes, even though it appeared as a separate item on 
the PE worksheet included with the RUC recommendations for these codes. 
The direct PE inputs for these codes are reflected in the proposed 
direct PE input database available on the CMS Web site under the 
supporting data files for the CY 2016 PFS proposed rule with comment 
period at http://www.cms.gov/PhysicianFeeSched/. The RVUs that result 
from the use of these proposed direct PE inputs (and work RVUs and work 
time, as applicable) are displayed in Addendum B on the CMS Web site.
    In addition to the refinements addressed above, there are three 
additional issues for which we are seeking comment and/or making 
specific proposals related to these services: image guidance, equipment 
utilization rate assumptions for linear accelerators, and superficial 
radiation treatment services.
(1) Image Guidance Services
    Under the previous CPT coding structure, image guidance was 
separately billable when furnished in conjunction with the radiation 
treatment delivery services. The image guidance was reported using 
different CPT codes, depending on which image guidance modality was 
used. These codes were split into professional and/or technical 
components that allowed practitioners to report a single component or 
the global service. The professional component of each of these codes 
included the work of the physician furnishing the image guidance. CPT 
code 77014, used to report CT guidance, had a work RVU of 0.85; CPT 
code 77421, used to report stereotactic guidance, had a work RVU of 
0.39, and CPT code 76950, used to report ultrasonic guidance, had a 
work RVU of 0.58. The technical component of these codes incorporated 
the resource costs of the image guidance capital equipment (such as CT, 
ultrasound, or stereotactic) and the clinical staff involved in 
furnishing the image guidance associated with the radiation treatment. 
When billed globally, the RVUs reflected the sum of the professional 
and technical components. In the revised coding structure, one new 
image guidance code is to be reported regardless of the modality used, 
and in developing its recommended values, the RUC assumed that CT 
guidance would be typical.
    However, the 2013 Medicare claims data for separately reported 
image guidance indicates that stereotactic guidance for radiation 
treatment services was furnished more frequently than CT guidance. The 
RUC has recommended a work RVU of 0.58 and associated work times of 3 
pre-service minutes, 10 intraservice minutes, and 3 post-service 
minutes for image guidance CPT code 77387. We reviewed this 
recommendation considering the discrepancy between the modality the RUC 
assumed to be typical in the vignette and the modality typically 
reported in the Medicare claims data. Given that the recommended work 
RVU for the new single code is similar to the work RVUs of the 
predecessor codes, roughly prorated based on their distribution in 
Medicare claims data, we agree with the RUC-recommended work RVU for 
the service. However, the RUC also recommended an increase in overall 
work time associated with image guidance consistent with the survey 
data used to value the new services. If accurate, this increase in time 
and maintenance of total work would suggest a decrease in the overall 
intensity for image guidance relative to the current codes. Given this 
implication, we are seeking comment as to the appropriate work time 
associated with CPT code 77387.
    Although 77421 (stereotactic guidance) and 76950 (ultrasonic 
guidance) have been deleted, we note that CPT maintained CPT code 77014 
(Computed tomography guidance for placement of radiation therapy 
fields) and the RUC recommendation states that CPT did so based on 
concerns that without this option, some practitioners might have no 
valid CPT alternative than to use higher valued diagnostic CT codes 
when they used this CT guidance. The RUC recommendation also includes a 
statement that utilization of this code is expected to drop to 
negligible levels by 2015, assuming that practitioners would use the 
new codes that are not differentiated based on imaging modality. Once 
all the new codes are implemented for Medicare, we anticipate that CPT 
and/or the RUC will address the continued use of 77014 and, if it 
continues to be part of the code set, provide recommendations as to the 
appropriate values given changes in utilization.
    Regarding the reporting of the new image guidance codes, CPT 
guidance instructs that the technical portion of image guidance is now 
bundled into the IMRT and Stereotactic Radiation Treatment delivery 
codes, but it is not bundled into the simple, intermediate, and complex 
radiation treatment delivery codes. CPT guidance states that the 
technical component of the image guidance code can be reported with 
codes 77402, 77407, and 77412 (simple, intermediate, and complex 
radiation treatment) when furnished, which means that the technical 
component of the image guidance code should not be reported with the 
IMRT or Stereotactic Radiation Treatment delivery codes. The RUC 
recommendation, however, incorporates the same capital cost of image 
guidance equipment (a linear accelerator, or linac), for all these 
radiation treatment delivery codes, including the codes that describe 
IMRT and Stereotactic Radiation Treatment delivery services. The RUC 
explains that the recommendations were done this way because the older 
lower-dose external beam radiation machines are no longer manufactured 
and the image guidance technology is integrated into the single kind of 
linear accelerator used for all the radiation treatment services. In 
reviewing the new code structure and the RUC recommendations, we assume 
that the CPT editorial panel did not foresee that the RUC would 
recommend that we develop PE RVUs for all the radiation treatment 
delivery codes based on the assumption that the same capital equipment 
is typically used in furnishing the entire range of external beam 
radiation treatments. Because the RUC recommendations incorporate the 
more extensive capital equipment in the lower dose treatment codes as 
well, a portion of the resource costs of the technical portion of 
imaging guidance are already allocated into the PE RVUs for all of the 
treatment delivery codes, not just the IMRT and Stereotactic Radiation 
Treatment delivery codes as CPT guidance would suggest.
    In order to avoid incorporating the cost of this equipment into 
both the treatment delivery codes (77402, 77407, and 77412) and the 
technical component of the new imaging guidance code (77387-TC), we 
considered valuing 77387 as a professional service only and not 
creating the professional/technical component splits envisioned by CPT. 
In the context of the budget neutral PFS, incorporating a duplicative

[[Page 41771]]

direct input with a cost of more than six dollars per minute has 
significant impacts on the PE RVUs for all other services. However, we 
also noted that the RUC did not address this apparent contradiction in 
its recommendation and not all of the recommended direct PE inputs for 
the technical component of 77387 are capital equipment costs. 
Therefore, we are proposing to allow for professional and technical 
component billing for these services, as reflected in CPT guidance, and 
we are proposing to use the RUC recommended direct PE inputs for these 
services (refined as described in Table 15). However, we are also 
seeking comment on the apparent contradiction between technical 
component billing for image guidance in the context of the inclusion of 
a single linac with integrated imaging guidance technology being 
included for all external beam treatment codes.
(2) Equipment Utilization Rate for Linear Accelerators
    The cost of the capital equipment is the primary determining factor 
in the payment rates for these services. For each CPT code, the 
equipment costs are estimated based on multiplying the assumed number 
of minutes the equipment is used for that procedure by the per minute 
cost of the particular equipment item. Under our PE methodology, we 
currently use two default equipment usage assumptions in allocating 
capital equipment costs to calculate PE RVUs. The first is that each 
equipment item is only available to be used during what are assumed to 
be regular business hours for a physician's office: 10 hours per day, 5 
days per week (50 hours per week) and 50 weeks per year. The second 
assumption is that the equipment is in use only 50 percent of the time 
that it is available for use. The current default 50 percent 
utilization rate assumption translates into 25 hours per week out of a 
50-hour work week.
    We have previously addressed the accuracy of these default 
assumptions as they apply to particular equipment resources and 
particular services. In the CY 2008 PFS proposed rule (72 FR 38132) we 
discussed the 50 percent utilization assumption and acknowledged that 
the default 50 percent usage assumption is unlikely to capture the 
actual usage rates for all equipment. However, we stated that we did 
not believe that we had strong empirical evidence to justify any 
alternative approaches. We indicated that we would continue to monitor 
the appropriateness of the equipment utilization assumption, and 
evaluate whether changes should be proposed in light of the data 
available.
    Subsequently, a 2009 report on equipment utilization by MedPAC 
included studies that suggested a higher utilization rate for 
diagnostic imaging equipment costing more than $1 million. These 
studies cited by MedPAC suggested that for Magnetic Resonance Imaging 
equipment, a utilization rate of 92 percent on a 50-hour week would be 
most accurate. Similarly, another MedPAC cited study suggested that for 
Computed Tomography scanners, 45 hours was more accurate and that is 
equivalent to a 90 percent utilization rate on a 50-hour work week. For 
the CY 2010 PFS proposed rule, we proposed to increase the equipment 
usage rate to 90 percent for all services containing equipment that 
cost in excess of $1 million dollars. We stated that the studies cited 
by MedPAC suggested that physicians and suppliers would not typically 
make huge capital investments in equipment that would only be utilized 
50 percent of the time (74 FR 33532).
    In response to comments to that proposal, we finalized a 90 percent 
utilization rate assumption for MRI and CT to be transitioned over a 4-
year period. Regarding the utilization assumptions for other equipment 
priced over $1 million, we stated that we would continue to explore 
data sources regarding use of the most accurate utilization rates 
possible (74 FR 61755). Congress subsequently specified the utilization 
rate to be assumed for MRI and CT by successive amendments to Section 
1848(b)(4)(C) of the Act. Section 3135(a) of the Affordable Care Act 
(Pub. L. 111-148) set the assumed utilization rate for expensive 
diagnostic imaging equipment to 75 percent, effective for 2011 and 
subsequent years. Section 635 of the American Taxpayer Relief Act 
(ATRA) (Pub. L. 112-240) set the assumed equipment utilization rate to 
90%, effective for 2014 and subsequent years. Both of these changes 
were exempted from the budget neutrality requirements described in 
section 1848(c)(2)(B)(ii)(II) of the Act.
    We have also made other adjustments to the default assumptions 
regarding the number of hours for which the equipment is available to 
be used. For example, some equipment used in furnishing services to 
Medicare beneficiaries is available to be used on a 24-hour/day, 7 
days/per week basis. For these items, we develop the rate per minute by 
amortizing the cost over the extended period of time the equipment is 
in use.
    Based on the RUC recommendations for the new codes that describe 
radiation treatment services, we do not believe our default assumptions 
regarding equipment usage are accurate for the capital equipment used 
in radiation treatment services. As we noted above, the RUC 
recommendations assume that the same type of linear accelerator is now 
typically used to furnish all levels and types of external beam 
radiation treatment services because the machines previously used to 
furnish these services are no longer manufactured. In valuing the 
previous code set and making procedure time assumptions, different 
equipment items were assumed to be used to furnish the different levels 
and types of radiation treatment. With the current RUC-recommended 
inputs, we can then assume that the same equipment item is used to 
furnish more services. If we assume the RUC recommendation to include 
the same kind of capital equipment for all of these codes is accurate, 
we believe that it is illogical to continue to assume that the 
equipment is only used for 25 out of a possible 50 hours per week. In 
order to estimate the difference between the previous number of minutes 
the linear accelerator was assumed to be in use under the previous 
valuation and the number of minutes now being recommended, we applied 
the change in assumptions to the services reported in the most recent 
year of Medicare claims data. Under the assumptions reflected in the 
previous direct PE inputs, the kind of linear accelerator used for IMRT 
made up a total of 44.8 million out of 65 million minutes of external 
beam treatments furnished to Medicare beneficiaries. Under the new code 
set, however, a single kind of linear accelerator would be used for all 
of the 65 million minutes furnished to Medicare beneficiaries. This 
represents a 45 percent increase in the aggregate amount of time that 
this kind of linac is in use. Of course, the utilization rate that 
corresponds with that increase in minutes is not necessarily precise 
since the current utilization rate only reflects the default assumption 
and is not itself rooted in empirical data. Additionally, in some 
cases, individual practices that already use linear accelerators for 
IMRT may have replaced the now-obsolete capital equipment with new, 
additional linear accelerators instead of increasing the use of capital 
equipment already owned. However, we do not believe that the latter 
scenario is likely to be common in cases where the linear accelerators 
had previously been used only 25 hours per week.
    Therefore, we are proposing to adjust the equipment utilization 
rate

[[Page 41772]]

assumption for the linear accelerator to account for the significant 
increase in usage. Instead of applying our default 50 percent 
assumption, we are proposing to use a 70 percent assumption based on 
the recognition that the item is now being typically used in a 
significantly broader range of services, and that would increase its 
overall usage in comparison to the previous assumption. We note that we 
developed the 70 percent rate based on a rough reconciliation between 
the number of minutes the equipment is being used according to the new 
recommendations versus the current number of minutes based on an 
analysis of claims data. We continue to seek evidence to ensure that 
the usage assumptions, both the utilization rate and number of 
available hours, used to calculate equipment costs are as accurate as 
possible. We believe that comparing the changes in direct PE input 
recommendations and using the Medicare claims data indicates that the 
utilization assumption to 70 percent is more accurate than the default 
utilization assumption of 50 percent. However, we have reviewed other 
information that suggests this utilization rate may be higher than 70 
percent and that the number of available hours per week is greater than 
50.
    For example, as part of the 2014 RUC recommendations for the 
Radiation Treatment Delivery codes, the RUC submitted a 2011 staffing 
survey conducted by the American Society for Radiology Technicians 
(ASRT). Using the 2014 version of the same study, we noted that there 
are an average of 2.3 linacs per radiation treatment facility and 52.7 
patients per day treated per radiation treatment facility. These data 
suggest that an average of 22.9 patients is treated on each linac per 
day. Using an average of the RUC-recommended procedure times for CPT 
codes 77385, 77386, 77402, 77407, and 77412 weighted by the annual 
volume of procedures derived from Medicare claims data yielded a total 
of 670.39 minutes or 11.2 hours that a single linac is in use per day. 
This is in contrast to both the number of hours of use reflected in our 
default assumptions (5 of the 10 available business hours per day) and 
in our proposed revision to the equipment utilization rate assumption 
(7 hours out of 10 available business hours per day).
    For advanced diagnostic imaging services, we finalized a policy to 
change the equipment utilization assumption only by 10 percent per 
year, in response to suggestions from commenters. Because capital 
equipment costs are amortized over several years, we believe it is 
reasonable to transition changes to the default assumptions for 
particular items over several years. We note that the change from one 
kind of capital equipment to another is likely to occur over a number 
of years, roughly equivalent to the useful life of particular items as 
they become obsolete. In the case of most of these items, we have 
assumed a 7-year useful life, and therefore, we assume that the 
transition to use of the single kind of capital equipment would likely 
take place over 7 years as individual pieces of equipment age into 
obsolescence. However, in the case of this transition in capital 
equipment, we have reasons to believe that the transition to the new 
capital equipment has already occurred. First, we note that the 
specialty societies concluded that the single linear accelerator was 
typical for these services at the time that the current recommendations 
were developed in 2013. Therefore, we believe it is logical to assume 
that, at a minimum, the first several years of the transition to new 
capital equipment had already taken place by 2013. This would account 
for the linear accelerator being typically used at that time. This 
would not be surprising, given that prior to the 2013 review by the 
RUC, the codes describing the non-IMRT external beam radiation 
treatments had last been reviewed in 2002. Second, because we are 
proposing to use the 2013 recommendations for 2016 PFS payment rates, 
we believe it would be reasonable to assume that in the years between 
2013 and 2016, the majority of the rest of the obsolete machines would 
have been replaced with the single linear accelerator.
    Nonetheless, we recognize that there would be value in following 
precedent to transition changes in utilization assumptions over several 
years.
    Given the fact that it is likely that the transition to the linear 
accelerator began prior to the 2013 revaluation of the radiation 
treatment delivery codes by CPT and that the useful life of the newest 
generation of linear accelerator is 7 years, we believe a 2-year 
transition to the 70 percent utilization rate assumption would account 
for any remaining time to transition to the new equipment. Therefore, 
in developing PE RVUs for these services, we are proposing to use a 60 
percent utilization rate assumption for CY 2016 and a 70 percent 
utilization rate assumption for CY 2017. The PE RVUs displayed in 
addendum B on the CMS Web site were calculated using the proposed 60 
percent equipment utilization rate for the linac as displayed in the CY 
2016 direct PE input database.
    Additionally, we continue to seek empirical data on the capital 
equipment costs, including equipment utilization rates, for the linac 
and other capital-intensive machines, and seek comment on how to most 
accurately address issues surrounding those costs within the PE 
methodology.
(3) Superficial Radiation Treatment Delivery
    In the CY 2015 PFS final rule with comment period, we noted that 
changes to the CPT prefatory language modify the services that are 
appropriately billed with CPT code 77401 (radiation treatment delivery, 
superficial and/or ortho voltage, per day). The changes effectively 
meant that many other procedures supporting superficial radiation 
therapy were bundled with 77401. The RUC, however, did not review the 
inputs for superficial radiation therapy procedures, and therefore, did 
not assess whether changes in its valuation were appropriate in light 
of this bundling. Some stakeholders suggested that the change in the 
prefatory language precluded them from billing for codes that were 
previously frequently billed in addition to this code and expressed 
concern that as a result there would be significant reduction in their 
overall payments. In the CY 2015 PFS final rule with comment period, we 
requested information on whether the new radiation therapy code set 
combined with modifications in prefatory text allowed for appropriate 
reporting of the services associated with superficial radiation and 
whether the payment continued to reflect the relative resources 
required to furnish superficial radiation therapy services.
    In response to our request, we received a recommendation from a 
stakeholder to make adjustments to both the physician work and PE 
components for code 77401. The stakeholder suggested that since crucial 
aspects of the service, such as treatment planning and device design 
and construction, were not currently reflected in 77401, and 
practitioners were precluded from reporting these activities 
separately, that physician work should be included for CPT code 77401. 
Additionally, the stakeholders suggested that the current inputs used 
to value the code are not accurate because the inputs include zero 
physician work and minutes for a radiation therapist to provide the 
service directly to the patient. The stakeholders suggested, 
alternatively, that physicians, not radiation therapists, typically 
provide superficial radiation services directly. Therefore, we are 
seeking recommendations from other stakeholders, including the RUC, 
regarding whether or not it would be

[[Page 41773]]

appropriate to add physician work for this service and remove minutes 
for the radiation therapists, even though physician work is not 
included in other radiation treatment services.
    The stakeholder also suggested that we amend the direct PE inputs 
by including nurse time and updating the price of the capital equipment 
used in furnishing the service. We believe it would be most appropriate 
to address the clinical labor assigned to the code in the context of 
the information regarding the physician work that might be associated 
with the service. Therefore, we seek information on the possible 
inclusion of nurse time for this service as part of the comments and/or 
recommendations regarding physician work for the service. However, we 
reviewed the submitted invoices for the request to update the capital 
equipment for the service. We are proposing to update the equipment 
item ER045 ``orthovoltage radiotherapy system'' by renaming it ``SRT-
100 superficial radiation therapy system'' and updating the price from 
$140,000 to $216,000, on the basis of the submitted invoices. The PE 
RVUs displayed in Addendum B on the CMS Web site were calculated with 
this proposed modification that is displayed in the CY 2016 direct PE 
input database.
c. Advance Care Planning Services
    For CY 2015, the CPT Editorial Panel created two new codes 
describing advance care planning (ACP) services: CPT code 99497 
(Advance care planning including the explanation and discussion of 
advance directives such as standard forms (with completion of such 
forms, when performed), by the physician or other qualified health 
professional; first 30 minutes, face-to-face with the patient, family 
member(s) and/or surrogate); and an add-on CPT code 99498 (Advance care 
planning including the explanation and discussion of advance directives 
such as standard forms (with completion of such forms, when performed), 
by the physician or other qualified health professional; each 
additional 30 minutes (List separately in addition to code for primary 
procedure)). In the CY 2015 PFS final rule with comment period (79 FR 
67670-71), we assigned a PFS interim final status indicator of ``I'' 
(Not valid for Medicare purposes. Medicare uses another code for the 
reporting and payment of these services) to CPT codes 99497 and 99498 
for CY 2015. We said that we would consider whether to pay for CPT 
codes 99497 and 99498 after we had the opportunity to go through notice 
and comment rulemaking.
    We received many public comments to the final rule recommending 
that we recognize these two CPT codes and make separate payment for ACP 
services, in view of the time required to furnish the services and 
their importance for the quality of care and treatment of the patient. 
For CY 2016, we are proposing to assign CPT codes 99497 and 99498 PFS 
status indicator ``A,'' which is defined as: ``Active code. These codes 
are separately payable under the PFS. There will be RVUs for codes with 
this status.'' The presence of an ``A'' indicator does not mean that 
Medicare has made a national coverage determination regarding the 
service. Contractors remain responsible for local coverage decisions in 
the absence of a national Medicare policy. We are proposing to adopt 
the RUC-recommended values (work RVUs, time, and direct PE inputs) for 
CPT codes 99497 and 99498 beginning in CY 2016 and will consider all 
public comments that we receive on this proposal.
    Physicians' services are covered and paid by Medicare in accordance 
with section 1862(a)(1)(A) of the Act. Therefore, CPT code 99497 (and 
CPT code 99498 when applicable) should be reported when the described 
service is reasonable and necessary for the diagnosis or treatment of 
illness or injury. For example, this could occur in conjunction with 
the management or treatment of a patient's current condition, such as a 
68 year old male with heart failure and diabetes on multiple 
medications seen by his physician for the evaluation and management of 
these two diseases, including adjusting medications as appropriate. In 
addition to discussing the patient's short-term treatment options, the 
patient expresses interest in discussing long-term treatment options 
and planning, such as the possibility of a heart transplant if his 
congestive heart failure worsens and advance care planning including 
the patient's desire for care and treatment if he suffers a health 
event that adversely affects his decision-making capacity. In this case 
the physician would report a standard E/M code for the E/M service and 
one or both of the ACP codes depending upon the duration of the ACP 
service. However, the ACP service as described in this example would 
not necessarily have to occur on the same day as the E/M service.
    We seek comment on this proposal, including whether payment is 
needed and what type of incentives this proposal creates. In addition, 
we seek comment on whether payment for advance care planning is 
appropriate in other circumstances such as an optional element, at the 
beneficiary's discretion, of the annual wellness visit (AWV) under 
section 1861(hhh)(2)(G) of the Act.
d. Proposed Valuation of Other Codes for CY 2016
(1) Excision of Nail Bed (CPT Code 11750)
    The RUC's review of 10-day global services identified 18 services 
currently valued with greater than 1.5 office visits and 2012 Medicare 
utilization data over 1,000, including CPT code 11750. As a result, the 
RUC requested this service be surveyed for work and reviewed for CY 
2016.
    The RUC recommended a work RVU of 1.99 for CPT code 11750, despite 
a decrease in the associated post-operative visits. We believe the 
recommendation for this service overstates the work involved in 
performing this procedure specifically given the decrease in post-
operative visits. Due to similarity in service and time, we believe a 
direct crosswalk of the work RVUs for CPT code 10140 (Drainage of blood 
or fluid accumulation), which is also a 10 day global service with one 
post-operative visit, to CPT code 11750 more accurately reflects the 
time and intensity of furnishing the service. Therefore, for CY 2016 we 
are proposing a work RVU of 1.58 for CPT code 11750.
(2) Bone Biopsy Excisional (CPT Code 20240)
    In the same review of 10-day global services, the RUC identified 
CPT code 20240 as potentially misvalued. As a result, the RUC requested 
this service be surveyed and reviewed for CY 2016. Subsequent to this 
identification, the RUC also requested and we approved a global period 
change from a 10-day to a 0-day global period for this procedure. Based 
on the survey data, the RUC recommended a decrease in the intraservice 
time from 39 to 30 minutes, removal of two postoperative visits (one 
99238 and one 99212), and an increase in the work RVUs for CPT code 
20240 from 3.28 to 3.73. We do not believe this recommendation 
accurately reflects the work involved in this procedure, especially 
given the decrease in intraservice time and post-operative visits. 
Therefore, for CY 2016, we are proposing a work RVU of 2.61 for CPT 
code 20240 based on the reductions in time for the service.

[[Page 41774]]

(3) Endobronchial Ultrasound (CPT Codes 31622, 3160A, 3160B, 31625, 
31626, 31628, 31629, 3160C, 31632 and 31633)
    For CY 2016, the CPT Editorial Panel deleted one code, CPT 31620 
(Ultrasound of lung airways using an endoscope), and created three new 
codes, CPT 3160A-3160C, to describe bronchoscopic procedures that are 
inherently performed with endobronchial ultrasound (EBUS).
    In their review of the newly revised EBUS family, the RUC 
recommended a change in the work RVU for CPT code 31629 from 4.09 to 
4.00. The RUC also recommended maintaining the current work RVUs for 
CPT codes 31622, 31625, 31626, 31628, 31632 and 31633. We are proposing 
to use those values for CY 2016.
    For the newly created codes, the RUC recommended a work RVU of 5.00 
for CPT code 3160A, 5.50 for CPT code 3160B and 1.70 for CPT code 
3160C. We believe the recommended work RVUs for these services 
overstate the work involved in furnishing the procedures. In order to 
develop proposed work RVUs for CPT code 3160A, we compared the service 
described by the new code to deleted CPT codes 31620 and 31629, because 
this new code describes a service that combines services described by 
31620 and 31629. Specifically, we took the sum of the current work RVU 
of CPT code 31629 (WRVU=4.09) and the CY 2015 work RVU of CPT code 
31620 (WRVU=1.40) and multiplied it by the quotient of CPT code 3160A's 
RUC-recommended intraservice time (INTRA=60 min) and the sum of CPT 
codes 31620 and 31629's current and CY 2015 intraservice times 
(INTRA=70 min), respectively. This resulted in a work RVU of 4.71 and 
we are proposing that value. To value CPT code 3160B, we used the RUC-
recommended increment of 0.5 work RVU between this service and CPT code 
3160A to calculate for CPT code 3160B our proposed work RVUs of 5.21. 
Lastly, because the service described by new CPT code 3160C is very 
similar to deleted CPT code 31620, we believe a direct crosswalk of the 
previous values for 31620 accurately reflects the time and intensity of 
furnishing the service described by 3160C. Therefore, we are proposing 
a work RVUs of 1.40 for CPT code 3160C.
(4) Laparoscopic Lymphadenectomy (CPT Codes 38570, 38571 and 38572)
    The RUC identified three laparoscopic lymphadenectomy codes as 
potentially misvalued: CPT code 38570 (Laparoscopy, surgical; with 
retroperitoneal lymph node sampling (biopsy), single or multiple); CPT 
code 38571 (Laparoscopy, surgical; with retroperitoneal lymph node 
sampling (biopsy), single or multiple with bilateral total pelvic 
lymphadenectomy); and CPT code 38572 (Laparoscopy, surgical; with 
retroperitoneal lymph node sampling (biopsy), single or multiple with 
bilateral total pelvic lymphadenectomy and periaortic lymph node 
sampling (biopsy), single or multiple). Accordingly, the specialty 
society resurveyed these 10-day global codes, and the survey results 
indicated decreases in intraservice and total work times. After 
reviewing the survey responses, the RUC recommended that CMS maintain 
the current work RVU for CPT code 38570 of 9.34; reduce the work RVU 
for CPT code 38571 from 14.76 to 12.00; and reduce the work RVU for CPT 
code 38572 from 16.94 to 15.60. We propose to accept the RUC 
recommendations for CPT codes 38571 and 38572, as the RUC is 
recommending reductions in the work RVUs that correspond with marked 
decreases in intraservice time and decreases in total time. However, we 
do not agree with the RUC's recommendation to maintain the current work 
RVU for CPT code 38570 in spite of similar changes in intraservice and 
total times as were shown in the RUC recommendations for CPT codes 
38571 and 38572. Therefore, we propose to reduce the work RVU for CPT 
code 38570 to 8.49, which reflects the ratio of the reduction in total 
time for this code and would maintain rank order among the three codes.
(5) Mediastinoscopy With Biopsy (CPT Codes 3940A and 3940B)
    The RUC identified CPT code 39400 (Mediastinoscopy, including 
biopsy(ies) when performed) as a potentially misvalued code due to an 
unusually high preservice time and Medicare utilization over 10,000. In 
reviewing the code's history, it became apparent that the code has been 
used to report two distinct procedural variations although the code was 
valued using a vignette for only one of them. As a result, CPT code 
39400 is being deleted and replaced with CPT codes 3940A and 3940B to 
describe each of the two mediastinoscopy procedures.
    We are proposing to accept the RUC-recommended work RVU of 5.44 for 
code 3940A. We agree with the RUC that the crosswalk from CPT code 
52235 (Cystourethroscopy, with fulguration) appropriately estimates the 
overall work for CPT code 3940A. For CPT code 3940B, we disagree with 
the RUC recommended work RVU of 7.50. We believe that the work value 
for CPT code 3940A establishes an accurate baseline for this family of 
codes, so we are scaling the work RVU of CPT code 3940B in accordance 
with the change in the intraservice times between CPT codes 3940A and 
3940B. Applying this ratio in the intraservice time to the work value 
of CPT code 3940A yields a total work RVU of 7.25 for CPT code 3940B. 
We also note that the RUC recommendation for CPT code 3940A represents 
a decrease in value by 0.64 work RVUs, which is roughly proportionate 
to the reduction from a full hospital discharge visit (99238) to a half 
discharge visit assumed to be typical in the post-operative period. The 
RUC recommendation for CPT code 3940B had the same reduction in the 
post-operative work without a corresponding decrease in its recommended 
work RVU. In order to reflect the reduction in post-operative work and 
to maintain relativity between the two codes in the family, we are 
proposing 7.25 as the work RVU for CPT code 3940B.
(6) Hemorrhoid(s) Injection (CPT Code 46500)
    The RUC also identified CPT code 46500 (Injection of sclerosing 
solution, hemorrhoids) as potentially misvalued, and the specialty 
society resurveyed this 10-day global code. The survey showed a 
significant decrease in the reported intraservice and total work times. 
After reviewing the survey responses, the RUC recommended that CMS 
should maintain the current work RVU of 1.69 in spite of these drops in 
intraservice and total times. We propose to instead reduce the work RVU 
to 1.42, which reduces the work RVU by the same ratio as the reduction 
in total time.
    We are also proposing to refine the recommended PE inputs by 
removing the inputs associated with cleaning the scope. As recommended 
by the RUC, we are proposing to include a scope as a direct PE input 
that is disposable, and therefore, does not require cleaning.
(7) Liver Allotransplantation (CPT Code 47135)
    The RUC also identified CPT code 47135 (Liver allotransplantation; 
orthotopic, partial or whole, from cadaver or living donor, any age) as 
potentially misvalued, and the specialty society resurveyed this 90-day 
global code. The survey showed a significant decrease in reported 
intraservice work time, but a significant increase in total work time 
(the number of post-operative visits significantly declined while the 
level of visits increased). After reviewing the survey responses, the

[[Page 41775]]

RUC recommended an increase in the work RVU from 83.64 to 91.78, which 
is the median of the survey, as well as the exact value for CPT code 
33935 (Heart-lung transplant with recipient cardiectomy-pneumonectomy). 
However, we do not believe this crosswalk is the most accurate from 
among the group of transplant codes. CPT code 32854 (Lung transplant, 
double (bilateral sequential or en bloc); with cardiopulmonary bypass) 
has intraservice and total times that are closer to those the RUC 
recommended for CPT code 47135, and CPT code 32854 has a work RVU of 
90.00 which is the 25th percentile of the survey for CPT code 47135. 
Therefore, we propose to increase the work RVU of CPT code 47135 to 
90.00.
(8) Genitourinary Catheter Procedures (CPT Codes 5039A, 5039B, 5039C, 
5039D, 5039M, 5039E, 5069G, 5069H, 5069I)
    For CY 2016, the CPT Editorial Panel is deleting six codes (50392, 
50393, 50394, 50398, 74475, and 74480) that were commonly reported 
together, and are creating 12 new codes both to describe these 
genitourinary catheter procedures more accurately and to bundle 
inherent imaging services. Three of these codes (506XF, 507XK, and 
507XL) were referred back to CPT to be resurveyed as add-on codes. The 
other nine codes were reviewed at the January 2015 RUC meeting and 
assigned recommended work RVUs and direct PE inputs.
    We are proposing to use the RUC-recommended work RVU of 3.15 for 
CPT code 5039A. We agree that this is an appropriate value, and that 
the code should be used as a basis for establishing relativity with the 
rest of the family. As a result, we began by making comparisons between 
the service times of CPT code 5039A and the other codes in the family 
in order to determine the appropriate proposed work value of each 
procedure.
    For CPT code 5039B, we disagree with the RUC recommended work RVU 
of 1.42, and we are instead proposing a work RVU of 1.10, based on 
three separate data points. First, the RUC summary of recommendations 
stated that CPT code 5039B describes work previously described by a 
combination of CPT codes 50394 and 74425. These two codes have work 
RVUs of 0.76 and 0.36, respectively, which sum together to 1.12. 
Second, we noted that the work of CPT code 49460 (Mechanical removal of 
obstructive material from gastrostomy) is similar, with the same 
intraservice time of 15 minutes and same total time of 55 minutes but a 
work RVU of 0.96. Finally, we observed that the minimum survey result 
had a work RVU of 1.10, and we believe this value appropriately 
reflects the total work for the service. Accordingly, we are proposing 
1.10 as the work RVU for CPT code 5039B.
    We employed a similar methodology to develop a proposed work RVU of 
4.25 for CPT code 5039C. The three previously established codes are 
being combined in CPT code 5039C; these had respective work values of 
3.37 (CPT code 50392), 0.54 (CPT code 74475), and 0.36 (CPT code 
74425); together these sum to 4.27 work RVUs. We also looked at valuing 
CPT code 5039C based on relativity with other codes in the family. The 
ratio of the intraservice time of 35 minutes for CPT code 5039A and the 
intraservice time of 48 minutes for CPT code 5039C; applied to the work 
RVU of base code 5039A (3.15) results in a potential work RVU of 4.32. 
The total time compared to CPT code 5039A also went from 91 minutes to 
107 minutes and this ratio applied to the base work RVU results in a 
work RVU of 3.70. We utilized these data to inform our choice of an 
appropriate crosswalk. We believe CPT code 31660 (Bronchoscopy, rigid 
or flexible, including fluoroscopic guidance) is an appropriate 
reference crosswalk for CPT code 5039C. CPT code 31660 has an 
intraservice time of 50 minutes, total time of 105 minutes, and a work 
RVU of 4.25. Therefore, we propose to establish the work RVU for CPT 
code 5039C at the crosswalked value of 4.25 work RVUs.
    According to the RUC recommendations, CPT codes 5039C and 5039D are 
very similar procedures, with CPT code 5039D making use of a 
nephroureteral catheter instead of a nephrostomy catheter. The RUC 
valued the added difficulty of CPT code 5039D at 1.05 work RVUs 
compared to code CPT code 5039C. We are maintaining the relative 
difference in work between these two codes by proposing a value of 5.30 
for CPT code 5039D. (This is the work RVU of 4.25 for CPT code 5039C 
plus 1.05 RVUs.) Additionally, we are using CPT code 57155 (Insertion 
of uterine tandem and/or vaginal ovoids for clinical brachytherapy) as 
our reference crosswalk. CPT code 57155 has a work RVU of 5.40 and an 
identical intraservice time of 60 minutes, but it also has fourteen 
additional minutes of total time, 133 minutes compared to 119 minutes 
for CPT code 5039D, which supports the difference of 0.10 RVUs. For 
these reasons, we are proposing the value of CPT code 5039D at 5.30 
work RVUs.
    As with the other genitourinary codes, we developed the proposed 
work value of CPT code 5039M in order to preserve relativity within the 
family. CPT code 5039M has 15 fewer minutes of intraservice time 
compared to CPT code 5039D (45 minutes compared to 60 minutes). This is 
a ratio of 0.75, applied to the based work RVU of CPT code 5039D (5.30) 
resulted in a potential work RVU of 3.98. CPT code 5039C was another 
close match within the family, with 3 more minutes of intraservice time 
compared to 5039M, 48 minutes of intraservice time instead of 45 
minutes. This ratio (0.94) applied to the base work RVU of CPT code 
5039C (4.25) also resulted in a potential work RVU of 3.98. Based on 
this information, we identified CPT code 31634 (Bronchoscopy, rigid or 
flexible, with balloon occlusion) as an appropriate crosswalk, and 
propose a work RVU of 4.00 for CPT code 5039M. The two codes share an 
identical intraservice time of 45 minutes, though the latter possesses 
a lower total time of 90 minutes.
    For CPT code 5039E, we considered how the code and work RVU would 
fit within the family in comparison to our proposed values for CPT 
codes 5039A and 5039C. CPT code 5039A serves as the base code for this 
group; it has 35 minutes of intraservice time in comparison to 20 
minutes for CPT code 5039E. This intraservice time ratio of 0.57 
resulted in a potential work RVU of 1.80 for CPT code 5039E when 
applied to the work RVU of CPT code 5039A (3.15). Similarly, CPT code 
5039C is the most clinically similar procedure to CPT code 5039E. CPT 
code 5039C has 48 minutes of intraservice time compared to 20 minutes 
of intraservice time for CPT code 5039E. This ratio of 0.42 applied to 
the base work RVU of CPT code 5039C (4.25) results in a potential work 
RVU of 1.77. We also made use of two crosswalks to help determine a 
proposed value for CPT code 5039E. CPT code 64416 (Injection, 
anesthetic agent; brachial plexus) also includes 20 minutes of 
intraservice time and has a work RVU of 1.81. CPT code 36569 (Insertion 
of peripherally inserted central venous catheter) has the same 
intraservice and total time as CPT code 5039E, with a work RVU of 1.82. 
Accordingly, we are crosswalking the work RVU for CPT code 5039E to CPT 
code 36569 and proposing a work RVU of 1.82 for CY 2016.
    The remaining three codes all utilize ureteral stents and form 
their own small subfamily within the larger group of genitourinary 
catheter procedures. For CPT code 5069G, we are proposing a

[[Page 41776]]

work RVU of 4.21, which is the 25th percentile result from the survey 
information. We believe that the 25th percentile provides a more 
accurate value for CPT code 5069G based on the work involved in the 
procedure and within the context of other codes in the family. We are 
also referencing CPT code 31648 (Bronchoscopy, rigid or flexible, with 
removal of bronchial valve), which shares 45 minutes of intraservice 
time and has a work RVU of 4.20, as an appropriate crosswalk for CPT 
code 5069G.
    For CPT code 5069H, we compared its intraservice time to the code 
within the family that had the most similar duration, CPT code 5039D. 
This code has 60 minutes of intraservice time compared to 62 minutes 
for CPT code 5069H. This is a ratio of 1.03 applied to the base work 
RVU of CPT code 5039D (5.30) resulted in a potential work RVU of 5.48. 
We also looked to crosswalks with similar numbers, in particular CPT 
code 50382 (Removal and replacement of internally dwelling ureteral 
stent). This code has 60 minutes of intraservice time, 125 minutes of 
total time, and a work RVU of 5.50. For these reasons, we are 
crosswalking CPT code 5069H to CPT code 50382 and proposing a work RVU 
of 5.50.
    Finally, we developed the proposed value for CPT code 5069I using 
three related methods. CPT codes 5069H and 5069I describe very similar 
procedures, with 5069I adding the use of a nephrostomy tube. The RUC 
addressed the additional difficulty of this procedure by recommending 
1.55 more work RVUs for CPT code 5069I than for CPT code 5069H. Adding 
the 1.55 work RVUs to the proposed work RVU for CPT code 5069H (5.50) 
would produce a work RVU of 7.05 for CPT code 5069I. We also looked at 
the ratio of intraservice times for CPT code 5069I (75 minutes) and the 
base code in the subfamily, CPT code 5069G (45 minutes). The 
intraservice time ratio between these two codes is 1.67 when applied to 
the base work RVU of CPT code 5069G (4.21) resulted in a potential work 
RVU of 7.02. We also identified an appropriate crosswalk reference in 
CPT code 36481 (Percutaneous portal vein catheterization by any method) 
which shares the same intraservice time as CPT code 5069I and has a 
work RVU of 6.98. Accordingly, to maintain relativity among this 
subfamily of codes, we are proposing a work RVU of 7.05 for CPT code 
5069I based on an incremental increase of 1.55 RVUs from CPT code 
5069H.
    In reviewing the direct PE inputs for this family of codes, we 
refined a series of the RUC- recommended inputs in order to maintain 
relativity with current standards. All of the following refinements 
refer to the non-facility setting for this family of codes. Under the 
clinical labor inputs, we are proposing to remove the RN/LPN/MTA 
(L037D) (intraservice time for assisting physician in performing 
procedure) for CPT codes 5039B and 5039E. This amounts to 15 minutes 
for CPT code 5039B and 20 minutes for CPT code 5039E. Moderate sedation 
is not inherent in these procedures and, therefore, we do not believe 
that this clinical labor task would typically be completed in the 
course of this procedure. We are also reducing the RadTech (L041B) 
intraservice time for acquiring images from 47 minutes to 46 minutes 
for CPT code 5069H. This procedure contains 62 minutes of intraservice 
time, with clinical labor assigned for acquiring images (75 percent) 
and a circulator (25 percent). The exact time for these clinical labor 
tasks multiplies out to 46.5 minutes and 15.5 minutes, respectively. 
The RUC recommendation for CPT code 5069H rounded both of these values 
upwards, assigning 47 minutes for acquiring images and 16 minutes for 
the circulator, which together sum to 63 minutes. We are reducing the 
clinical labor time for acquiring images to 46 minutes to preserve the 
62 minutes of total intraservice time for CPT code 5069H.
    During the post-service portion of the clinical labor service 
period, we are proposing to change the labor type for the ``patient 
monitoring following service/check tubes, monitors, drains (not related 
to moderate sedation)'' input. There are 45 minutes of clinical labor 
time assigned under this category to CPT codes 5039A, 5039C, 5039D, 
5039M, 5069G, 5069H, and 5069I. Although we agree that the 45 minutes 
are appropriate for these procedures as part of moderate sedation, we 
are changing the clinical labor type from the recommended RN (L051A) to 
RN/LPN/MTA (L037D) to reflect the staff that will typically be doing 
the monitoring for these procedures. Even though the CPT Editorial 
Committee's description of post-service work for CPT code 5039E 
includes a recovery period for sedation, we recognize that according to 
the recommendation, CPT codes 5039B and 5039E do not use moderate 
sedation, so we did not propose to include moderate sedation inputs for 
these codes.
    The RUC recommendation for CPT code 5039D includes a nephroureteral 
catheter as a new supply input with an included invoice. However, in 
the RUC summary of recommendations for this code, there is no mention 
of a nephroureteral catheter in the intraservice work description. CPT 
code 5039D does mention the use of a nephroureteral stent in this 
description, but there is no request for a nephroureteral stent supply 
item on the PE worksheet for this code. We are therefore seeking 
clarification from stakeholders regarding the use of the nephroureteral 
catheter for CPT code 5039D. We have not proposed to add the 
nephroureteral catheter as a supply item for CPT code 5039D pending 
this information. We are also requesting a clarification to the 
intraservice work description in the summary of recommendations for 
this code to explain the use, if any, of the nephroureteral catheter in 
this procedure.
    The RUC recommended the inclusion of ``room, angiography'' (EL011) 
for this family of codes. We do not agree with the RUC that an 
angiography room would be used in the typical case for these 
procedures, as there are other rooms available which can provide 
fluoroscopic guidance. Most of the codes that make use of an 
angiography room are cardiovascular codes, and much of the equipment 
listed for this room would not be used for non-cardiovascular 
procedures. We are therefore proposing to replace equipment item 
``room, angiography'' (EL011) with equipment item ``room, radiographic-
fluoroscopic'' (EL014) for the same number of minutes. We are 
requesting public comment regarding the typical room type used to 
furnish the services described by these CPT codes, as well as the more 
general question of the typical room type used for GU and GI 
procedures. In the past, the RUC has developed broad recommendations 
regarding the typical uses of rooms for particular procedures, 
including the radiographic-fluoroscopy room. We believe that such a 
recommendation from the RUC concerning all of these codes could be 
useful in ensuring relativity across the PFS.
(9) Penile Trauma Repair (CPT Codes 5443A and 5443B)
    CPT created these two new codes because there are no existing codes 
to capture penile traumatic injury that includes penile fracture, also 
known as traumatic corporal tear, and complete penile amputation. CPT 
code 5443A will describe a repair of traumatic corporeal tear(s) while 
CPT code 5443B will describe a replantation, penis, complete 
amputation. For CPT code 5443B, we disagree with the RUC recommendation 
of a work RVU of 24.50. We believe that the 25th

[[Page 41777]]

percentile work RVU of 22.10 provides a more accurate value based on 
the work involved in the procedure and within the context of other 
codes in the same family, since CPT code 5443A was also valued using 
the 25th percentile. We find further support for this valuation through 
a crosswalk to CPT code 43334 (Repair, paraesophageal hiatal hernia via 
thoracotomy, except neonatal) which has an identical intraservice time 
and a work RVU of 22.12. Therefore we are proposing a work RVU of 22.10 
for CPT code 5443B.
    Because CPT codes 5443A and 5443B are typically performed on an 
emergency basis, we question the appropriateness of the standard 60 
minutes of preservice clinical labor in the facility setting, as the 
typical procedure would not make use of office-based clinical labor. 
For example, we do not believe that the typical case would require 8 
minutes to schedule space in the facility for an emergency procedure, 
or 20 minutes to obtain consent. We are seeking further public comment 
on this issue from the RUC and other stakeholders.
(10) Intrastromal Corneal Ring Implantation (CPT Code 657XG)
    CPT code 657XG is a new code describing insertion of prosthetic 
ring segments into the corneal stroma for treatment of keratoconus in 
patients whose disease has progressed to a degree that they no longer 
tolerate contact lens wear for visual rehabilitation.
    We disagree with the RUC recommendation of a work RVU of 5.93 for 
CPT code 657XG. Although we appreciated the extensive list of other 
codes the RUC provided as references, we are concerned that the 
recommended value for CPT code 657XG overestimates the work involved in 
furnishing this service relative to other PFS services. We did not find 
a single code with comparable intraservice and total time that had a 
higher work RVU. The recommended crosswalk, CPT code 67917 (Repair of 
ectropion; extensive), appears to have the highest work RVU of any 90-
day global surgery service in this range of work time values. It also 
has longer intraservice time and total time than the code in question, 
making a direct crosswalk inappropriate.
    As a result, we are proposing a new value for CPT code 657XG based 
on the intraservice time ratio in relation to the recommended 
crosswalk. We compared the 33 minutes of intraservice time in CPT code 
67917 to the 30 minutes of intraservice time in CPT code 657XG. The 
intraservice time ratio between these two codes is 0.91, and when 
multiplied by the work RVU of CPT code 67917 (5.93) resulted in a 
potential work RVU of 5.39. We also considered CPT code 58605 (Ligation 
or transection of fallopian tube(s)), which has the same intraservice 
time, seven additional minutes of total time, and a work RVU of 5.28. 
We believe that CPT 58605 is a closer fit for a direct crosswalk 
because it shares the same intraservice time of 30 minutes with CPT 
code 657XG. Accordingly, we are proposing a work RVU of 5.39 for CPT 
code 657XG.
    The RUC recommendation for CPT code 657XG includes a series of 
invoices for several new supplies and equipment items. One of these was 
the 10-0 nylon suture with two submitted invoice prices of $245.62 per 
box of 12, or $20.47 per suture, and another was priced at $350.62 per 
box of 12, or $29.22 per suture. Given the range of prices between 
these two invoices, we sought publicly available information and 
identified numerous sutures that appear to be consistent with those 
recommended by the specialty society, at lower prices, which we believe 
are more likely to be typical since we assume that the typical 
practitioner would seek the best price. One example is ``Surgical 
Suture, Black Monofilament, Nylon, Size: 10-0, 12''/30cm, Needle: DSL6, 
12/bx'' for $146. Therefore, we are proposing to establish a new supply 
code for ``suture, nylon 10-0'' and price that item at $12.17 each. We 
welcome comments from stakeholders regarding this supply item.
(11) Dilation and Probing of Lacrimal and Nasolacrimal Duct (CPT Codes 
66801, 68810, 68811, 68815 and 68816)
    The RUC's review of 10-day global services identified 18 services 
with greater than 1.5 office visits and 2012 Medicare utilization data 
over 1,000, including CPT codes 66801, 68810, 68811, 68815, and 68816. 
As a result, the RUC requested these services be surveyed reviewed for 
CY 2016.
    The RUC recommended a work RVU of 1.00 for CPT code 68801 and a 
work RVU of 1.54 for CPT code 68810. While we are proposing to use the 
RUC-recommended work RVU for CPT code 68810, we do not believe the 
recommendation for CPT code 68801 best reflects the work involved in 
the procedure because of a discrepancy between the post-operative work 
time and work RVU. Specifically, the RUC recommendation for the 
procedure included the removal of a 99211 visit, but the RUC-
recommended work RVU did not reflect any corresponding adjustment. As a 
result, we are proposing to accept the RUC's recommendation to remove 
the 99211 visit from the service but are proposing to further reduce 
the work RVU for CPT code 68801 by removing the RVUs associated with 
CPT code 99211. Therefore, for CY 2016, we are proposing a work RVUs of 
0.82 to CPT code 68801 and 1.54 to CPT code 68810.
    The RUC recommended a work RVU of 2.03, 3.00, and 2.35 for CPT 
codes 68811, 68815 and 68816, respectively. We do not believe the RUC 
recommendations for these services best reflect the work involved in 
performing these procedures. To value these services, we calculated a 
total time ratio by dividing the code's current total time by the RUC-
recommended total time, and then applying that ratio to the current 
work RVU. This produces our CY 2016 proposed work RVUs of 1.74, 2.70, 
and 2.10 for CPT codes 68811, 68815, and 68816, respectively.
(12) Spinal Instability (CPT Code 7208A, 7208B, 7208C, and 7208D)
    For CY 2015, the CPT Editorial Panel deleted codes 72010 
(radiologic examination, spine, entire, survey study, anteroposterior 
and lateral), 72069 (radiologic examination, spine, thorocolumbar, 
standing (scoliosis)), and 72090 (radiological examination, spine; 
scoliosis study, including supine and erect studies), revised one code, 
72080 (Radiologic examination, spine; thoracolumbar junction, minimum 
of 2 views) and created four new codes which cover radiologic 
examination of the entire thoracic and lumbar spine, including the 
skull, cervical and sacral spine if performed. The new codes were 
organized by number of views, ranging from one view in 7208A, two to 
three views in 7208B, four to five views in 7208C, and minimum of 6 
views in 7208D.
    We disagree with the RUC's work RVU recommendations for these four 
codes. For 7208A, we noted that the one minute increase in time 
resulted in a larger work RVU than would be expected when taking the 
ratio between time and RVU in the source code and comparing that to the 
time and work RVU ratio in the new code. Using the relationship between 
time and RVU from deleted code 72069, we are proposing a work RVU of 
0.26 for 7208A, which differs from the RUC-recommended value of 0.30. 
Using an incremental methodology based on the relationship between work 
and time in the first code we are proposing to adjust the RUC-
recommended work RVUs for CPT codes 7208B, 7208C and 7208D to, 
respectively, 0.31, 0.35, and 0.41.

[[Page 41778]]

(13) Echo Guidance for Ova Aspiration (CPT Code 76948)
    In the CY 2014 PFS final rule with comment period, we requested 
additional information to assist us in the valuation of ultrasound 
guidance codes. We nominated these codes as potentially misvalued based 
on the extent to which standalone ultrasound guidance codes were billed 
separately from services where ultrasound guidance was an integral part 
of the procedure. CPT code 76948 was among the codes considered 
potentially misvalued. CPT code 76948 was surveyed by the specialty 
societies and the RUC issued a recommendation for CY 2016. We have 
concerns about valuation this code, considering that it is a guidance 
code used only for a single procedure: 58970 (aspiration of ova), and 
we believe that these two codes are almost always billed concurrently. 
We believe codes 76948 and 58970 should be bundled to accurately 
reflect how the service is furnished.
    We are proposing to use work times based on refinements of the RUC-
recommended values by removing the 3 minutes of pre and post service 
time since these times are reflected in the 58970 procedure code. We 
are proposing work and time values for 76948 based on a crosswalk from 
76945 (Ultrasonic guidance for chorionic villus sampling, imaging 
supervision and interpretation) which has a physician work time of 30 
minutes and an RVU of 0.56. Therefore we are proposing to maintain 25 
minutes of intraservice time for 76948 and proposing a work RVU of 
0.56.
(14) Immunohistochemistry (CPT Codes 88341, 88342, and 88344)
    In establishing interim final direct PE inputs for CY 2015 for CPT 
codes 88341, 88342, and 88344, we replaced the RUC-recommended supply 
item ``UltraView Universal DAB Detection Kit'' (SL488) with ``Universal 
Detection Kit'' (SA117), since the RUC did not provide an explanation 
for the required use of a more expensive kit. We also adjusted the 
equipment time for equipment item ``microscope, compound'' (EP024). We 
re-examined these codes when valuing the immunofluorescence family of 
codes for CY 2016, and reviewed information received by commenters that 
explained the need for these supply items. Specifically, commenters 
explained that the universal detection kit that CMS included in place 
of the RUC-recommended kit was not typically used in these services as 
it was not clinically appropriate. We are proposing to include the RUC-
recommended supply item, SL488, for CPT codes 88341, 88342, and 88344, 
as well as the RUC-recommended equipment time for ``microscope, 
compound'' for CY 2016.
(15) Immunofluorescent Studies (CPT Codes 88346 and 8835X)
    For CY 2016, the CPT Editorial Panel deleted one code, CPT 88347 
(Antibody evaluation), created a new add-on service, CPT 8835X, and 
revised CPT code 88346 to describe immunofluorescent studies. The RUC 
recommended a work RVU of 0.74 for CPT code 88346 and 0.70 for CPT code 
8835X. While we are accepting the RUC recommendation for CPT code 
88346, we do not believe the recommendation for CPT code 8835X best 
reflects the work involved in the procedure due to our concerns with 
the relationship between the RUC-recommended intraservice times for the 
base code and the newly created add-on code. We examined intraservice 
time relationships between other base codes and add-on codes and found 
that two codes in the Intravascular ultrasound family, CPT 37250 
(Ultrasound evaluation of blood vessel during diagnosis or treatment) 
and 37251(Ultrasound evaluation of blood vessel during diagnosis or 
treatment), share a similar base code/add-on code intraservice time 
relationship, and are also diagnostic in nature, as are CPT codes 88346 
and 8835X. Due to these similarities, we believe it is appropriate to 
apply the relationship, which is a 24 percent difference, between CPT 
codes 37250 and 37251 in calculating work RVUs for CPT codes 88346 and 
8835X. Multiplying the RVU of CPT code 88346, 0.74, by 24 percent, and 
then subtracted the product from 0.74 results in a work RVU of 0.56 for 
CPT code 8835X. Therefore, for CY 2016, we are proposing a work RVU of 
0.74 for CPT code 88346 and 0.56 for CPT code 8835X.
(16) Morphometric Analysis (CPT Codes 88364, 88365, 88366, 88367, 
88373, 88374, 88377, 88368, and 88369)
    CPT codes 88367 and 88368 were reviewed and valued in the CY 2015 
PFS final rule with comment period (79 FR 67668 through 67669). Since 
then, the RUC has re-reviewed these services for CY 2016 due to the 
specialty society's initially low survey response rate. In our review 
of these codes, we noticed that the latest RUC recommendation is 
identical to the RUC recommendation provided for CY 2015 rulemaking. As 
a result, we do not believe there is any reason to modify our CY 2015 
work RVUs or work time for these procedures. Therefore, we are 
proposing to retain the CY 2015 work RVUs and work time for CPT codes 
88367 and 88368 for CY 2016.
    In establishing interim final direct PE inputs for CY 2015 for CPT 
codes 88364, 88365, 88366, 88367, 88373, 88374, 88377, 88368, and 
88369, we refined the RUC-recommended direct PE inputs as follows. We 
refined the units of several supply items, including ``ethanol, 100%'' 
(SL189), ``ethanol, 70%'' (SL190), ``ethanol, 85%'' (SL191), ``ethanol, 
95%'' (SL248), ``kit, FISH paraffin pretreatment'' (SL195), ``kit, HER-
2/neu DNA Probe'' (SL196), positive and negative control slides (SL112, 
SL118, SL119, SL184, SL185, SL508, SL509, SL510, SL511), ``(EBER) DNA 
Probe Cocktail'' (SL497),''Kappa probe cocktails'' (SL498) and ``Lambda 
probe cocktails'' (SL499), to maintain consistency within the codes in 
the family, and adjusted the quantities included in these codes to 
align with the code descriptors and better reflect the typical 
resources used in furnishing these services. We also adjusted the 
equipment time for equipment items ``water bath, FISH procedures 
(lab)'' (EP054), ``chamber, Hybridization'' (EP045), ``microscope, 
compound'' (EP024), ``instrument, microdissection (Veritas)'' (EP087), 
and ``ThermoBrite'' (EP088), to reflect the typical time the equipment 
is used, among other common refinements.
    We re-examined these codes when valuing the immunofluorescence 
family of codes for CY 2016, and reviewed information received from 
commenters that described the typical batch size for each of these 
services, thereby explaining the apparent inconsistencies and 
discrepancies in the quantity of units among the codes in the family. 
We are proposing to include the RUC-recommended quantities for each of 
these supply items for the CPT codes 88364, 88365, 88366, 88367, 88373, 
88374, 88377, 88368, and 88369 for CY 2016. With regard to the 
equipment items, we received information explaining that the 
recommended equipment times already accounted for the typical batch 
size, and thus, the recommended times were already reflective of the 
typical case. Therefore, we are proposing to adjust the equipment time 
for equipment items EP054, EP045, and EP087 to align with the RUC-
recommended times. We also received comments explaining the need for 
equipment item EP088. Based on that information, we are proposing to 
include this equipment item consistent with the RUC recommendations for 
CPT code 88366.
    We note that the information we received regarding the typical 
batch size

[[Page 41779]]

was critical in determining the appropriate direct PE inputs for these 
pathology services. We also note that we usually do not have 
information regarding the typical batch size or block size when we are 
reviewing the direct PE inputs for pathology services. The supply 
quantity and equipment minutes are often a direct function of the 
number of tests processed at once. Given the importance of the typical 
number of tests being processed by a laboratory in determining the 
direct PE inputs, which often include expensive supplies, we are very 
concerned that the direct PE inputs included in many pathology services 
may not reflect the typical resource costs involved in furnishing the 
typical service.
    In particular, we note that since laboratories of various sizes 
furnish pathology tests and that, depending on the test, a large 
laboratory may be at least as likely to have furnished a test to a 
Medicare beneficiary compared to a small laboratory, we believe that an 
equipment item included in a recommendation that is commercially 
available to a small laboratory may not be the same equipment item that 
is used in the typical case. If the majority of services billed under 
the PFS for a particular CPT code are furnished by laboratories that 
run many of these tests each day, then assumptions informed by 
commercially available products may significantly underestimate the 
typical number of tests processed together, and thus the assumptions 
underlying current valuations for per-test cost of supplies and 
equipment may be much higher than the typical resources used in 
furnishing the service. We invite stakeholders to provide us with 
information about the equipment and supply inputs used in the typical 
case for particular pathology services.
(17) Vestibular Caloric Irrigation (CPT Codes 9254A and 9254B)
    For CY 2016, the CPT Editorial Panel deleted CPT code 92543 
(Assessment and recording of balance system during irrigation of both 
ears) and created two new CPT codes, 9254A and 9254B, to report caloric 
vestibular testing for bithermal and monothermal testing procedures, 
respectively. The RUC recommended a work RVU of 0.80 for CPT code 9254A 
and a work RVU of 0.55 for CPT code 9254B. We believe the 
recommendations for these services overstate the work involved in 
performing these procedures. Due to similarity in service and time, we 
believe a direct crosswalk of CPT code 97606 (Negative pressure wound 
therapy, surface area greater than 50 square centimeters, per session) 
to CPT code 9254A is appropriate. To value CPT code 9254B, we divided 
the proposed work RVU for 9254A in half since the code descriptor for 
this procedure describes the service as having two irrigations as 
opposed to the four involved in 9254A. Therefore, for CY 2016, we are 
proposing a work RVUs of 0.60 to 9254A and 0.30 to 9254B.
(18) Instrument-Based Ocular Screening (CPT Codes 99174 and 9917X)
    For CY 2015, the CPT Editorial Panel created a new code, CPT code 
9917X, to describe instrument-based ocular screening with on-site 
analysis and also revised existing CPT code 99174, which describes 
instrument-based ocular screening with remote analysis and report. 
Currently, CPT code 99174 is assigned a status indicator of N (non-
covered service) which we believe should be maintained due to its 
nature as a screening service. After review of CPT code 9917X, we 
believe this service is also a screening service and should be assigned 
a status indicator of N (non-covered service). Therefore, for CY 2016, 
we are proposing to assign a PFS status indicator of N (non-covered 
service) for CPT codes 99174 and 9917X.
(19) Low-Dose Computer Tomography, Lung, Screening (GXXX1) and Lung 
Cancer Screening Counseling and Shared Decision Making Visit (GXXX2)
    We have issued national coverage determination (NCD) for the 
coverage of a lung cancer screening counseling and shared decision 
making visit and, for appropriate beneficiaries, annual screening with 
low dose computed tomography (LDCT) as an additional preventive 
benefit. The American College of Radiology (ACR) submitted 
recommendations for work and direct PE inputs. The ACR recommended that 
we crosswalk GXXX1 to 71250 (computed tomography, thorax; without 
contrast material) with additional physician work added to account for 
the added intensity of the service. After reviewing this 
recommendation, we believe that the physician work (time and intensity) 
is identical in both GXXX1 and 71250, and therefore, we are proposing a 
work RVU of 1.02 for GXXX1.
    We are proposing to value the lung cancer screening counseling and 
shared decision making visit (GXXX2) using a crosswalk from the work 
value for G0443 (Brief face-to-face counseling for alcohol misuse, 15 
minutes) which has a work RVU of 0.45. We added 2 minutes of pre-
service time, and 1 minute post-service time which we valued at 0.0224 
RVU per minute yielding a total of 0.062 additional RVUs which we then 
added to 0.45, bringing the total proposed work RVUs for GXXX2 to 0.52. 
The direct PE input recommendations from the ACR were refined according 
to CMS standard refinements and appear in the CY 2016 proposed direct 
PE input database.
7. Direct PE Input-Only Recommendations
    In CY 2014, we proposed to limit the nonfacility PE RVUs for 
individual codes so that the total nonfacility PFS payment amount would 
not exceed the total combined amount that Medicare would pay for the 
same code in the facility setting. In developing the proposal, we 
sought a reliable means for Medicare to set upper payment limits for 
office-based procedures given our several longstanding concerns 
regarding the accuracy of certain aspects of the direct PE inputs, 
including both items and procedure time assumptions, and prices of 
individual supplies and equipment (78 FR 74248 through 74250). After 
considering the many comments we received regarding our proposal, the 
majority of which urged us to withdraw the proposal for a variety of 
reasons, we decided not to finalize the policy. However, we continue to 
believe that using practice expense data that are auditable, 
comprehensive, and regularly updated would contribute to the accuracy 
of practice expense calculations.
    Subsequent to our decision not to finalize the proposal, the RUC 
forwarded direct PE input recommendations for a subset of codes with 
nonfacility PE RVUs that would have been limited by the policy. Some of 
these codes also include work values, but the RUC recommendations did 
not address the accuracy of those values.
    We generally believe that combined reviews of work and PE for each 
code under the potentially misvalued codes initiative leads to more 
accurate and appropriate assignment of RVUs. We also believe, and have 
previously stated, that our standard process for evaluating potentially 
misvalued codes is unlikely to be the most effective means of 
addressing our concerns regarding the accuracy of some aspects of the 
direct PE inputs (79 FR 74248).
    However, we also believe it is important to use the most accurate 
and up-to-date information available to us when developing PFS RVUs for 
individual services. Therefore, we have reviewed the RUC-recommended 
direct PE inputs for these services and are proposing to use them, with 
the refinements addressed in this section. However, we are also 
identifying these

[[Page 41780]]

codes as potentially misvalued because their direct PE inputs were not 
reviewed alongside review of their work RVUs and time. We considered 
not addressing these recommendations until such time as comprehensive 
reviews could occur, but we recognized the public interest in using the 
updated recommendations regarding the PE inputs until such time as the 
work RVUs and time can be addressed. Therefore, we note that while we 
are proposing adjusted PE inputs for these services based on these 
recommendations, we would anticipate addressing any corresponding 
change to direct PE inputs once the work RVUs and time are addressed.
a. Repair of Nail Bed (CPT Code 11760)
    This recommendation includes 22 minutes of clinical labor time 
assigned for ``Assist physician in performing procedure.'' Because CPT 
code 11760 has 33 minutes of work intraservice time, we believe that 
this clinical labor input was intended to be calculated at 67 percent 
of work time. However, the equipment times are also calculated based on 
the 22 minutes of intraservice time. We are seeking comment on whether 
or not it would be appropriate to include the full 33 minutes of work 
intraservice time for the equipment.
b. Submucosal Ablation of the Tongue Base (CPT Code 41530)
    We did not review CPT code 41530 for direct PE inputs, because we 
noted that the RUC anticipates making recommendations regarding the 
work RVU and direct PE inputs for this service in the near future.
c. Cytopathology Fluids, Washings or Brushings (CPT Codes 88104, 88106, 
88108)
    We are proposing to update the Millipore filter supply (SL502) 
based on stakeholder submission of new information following the RUC's 
original recommendation. As requested, we are proposing to crosswalk 
the price of the Millipore filter to the cytology specimen filter 
(Transcyst) supply (SL041) and assign a value of $4.15. This change is 
reflected in the proposed direct PE input database.
d. Cytopathology Smears, Screening and Interpretation (CPT Codes 88160, 
88161, 88162)
    We are concerned that there is a lack of clarity and the 
possibility for confusion contained in the CPT descriptors of CPT codes 
88160 and 88161. The CPT descriptor for the first code refers to the 
``screening and interpretation'' of Cytopathology smears, while the 
descriptor for the second code refers to the ``preparation, screening 
and interpretation'' of Cytopathology smears. We believe that there is 
currently the potential for duplicative counting of direct PE inputs 
due to the overlapping nature of these two codes. We are concerned that 
the same procedure may be billed multiple times under both CPT code 
88160 and 88161. We believe that these codes are potentially misvalued, 
and we are seeking a full review of this family of codes for both work 
and PE, given the potential for overlap. We recognize that the ideal 
solution may involve revisions by the CPT Editorial Panel.
    With regard to the current direct PE input recommendations, we are 
proposing to remove the clinical labor minutes recommended for ``Stain 
air dried slides with modified Wright stain'' for CPT code 88160 since 
staining slides would not be a typical clinical labor task if there is 
no slide preparation taking place, as the descriptor for this code 
suggests.
    We are proposing to update the protease solution supply (SL506) 
based on stakeholder submission of new information following the RUC's 
original recommendation. As requested, we are proposing to change the 
name of the supply to ``Protease'', alter the unit of measurement from 
milliliters to milligrams, change the quantity assigned to CPT code 
88182 from 1 to 1.12, and update the price from $0.47 to $0.4267. These 
changes are reflected in the proposed direct PE input database.
    We are requesting additional information regarding the use of the 
desktop computer with monitor (ED021) for CPT code 88182. We have made 
no change to the current equipment time value pending the submission of 
additional information.
e. Flow Cytometry, Cytoplasmic Cell Surface (CPT Code 88184, 88185)
    We are requesting additional information regarding the specific use 
of the desktop computer with monitor (ED021) for CPT codes 88184 and 
88185 since the recommendation does not specify how it is used.
f. Consultation on Referred Slides and Materials (CPT Codes 88321, 
88323, 88325)
    We are proposing to remove the clinical labor time for ``Accession 
specimen/prepare for examination'' for CPT codes 88321 and 88325. These 
codes do not involve the preparation of slides, so this clinical labor 
task is duplicative with the labor carried out under ``Open shipping 
package, remove and sort slides based on outside number.'' We are 
proposing to maintain the recommended 4 minutes for this clinical labor 
task for CPT code 88323, since it does require slide preparation.
    We are proposing to refine the clinical labor time for ``Register 
the patient in the information system, including all demographic and 
billing information'' from 13 minutes to 5 minutes for all three codes. 
As indicated in Table 6, our proposed standard clinical labor time for 
entering patient data is 4 minutes for pathology codes, and we believe 
that the extra tasks involving label preparation described in this 
clinical labor task would typically require an additional 1 minute to 
complete. We also believe that the additional recommended time likely 
reflects administrative tasks that are appropriately accounted for in 
the indirect PE methodology.
    We are proposing to refine the clinical labor time from 7 minutes 
to 5 minutes for the new task ``Receive phone call from referring 
laboratory/facility with scheduled procedure to arrange special 
delivery of specimen procurement kit, including muscle biopsy clamp as 
needed. Review with sender instructions for preservation of specimen 
integrity and return arrangements. Contact courier and arrange delivery 
to referring laboratory/facility.'' Based on the description of this 
task, we believe that this task would typically take 5 minutes to be 
performed by the Lab Technician.
    We are proposing to remove the eosin solution supply (SL063) from 
CPT code 88323. We do not agree that this supply would be typically 
used in this procedure, and the eosin solution is redundant when used 
together with the hematoxylin stain supply (SL135). We are also 
refining the quantity of the hematoxylin stain from 32 to 8 for CPT 
code 88323, to be consistent with its use in other related Pathology 
codes.
    We are proposing to remove many of the inputs for clinical labor, 
supplies, and equipment for CPT code 88325. The descriptor for this 
code indicates that it does not involve slide preparation, and 
therefore we are proposing labor, supplies, and equipment inputs to 
match the inputs recommended for CPT code 88321, which also does not 
include the preparation of slides.
g. Morphometric Analysis, Tumor Immunohistochemistry (CPT Codes 88360, 
88361)
    We are proposing to update the pricing for the Benchmark ULTRA 
automated slide preparation system (EP112) and the E-Bar II Barcode 
Slide Label System (EP113). Based on stakeholder submission of 
information subsequent to the original RUC recommendation, we are 
reclassifying

[[Page 41781]]

these two pieces of equipment as a single item with a price of 
$150,000. CPT codes 88360 and 88361 have been valued using this new 
price. The equipment time values remain unchanged.
    The RUC recommendation for CPT codes 88360 and 88361 included an 
invoice for the Antibody Estrogen Receptor monoclonal supply (SL493). 
The submitted invoice has a price of $694.70 per box of 50, or $13.89 
per test. We sought publically available information regarding this 
supply and identified numerous monoclonal antibody estrogen receptors 
that appear to be consistent with those recommended by the specialty 
society, at publicly available lower prices, which we believe are more 
likely to be typical since we assume that the typical practitioner 
would seek the best price available to the public. One example is 
Estrogen Receptor Antibody (h-151) [DyLight 405], priced at 100 tests 
per box for $319. Therefore, we are proposing to establish a new supply 
code for ``Antibody Estrogen Receptor monoclonal'' and price that item 
at $3.19 each. We welcome comments from stakeholders regarding this 
supply item.
h. Nerve Teasing Preparations (CPT Code 88362)
    We are proposing to refine the recommended clinical labor time for 
``Assist pathologist with gross specimen examination including the 
following; Selection of fresh unfixed tissue sample; selection of 
tissue for formulant fixation for paraffin blocking and epon blocking. 
Reserve some specimen for additional analysis'' from 10 minutes to 5 
minutes. We note that the 5 minutes includes 3 minutes for assisting 
the pathologist with the gross specimen examination (as listed in Table 
6) and an additional 2 minutes for the additional tasks due to the work 
taking place on a fresh specimen.
i. Nasopharyngoscopy With Endoscope (CPT Code 92511)
    We are proposing to remove the endosheath (SD070) from this 
procedure, because we do not believe it would be typically used and it 
was not included in the recommendations for any of the other related 
codes in the same tab. If the endosheath were included as a supply with 
the presentation of additional clinical information, then we believe it 
would be appropriate to remove all of the clinical labor and equipment 
time currently assigned to cleaning the scope.
j. Needle Electromyography (CPT Codes 95863, 95864, 95869, 95870)
    We are proposing to reduce the quantity of the iontophoresis 
electrode kit (SA014) supply from 4 to 3. According to the description 
of this code, the procedure typically uses 2-4 electrodes, and 
therefore we believe that a supply quantity of 3 would better reflect 
the typical case. We are requesting further information regarding the 
typical number of electrodes used in this procedure; if the maximum of 
4 electrodes is in fact typical for the procedure, then we recommend 
that the code descriptor be referred to CPT for further clarification.

J. Medicare Telehealth Services

1. Billing and Payment for Telehealth Services
    Several conditions must be met for Medicare to make payments for 
telehealth services under the PFS. The service must be on the list of 
Medicare telehealth services and meet all of the following additional 
requirements:
     The service must be furnished via an interactive 
telecommunications system.
     The service must be furnished by a physician or authorized 
practitioner.
     The service must be furnished to an eligible telehealth 
individual.
     The individual receiving the service must be located in a 
telehealth originating site.
    When all of these conditions are met, Medicare pays a facility fee 
to the originating site and makes a separate payment to the distant 
site practitioner furnishing the service.
    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 
furnished via a telecommunications system. We first implemented this 
statutory provision, which was effective October 1, 2001, in the CY 
2002 PFS final rule with comment period (66 FR 55246). We established a 
process for annual updates to the list of Medicare telehealth services 
as required by section 1834(m)(4)(F)(ii) of the Act in the CY 2003 PFS 
final rule with comment period (67 FR 79988).
    As specified 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 distant site 
physician or practitioner.
    Telephones, facsimile machines, and stand-alone electronic mail 
systems that are not integrated into an electronic health record system 
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 allows the 
use of asynchronous ``store-and-forward'' technology when the 
originating site is part of a federal telemedicine demonstration 
program in Alaska or Hawaii. As specified in Sec.  410.78(a)(1), 
asynchronous store-and-forward is the transmission of medical 
information from an originating site for review by the distant site 
physician or practitioner at a later time.
    Medicare telehealth services may be furnished to an eligible 
telehealth individual notwithstanding the fact that the practitioner 
furnishing the telehealth service is not at the same location as the 
beneficiary. An eligible telehealth individual is an individual 
enrolled under Part B who receives a telehealth service furnished at an 
originating site.
    Practitioners furnishing Medicare telehealth services are reminded 
that these services are subject to the same non-discrimination laws as 
other services, including the effective communication requirements for 
persons with disabilities of section 504 of the Rehabilitation Act and 
language access for persons with limited English proficiency, as 
required under Title VI of the Civil Rights Act of 1964. For more 
information, see http://www.hhs.gov/ocr/civilrights/resources/specialtopics/hospitalcommunication.
    Practitioners furnishing Medicare telehealth services submit claims 
for telehealth services to the Medicare Administrative 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.
    Originating sites, which can be one of several types of sites 
specified in the statute where an eligible telehealth individual is 
located at the time the service is being furnished via a 
telecommunications system, are paid a fee under the PFS a facility fee 
for each Medicare telehealth service. The statute

[[Page 41782]]

specifies both the types of entities that can serve as originating 
sites and the geographic qualifications for originating sites. With 
regard to geographic qualifications, Sec.  410.78(b)(4) limits 
originating sites to those located in rural health professional 
shortage areas (HPSAs) or in a county that is not included in a 
metropolitan statistical areas (MSAs).
    Historically, we have defined rural HPSAs to be those located 
outside of MSAs. Effective January 1, 2014, we modified the regulations 
regarding originating sites to define rural HPSAs as those located in 
rural census tracts as determined by the Office of Rural Health Policy 
(ORHP) of the Health Resources and Services Administration (HRSA) (78 
FR 74811). Defining ``rural'' to include geographic areas located in 
rural census tracts within MSAs allows for broader inclusion of sites 
within HPSAs as telehealth originating sites. Adopting the more precise 
definition of ``rural'' for this purpose expands access to health care 
services for Medicare beneficiaries located in rural areas. HRSA has 
developed a Web site tool to provide assistance to potential 
originating sites to determine their geographic status. To access this 
tool, see the CMS Web site at www.cms.gov/teleheath/.
    An entity participating in a federal telemedicine demonstration 
project that has been approved by, or received funding from, the 
Secretary as of December 31, 2000 is eligible to be an originating site 
regardless of its geographic location.
    Effective January 1, 2014, we also changed our policy so that 
geographic status for an originating site would be established and 
maintained on an annual basis, consistent with other telehealth payment 
policies (78 FR 74400). Geographic status for Medicare telehealth 
originating sites for each calendar year is now based upon the status 
of the area as of December 31 of the prior calendar year.
    For a detailed history of telehealth payment policy, see 78 FR 
74399.
2. 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. Under this process, we assign any qualifying request 
to make additions to the list of telehealth services to one of two 
categories. Revisions to criteria that we use to review requests in the 
second category were finalized in the November 28, 2011 Federal 
Register (76 FR 73102). 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, a practitioner who is present 
with the beneficiary in the originating site. 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 furnished 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 furnishing 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 (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.
    For the list of covered telehealth services, see the CMS Web site 
at www.cms.gov/teleheath/. 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, qualifying requests submitted before the 
end of CY 2015 will be considered for the CY 2017 proposed rule. 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. 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, see the CMS Web site at www.cms.gov/telehealth/.
3. Submitted Requests to the List of Telehealth Services for CY 2016
    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 final rule with comment period (76 FR 
73098), we believe that the category 1 criteria not only streamline our 
review process for publicly 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.
a. Submitted Requests
    We received several requests in CY 2014 to add various services as 
Medicare telehealth services effective for CY 2016. The following 
presents a discussion of these requests, and our proposals for 
additions to the CY 2016 telehealth list. Of the requests received, we 
find that the following services are sufficiently similar to 
psychiatric diagnostic procedures or office/outpatient visits currently 
on the telehealth list to qualify on a category one basis. Therefore, 
we propose to add the following services to the telehealth list on a 
category 1 basis for CY 2016:

[[Page 41783]]

     CPT code 99356 (prolonged service in the inpatient or 
observation setting, requiring unit/floor time beyond the usual 
service; first hour (list separately in addition to code for inpatient 
evaluation and management service); and 99357 (prolonged service in the 
inpatient or observation setting, requiring unit/floor time beyond the 
usual service; each additional 30 minutes (list separately in addition 
to code for prolonged service).
    The prolonged service codes can only be billed in conjunction with 
hospital inpatient and skilled nursing facility evaluation & management 
(E/M) codes, and of these, only subsequent hospital and subsequent 
nursing facility visit codes are on list of Medicare telehealth 
services. Therefore, CPT codes 99356 and 99357 would only be reportable 
with codes for which limits of one subsequent hospital visit every 
three days via telehealth, and one subsequent nursing facility visit 
every thirty days, would continue to apply.
     CPT codes 90963 (end-stage renal disease (ESRD) related 
services for home dialysis per full month, for patients younger than 2 
years of age to include monitoring for the adequacy of nutrition, 
assessment of growth and development, and counseling of parents); 90964 
(end-stage renal disease (ESRD) related services for home dialysis per 
full month, for patients 2-11 years of age to include monitoring for 
the adequacy of nutrition, assessment of growth and development, and 
counseling of parents); 90965 (end-stage renal disease (ESRD) related 
services for home dialysis per full month, for patients 12-19 years of 
age to include monitoring for the adequacy of nutrition, assessment of 
growth and development, and counseling of parents); and 90966 (end-
stage renal disease (ESRD) related services for home dialysis per full 
month, for patients 20 years of age and older).
    Although these services are for home-based dialysis, and a 
patient's home is not an authorized originating site for telehealth, we 
recognize that many components of these services would be furnished 
from an authorized originating site and, therefore, can be furnished 
via telehealth.
    The required clinical examination of the catheter access site must 
be furnished face-to-face ``hands on'' (without the use of an 
interactive telecommunications system) by a physician, certified nurse 
specialist (CNS), nurse practitioner (NP), or physician's assistant 
(PA). An interactive telecommunications system may be used for 
providing additional visits required under the 2 to 3 visit Monthly 
Capitation Payment (MCP) code and the 4 or more visit MCP code. See the 
final rule for CY 2005 (69 FR 66276) for further information on 
furnishing ESRD services via telehealth.
    We also received requests to add services to the telehealth list 
that do not meet our criteria for Medicare telehealth services. We are 
not proposing to add the following procedures for the reasons noted:
     All evaluation and management services, telerehabilitation 
services, and palliative care, pain management and patient navigation 
services for cancer patients.
    None of these requests identified the specific codes that were 
being requested for addition as telehealth services, and two of the 
requests did not include evidence of any clinical benefit when the 
services are furnished via telehealth. Since we did not have 
information on the specific codes requested for addition or evidence of 
clinical benefit for these requests, we cannot evaluate whether the 
services are appropriate for addition to the Medicare telehealth 
services list.
     CPT codes 99291 (critical care, evaluation and management 
of the critically ill or critically injured patient; first 30-74 
minutes); and 99292 (critical care, evaluation and management of the 
critically ill or critically injured patient; each additional 30 
minutes (list separately in addition to code for primary service).
    We previously considered and rejected adding these codes to the 
list of Medicare telehealth services in the CY 2009 PFS final rule (74 
FR 69744) on a category 1 basis because, due to the acuity of 
critically ill patients, we did not consider critical care services 
similar to any services on the current list of Medicare telehealth 
services. In that rule, we said that critical care services must be 
evaluated as category 2 services. Because we would consider critical 
care services under category 2, we needed to evaluate whether these are 
services for which telehealth can be an adequate substitute for a face-
to-face encounter. We had no evidence suggesting that the use of 
telehealth could be a reasonable surrogate for the face-to-face 
delivery of this type of care.
    The American Telemedicine Association (ATA) submitted a request, 
which cited several studies to support adding these services on a 
category 2 basis. To qualify under category 2, we would need evidence 
that the service produces a clinical benefit for the patient. However, 
in reviewing the information provided by the ATA and a study entitled, 
``Impact of an Intensive Care Unit Telemedicine Program on Patient 
Outcomes in an Integrated Health Care System,'' published July 2014, in 
``JAMA Internal Medicine,'' which found no evidence that the 
implementation of ICU TM significantly reduced mortality rates or 
hospital length of stay, we do not believe that the evidence 
demonstrates a clinical benefit to patients. Therefore, we are not 
proposing to add these services on a category 2 basis to the list of 
Medicare telehealth services for CY 2016.
     CPT code 99358 (prolonged evaluation and management 
service before and/or after direct patient care; first hour) and 99359 
(prolonged evaluation and management service before and/or after direct 
patient care; each additional 30 minutes (list separately in addition 
to code for prolonged service).
    As we indicated in the CY 2015 PFS final rule with comment period 
(79 FR 67600), these services are not separately payable by Medicare. 
It would be inappropriate to include a service as a telehealth service 
when Medicare does not otherwise make a separate payment for it. 
Therefore, we are not proposing to add these non-payable services to 
the list of Medicare telehealth services for CY 2016.
     CPT code 99444 (online evaluation and management service 
provided by a physician or other qualified health care professional who 
may report an evaluation and management services provided to an 
established patient or guardian, not originating from a related E/M 
service provided within the previous 7 days, using the internet or 
similar electronic communications network).
    As we indicated in the CY 2014 PFS final rule with comment period 
(78 FR 74403), we assigned a status indicator of ``N'' (Noncovered 
service) to this service because: (1) this service is non-face-to-face; 
and (2) the code descriptor includes language that recognizes the 
provision of services to parties other than the beneficiary and for 
whom Medicare does not provide coverage (for example, a guardian). 
Under section 1834(m)(2)(A) of the Act, Medicare pays the physician or 
practitioner furnishing a telehealth service an amount equal to the 
amount that would have been paid if the service was furnished without 
the use of a telecommunications system. Because CPT code 99444 is 
currently noncovered, there would be no Medicare payment if this 
service was furnished without the use of a telecommunications system. 
Since this service is noncovered under Medicare, we are not proposing 
to add it to the list of Medicare telehealth services for CY 2016.

[[Page 41784]]

     CPT code 99490 (chronic care management services, at least 
20 minutes of clinical staff time directed by a physician or other 
qualified health care professional, per calendar month, with the 
following required elements: multiple (two or more) chronic conditions 
expected to last at least 12 months, or until the death of the patient; 
chronic conditions place the patient at significant risk of death, 
acute exacerbation/decompensation, or functional decline; comprehensive 
care plan established, implemented, revised, or monitored).
    This service is one that can be furnished without the beneficiary's 
face-to-face presence, and using any number of non-face-to-face means 
of communication. Therefore, the service is not appropriate for 
consideration as a Medicare telehealth service. It is unnecessary to 
add this service to the list of Medicare telehealth services. 
Therefore, we are not proposing to add it to the list of Medicare 
telehealth services for CY 2016.
     CPT codes 99605 (medication therapy management service(s) 
provided by a pharmacist, individual, face-to-face with patient, with 
assessment and intervention if provided; initial 15 minutes, new 
patient); 99606 (medication therapy management service(s) provided by a 
pharmacist, individual, face-to-face with patient, with assessment and 
intervention if provided; initial 15 minutes, established patient); and 
99607 (medication therapy management service(s) provided by a 
pharmacist, individual, face-to-face with patient, with assessment and 
intervention if provided; each additional 15 minutes (list separately 
in addition to code for primary service).
    These codes are noncovered services for which no payment may be 
made under the PFS. Therefore, we are not proposing to add these 
services to the list of Medicare telehealth services for CY 2016.
    In summary, we are proposing to add the following codes to the list 
of Medicare telehealth services beginning in CY 2016 on a category 1 
basis: Prolonged service inpatient CPT codes 99356 and 99357 and ESRD-
related services 90933 through 90936. As indicated above, the prolonged 
service codes can only be billed in conjunction with subsequent 
hospital and subsequent nursing facility codes. Limits of one 
subsequent hospital visit every three days, and one subsequent nursing 
facility visit every thirty days, would continue to apply when the 
services are furnished as telehealth services. For the ESRD related 
services, the required clinical examination of the catheter access site 
must be furnished face-to-face ``hands on'' (without the use of an 
interactive telecommunications system) by a physician, certified nurse 
specialist (CNS), nurse practitioner (NP), or physician's assistant 
(PA).
    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 
2017, these requests must be submitted and received by December 31, 
2015. 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/.
4. Proposal To Amend Sec.  410.78 To Include Certified Registered Nurse 
Anesthetists as Practitioners for Telehealth Services
    Under section 1834(m)(1) of the Act, Medicare makes payment for 
telehealth services furnished by physicians and practitioners. Section 
1834(m)(4)(E) of the Act specifies that, for purposes of furnishing 
Medicare telehealth services, the term ``practitioner'' has the meaning 
given that term in section 1842(b)(18)(C), which includes a certified 
registered nurse anesthetist (CRNA) as defined in section 1861 (bb)(2).
    We initially omitted CRNAs from the list of distant site 
practitioners for telehealth services in the regulation because we did 
not believe these practitioners would furnish any of the service on the 
list of Medicare telehealth services. However, CRNAs in some states are 
licensed to furnish certain services on the telehealth list, including 
E/M services. Therefore, we propose to revise the regulation at Sec.  
410.78(b)(2) to include a CRNA, as described under Sec.  410.69, to the 
list of distant site practitioners who can furnish Medicare telehealth 
services.

K. Incident to Proposals: Billing Physician as the Supervising 
Physician and Ancillary Personnel Requirements

1. Background
    Section 1861(s)(2)(A) of the Act establishes the benefit category 
for services and supplies furnished as ``incident to'' the professional 
services of a physician. The statute specifies that services and 
supplies furnished as an incident to a physician's professional service 
(hereinafter ``incident to services'') are ``of kinds which are 
commonly furnished in physicians' offices and are commonly either 
rendered without charge or included in physicians' bills.'' In addition 
to the requirements of the statute, Sec.  410.26 sets forth specific 
requirements that must be met for physicians and other practitioners to 
bill Medicare for incident to services. Section 410.26(a)(7) limits 
incident to services to those included under section 1861(s)(2)(A) of 
the Act and that are not covered under another benefit category. 
Section 410.26(b) specifies (in part) that in order for services and 
supplies to be paid as incident to services under Medicare Part B, the 
services or supplies must be:
     Furnished in a noninstitutional setting to 
noninstitutional patients.
     An integral, though incidental, part of the service of a 
physician (or other practitioner) in the course of diagnosis or 
treatment of an injury or illness.
     Furnished under direct supervision (as specified under 
Sec.  410.26(a)(2)) of a physician or other practitioner eligible to 
bill and directly receive Medicare payment.
     Furnished by a physician, a practitioner with an incident 
to benefit, or auxiliary personnel.
    In addition to Sec.  410.26, there are regulations specific to each 
type of practitioner who is allowed to bill for incident to services as 
specified in Sec.  410.71(a)(2) (clinical psychologist services), Sec.  
410.74(b) (physician assistants' services), Sec.  410.75(d) (nurse 
practitioners' services), Sec.  410.76(d) (clinical nurse specialists' 
services), and Sec.  410.77(c) (certified nurse-midwives' services). 
When referring to practitioners who can bill for services furnished 
incident to their professional services, we are referring to physicians 
and these practitioners.
    Incident to services are treated as if they were furnished by the 
billing physician or other practitioner for purposes of Medicare 
billing and payment. Consistent with this terminology, in this 
discussion when referring to the physician or other practitioner 
furnishing the service, we are referring to the physician or other 
practitioner who is billing for the incident to service. When we refer 
to the ``auxiliary personnel'' or the person who provides the service, 
we are referring to an individual who is personally performing the 
service or some aspect of it as distinguished from the physician or 
other practitioner who bills for the incident to service.
    Since we treat incident to services as services furnished by the 
billing physician or other practitioner for

[[Page 41785]]

purposes of Medicare billing and payment, payment is made to the 
billing physician or other practitioner under the PFS, and all relevant 
Medicare rules apply including, but not limited to, requirements 
regarding medical necessity, documentation, and billing. Those 
practitioners who can bill Medicare for incident to services are paid 
at their applicable Medicare payment rate as if they personally 
furnished the service. For example, when incident to services are 
billed by a physician, they are paid at 100 percent of the fee schedule 
amount, and when the services are billed by a nurse practitioner or 
clinical nurse specialist, they are paid at 85 percent of the fee 
schedule amount. Payments are subject to the usual deductible and 
coinsurance amounts.
    In the CY 2014 PFS final rule with comment period, we amended Sec.  
410.26 by adding a paragraph (b)(7) to require that, as a condition for 
Medicare Part B payment, all incident to services must be furnished in 
accordance with applicable state law. Additionally, we amended the 
definition of auxiliary personnel at Sec.  410.26(a)(1) to require that 
the individual who provides the incident to services must meet any 
applicable requirements to provide such services (including licensure) 
imposed by the state in which the services are furnished. These 
requirements for compliance with applicable state laws apply to any 
individual providing incident to services as a means to protect the 
health and safety of Medicare beneficiaries in the delivery of health 
care services, and to provide the Medicare program with additional 
recourse for denying or recovering Part B payment for incident to 
services that are not furnished in compliance with state law (78 FR 
74410). Revisions to Sec.  410.26(a)(1) and (b)(7) were intended to 
clarify the longstanding payment policy of paying only for services 
that are furnished in compliance with any applicable state or federal 
requirements. The amended regulations also provide the Medicare program 
with additional recourse for denying or recovering Part B payment for 
incident to services that are not furnished in compliance with 
applicable requirements.
2. Billing Physician as the Supervising Physician
    In addition to the CY 2014 revisions to the regulations for 
incident to services, we believe that additional requirements for 
incident to services should be explicitly and unambiguously stated in 
the regulations. As described in this proposed rule, incident to a 
physician's or other practitioner's professional services means that 
the services or supplies are furnished as an integral, although 
incidental, part of the physician's or other practitioner's personal 
professional services in the course of diagnosis or treatment of an 
injury or illness (Sec.  410.26(b)(2)). Incident to services require 
direct supervision of the auxiliary personnel providing the service by 
the physician or other practitioner (Sec.  410.26(b)(5)).
    We are proposing to revise the regulations specifying the 
requirements for which physicians or other practitioners can bill for 
incident to services. In the CY 2002 PFS final rule, in response to a 
comment seeking clarification regarding what physician billing number 
should be used on the claim form for an incident to service, at 66 FR 
55267, we stated that when a claim is submitted to Medicare under the 
billing number of a physician or other practitioner for an `incident 
to' service, the physician or other practitioner is stating that he or 
she performed the service or directly supervised the auxiliary 
personnel performing the service. Accordingly, the Medicare billing 
number of the ordering physician or other practitioner should not be 
used if that person did not directly supervise the auxiliary personnel.
    Section 410.26(b)(5) currently states that the physician (or other 
practitioner) supervising the auxiliary personnel need not be the same 
physician (or other practitioner) upon whose professional service the 
incident to service is based. To be certain that the incident to 
services furnished to a beneficiary are in fact an integral, although 
incidental, part of the physician's or other practitioner's personal 
professional service that is billed to Medicare, we believe that the 
physician or other practitioner who bills for the incident to service 
must also be the physician or other practitioner who directly 
supervises the service. It has been our position that billing 
practitioners should have a personal role in, and responsibility for, 
furnishing services for which they are billing and receiving payment as 
an incident to their own professional services. This is consistent with 
the requirements that all physicians and billing practitioners attest 
on each Medicare claim that he or she ``personally furnished'' the 
services for which he or she is billing. Without this requirement, 
there could be an insufficient nexus with the physician's or other 
practitioner's services being billed on a claim to Medicare as incident 
to services and the actual services being furnished to the Medicare 
beneficiary by the auxiliary personnel. Therefore, we are proposing to 
amend Sec.  410.26(b)(5) to state that the physician or other 
practitioner who bills for incident to services must also be the 
physician or other practitioner who directly supervises the auxiliary 
personnel who provide the incident to services. Also, to further 
clarify the meaning of the proposed amendment to this regulation, we 
are proposing to remove the last sentence from Sec.  410.26(b)(5) 
specifying that the physician (or other practitioner) supervising the 
auxiliary personnel need not be the same physician (or other 
practitioner) upon whose professional service the incident to service 
is based.
3. Auxiliary Personnel Who Have Been Excluded or Revoked From Medicare
    As a condition of Medicare payment, auxiliary personnel who, under 
the direct supervision of a physician or other practitioner, provide 
incident to services to Medicare beneficiaries must comply with all 
applicable Federal and State laws. This includes not having been 
excluded from Medicare, Medicaid and all other federally funded health 
care programs by the Office of Inspector General. We are proposing to 
amend the regulation to explicitly prohibit auxiliary personnel from 
providing incident to services who have either been excluded from 
Medicare, Medicaid and all other federally funded health care programs 
by the Office of Inspector General or who have had their enrollment 
revoked for any reason. These excluded or revoked individuals are 
already prohibited from providing services to Medicare beneficiaries, 
so this proposed revision is an additional safeguard to ensure that 
these excluded or revoked individuals are not providing incident to 
services and supplies under the direct supervision of a physician or 
other authorized supervising practitioner. These proposed revisions to 
the incident to regulations will provide the Medicare program with 
additional recourse for denying or recovering Part B payment for 
incident to services and supplies that are not furnished in compliance 
with our program requirements.
4. Compliance and Oversight
    We recognize that there are many ways in which compliance with 
these requirements could be consistently and fairly assured across the 
Medicare program. In considering implementation of these proposals, we 
wish to be mindful of the need to minimize or eliminate any 
practitioner administrative burden while at the same time ensuring that 
practitioners are not subjected to unnecessary audits or

[[Page 41786]]

placed at risk of inadvertent non-compliance. Therefore, while we 
believe that the initial responsibility of compliance rests with the 
practitioner, we invite comments through this proposed rule about 
possible approaches we could take to improve our ability ensure that 
incident to services are provided to beneficiaries by qualified 
individuals in a manner consistent with Medicare statute and 
regulations. We invite commenters to consider the options we will 
consider, such as creating new categories of enrollment, implementing a 
mechanism for registration short of full enrollment, requiring the use 
of claim elements such as modifiers to identify the types of 
individuals providing services, or relying on post-payment audits, 
investigations and recoupments by CMS contractors such as Recovery 
Auditors or Program Integrity Contractors. We will consider these 
comments in the course of implementing the proposals we finalize in 
rulemaking for CY 2016, and further, if we decide in the future that 
additional regulations or guidance will be necessary to monitor 
compliance with these or other requirements surrounding incident to 
services.

L. Portable X-ray: Billing of the Transportation Fee

    Portable X-ray suppliers receive a transportation fee for 
transporting portable X-ray equipment to the location where portable X-
rays are taken. If more than one patient at the same location is X-
rayed, the portable X-ray transportation fee is allocated among the 
patients. We have received feedback that some portable x-ray suppliers 
have been operating under the assumption that the prorated 
transportation payment when more than one patient is receiving portable 
X-ray services at the same location refers to only a subset of 
patients. The Medicare Claims Processing Manual (Pub. 100-4, Chapter 
13, Section 90.3) currently states:

    Carriers shall allow only a single transportation payment for 
each trip the portable X-ray supplier makes to a particular 
location. When more than one Medicare patient is X-rayed at the same 
location, e.g., a nursing home, prorate the single fee schedule 
transportation payment among all patients receiving the services. 
For example, if two patients at the same location receive X-rays, 
make one-half of the transportation payment for each.

    In some jurisdictions, Medicare contractors have been allowing the 
portable X-ray transportation fee to be allocated only among Medicare 
Part B beneficiaries. In other jurisdictions, Medicare contractors have 
required the transportation fee to be allocated among all Medicare 
patients (Parts A and B). We believe it would be more appropriate to 
allocate the transportation fee among all patients who receive portable 
X-ray services in a single trip. Medicare should not pay for more than 
its share of the transportation costs for portable X-ray services.
    We are proposing to revise the Medicare Claims Processing Manual 
(Pub. 100-4, Chapter 13, Section 90.3) to remove the word ``Medicare'' 
before ``patient'' in section 90.3. We are also proposing to clarify 
that this subregulatory guidance means that, when more than one patient 
is X-rayed at the same location, the single transportation payment 
under the PFS is to be prorated among all patients (Medicare Parts A 
and B, and non-Medicare) receiving portable X-ray services during that 
trip, regardless of their insurance status.
    For example, for portable x-ray services furnished at a SNF, we 
believe that the transportation fee should be allocated among all 
patients receiving portable X-ray services at the same location in a 
single trip irrespective of whether the patient is in a Part A stay, a 
Part B patient, or not a Medicare beneficiary at all. If the patient is 
in a Part A SNF stay, payment for the allocated portion of the 
transportation fee (and the X-ray) would be the SNF's responsibility. 
For a privately insured patient, it would be the responsibility of that 
patient's insurer. For a Medicare Part B patient, payment would be made 
under Part B for the share of the transportation fee attributable to 
that patient. We welcome comments on this proposal to determine 
Medicare Part B's portion of the transportation payment by prorating 
the single fee among all patients.

M. Technical Correction: Waiver of Deductible for Anesthesia Services 
Furnished on the Same Date as a Planned Screening Colorectal Cancer 
Test

    Section 1833(b)(1) of the Act waives the deductible for colorectal 
cancer screening tests regardless of the code that is billed for the 
establishment of a diagnosis as a result of the test, or the removal of 
tissue or other matter or other procedure that is furnished in 
connection with, as a result of, and in the same clinical encounter as 
the screening test. To implement this statutory provision, we amended 
our regulation at Sec.  410.160 to add to the list of services to which 
the deductible does not apply, beginning January 1, 2011, a surgical 
service furnished in connection with, as a result of, and in the same 
clinical encounter as a planned colorectal cancer screening test. A 
surgical service furnished in connection with, as a result of, and in 
the same clinical encounter as a colorectal cancer screening test means 
a surgical service furnished on the same date as a planned colorectal 
cancer screening test as described in Sec.  410.37.
    In the CY 2015 PFS final rule with comment period, we modified the 
regulatory definition of colorectal cancer screening test with regard 
to colonoscopies to include anesthesia services whether billed as part 
of the colonoscopy service or separately. (See Sec.  410.37(a)(1)(iii) 
of our regulations). In the preamble to the final rule, we stated that 
the statutory waiver of deductible would apply to anesthesia services 
furnished in conjunction with a colorectal cancer screening test even 
when a polyp or other tissue is removed during a colonoscopy (79 FR 
67731). We also indicated that practitioners should report anesthesia 
services with the PT modifier in such circumstances. The final policy 
was implemented for services furnished during CY 2015. While we 
modified the definition of colorectal cancer screening services in the 
regulation at Sec.  410.37(a)(1)(iii) to include anesthesia furnished 
with a screening colonoscopy, we did not make a conforming change to 
our regulations to expressly reflect the inapplicability of the 
deductible to those anesthesia services.
    To better reflect our policy in the regulations, we propose a 
technical correction to amend Sec.  410.160(b)(8) to expressly 
recognize anesthesia services. Specifically, we propose to amend Sec.  
410.160(b)(8) to add ``and beginning January 1, 2015, for an anesthesia 
service,'' following the first use of the phrase ``a surgical service'' 
and to add ``or anesthesia'' following the word ``surgical'' each time 
it is used in the second sentence of Sec.  410.160(b)(8). This 
amendment to our regulation will ensure that both surgical or 
anesthesia services furnished in connection with, as a result of, and 
in the same clinical encounter as a colorectal cancer screening test 
will be exempt from the deductible requirement when furnished on the 
same date as a planned colorectal cancer screening test as described in 
Sec.  410.37.

[[Page 41787]]

III. Other Provisions of the Proposed Regulations

A. Proposed Provisions associated with the Ambulance Fee Schedule

1. Overview of Ambulance Services
a. Ambulance Services
    Under the ambulance fee schedule, the Medicare program pays for 
ambulance transportation services for Medicare beneficiaries when other 
means of transportation are contraindicated by the beneficiary's 
medical condition and all other coverage requirements are met. 
Ambulance services are classified into different levels of ground 
(including water) and air ambulance services based on the medically 
necessary treatment provided during transport.
    These services include the following levels of service:

 For Ground--
++ Basic Life Support (BLS) (emergency and non-emergency)
++ Advanced Life Support, Level 1 (ALS1) (emergency and non-emergency)
++ Advanced Life Support, Level 2 (ALS2)
++ Paramedic ALS Intercept (PI)
++ Specialty Care Transport (SCT)
 For Air--
++ Fixed Wing Air Ambulance (FW)
++ Rotary Wing Air Ambulance (RW)
b. Statutory Coverage of Ambulance Services
    Under sections 1834(l) and 1861(s)(7) of the Act, Medicare Part B 
(Supplemental Medical Insurance) covers and pays for ambulance 
services, to the extent prescribed in regulations, when the use of 
other methods of transportation would be contraindicated by the 
beneficiary's medical condition.
    The House Ways and Means Committee and Senate Finance Committee 
Reports that accompanied the 1965 Social Security Amendments suggest 
that the Congress intended that--
     The ambulance benefit cover transportation services only 
if other means of transportation are contraindicated by the 
beneficiary's medical condition; and
     Only ambulance service to local facilities be covered 
unless necessary services are not available locally, in which case, 
transportation to the nearest facility furnishing those services is 
covered (H.R. Rep. No. 213, 89th Cong., 1st Sess. 37 and Rep. No. 404, 
89th Cong., 1st Sess. Pt 1, 43 (1965)).
    The reports indicate that transportation may also be provided from 
one hospital to another, to the beneficiary's home, or to an extended 
care facility.
c. Medicare Regulations for Ambulance Services
    Our regulations relating to ambulance services are set forth at 42 
CFR part 410, subpart B and 42 CFR part 414, subpart H. Section 
410.10(i) lists ambulance services as one of the covered medical and 
other health services under Medicare Part B. Therefore, ambulance 
services are subject to basic conditions and limitations set forth at 
Sec.  410.12 and to specific conditions and limitations included at 
Sec.  410.40 and Sec.  410.41. Part 414, subpart H, describes how 
payment is made for ambulance services covered by Medicare.
2. Ambulance Extender Provisions
a. Amendment to Section 1834(l)(13) of the Act
    Section 146(a) of the MIPPA amended section 1834(l)(13)(A) of the 
Act to specify that, effective for ground ambulance services furnished 
on or after July 1, 2008 and before January 1, 2010, the ambulance fee 
schedule amounts for ground ambulance services shall be increased as 
follows:
     For covered ground ambulance transports that originate in 
a rural area or in a rural census tract of a metropolitan statistical 
area, the fee schedule amounts shall be increased by 3 percent.
     For covered ground ambulance transports that do not 
originate in a rural area or in a rural census tract of a metropolitan 
statistical area, the fee schedule amounts shall be increased by 2 
percent.
    The payment add-ons under section 1834(l)(13)(A) of the Act have 
been extended several times. Most recently, section 203(a) of the 
Medicare Access and CHIP Reauthorization Act of 2015 (Pub. L. 114-10, 
enacted on April 16, 2015) amended section 1834(l)(13)(A) of the Act to 
extend the payment add-ons through December 31, 2017. Thus, these 
payment add-ons apply to covered ground ambulance transports furnished 
before January 1, 2018. We are proposing to revise Sec.  
414.610(c)(1)(ii) to conform the regulations to this statutory 
requirement. (For a discussion of past legislation extending section 
1834(l)(13) of the Act, please see the CY 2014 PFS final rule with 
comment period (78 FR 74438 through 74439)).
    This statutory requirement is self-implementing. A plain reading of 
the statute requires only a ministerial application of the mandated 
rate increase, and does not require any substantive exercise of 
discretion on the part of the Secretary.
b. Amendment to Section 1834(l)(12) of the Act
    Section 414(c) of the Medicare Prescription Drug, Improvement and 
Modernization Act of 2003 (Pub. L. 108-173, enacted on December 8, 
2003) (MMA) added section 1834(l)(12) to the Act, which specified that, 
in the case of ground ambulance services furnished on or after July 1, 
2004, and before January 1, 2010, for which transportation originates 
in a qualified rural area (as described in the statute), the Secretary 
shall provide for a percent increase in the base rate of the fee 
schedule for such transports. The statute requires this percent 
increase to be based on the Secretary's estimate of the average cost 
per trip for such services (not taking into account mileage) in the 
lowest quartile of all rural county populations as compared to the 
average cost per trip for such services (not taking into account 
mileage) in the highest quartile of rural county populations. Using the 
methodology specified in the July 1, 2004 interim final rule (69 FR 
40288), we determined that this percent increase was equal to 22.6 
percent. As required by the MMA, this payment increase was applied to 
ground ambulance transports that originated in a ``qualified rural 
area,'' that is, to transports that originated in a rural area included 
in those areas comprising the lowest 25th percentile of all rural 
populations arrayed by population density. For this purpose, rural 
areas included Goldsmith areas (a type of rural census tract). This 
rural bonus is sometimes referred to as the ``Super Rural Bonus'' and 
the qualified rural areas (also known as ``super rural'' areas) are 
identified during the claims adjudicative process via the use of a data 
field included in the CMS-supplied ZIP code file.
    The Super Rural Bonus under section 1834(l)(12) of the Act has been 
extended several times. Most recently, section 203(b) of the Medicare 
Access and CHIP Reauthorization Act of 2015 amended section 
1834(l)(12)(A) of the Act to extend this rural bonus through December 
31, 2017. Therefore, we are continuing to apply the 22.6 percent rural 
bonus described above (in the same manner as in previous years) to 
ground ambulance services with dates of service before January 1, 2018 
where transportation originates in a qualified rural area. Accordingly, 
we are proposing to revise Sec.  414.610(c)(5)(ii) to conform the 
regulations to this statutory requirement. (For a discussion of past 
legislation extending section 1834(l)(12) of the Act, please see the CY 
2014 PFS

[[Page 41788]]

final rule with comment period (78 FR 74439 through 74440)).
    This statutory provision is self-implementing. It requires an 
extension of this rural bonus (which was previously established by the 
Secretary) through December 31, 2017, and does not require any 
substantive exercise of discretion on the part of the Secretary.
3. Changes in Geographic Area Delineations for Ambulance Payment
a. Background
    In the CY 2015 PFS final rule with comment period (79 FR 67744 
through 67750) as amended by the correction issued December 31, 2014 
(79 FR 78716 through 78719), we adopted, beginning in CY 2015, the 
revised OMB delineations as set forth in OMB's February 28, 2013 
bulletin (No. 13-01) and the most recent modifications of the Rural-
Urban Commuting Area (RUCA) codes for purposes of payment under the 
ambulance fee schedule. With respect to the updated RUCA codes, we 
designated any census tracts falling at or above RUCA level 4.0 as 
rural areas. In addition, we stated that none of the super rural areas 
would lose their status upon implementation of the revised OMB 
delineations and updated RUCA codes. After publication of the CY 2015 
PFS final rule with comment period and the correction, we received 
feedback and comments from stakeholders expressing concerns about the 
implementation of the new geographic area delineations finalized in 
that rule (as corrected). In response to these concerns, we are 
clarifying our implementation of the revised OMB delineations and the 
updated RUCA codes in CY 2015, and reproposing the implementation of 
the revised OMB delineations and updated RUCA codes for CY 2016 and 
subsequent calendar years. We are requesting public comment on our 
proposals, as further discussed in section III A.3.b. of this proposed 
rule.
b. Provisions of the Proposed Rule
    Under section 1834(l)(2)(C) of the Act, the Secretary is required 
to consider appropriate regional and operational differences in 
establishing the ambulance fee schedule. Historically, the Medicare 
ambulance fee schedule has used the same geographic area designations 
as the acute care hospital inpatient prospective payment system (IPPS) 
and other Medicare payment systems to take into account appropriate 
regional (urban and rural) differences. This use of consistent 
geographic standards for Medicare payment purposes provides for 
consistency across the Medicare program.
    The geographic areas used under the ambulance fee schedule 
effective in CY 2007 were based on OMB standards published on December 
27, 2000 (65 FR 82228 through 82238), Census 2000 data, and Census 
Bureau population estimates for 2007 and 2008 (OMB Bulletin No. 10-02). 
For a discussion of OMB's delineation of Core-Based Statistical Areas 
(CBSAs) and our implementation of the CBSA definitions under the 
ambulance fee schedule, we refer readers to the preamble of the CY 2007 
Ambulance Fee Schedule proposed rule (71 FR 30358 through 30361) and 
the CY 2007 PFS final rule with comment period (71 FR 69712 through 
69716). On February 28, 2013, OMB issued OMB Bulletin No. 13-01, which 
established revised delineations for Metropolitan Statistical Areas 
(MSAs), Micropolitan Statistical Areas, and Combined Statistical Areas, 
and provided guidance on the use of the delineations of these 
statistical areas. A copy of this bulletin may be obtained at http://www.whitehouse.gov/sites/default/files/omb/bulletins/2013/b-13-01.pdf. 
According to OMB, this bulletin provides the delineations of all 
Metropolitan Statistical Areas, Metropolitan Divisions, Micropolitan 
Statistical Areas, Combined Statistical Areas, and New England City and 
Town Areas in the United States and Puerto Rico based on the standards 
published on June 28, 2010, in the Federal Register (75 FR 37246-37252) 
and Census Bureau data. OMB defines an MSA as a CBSA associated with at 
least one urbanized area that has a population of at least 50,000, and 
a Micropolitan Statistical Area (referred to in this discussion as a 
Micropolitan Area) as a CBSA associated with at least one urban cluster 
that has a population of at least 10,000 but less than 50,000 (75 FR 
37252). Counties that do not qualify for inclusion in a CBSA are deemed 
``Outside CBSAs.'' We note that, when referencing the new OMB 
geographic boundaries of statistical areas, we are using the term 
``delineations'' consistent with OMB's use of the term (75 FR 37249).
    Although the revisions OMB published on February 28, 2013 were not 
as sweeping as the changes made when we adopted the CBSA geographic 
designations for CY 2007, the February 28, 2013 OMB bulletin did 
contain a number of significant changes. For example, there are new 
CBSAs, urban counties that became rural, rural counties that became 
urban, and existing CBSAs that were split apart. As we stated in the CY 
2015 PFS final rule with comment period (79 FR 67745), we reviewed our 
findings and impacts relating to the new OMB delineations, and found no 
compelling reason to further delay implementation. We stated in the CY 
2015 final rule with comment period, and we continue to believe, that 
it is important for the ambulance fee schedule to use the latest labor 
market area delineations available as soon as reasonably possible to 
maintain a more accurate and up-to-date payment system that reflects 
the reality of population shifts.
    Additionally, in the FY 2015 IPPS final rule (79 FR 49952), we 
adopted OMB's revised delineations to identify urban areas and rural 
areas for purposes of the IPPS wage index. For the reasons discussed in 
this section above, we believe that it would be appropriate to adopt 
the same geographic area delineations for use under the ambulance fee 
schedule as are used under the IPPS and other Medicare payment systems. 
Thus, we are proposing to continue implementation of the new OMB 
delineations as described in the February 28, 2013 OMB Bulletin No. 13-
01 for CY 2016 and subsequent CYs to more accurately identify urban and 
rural areas for ambulance fee schedule payment purposes. We continue to 
believe that the updated OMB delineations more realistically reflect 
rural and urban populations, and that the use of such delineations 
under the ambulance fee schedule would result in more accurate payment. 
Under the ambulance fee schedule, consistent with our current 
definitions of urban and rural areas (Sec.  414.605), in CY 2016 and 
subsequent CYs, MSAs would continue to be recognized as urban areas, 
while Micropolitan and other areas outside MSAs, and rural census 
tracts within MSAs (as discussed below in this section), would continue 
to be recognized as rural areas. We invite public comments on this 
proposal.
    In addition to the OMB's statistical area delineations, the current 
geographic areas used in the ambulance fee schedule also are based on 
rural census tracts determined under the most recent version of the 
Goldsmith Modification. These rural census tracts within MSAs are 
considered rural areas under the ambulance fee schedule (see Sec.  
414.605). For certain rural add-on payments, section 1834(l) of the Act 
requires that we use the most recent version of the Goldsmith 
Modification to determine rural census tracts within MSAs. In the CY 
2007 PFS final rule with comment period (71 FR 69714 through 69716), we 
adopted the most recent (at that time) version of the

[[Page 41789]]

Goldsmith Modification, designated as RUCA codes. RUCA codes use 
urbanization, population density, and daily commuting data to 
categorize every census tract in the country. For a discussion about 
RUCA codes, we refer the reader to the CY 2007 PFS final rule with 
comment period (71 FR 69714 through 69716) and the CY 2015 PFS final 
rule with comment period (79 FR 67745 through 67746). As stated 
previously, on February 28, 2013, OMB issued OMB Bulletin No. 13-01, 
which established revised delineations for Metropolitan Statistical 
Areas, Micropolitan Statistical Areas, and Combined Statistical Areas, 
and provided guidance on the use of the delineations of these 
statistical areas. Several modifications of the RUCA codes were 
necessary to take into account updated commuting data and the revised 
OMB delineations. We refer readers to the U.S. Department of 
Agriculture's Economic Research Service Web site for a detailed listing 
of updated RUCA codes found at http://www.ers.usda.gov/data-products/rural-urban-commuting-area-codes.aspx. The updated RUCA code 
definitions were introduced in late 2013 and are based on data from the 
2010 decennial census and the 2006-2010 American Community Survey. 
Information regarding the American Community Survey can be found at 
http://www.ers.usda.gov/data-products/rural-urban-commuting-area-codes.aspx. We believe that the most recent RUCA codes provide more 
accurate and up-to-date information regarding the rurality of census 
tracts throughout the country. Accordingly, we are proposing to 
continue to use the most recent modifications of the RUCA codes for CY 
2016 and subsequent CYs, to recognize levels of rurality in census 
tracts located in every county across the nation, for purposes of 
payment under the ambulance fee schedule. If we continue to use the 
most recent RUCA codes, many counties that are designated as urban at 
the county level based on population would continue to have rural 
census tracts within them that would be recognized as rural areas 
through our use of RUCA codes.
    As we stated in the CY 2015 PFS final rule with comment period (79 
FR 67745), the 2010 Primary RUCA codes are as follows:
    (1) Metropolitan area core: primary flow with an urbanized area 
(UA).
    (2) Metropolitan area high commuting: primary flow 30 percent or 
more to a UA.
    (3) Metropolitan area low commuting: primary flow 10 to 30 percent 
to a UA.
    (4) Micropolitan area core: primary flow within an Urban Cluster of 
10,000 to 49,999 (large UC).
    (5) Micropolitan high commuting: primary flow 30 percent or more to 
a large UC.
    (6) Micropolitan low commuting: primary flow 10 to 30 percent to a 
large UC.
    (7) Small town core: primary flow within an Urban Cluster of 2,500 
to 9,999 (small UC).
    (8) Small town high commuting: primary flow 30 percent or more to a 
small UC.
    (9) Small town low commuting: primary flow 10 to 30 percent to a 
small UC.
    (10) Rural areas: primary flow to a tract outside a UA or UC.
    Based on this classification, and consistent with our current 
policy as set forth in the CY 2015 PFS final rule with comment period 
(79 FR 67745), we are proposing to continue to designate any census 
tracts falling at or above RUCA level 4.0 as rural areas for purposes 
of payment for ambulance services under the ambulance fee schedule. As 
discussed in the CY 2007 PFS final rule with comment period (71 FR 
69715) and the CY 2015 PFS final rule with comment period (79 FR 
67745), the Office of Rural Health Policy within the Health Resources 
and Services Administration (HRSA) determines eligibility for its rural 
grant programs through the use of the RUCA code methodology. Under this 
methodology, HRSA designates any census tract that falls in RUCA level 
4.0 or higher as a rural census tract. In addition to designating any 
census tracts falling at or above RUCA level 4.0 as rural areas, under 
the updated RUCA code definitions, HRSA has also designated as rural 
census tracts those census tracts with RUCA codes 2 or 3 that are at 
least 400 square miles in area with a population density of no more 
than 35 people. We refer readers to HRSA's Web site at ftp://ftp.hrsa.gov/ruralhealth/Eligibility2005.pdf for additional 
information. Consistent with the HRSA guidelines discussed above and 
the policy we adopted in the CY 2015 PFS final rule with comment period 
(79 FR 67750), we are proposing for CY 2016 and subsequent CYs, to 
designate as rural areas those census tracts that fall at or above RUCA 
level 4.0. We continue to believe that this HRSA guideline accurately 
identifies rural census tracts throughout the country, and thus would 
be appropriate to apply for ambulance fee schedule payment purposes.
    Also, consistent with the policy we finalized in the CY 2015 PFS 
final rule with comment period (79 FR 67749), we would not designate as 
rural areas those census tracts that fall in RUCA levels 2 or 3 that 
are at least 400 square miles in area with a population density of no 
more than 35 people. We have determined that it is not feasible to 
implement this guideline due to the complexities of identifying these 
areas at the ZIP code level. We do not have sufficient information 
available to identify the ZIP codes that fall in these specific census 
tracts. Also, payment under the ambulance fee schedule is based on the 
ZIP codes; therefore, if the ZIP code is predominantly metropolitan but 
has some rural census tracts, we do not split the ZIP code areas to 
distinguish further granularity to provide different payments within 
the same ZIP code. We believe that payment for all ambulance 
transportation services at the ZIP code level provides for a more 
consistent and administratively feasible payment system. For example, 
if we were to pay based on ZIP codes for some areas and counties or 
census tracts for other areas, there are circumstances where ZIP codes 
cross county or census tract borders and where counties or census 
tracts cross ZIP code borders. Such overlaps in geographic designations 
would complicate our ability to appropriately assign ambulance 
transportation services to geographic areas for payment under the 
ambulance fee schedule. Therefore, under the ambulance fee schedule, we 
would not designate as rural areas those census tracts that fall in 
RUCA levels 2 or 3 that are at least 400 square miles in area with a 
population density of no more than 35 people.
    We invite public comments on our proposals, as discussed in this 
proposed rule, to continue to use the updated RUCA codes under the 
ambulance fee schedule for CY 2016 and subsequent CYs.
    As we stated in the CY 2015 PFS proposed rule (79 FR 40374), the 
adoption of the most current OMB delineations and the updated RUCA 
codes would affect whether certain areas are recognized as rural or 
urban. The distinction between urban and rural is important for 
ambulance payment purposes because urban and rural transports are paid 
differently. The determination of whether a transport is urban or rural 
is based on the point of pick-up for the transport; thus, a transport 
is paid differently depending on whether the point of pick-up is in an 
urban or a rural area. During claims processing, a geographic 
designation of urban, rural, or super rural is assigned to each claim 
for an ambulance

[[Page 41790]]

transport based on the point of pick-up ZIP code that is indicated on 
the claim.
    The continued implementation of the revised OMB delineations and 
the updated RUCA codes would continue to affect whether or not 
transports would be eligible for rural adjustments under the ambulance 
fee schedule statute and regulations. For ground ambulance transports 
where the point of pick-up is in a rural area, the mileage rate is 
increased by 50 percent for each of the first 17 miles (Sec.  
414.610(c)(5)(i)). For air ambulance services where the point of pick-
up is in a rural area, the total payment (base rate and mileage rate) 
is increased by 50 percent (Sec.  414.610(c)(5)(i)).
    Section 1834(l)(12) of the Act (as amended most recently by section 
203(b) of the Medicare Access and CHIP Reauthorization Act of 2015) 
specifies that, for services furnished during the period July 1, 2004 
through December 31, 2017, the payment amount for the ground ambulance 
base rate is increased by a ``percent increase'' (Super Rural Bonus) 
where the ambulance transport originates in a ``qualified rural area,'' 
which is a rural area that we determine to be in the lowest 25th 
percentile of all rural populations arrayed by population density (also 
known as a ``super rural area''). We implement this Super Rural Bonus 
in Sec.  414.610(c)(5)(ii). As discussed in section III.A.2.b. of this 
proposed rule, we are proposing to revise Sec.  414.610(c)(5)(ii) to 
conform the regulations to this statutory requirement. As we stated in 
the CY 2015 PFS proposed rule (79 FR 40374) and final rule with comment 
period (79 FR 67746), adoption of the revised OMB delineations and the 
updated RUCA codes would have no negative impact on ambulance 
transports in super rural areas, as none of the current super rural 
areas would lose their status due to the revised OMB delineations and 
the updated RUCA codes. Furthermore, under section 1834(l)(13) of the 
Act (as amended most recently by section 203(a) of the Medicare Access 
and CHIP Reauthorization Act of 2015), for ground ambulance transports 
furnished through December 31, 2017, transports originating in rural 
areas are paid based on a rate (both base rate and mileage rate) that 
is 3 percent higher than otherwise is applicable. (See also Sec.  
414.610(c)(1)(ii)). As discussed in section III.A.2.a. of this proposed 
rule, we are proposing to revise Sec.  414.610(c)(1)(ii) to conform the 
regulations to this statutory requirement.
    Similar to our discussion in the CY 2015 PFS proposed rule (79 FR 
40374) and final rule with comment period (79 FR 67746), if we continue 
to use OMB's revised delineations and the updated RUCA codes for CY 
2016 and subsequent CYs, ambulance providers and suppliers that pick up 
Medicare beneficiaries in areas that would be Micropolitan or otherwise 
outside of MSAs based on OMB's revised delineations or in a rural 
census tract of an MSA based on the updated RUCA codes (but were within 
urban areas under the geographic delineations in effect in CY 2014) 
would continue to experience increases in payment for such transports 
(as compared to the CY 2014 geographic delineations) because they may 
be eligible for the rural adjustment factors discussed above in this 
section. In addition, those ambulance providers and suppliers that pick 
up Medicare beneficiaries in areas that would be urban based on OMB's 
revised delineations and the updated RUCA codes (but were previously in 
Micropolitan Areas or otherwise outside of MSAs, or in a rural census 
tract of an MSA under the geographic delineations in effect in CY 2014) 
would continue to experience decreases in payment for such transports 
(as compared to the CY 2014 geographic delineations) because they would 
no longer be eligible for the rural adjustment factors discussed above 
in this section.
    The continued use of the revised OMB delineations and the updated 
RUCA codes for CY 2016 and subsequent CYs would mean the continued 
recognition of urban and rural boundaries based on the population 
migration that occurred over a 10-year period, between 2000 and 2010. 
As discussed above in this section, we are proposing to continue to use 
the updated RUCA codes to identify rural census tracts within MSAs, 
such that any census tracts falling at or above RUCA level 4.0 would 
continue to be designated as rural areas. In order to determine which 
ZIP codes are included in each such rural census tract, we are 
proposing to continue to use the ZIP code approximation file developed 
by HRSA. This file includes the 2010 RUCA code designation for each ZIP 
code and can be found at http://www.ers.usda.gov/data-products/rural-urban-commuting-area-codes.aspx. If ZIP codes are added over time to 
the USPS ZIP code file (and thus are not included in the 2010 ZIP code 
approximation file provided to us by HRSA) or if ZIP codes are revised 
over time, we would determine the appropriate urban/rural designation 
for such ZIP code based on any updates provided on the HRSA and OMB Web 
sites, located at http://www.ers.usda.gov/data-products/rural-urban-commuting-area-codes.aspx and http://www.whitehouse.gov/sites/default/files/omb/bulletins/2013/b-13-01.pdf.
    Based on the April 2015 USPS ZIP code file that we are using in 
this proposed rule to assess the impacts of the revised geographic 
delineations, there are a total of 42,925 ZIP codes in the U.S. Table 
16 sets forth an analysis of the number of ZIP codes that changed 
urban/rural status in each U.S. state and territory after CY 2014 due 
to our implementation of the revised OMB delineations and the updated 
RUCA codes beginning in CY 2015, using the April 2015 USPS ZIP code 
file, the revised OMB delineations, and the updated RUCA codes 
(including the RUCA ZIP code approximation file discussed above). Based 
on this data, the geographic designations for approximately 95.22 
percent of ZIP codes are unchanged by OMB's revised delineations and 
the updated RUCA codes. Similar to the analysis set forth in the CY 
2015 PFS final rule with comment period, as corrected (79 FR 78716 
through 78719), as reflected in Table 16, more ZIP codes have changed 
from rural to urban (1,600 or 3.73 percent) than from urban to rural 
(451 or 1.05 percent). In general, it is expected that ambulance 
providers and suppliers in 451 ZIP codes within 42 states, may continue 
to experience payment increases under the revised OMB delineations and 
the updated RUCA codes, as these areas have been redesignated from 
urban to rural. The state of Ohio has the most ZIP codes that changed 
from urban to rural with a total of 54, or 3.63 percent. Ambulance 
providers and suppliers in 1,600 ZIP codes within 44 states and Puerto 
Rico may continue to experience payment decreases under the revised OMB 
delineations and the updated RUCA codes, as these areas have been 
redesignated from rural to urban. The state of West Virginia has the 
most ZIP codes that changed from rural to urban (149 or 15.92 percent). 
As discussed above, these findings are illustrated in Table 16.

[[Page 41791]]



                                 Table 16--ZIP Code Analysis Based on OMB's Revised Delineations and Updated RUCA Codes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                           Percentage of
                                             Total ZIP       Total ZIP     Percentage of     Total ZIP     Percentage of     Total ZIP       total ZIP
            State/Territory *                  codes       codes changed     total ZIP     codes changed     total ZIP       codes not       codes not
                                                          rural to urban       codes      urban to rural       codes          changed         changed
--------------------------------------------------------------------------------------------------------------------------------------------------------
AK......................................             276               0            0.00               0            0.00             276          100.00
AL......................................             854              43            5.04               8            0.94             803           94.03
AR......................................             725              19            2.62               9            1.24             697           96.14
AS......................................               1               0            0.00               0            0.00               1          100.00
AZ......................................             569              21            3.69               7            1.23             541           95.08
CA......................................            2723              85            3.12              43            1.58            2595           95.30
CO......................................             677               4            0.59               9            1.33             664           98.08
CT......................................             445              37            8.31               0            0.00             408           91.69
DC......................................             303               0            0.00               0            0.00             303          100.00
DE......................................              99               6            6.06               0            0.00              93           93.94
EK......................................              63               0            0.00               0            0.00              63          100.00
EM......................................             857              35            4.08               4            0.47             818           95.45
FL......................................            1513              69            4.56               9            0.59            1435           94.84
FM......................................               4               0            0.00               0            0.00               4          100.00
GA......................................            1032              47            4.55               4            0.39             981           95.06
GU......................................              21               0            0.00               0            0.00              21          100.00
HI......................................             143               9            6.29               3            2.10             131           91.61
IA......................................            1080              20            1.85               3            0.28            1057           97.87
ID......................................             335               0            0.00               0            0.00             335          100.00
IL......................................            1629              68            4.17               7            0.43            1554           95.40
IN......................................            1000              33            3.30              20            2.00             947           94.70
KY......................................            1030              30            2.91               5            0.49             995           96.60
LA......................................             739              69            9.34               1            0.14             669           90.53
MA......................................             751               8            1.07               9            1.20             734           97.74
MD......................................             630              69           10.95               0            0.00             561           89.05
ME......................................             505               5            0.99              12            2.38             488           96.63
MH......................................               2               0            0.00               0            0.00               2          100.00
MI......................................            1185              22            1.86              21            1.77            1142           96.37
MN......................................            1043              31            2.97               7            0.67            1005           96.36
MP......................................               3               0            0.00               0            0.00               3          100.00
MS......................................             541              14            2.59               1            0.18             526           97.23
MT......................................             411               0            0.00               3            0.73             408           99.27
NC......................................            1102              87            7.89              10            0.91            1005           91.20
ND......................................             419               2            0.48               0            0.00             417           99.52
NE......................................             632               7            1.11               6            0.95             619           97.94
NH......................................             292               0            0.00               2            0.68             290           99.32
NJ......................................             748               1            0.13               2            0.27             745           99.60
NM......................................             438               4            0.91               2            0.46             432           98.63
NV......................................             257               1            0.39               2            0.78             254           98.83
NY......................................            2246              84            3.74              42            1.87            2120           94.39
OH......................................            1487              23            1.55              54            3.63            1410           94.82
OK......................................             791               5            0.63               7            0.88             779           98.48
OR......................................             496              26            5.24               9            1.81             461           92.94
PA......................................            2244             129            5.75              38            1.69            2077           92.56
PR......................................             177              21           11.86               0            0.00             156           88.14
PW......................................               2               0            0.00               0            0.00               2          100.00
RI......................................              91               2            2.20               1            1.10              88           96.70
SC......................................             544              47            8.64               2            0.37             495           90.99
SD......................................             418               0            0.00               1            0.24             417           99.76
TN......................................             814              52            6.39              12            1.47             750           92.14
TX......................................            2726              64            2.35              32            1.17            2630           96.48
UT......................................             360               2            0.56               0            0.00             358           99.44
VA......................................            1277              98            7.67              19            1.49            1160           90.84
VI......................................              16               0            0.00               0            0.00              16          100.00
VT......................................             309               3            0.97               0            0.00             306           99.03
WA......................................             744              17            2.28               6            0.81             721           96.91
WI......................................             919              19            2.07               5            0.54             895           97.39
WK......................................             711              11            1.55               7            0.98             693           97.47
WM......................................             342               2            0.58               3            0.88             337           98.54
WV......................................             936             149           15.92               3            0.32             784           83.76
WY......................................             198               0            0.00               1            0.51             197           99.49
                                         ---------------------------------------------------------------------------------------------------------------
    TOTALS..............................          42,925            1600            3.73             451            1.05          40,874           95.22
--------------------------------------------------------------------------------------------------------------------------------------------------------
* ZIP code analysis includes U.S. States and Territories (FM--Federated States of Micronesia, GU--Guam, MH--Marshall Islands, MP--Northern Mariana
  Islands, PW--Palau, AS--American Samoa; VI--Virgin Islands; PR--Puerto Rico). Missouri is divided into east and west regions due to work distribution
  of the Medicare Administrative Contractors (MACs): EM--East Missouri, WM--West Missouri. Johnson and Wyandotte counties in Kansas were changed as of
  January 2010 to East Kansas (EK) and the rest of the state is West Kansas (WK).


[[Page 41792]]

    For more detail on the impact of our proposals, in addition to 
Table 16, the following files are available through the Internet on the 
Ambulance Fee Schedule Web site at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AmbulanceFeeSchedule/index.html: ZIP 
Codes By State Changed From Urban To Rural: ZIP Codes By State Changed 
From Rural To Urban: List of ZIP Codes With RUCA Code Designations: and 
Complete List of ZIP Codes.
    As discussed in the CY 2015 PFS final rule with comment period (79 
FR 67750), we believe the most current OMB statistical area 
delineations, coupled with the updated RUCA codes, more accurately 
reflect the contemporary urban and rural nature of areas across the 
country, and thus we believe the use of the most current OMB 
delineations and RUCA codes under the ambulance fee schedule will 
enhance the accuracy of ambulance fee schedule payments. As we 
discussed in the CY 2015 PFS final rule with comment period (79 FR 
67750), we considered, as alternatives, whether it would be appropriate 
to delay the implementation of the revised OMB delineations and the 
updated RUCA codes, or to phase in the implementation of the new 
geographic delineations over a transition period for those ZIP codes 
losing rural status. We determined that it would not be appropriate to 
implement a delay or a transition period for the revised geographic 
delineations for the reasons set forth in the CY 2015 PFS final rule. 
Similarly, we considered whether a delay in implementation or a 
transition period would be appropriate for CY 2016 and subsequent CYs. 
We continue to believe that it is important to use the most current OMB 
delineations and RUCA codes available as soon as reasonably possible to 
maintain a more accurate and up-to-date payment system that reflects 
the reality of population shifts. Because we believe the revised OMB 
delineations and updated RUCA codes more accurately identify urban and 
rural areas and enhance the accuracy of the Medicare ambulance fee 
schedule, we do not believe a delay in implementation or a transition 
period would be appropriate for CY 2016 and subsequent CYs. Areas that 
have lost their rural status and become urban have become urban because 
of recent population shifts. We believe it is important to base payment 
on the most accurate and up-to-date geographic area delineations 
available. Furthermore, we believe a delay in implementation of the 
revised OMB delineations and the updated RUCA codes would be a 
disadvantage to the ambulance providers or suppliers experiencing 
payment increases based on these updated and more accurate OMB 
delineations and RUCA codes. Thus, we are not proposing a delay in 
implementation or a transition period for the revised OMB delineations 
and updated RUCA codes for CY 2016 and subsequent CYs.
    We invite public comments on our proposals to continue 
implementation of the revised OMB delineations as set forth in OMB's 
February 28, 2013 bulletin (No. 13-01) and the most recent 
modifications of the RUCA codes as discussed above for CY 2016 and 
subsequent CYs for purposes of payment under the ambulance fee 
schedule. In addition, we invite public comments on any alternative 
methods for implementing the revised OMB delineations and the updated 
RUCA codes.
4. Proposed Changes to the Ambulance Staffing Requirement
    Under section 1861(s)(7) of the Act, Medicare Part B covers 
ambulance services when the use of other methods of transportation is 
contraindicated by the individual's medical condition, but only to the 
extent provided in regulations. Section 410.41(b)(1) requires that a 
vehicle furnishing ambulance services at the Basic Life Support (BLS) 
level must be staffed by at least two people, one of whom must meet the 
following requirements: (1) be certified as an emergency medical 
technician by the state or local authority where the services are 
furnished, and (2) be legally authorized to operate all lifesaving and 
life-sustaining equipment on board the vehicle.
    Section 410.41(b)(2) states that, for vehicles furnishing ambulance 
services at the Advanced Life Support (ALS) level, ambulance providers 
and suppliers must meet the staffing requirements for vehicles 
furnishing services at the BLS level. In addition, one of the two staff 
members must be certified as a paramedic or an emergency medical 
technician, by the state or local authority where the services are 
being furnished, to perform one or more ALS services. These staffing 
requirements are further explained in the Medicare Benefit Policy 
Manual (Pub. No. 100-02), Chapter 10 (see sections 10.1.2 and 30.1.1)
    In its July 24, 2014 Management Implication Report, 13-0006, 
entitled ``Medicare Requirements for Ambulance Crew Certification,'' 
the Office of Inspector General (OIG) discussed its investigation of 
ambulance suppliers in a state that requires a higher level of training 
than Medicare requires for ambulance staff. In some instances, OIG 
found that second crew members: (1) possessed a lower level of training 
than required by state law, or (2) had purchased or falsified 
documentation to establish their credentials. The OIG expressed its 
concern that our current regulations and manual provisions do not set 
forth licensure or certification requirements for the second crew 
member. The OIG was informed by federal prosecutors that prosecuting 
individuals who had purchased or falsified documentation to establish 
their credentials would be difficult because Medicare had no 
requirements regarding the second ambulance staff member and the 
ambulance transports complied with the relevant Medicare regulations 
and manual provisions for ambulance staffing.
    The OIG recommended that Medicare revise its regulations and manual 
provisions related to ambulance staffing to parallel the standard used 
for vehicle requirements at Sec.  410.41(a), which requires that 
ambulances be equipped in ways that comply with state and local laws. 
Specifically, the OIG recommended that our regulation and manual 
provisions addressing ambulance vehicle staffing should indicate that, 
for Medicare to cover ambulance services furnished to a Medicare 
beneficiary, the ambulance crew must meet the requirements currently 
set forth in Sec.  410.41(b) or the state and local requirements, 
whichever are more stringent. Currently, Sec.  410.41(b) does not 
require that ambulance vehicle staff comply with all applicable state 
and local laws. We agree with OIG's concerns and believe that requiring 
ambulance staff to also comply with state and local requirements would 
enhance the quality and safety of ambulance services furnished to 
Medicare beneficiaries.
    Accordingly, we are proposing to revise Sec.  410.41(b) to require 
that all Medicare-covered ambulance transports must be staffed by at 
least two people who meet both the requirements of applicable state and 
local laws where the services are being furnished, and the current 
Medicare requirements under Sec.  410.41(b). We believe that this 
would, in effect, require both of the required ambulance vehicle staff 
to also satisfy any applicable state and local requirements that may be 
more stringent than those currently set forth at Sec.  410.41(b), 
consistent with OIG's recommendation. In addition, we are proposing to 
revise the definition of Basic Life Support (BLS) in Sec.  414.605 to 
include the proposed revised staffing requirements discussed above for

[[Page 41793]]

Sec.  410.41(b). These proposed revisions to Sec.  410.41(b) and Sec.  
414.605 would account for differences in individual state or local 
staffing and licensure requirements, better accommodating state or 
local laws enacted to ensure beneficiaries' health and safety. 
Likewise, these proposed revisions would strengthen the federal 
government's ability to prosecute violations associated with such 
requirements and recover inappropriately or fraudulently received funds 
from ambulance companies found to be operating in violation of state or 
local laws. Furthermore, as discussed above, we believe that these 
proposals would enhance the quality and safety of ambulance services 
provided to Medicare beneficiaries.
    In addition, we are proposing to revise Sec.  410.41(b) and the 
definition of Basic Life Support (BLS) in Sec.  414.605 to clarify 
that, for BLS vehicles, at least one of the staff members must be 
certified at a minimum as an emergency medical technician-basic (EMT-
Basic), which we believe would more clearly state our current policy. 
Currently, these regulations require that, for BLS vehicles, one staff 
member be certified as an EMT (Sec.  410.41(b)) or EMT-Basic (Sec.  
414.605). These proposed revisions to the regulations do not change our 
current policy, but clarify that one of the BLS vehicle staff members 
must be certified at the minimum level of EMT-Basic, but may also be 
certified at a higher level, for example, EMT-intermediate or EMT 
paramedic.
    Finally, we are proposing to revise the definition of Basic Life 
Support (BLS) in Sec.  414.605 to delete the last sentence, which sets 
forth examples of certain state law provisions. This sentence (``For 
example, only in some states is an EMT-Basic permitted to operate 
limited equipment on board the vehicle, assist more qualified personnel 
in performing assessments and interventions, and establish a peripheral 
intravenous (IV) line''), has been included in the definition of BLS 
since the ambulance fee schedule was finalized in 2002 (67 FR 9100, 
Feb. 27, 2002). Because state laws may change over the course of time, 
we are concerned that this sentence may not accurately reflect the 
status of the relevant state laws over time. Therefore, we are 
proposing to delete the last sentence of this definition. Furthermore, 
we do not believe that the examples set forth in this sentence are 
necessary to convey the definition of BLS for Medicare coverage and 
payment purposes.
    We invite public comments on our proposals to revise the ambulance 
vehicle staffing requirements in Sec.  410.41(b) and Sec.  414.605 as 
discussed above. If we finalize these proposals, we will revise our 
manual provisions addressing ambulance vehicle staffing as appropriate, 
consistent with our finalized policy.

B. Chronic Care Management (CCM) Services for Rural Health Clinics 
(RHCs) and Federally Qualified Health Centers (FQHCs)

1. Background
a. Primary Care and Care Coordination
    Over the last several years, we have been increasing our focus on 
primary care, and have explored ways in which care coordination can 
improve health outcomes and reduce expenditures.
    In the CY 2012 PFS proposed rule (76 FR 42793 through 42794, and 
42917 through 42920), and the CY 2012 PFS final rule (76 FR 73063 
through 73064), we discussed how primary care services have evolved to 
focus on preventing and managing chronic disease, and how refinements 
for payment for post-discharge care management services could improve 
care management for a beneficiary's transition from the hospital to the 
community setting. We acknowledged that the care coordination included 
in services such as office visits does not always describe adequately 
the non-face-to-face care management work involved in primary care and 
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 skilled nursing facility (SNF) 
stay. We initiated a public discussion on primary care and care 
coordination services, and stated that we would consider payment 
enhancements in future rulemaking as part of a multiple year strategy 
exploring the best means to encourage primary care and care 
coordination services.
    In the CY 2013 PFS proposed rule (77 FR 44774 through 44775), we 
noted several initiatives and programs designed to improve payment for, 
and encourage long-term investment in, care management services. These 
include the Medicare Shared Savings Program; testing of the Pioneer 
Accountable Care Organization (ACO) and the Advance Payment ACO model; 
the Primary Care Incentive Payment (PCIP) Program; the patient-centered 
medical home model in the Multi-payer Advanced Primary Care Practice 
(MAPCP) Demonstration; the Federally Qualified Health Center (FQHC) 
Advanced Primary Care Practice demonstration; the Comprehensive Primary 
Care (CPC) initiative; and the HHS Strategic Framework on Multiple 
Chronic Conditions. We also noted that we were monitoring the progress 
of the AMA Chronic Care Coordination Workgroup in developing codes to 
describe care transition and care coordination activities, and proposed 
refinement of the PFS payment for post discharge care management 
services.
    In the CY 2013 PFS final rule (77 FR 68978 through 68994), we 
finalized policies for payment of Transitional Care Management (TCM) 
services, effective January 1, 2013. We adopted two CPT codes (99495 
and 99496) to report physician or qualifying nonphysician practitioner 
care management services for a patient following a discharge from an 
inpatient hospital or SNF, an outpatient hospital stay for observation 
or partial hospitalization services, or partial hospitalization in a 
community mental health center. As a condition for receiving TCM 
payment, a face-to-face visit was required.
    In the CY 2014 PFS proposed rule (78 FR 43337 through 43343), we 
proposed to establish separate payment under the PFS for chronic care 
management (CCM) services and proposed a scope of services and 
requirements for billing and supervision. In the CY 2014 PFS final rule 
(78 74414 through 74427), we finalized policies to establish separate 
payment under the PFS for CCM services furnished to patients with 
multiple chronic conditions that are expected to last at least 12 
months or until the death of the patient, and that place the patient at 
significant risk of death, acute exacerbation/decompensation, or 
functional decline. In the CY 2015 PFS final rule (79 FR 67715 through 
67730), additional billing requirements were finalized, including the 
requirement to furnish CCM services using a certified electronic health 
record or other electronic technology. Payment for CCM services was 
effective beginning on January 1, 2015, for physicians billing under 
the PFS.
b. RHC and FQHC Payment Methodologies
    A RHC or FQHC visit must be a face-to-face encounter between the 
patient and a RHC or FQHC practitioner (physician, nurse practitioner, 
physician assistant, certified nurse midwife, clinical psychologist, or 
clinical social worker, and under certain conditions, an RN or LPN 
furnishing care to a homebound RHC or FQHC patient) during which time 
one or more RHC or FQHC services are furnished. A TCM service can also 
be a RHC or FQHC visit. A Diabetes Self-Management Training

[[Page 41794]]

(DSMT) service or a Medical Nutrition Therapy (MNT) service furnished 
by a certified DSMT or MNT provider may also be a FQHC visit.
    RHCs are paid an all-inclusive rate (AIR) for medically-necessary 
medical and mental health services, and qualified preventive health 
services furnished on the same day (with some exceptions). In general, 
the A/B MAC calculates the AIR for each RHC by dividing total allowable 
costs by the total number of visits for all patients. Productivity, 
payment limits, and other factors are also considered in the 
calculation. Allowable costs must be reasonable and necessary and may 
include practitioner compensation, overhead, equipment, space, 
supplies, personnel, and other costs incident to the delivery of RHC 
services. The AIR is subject to a payment limit, except for those RHCs 
that have an exception to the payment limit. Services furnished 
incident to a RHC professional service are included in the per-visit 
payment and are not billed separately.
    FQHCs have also been paid under the AIR methodology; however, on 
October 1, 2014, FQHCs began to transition to a FQHC PPS system in 
which they are paid based on the lesser of a national encounter-based 
rate or their total adjusted charges. The FQHC PPS rate is adjusted for 
geographic differences in the cost of services by the FQHC geographic 
adjustment factor. It is also increased by 34 percent when a FQHC 
furnishes care to a patient that is new to the FQHC or to a beneficiary 
receiving an Initial Preventive Physical Examination (IPPE) or an 
Annual Wellness Visit (AWV). Both the AIR and FQHC PPS payment rates 
were designed to reflect all the services that a RHC or FQHC furnishes 
in a single day, regardless of the length or complexity of the visit or 
the number or type of practitioners seen.
c. Payment for CCM Services
    To address the concern that the non-face-to-face care management 
work involved in furnishing comprehensive, coordinated care management 
for certain categories of beneficiaries is not adequately paid for as 
part of an office visit, beginning on January 1, 2015, practitioners 
billing under the PFS are paid separately for CCM services under CPT 
code 99490 when CCM service requirements are met.
    RHCs and FQHCs cannot bill under the PFS for RHC or FQHC services 
and individual practitioners working at RHCs and FQHCs cannot bill 
under the PFS for RHC or FQHC services while working at the RHC or 
FQHC. While many RHCs and FQHCs coordinate services within their own 
facilities, and may sometimes help to coordinate services outside their 
facilities, the type of structured care management services that are 
now payable under the PFS for patients with multiple chronic 
conditions, particularly for those who are transitioning from a 
hospital or SNF back into their communities, are not included in the 
RHC or FQHC payment. This proposed rule proposes to provide an 
additional payment for the costs of CCM services that are not already 
captured in the RHC AIR or the FQHC PPS payment, beginning on January 
1, 2016. Services that are currently being furnished and paid under the 
RHC AIR or FQHC PPS payment methodology will not be affected by the 
ability of the RHC or FQHC to receive payment for additional services 
that are not included in the RHC AIR or FQHC PPS.
d. Solicitation of Comments on Payment for CCM Services in RHCs and 
FQHCs
    In the May 2, 2014 ``Medicare Program: Prospective Payment System 
for Federally Qualified Health Centers; Changes to Contracting Policies 
for Rural Health Clinics; and Changes to Clinical Laboratory 
Improvement Amendments of 1988 Enforcement Actions for Proficiency 
Testing Referral; Final Rule'' (79 FR 25447), we discussed ways to 
achieve the Affordable Care Act goal of furnishing integrated and 
coordinated services, and specifically noted the CCM services program 
beginning in 2015 for physicians billing under the PFS. We encouraged 
RHCs and FQHCs to review the CCM services information in the CY 2014 
PFS final rule with comment period and submit comments to us on how the 
CCM services payment could be adapted for RHCs and FQHCs to promote 
integrated and coordinated care in RHCs and FQHCs.
    All of the comments we received in response to this request were 
strongly supportive of payment to RHCs and FQHCs for CCM services. Some 
commenters were concerned that the requirements for electronic exchange 
of information and interoperability with other providers would be 
difficult for some entities, and that some patients do not have the 
resources to receive secure messages via the internet. One commenter 
suggested that the additional G-codes for CCM services should be 
sufficient to cover the associated costs of documenting care 
coordination in FQHCs, and another commenter suggested that we develop 
a risk-adjusted CCM services fee. We also received subsequent 
recommendations from the National Association of Rural Health Clinics 
on various payment options for CCM services in RHCs. These comments 
were very helpful in forming the basis for this proposal, and we thank 
the commenters for their comments.
2. Proposed Payment Methodology and Billing for CCM Services in RHCs 
and FQHCs
a. Proposed Payment Methodology and Billing Requirements
    The requirements we are proposing for RHCs and FQHCs to receive 
payment for CCM services are consistent with those finalized in the CY 
2015 PFS final rule with comment period for practitioners billing under 
the PFS and are summarized in Table 17. We propose to establish 
payment, beginning on January 1, 2016, for RHCs and FQHCs who furnish a 
minimum of 20 minutes of qualifying CCM services during a calendar 
month to patients with multiple (two or more) chronic conditions that 
are expected to last at least 12 months or until the death of the 
patient, and that place the patient at significant risk of death, acute 
exacerbation/decompensation, or functional decline. The CPT code 
descriptor sets forth the eligibility guidelines for CCM services and 
will serve as the basis for potential medical review. In accordance 
with both the CPT instructions and Medicare policy, only one 
practitioner can bill this code per month, and there are restrictions 
regarding the billing of other overlapping care management services 
during the same service period. The following section discusses these 
aspects of our proposal in more detail and additional information will 
be communicated in subregulatory guidance.
    We propose that a RHC or FQHC can bill for CCM services furnished 
by, or incident to, a RHC or FQHC physician, nurse practitioner, 
physician assistant, or certified nurse midwife for a RHC or FQHC 
patient once per month, and that only one CCM payment per beneficiary 
per month can be paid. If another practice furnishes CCM services to a 
beneficiary, the RHC or FQHC cannot bill for CCM services for the same 
beneficiary for the same service period. We also propose that TCM and 
any other program that provides additional payment for care management 
services (outside of the RHC AIR or FQHC PPS payment) cannot be billed 
during the same service period.
    For purposes of meeting the minimum 20-minute requirement, the RHC 
or FQHC could count the time of only one practitioner or auxiliary 
staff (for example, a nurse, medical assistant, or

[[Page 41795]]

other individual working under the supervision of a RHC or FQHC 
physician or other practitioner) at a time, and could not count 
overlapping intervals such as when two or more RHC or FQHC 
practitioners are meeting about the patient. Only conversations that 
fall under the scope of CCM services would be included towards the time 
requirement.
    We noted that for billing under the PFS, the care coordination 
included in services such as office visits do not always describe 
adequately the non-face-to-face care management work involved in 
primary care. We also noted that payment for office visits 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. In considering CCM 
payment for RHCs and FQHCs, we believe that the non-face-to-face time 
required to coordinate care is also not captured in the RHC AIR or the 
FQHC PPS payment, particularly for the rural and/or low-income 
populations served by RHCs and FQHCs. Allowing separate payment for CCM 
services in RHCs and FQHCs is intended to reflect the additional 
resources necessary for the unique services that are required in order 
to furnish CCM services that are not already captured in the RHC AIR or 
the FQHC PPS payment.
    We propose that payment for CCM services be based on the PFS 
national average non-facility payment rate when CPT code 99490 is 
billed alone or with other payable services on a RHC or FQHC claim. 
(For the first quarter of 2015, the national average payment rate is 
$42.91 per beneficiary per calendar month.) CCM payment to RHCs and 
FQHCs would be based on the PFS amount, but would be paid as part of 
the RHC and FQHC benefit, using the CPT code to identify that the 
requirements for payment are met and a separate payment should be made. 
We also propose to waive the RHC and FQHC face-to-face requirements 
when CCM services are furnished to a RHC or FQHC patient. Coinsurance 
would be applied as applicable to FQHC claims, and coinsurance and 
deductibles would apply as applicable to RHC claims. RHCs and FQHCs 
would continue to be required to meet the RHC and FQHC Conditions of 
Participation and any additional RHC or FQHC payment requirements. We 
intend to provide detailed billing instructions in subregulatory 
guidance following publication of a final rule.
b. Other Options Considered
    We considered adding CCM services as a RHC or FQHC covered stand-
alone service and removing the RHC/FQHC policy requiring a face-to-face 
visit requirement for this service. Under this option, payment for RHCs 
would be at the AIR, payment for FQHCs would be the lesser of total 
charges or the PPS rate, and if CCM services are furnished on the same 
day as another payable medical visit, only one visit would be paid. We 
are not proposing this payment option because it would result in a 
significant overpayment if no other services were furnished on the same 
day, and would result in no additional payment if furnished on the same 
day as another medical visit.
    We also considered allowing RHCs and FQHCs to carve out CCM 
services and bill them separately to the PFS. We are not proposing this 
payment option because CCM services are a RHC and FQHC service and only 
non-RHC/FQHC services can be billed through the PFS.
    We also considered developing a modifier that could be added to the 
claim for additional payment when CCM services are furnished. We are 
not proposing this option because it would require that payment for CCM 
services be made only when furnished along with a billable service that 
qualifies as an RHC or FQHC service.
    We also considered establishing payment for CCM costs on a 
reasonable cost basis though the cost report. We are not proposing this 
option because payment for CCM services through the cost report would 
complicate coinsurance and/or deductible accountability, whereas it is 
more administratively feasible to apply coinsurance and/or deductible 
on a RHC/FQHC claim, as applicable. For example, section 1833(a)(3) of 
the Act specifies that influenza and pneumococcal vaccines and their 
administration are exempt from payment at 80 percent of reasonable 
costs and payment to RHCs and FQHCs for such services is at 100 percent 
of reasonable cost. Since influenza and pneumococcal vaccines and their 
administration are not subject to copayment, it is administratively 
feasible to pay these services through the cost report.
3. Proposed Requirements for CCM Payment in RHCs and FQHCs
a. Proposed Beneficiary Eligibility for CCM Services
    Consistent with beneficiary eligibility requirements under the PFS, 
we propose that RHCs and FQHCs receive payment for furnishing CCM 
services to patients with multiple chronic conditions that are expected 
to survive at least 12 months or until the death of the patient, and 
that place the patient at significant risk of death, acute 
exacerbation/decompensation, or functional decline. RHCs and FQHCs are 
encouraged to focus on patients with high acuity and high risk when 
furnishing CCM services to eligible patients, including those who are 
returning to a community setting following discharge from a hospital or 
SNF.
b. Proposed Beneficiary Agreement Requirements
    Not all patients who are eligible for separately payable CCM 
services may necessarily want these services to be provided, and some 
patients who receive CCM services may wish to discontinue them. A 
beneficiary who declines to receive CCM services from the RHC or FQHC, 
or who accepts the services and then chooses to revoke his/her 
agreement, would continue to be able to receive care from the RHC or 
FQHC and receive any care management services that are currently being 
furnished under the RHC AIR or FQHC PPS payment system.
    Consistent with beneficiary notification and consent requirements 
under the PFS, we propose that the following requirements be met before 
the RHC or FQHC can furnish or bill for CCM services:
     The eligible beneficiary must be informed about the 
availability of CCM services from the RHC or FQHC and provide his or 
her written agreement to have the services provided, including the 
electronic communication of the patient's information with other 
treating providers as part of care coordination. This would include a 
discussion with the patient about what CCM services are, how they 
differ from any care management services the RHC or FQHC currently 
offers, how these services are accessed, how the patient's information 
will be shared among others, that a non RHC or FQHC cannot furnish or 
bill for CCM services during the same calendar month that the RHC or 
FQHC furnishes CCM services, the applicability of coinsurance even when 
CCM services are not delivered face-to-face in the RHC or FQHC, and 
that any care management services that are currently provided will 
continue even if the patient does not agree to have CCM services 
provided.
     The RHC or FQHC must document in the patient's medical 
record that all of the CCM services were explained and offered to the 
patient, and note the patient's decision to accept these services.

[[Page 41796]]

     At the time the agreement is obtained, the eligible 
beneficiary must be informed that the agreement for CCM services could 
be revoked by the beneficiary at any time either verbally or in 
writing, and the RHC or FQHC practitioner must explain the effect of a 
revocation of the agreement for CCM services. If the revocation occurs 
during a CCM 30-day period, the revocation would be effective at the 
end of that period. The eligible beneficiary must also be informed that 
the RHC or FQHC is able to be separately paid for these services during 
the 30-day period only if no other practitioner or eligible entity, 
including another RHC or FQHC that is not part of the RHC's or FQHC's 
organization, has already billed for this service. Since only one CCM 
payment can be paid per beneficiary per month, the RHC or FQHC would 
need to ask the patient if they are already receiving CCM services from 
another practitioner. Revocation by the beneficiary of the agreement 
must also be noted by recording the date of the revocation in the 
beneficiary's medical record and by providing the beneficiary with 
written confirmation that the RHC or FQHC would not be providing CCM 
services beyond the current 30-day period. A beneficiary who has 
revoked the agreement for CCM services from a RHC or FQHC may choose 
instead to receive these services from a different practitioner 
(including another RHC or FQHC), beginning at the conclusion of the 30-
day period.
     The RHC or FQHC must provide a written or electronic copy 
of the care plan to the beneficiary and record this in the 
beneficiary's electronic medical record.
c. Proposed Scope of CCM Services in RHCs and FQHCs
    We propose that all of the following scope of service requirements 
must be met to bill for CCM services:
     Initiation of CCM services during a comprehensive 
Evaluation/Management (E/M), AWV, or IPPE visit. The time spent 
furnishing these services would not be included in the 20 minute 
monthly minimum required for CCM billing.
     Continuity of care with a designated RHC or FQHC 
practitioner with whom the patient is able to get successive routine 
appointments.
     Care management for chronic conditions, including 
systematic assessment of a patient's medical, functional, and 
psychosocial needs; system-based approaches to ensure timely receipt of 
all recommended preventive care services; medication reconciliation 
with review of adherence and potential interactions; and oversight of 
patient self-management of medications.
     A patient-centered plan of care document created by the 
RHC or FQHC practitioner furnishing CCM services in consultation with 
the patient, caregiver, and other key practitioners treating the 
patient to assure that care is provided in a way that is congruent with 
patient choices and values. The plan would be a comprehensive plan of 
care for all health issues based on a physical, mental, cognitive, 
psychosocial, functional and environmental (re)assessment and an 
inventory of resources and supports. It would typically include, but 
not be limited to, the following elements: problem list, expected 
outcome and prognosis, measurable treatment goals, symptom management, 
planned interventions, medication management, community/social services 
ordered, how the services of agencies and specialists unconnected to 
the practice will be directed/coordinated, the individuals responsible 
for each intervention, requirements for periodic review and, when 
applicable, revision, of the care plan. A complete list of problems, 
medications, and medication allergies would be in the electronic health 
record to inform the care plan, care coordination, and ongoing clinical 
care.
     Creation of an electronic care plan that would be 
available 24 hours a day and 7 days a week to all practitioners within 
the RHC or FQHC who are furnishing CCM services whose time counts 
towards the time requirement for billing the CCM code, and to other 
practitioners and providers, as appropriate, who are furnishing care to 
the beneficiary, to address a patient's urgent chronic care needs. No 
specific electronic solution or format is required to meet this scope 
of service element. However, we encourage RHCs and FQHCs who wish to 
learn more about currently available electronic standards for care 
planning to refer to the proposed rulemaking for the 2015 Edition of 
Health Information Technology Certification Criteria, which includes a 
proposal to enable users of certified health IT to create and receive 
care plan information in accordance with the C-CDA Release 2.0 standard 
(80 FR 16842).
     Management of care transitions within health care 
including referrals to other clinicians, visits following a patient 
visit to an emergency department, and visits following discharges from 
hospitals and SNFs. The RHC or FQHC must be able to facilitate 
communication of relevant patient information through electronic 
exchange of a summary care record with other health care providers 
regarding these transitions. The RHC or FQHC must also have qualified 
personnel who are available to deliver transitional care services to a 
patient in a timely way to reduce the need for repeat visits to 
emergency departments and readmissions to hospitals and SNFs.
     Coordination with home and community based clinical 
service providers required to support a patient's psychosocial needs 
and functional deficits. Communication to and from home and community 
based providers regarding these clinical patient needs must be 
documented in the RHC's or FQHC's medical record system.
     Secure messaging, internet or other asynchronous non-face-
to-face consultation methods for a patient and caregiver to communicate 
with the provider regarding the patient's care in addition to the use 
of the telephone. We would note that the faxing of information would 
not meet this requirement. These methods would be required to be 
available, but would not be required to be used by every practitioner 
or for every patient receiving CCM services.
d. Proposed Electronic Health Records (EHR) Requirements
    We believe that the use of EHR technology that allows data sharing 
is necessary to assure that RHCs and FQHCs can effectively coordinate 
services with other practitioners for patients with multiple chronic 
conditions. Therefore, we propose the following requirements:
     Certified health IT must be used for the recording of 
demographic information, health-related problems, medications, and 
medication allergies; a clinical summary record; and other scope of 
service requirements that reference a health or medical record.
     RHCs and FQHCs must use technology certified to the 
edition(s) of certification criteria that is, at a minimum, acceptable 
for the EHR Incentive Programs as of December 31st of the year 
preceding each CCM payment year to meet the following core technology 
capabilities: structured recording of demographics, problems, 
medications, medication allergies, and the creation of a structured 
clinical summary. For example, technology used to furnish CCM services 
beginning on January 1, 2016, would be required to meet, at a minimum, 
the requirements included in the 2014 Edition certification criteria. 
For the purposes of the scope of services, we refer to technology 
meeting these requirements as ``CCM Certified Technology.''

[[Page 41797]]

     Applicable HIPAA standards would apply to electronic 
sharing of patient information.

 Table 17--Summary of Proposed CCM Scope of Service Elements and Billing
                              Requirements
------------------------------------------------------------------------
      CCM Scope of service/billing
              requirements                    Health IT requirements
------------------------------------------------------------------------
Initiation of CCM services at an AWV,    None.
 IPPE, or a comprehensive E/M visi.
Structured recording of demographics,    Structured recording of
 problems, medications, medication        demographics, problems,
 allergies, and the creation of a         medications, medication
 structured clinical summary record. A    allergies, and creation of
 full list of problems, medications and   structured clinical summary
 medication allergies in the EHR must     records using CCM certified
 inform the care plan, care               technology.
 coordination, and ongoing clinical
 care.
Access to CCM services 24/7 (providing   None.
 the beneficiary with a means to make
 timely contact with the RHC or FQHC to
 address his or her urgent chronic care
 needs regardless of the time of day or
 day of the week.
Continuity of care with a designated     None.
 RHC or FQHC practitioner with whom the
 beneficiary is able to get successive
 routine appointment.
CCM services for chronic conditions      None.
 including systematic assessment of the
 beneficiary's medical, functional, and
 psychosocial needs; system-based
 approaches to ensure timely receipt of
 all recommended preventive care
 services; medication reconciliation
 with review of adherence and potential
 interactions; and oversight of
 beneficiary self-management of
 medication.
Creation of a patient-centered care      Must at least electronically
 plan based on a physical, mental,        capture care plan information;
 cognitive, psychosocial, functional      make this information
 and environmental (re)assessment and     available on a 24/7 basis to
 an inventory of resources and            all practitioners within the
 supports; a comprehensive care plan      RHC or FQHC whose time counts
 for all health issues. Share the care    towards the time requirement
 plan as appropriate with other           for the practice to bill for
 practitioners and providers.             CCM services; and share care
                                          plan information
                                          electronically (other than by
                                          fax) as appropriate with other
                                          practitioners, providers, and
                                          caregivers.
Provide the beneficiary with a written   Document provision of the care
 or electronic copy of the care plan      plan as required to the
 and document its provision in the        beneficiary in the EHR using
 electronic medical record.               CCM certified technology.
Management of care transitions between   Format clinical summaries
 and among health care providers and      according to CCM certified
 settings, including referrals to other   technology. Not required to
 clinicians; follow-up after an           use a specific tool or service
 emergency department visit; and follow-  to exchange/transmit clinical
 up after discharges from hospitals,      summaries, as long as they are
 skilled nursing facilities or other      transmitted electronically
 health care facilities.                  (other than by fax).
Coordination with home and community     Communication to and from home
 based clinical service providers.        and community based providers
                                          regarding the patient's
                                          psychosocial needs and
                                          functional deficits must be
                                          documented in the patient's
                                          medical record using CCM
                                          certified technology.
Enhanced opportunities for the           None.
 beneficiary and any caregiver to
 communicate with the RHC or FQHC
 regarding the beneficiary's care
 through not only telephone access, but
 also through the use of secure
 messaging, internet or other
 asynchronous non face-to-face
 consultation methods.
Beneficiary consent--Inform the          ...............................
 beneficiary of the availability of CCM
 services and obtain his or her written
 agreement to have the services
 provided, including authorization for
 the electronic communication of his or
 her medical information with other
 treating providers.
Document in the beneficiary's medical    ...............................
 record that all of the CCM services
 were explained and offered, and note
 the beneficiary's decision to accept
 or decline these services.
Document the beneficiary's written       Document the beneficiary's
 consent and authorization in the EHR     written consent and
 using CCM certified technology.          authorization in the EHR using
                                          CCM certified technology.
Beneficiary consent--Inform the          None.
 beneficiary of the right to stop the
 CCM services at any time (effective at
 the end of the calendar month) and the
 effect of a revocation of the
 agreement on CCM services.
Beneficiary consent--Inform the          None.
 beneficiary that only one practitioner
 can furnish and be paid for these
 services during a calendar month.
------------------------------------------------------------------------

    We invite public comments on all aspects of the proposed payment 
methodology and billing for CCM services in RHCs and FQHCs, the 
proposed CCM requirements for RHCs and FQHCs, and any other aspect of 
our proposal.

C. Healthcare Common Procedure Coding System (HCPCS) Coding for Rural 
Health Clinics (RHCs)

1. RHC Payment Methodology and Billing Requirements
    RHCs are paid an all-inclusive rate (AIR) per visit for medically 
necessary primary health services and qualified preventive health 
services furnished face-to-face by a RHC practitioner to a Medicare 
beneficiary. The all-inclusive payment system was designed to minimize 
reporting requirements, and as such, the rate includes all costs 
associated with the services that a RHC furnishes in a single day to a 
Medicare

[[Page 41798]]

beneficiary, regardless of the length or complexity of the visit or the 
number or type of RHC practitioners seen. Except for certain preventive 
services that are not subject to coinsurance requirements, it has not 
been necessary for RHCs to submit reporting of medical and procedure 
codes, such as level I and level II of the HCPCS, on claims for 
services that were furnished during the visit to determine Medicare 
payment. Generally, the services reported using the appropriate site of 
service revenue code on a RHC claim receives payment under the AIR, 
with coinsurance and deductible applied based upon the associated 
charges on that line, notwithstanding other Medicare requirements.
    Historically, billing instructions for RHCs and Federally Qualified 
Health Centers (FQHCs) have been similar. Beginning on April 1, 2005, 
through December 31, 2010, RHCs and FQHCs were no longer required to 
report HCPCS when billing for RHC and FQHC services rendered during an 
encounter, absent a few exceptions. CMS Transmittal 371, dated November 
19, 2004, eliminated HCPCS coding for FQHCs and eliminated the 
additional line item reporting of preventive services for RHCs and 
FQHCs for claims with dates of service on or after April 1, 2005. CMS 
Transmittal 1719, dated April 24, 2009, effective October 1, 2009, 
required RHCs and FQHCs to report HCPCS codes for a few services, such 
as certain preventive services eligible for a waiver of deductible, 
services subject to frequency limits, and services eligible for 
payments in addition to the all-inclusive rate.
    Section 1834(o)(1)(B) of the Act, as added by the Affordable Care 
Act, required that FQHCs begin reporting services using HCPCS codes to 
develop and implement the FQHC PPS. Since January 1, 2011, FQHCs have 
been required to report all services furnished during an encounter by 
specifically listing the appropriate HCPCS code(s) for each line item, 
along with the site of service revenue code(s), when billing Medicare. 
As of October 1, 2014, HCPCS coding is used to calculate payment for 
FQHCs that are paid under the FQHC PPS.
    Section 4104 of the Affordable Care Act waived the coinsurance and 
deductible for the initial preventive physical examination (IPPE), the 
annual wellness visit (AWV), and other Medicare covered preventive 
services recommended by the United States Preventive Services Task 
Force (USPSTF) with a grade of A or B. Since January 1, 2011, HCPCS 
coding has been required for these preventive services when reported by 
RHCs. When billing for an approved preventive service, RHCs must report 
an additional line with the appropriate site of service revenue code 
with the approved preventive service HCPCS code and the associated 
charges. Although HCPCS coding is currently required for approved 
preventive services on RHC claims, HCPCS coding is not used to 
determine RHC payment.
2. Proposed Requirement for Reporting of HCPCS Coding for All Services 
Furnished by RHCs During a Medicare Visit
    For payment under Medicare Part B, the statute requires health 
transactions to be exchanged electronically, subject to certain 
exceptions, using standards specified by the Secretary. Specifically, 
section 1862(a)(22) of the Act requires that no payment may be made 
under part A or part B for any expenses incurred for items or services, 
subject to exceptions under section 1862(h), for which a claim is 
submitted other than in an electronic form specified by the Secretary. 
Further, section 1173 of the Act, added by section 262 of the Health 
Insurance Portability and Accountability Act of 1996 (HIPAA), requires 
the Secretary to adopt standards for transactions, and data elements 
for such transactions, to enable health information to be exchanged 
electronically, that are appropriate for transactions. These include 
but are not limited to health claims or equivalent encounter 
information. As a result of the HIPAA amendments, HHS adopted 
regulations pertaining to data standards for health care related 
transactions. The regulations at 45 CFR 160.103 define a covered entity 
to include a provider of medical or health services (as defined in 
section 1861(s) of the Act), and define the types of standard 
transactions. When conducting a transaction, under 45 CFR 162.1000, a 
covered entity must use the applicable medical data code sets described 
in Sec.  162.1002 that are valid at the time the health care is 
furnished, and these regulations define the standard medical data code 
sets adopted by the Secretary as HCPCS and CPT (Current Procedural 
Terminology- Fourth Edition) for physician services and other health 
care services.
    Under section 1861(s)(2)(E) of the Act, a RHC is a supplier of 
``medical or health services.'' As such, our regulations require these 
covered entities to report a standard medical code set for electronic 
health care transactions, although our program instructions have 
directed RHCs to submit HCPCS codes only for preventive services. We 
believe reporting of HCPCS coding for all services furnished by a RHC 
would be consistent with the health transactions requirements, and 
would provide useful information on RHC patient characteristics, such 
as level of acuity and frequency of services furnished, and the types 
of services being furnished by RHCs. This information would also allow 
greater oversight of the program and inform policy decisions.
    We propose that all RHCs must report all services furnished during 
an encounter using standardized coding systems, such as level I and 
level II of the HCPCS, for dates of service on or after January 1, 
2016. In accordance with section 1862(h) of the Act, in limited 
situations RHCs that are unable to submit electronic claims and RHCs 
with fewer than 10 full time equivalent employees are exempt from 
submitting claims electronically. We propose that RHCs exempt from 
electronic reporting under 1862(h) of the Act must also report all 
services furnished during an encounter using HCPCS coding via paper 
claims for dates of services on or after January 1, 2016. This proposal 
would necessitate new billing practices for such RHCs, but we believe 
there would be no significant burden for the limited number of RHCs 
exempt from electronic billing.
    Under this proposal, a HCPCS code would be reported along with the 
presently required Medicare revenue code for each service furnished by 
the RHC to a Medicare patient. Although HCPCS coding is currently used 
to determine FQHC payment under the FQHC PPS, under this proposal, RHCs 
would continue to be paid under the AIR and there would be no change in 
their payment methodology.
    Accordingly, we are proposing to remove the requirement at Sec.  
405.2467(b) pertaining to HCPCS coding for FQHCs and redesignate 
paragraphs (c) and (d) as paragraphs (b) and (c), respectively. We are 
also proposing to add a new paragraph (g)(3) to Sec.  405.2462 to 
require FQHCs and RHCs, whether or not exempt from electronic reporting 
under Sec.  424.32(d)(3), to report on Medicare claims all service(s) 
furnished during each FQHC and RHC visit (as defined in Sec.  405.2463) 
using HCPCS and other codes as required.
    We propose to require reporting of HCPCS coding for all services 
furnished by RHCs to Medicare beneficiaries effective for dates of 
service on or after January 1, 2016. We are aware that many RHCs 
already record this information through their billing software or 
electronic health record systems; however, we recognize there may be 
some RHCs that need to make

[[Page 41799]]

changes in their systems. We invite RHCs to submit comments on the 
feasibility of updating their billing systems to meet this 
implementation date of January 1, 2016.
    As part of the implementation of the HCPCS coding requirement, we 
plan to provide instructions on how RHCs are to report HCPCS and other 
coding and clarify other appropriate billing procedures through program 
instruction. CMS' Medicare claims processing system would be revised to 
accept the addition of the new RHC reporting requirements effective 
January 1, 2016.

D. Payment to Grandfathered Tribal FQHCs That Were Provider-Based 
Clinics on or Before April 7, 2000

1. Background
a. Health Services to American Indians and Alaskan Natives (AI/AN)
    There is a special government-to-government relationship between 
the federal government and federally recognized tribes based on U.S. 
treaties, laws, Supreme Court decisions, Executive Orders and the U.S. 
Constitution. This government-to-government relationship forms the 
basis for federal health services to American Indians/Alaska Natives 
(AI/AN) in the U.S.
    In 1976, the Indian Health Care Improvement Act (IHCIA, P.L. 94-
437) amended the statute to permit payment by Medicare and Medicaid for 
services provided to AI/ANs in Indian Health Service (IHS) and tribal 
health care facilities that meet the applicable requirements. Under 
this authority, Medicare services to AI/ANs may be furnished by IHS 
operated facilities and programs and tribally-operated facilities and 
programs under Title I or Title V of the Indian Self Determination 
Education Assistance Act, as amended (ISDEAA, P.L 93-638).
    According to the IHS Year 2015 Profile, the IHS healthcare delivery 
system currently consists of 46 hospitals, with 28 of those hospitals 
operated by the IHS and 18 of them operated by tribes under the ISDEAA.
    Payment rates for inpatient and outpatient medical care furnished 
by the IHS and tribal facilities is set annually by the IHS under the 
authority of sections 321(a) and 322(b) of the Public Health Service 
(PHS) Act (42 U.S.C. 248 and 249(b)), Public Law 83-568 (42 U.S.C. 
2001(a)), and the Indian Health Care Improvement Act (IHCIA) (25 U.S.C. 
1601 et seq.), based on the previous year's cost reports from federal 
and tribal hospitals. The 1976 IHCIA provided the authority for CMS 
(then HCFA) to pay IHS for its hospital services to Medicare eligible 
patients, and in 1978 CMS agreed to use a Medicare all-inclusive 
payment rate for IHS hospitals and IHS hospital-based clinics.
    There is an outpatient visit rate for Medicare visits in Alaska and 
an outpatient visit rate for Medicare visits in the lower 48 States. 
The Medicare outpatient rate is only applicable for those IHS or tribal 
facilities that meet the definition of a provider-based department as 
described at Sec.  413.65(a), or a ``grandfathered'' facility as 
described at Sec.  413.65(m). For calendar year 2015, the Medicare 
outpatient encounter rate is $564 for Alaska and $307 for the rest of 
the country (80 FR 18639, April 7, 2015).
b. Provider-Based Entities and the ``Grandfathering'' Provision
    In 2000, we adopted regulations at Sec.  413.65 that established 
criteria for facilities to be considered provider-based to a hospital 
for Medicare payment purposes. The provider-based rules apply to 
facilities located both on and off the main hospital campus for which 
provider-based status is sought.
    In the CY 2001 Hospital Outpatient PPS final rule with comment 
period (65 FR 18507), we addressed comments on the proposed provider-
based rules. In regard to IHS facilities, commenters expressed concern 
that the proposed rule would undermine the ISDEAA contracting and 
compacting relationships between the IHS and tribes because provider-
based clinics must be clinically and administratively integrated into 
the hospital, and a tribe that assumes the operation of a provider-
based clinic but not the operation of the hospital would not be able to 
meet this requirement. They were also concerned that the proposed 
proximity requirements would threaten the status of many IHS and tribal 
facilities that frequently were located in distant remote areas.
    In response to these comments and the special provisions of law 
referenced above governing health care for IHS and the tribes, we 
recognized the special relationship between tribes and the United 
States government, and did not apply the general provider-based 
criteria to IHS and tribally-operated facilities. The regulations 
currently include a grandfathering provision at Sec.  413.65(m) for IHS 
and tribal facilities that were provider-based to a hospital on or 
prior to April 7, 2000. This section states that facilities and 
organizations operated by the IHS or tribes will be considered to be 
departments of hospitals operated by the IHS or tribes if, on or before 
April 7, 2000, they furnished only services that were billed as if they 
had been furnished by a department of a hospital operated by the IHS or 
a tribe and they are:
     Owned and operated by the IHS;
     Owned by the tribe but leased from the tribe by the IHS 
under the ISDEAA in accordance with applicable regulations and policies 
of the IHS in consultation with tribes; or
     Owned by the IHS but leased and operated by the tribe 
under the ISDEAA in accordance with applicable regulations and policies 
of the IHS in consultation with tribes.
    Under the authority of the ISDEAA, a tribe may assume control of an 
IHS hospital and the provider-based clinics affiliated with the 
hospital, or may only assume responsibility of the provider-based 
clinic. On August 11, 2003, we issued a letter to Trailblazer Health 
Enterprises, LLC, stating that changes in the status of a hospital or 
facility from IHS to tribal operation, or vice versa, or the 
realignment of a facility from one IHS or tribal hospital to another 
IHS or tribal hospital, would not affect the facility's grandfathered 
status if the resulting configuration is one which would have qualified 
for grandfathering under Sec.  413.65(m) if it had been in effect on 
April 7, 2000.
    The Medicare Conditions of Participation (CoPs) for Medicare-
participating hospitals at Sec.  482.12 require administrative and 
clinical integration between a hospital and its clinics, departments, 
and provider-based entities. A tribal clinic billing under an IHS 
hospital's CMS Certification Number (CCN), without any additional 
administrative or clinical relationship with the IHS hospital, could 
put that hospital at risk for non-compliance with the CoPs.
    Consequently, we believe that a different structure is needed to 
maintain access to care for AI/AN populations served by these hospitals 
and clinics, while also ensuring that these facilities are in 
compliance with our health and safety rules. The FQHC program may 
provide an alternative structure that meets the needs of these tribal 
clinics and the populations they serve, while also ensuring the IHS 
hospitals are not at risk for non-compliance with the requirements in 
Sec.  482.12.
c. Federally Qualified Health Centers (FQHCs)
    FQHCs were established in 1990 by section 4161 of the Omnibus 
Budget Reconciliation Act of 1990 and were effective beginning on 
October 1, 1991. They are facilities that furnish services

[[Page 41800]]

that are typically furnished in an outpatient clinic setting.
    The statutory requirements that FQHCs must meet to qualify for the 
Medicare benefit are in section 1861(aa)(4) of the Act. All FQHCs are 
subject to Medicare regulations at 42 CFR part 405, subpart X, and 42 
CFR part 491. Based on these provisions, the following three types of 
organizations that are eligible to enroll in Medicare as FQHCs:
     Health Center Program grantees: Organizations receiving 
grants under section 330 of the PHS Act (42 U.S.C. 254b).
     Health Center Program ``look-alikes'': Organizations that 
have been identified by the Health Resources and Services 
Administration as meeting the requirements to receive a grant under 
section 330 of the PHS Act, but which do not receive section 330 grant 
funding.
     Outpatient health programs or facilities operated by a 
tribe or tribal organization under the ISDEAA, or by an urban Indian 
organization receiving funds under Title V of the IHCIA.
    FQHCs are also entities that were treated by the Secretary for 
purposes of Medicare Part B as a comprehensive federally funded health 
center as of January 1, 1990 (see section 1861(aa)(4)(C) of the Act).
    Section 1834 of the Act was amended by section 10501(i)(3)(A) of 
the Affordable Care Act by adding a new subsection (o), ``Development 
and Implementation of Prospective Payment System''. Section 
1834(o)(1)(A) of the Act requires that the system include a process for 
appropriately describing the services furnished by FQHCs, and establish 
payment rates based on such descriptions of services, taking into 
account the type, intensity, and duration of services furnished by 
FQHCs. It also stated that the new system may include adjustments (such 
as geographic adjustments) as determined appropriate by the Secretary.
    Section 1833(a)(1)(Z) was added by the Affordable Care Act to 
require that Medicare payment for FQHC services under section 1834(o) 
of the Act shall be 80 percent of the lesser of the actual charge or 
the PPS amount determined under section 1834(o) of the Act.
    In accordance with the requirements in the Affordable Care Act, 
beginning on October 1, 2014, payment to FQHCs is based on the lesser 
of the national encounter-based FQHC PPS rate, or the FQHC's total 
charges, for primary health services and qualified preventive health 
services furnished to Medicare beneficiaries. The FQHC PPS rate is 
adjusted by the FQHC geographic adjustment factor (GAF), which is based 
on the Geographic Practice Cost Index used under the PFS. The FQHC PPS 
rate is also adjusted when the FQHC furnishes services to a patient 
that is new to the FQHC, and when the FQHC furnishes an IPPE or an AWV. 
The FQHC PPS base rate for the period from October 1, 2014 to December 
31, 2015 is $158.85. The rate will be adjusted in calendar year 2016 by 
the Medicare Economic Index (MEI), as defined at section 1842(i)(3) of 
the Act, and subsequently by either the MEI or a FQHC market basket 
(which would be determined pursuant to CMS regulations).
    To assure that FQHCs receive appropriate payment for services 
furnished, we established a new set of five HCPCS G-codes for FQHCs to 
report Medicare visits. These G-codes include all the services in a 
typical bundle of services that would be furnished per diem to a 
Medicare patient at the FQHC. The five FQHC G-codes are:

G0466-FQHC visit, new patient
G0467-FQHC visit, established patient
G0468-FQHC visit, IPPE or AWV
G0469-FQHC visit, mental health, new patient
G0470-FQHC visit, mental health, established patient

    FQHCs establish charges for the services they furnish to FQHC 
patients, including Medicare beneficiaries, and charges must be uniform 
for all patients, regardless of insurance status. The FQHC would 
determine the services that are included in each of the 5 FQHC G-codes, 
and the sum of the charges for each of the services associated with the 
G-code would be the G-code payment amount. Payment to the FQHC for a 
Medicare visit is the lesser of the FQHC's charges (as established by 
the G-code), or the PPS rate.
2. Proposed Payment Methodology and Requirements
    We are proposing that IHS and tribal facilities and organizations 
that met the conditions of section 413.65(m) on or before April 7, 
2000, and have a change in their status on or after April 7, 2000 from 
IHS to tribal operation, or vice versa, or the realignment of a 
facility from one IHS or tribal hospital to another IHS or tribal 
hospital such that the organization no longer meets the CoPs, may seek 
to become certified as grandfathered tribal FQHCs. To help avoid any 
confusion, we refer to these tribal FQHCs as grandfathered tribal FQHCs 
to distinguish them from freestanding tribal FQHCs that are currently 
being paid the lesser of their charges or the adjusted national FQHC 
PPS rate of $158.85, and from provider-based tribal clinics that may 
have begun operations subsequent to April 7, 2000.
    Under the authority in 1834(o) of the Affordable Care Act to 
``include adjustments . . . determined appropriate by the Secretary,'' 
we are proposing that these grandfathered tribal FQHCs be paid the 
lesser of their charges or a grandfathered tribal FQHC PPS rate of 
$307, which equals the Medicare outpatient per visit payment rate paid 
to them as a provider-based department, as set annually by the IHS, 
rather than the FQHC PPS per visit base rate of $158.85, and that 
coinsurance would be 20 percent of the lesser of the actual charge or 
the grandfathered tribal FQHC PPS rate. These grandfathered tribal 
FQHCs would be required to meet all FQHC certification and payment 
requirements. This FQHC PPS adjustment for grandfathered tribal clinics 
would not apply to a currently certified tribal FQHC, a tribal clinic 
that was not provider-based as of April 7, 2000, or an IHS-operated 
clinic that is no longer provider-based to a tribally-operated 
hospital. This provision would also not apply in those instances where 
both the hospital and its provider-based clinic(s) are operated by the 
tribe or tribal organization.
    Since we are proposing that these grandfathered tribal FQHCs would 
be paid based on the IHS payment rates and not the FQHC PPS payment 
rates, we are also proposing that the payment rate would not be 
adjusted by the FQHC PPS GAF, or be eligible for the special payment 
adjustments under the FQHC PPS for new patients, patients receiving an 
IPPE or an AWV. They would also not be eligible for the exceptions to 
the single per diem payment that is available to FQHCs paid under the 
FQHC PPS. As the IHS outpatient rate for Medicare is set annually, we 
also propose not to apply the MEI or a FQHC market basket adjustment 
that is applied annually to the FQHC PPS base rate. We are proposing 
that these adjustments not be applied because we believe that the 
special status of these grandfathered tribal clinics, and the enhanced 
payment they would receive under the FQHC PPS system, would make 
further adjustments unnecessary and/or duplicative of adjustments 
already made by IHS in deriving the rate. While we are proposing in 
this proposed rule an adjustment to the FQHC PPS rate to reflect the 
IHS rate for these grandfathered tribal clinics, if adopted as final, 
we will monitor future costs and claims data of these tribal clinics 
and reconsider options as appropriate.

[[Page 41801]]

    Grandfathered tribal FQHCs would be paid for services included in 
the FQHC benefit, even if those services are not included in the IHS 
Medicare outpatient all-inclusive rate. Services that are included in 
the IHS outpatient all-inclusive rate but not in the FQHC benefit would 
not be paid. Information on the FQHC benefit is available in Chapter 13 
of the Medicare Benefit Policy Manual.
    Grandfathered tribal FQHCs will be subject to Medicare regulations 
at part 405, subpart X, and part 491, except as noted in section 
III.D.2. of this proposed rule.
    We therefore propose to revise Sec.  405.2462, Sec.  405.2463, 
Sec.  405.2464, and Sec.  405.2469 to specify the requirements for 
payment as a grandfathered tribal FQHC, and to specify payment 
provisions, adjustments, rates, and other requirements for 
grandfathered tribal FQHCs.
3. Transition
    To become certified as a FQHC, an eligible tribe or tribal 
organization must submit a Form 855A and all required accompanied 
documentation, including an attestation of compliance with the Medicare 
FQHC Conditions for Coverage at part 491, to the Jurisdiction H 
Medicare Administrative Contractor (A/B MAC). After reviewing the 
application and determining that it is complete and approvable, the MAC 
would forward the application with its recommendation for approval to 
the CMS Regional Office (RO) that has responsibility for the geographic 
area in which the tribal clinic is located. The RO would issue a 
Medicare FQHC participation agreement to the tribal FQHC, including a 
CMS Certification Number (CCN), and would advise the MAC of the CCN 
number, to facilitate the MAC's processing of FQHC claims submitted by 
the tribal FQHC. Payment to grandfathered tribal FQHCs would begin on 
the first day of the month in the first quarter of the year subsequent 
to receipt of a Medicare CCN.
4. Conforming Changes
    In addition, to the changes proposed in Sec.  405.2462, Sec.  
405.2463, Sec.  405.2464, and Sec.  405.2469, we are proposing to: 
remove obsolete language from Sec.  405.2410 regarding FQHCs that bill 
on the basis of the reasonable cost system, add a section heading to 
Sec.  405.2415, and remove obsolete language from Sec.  405.2448 
regarding employment requirements.

E. Part B Drugs

1. Payment for Biosimilar Biological Products Under Section 1847A
    Section 3139 of the Affordable Care Act amended section 1847A of 
the Act to define a biosimilar biological product and a reference 
biological product, and to provide for Medicare payment of biosimilar 
biological products using the average sale price (ASP) methodology.
    Section 1847A(c)(6)(H) of the Act, as added by section 3139 of the 
Affordable Care Act, defines a biosimilar biological product as a 
biological product approved under an abbreviated application for a 
license of a biological product that relies in part on data or 
information in an application for another biological product licensed 
under section 351 of the Public Health Service Act (PHSA). Section 
1847A(c)(6)(I) of the Act, as added by section 3139 of the Affordable 
Care Act, defines the reference biological product for a biosimilar 
biological product as the biological product licensed under such 
section 351 of the PHSA that is referred to in the application of the 
biosimilar biological product.
    Section 3139 of the Affordable Care Act also amended section 
1847A(b) of the Act by adding a new paragraph (8) to specify that the 
payment amount for a biosimilar biological product will be the sum of 
the following two amounts: the ASP as determined using the methodology 
described under paragraph 1847A(b)(6) applied to a biosimilar 
biological product for all National Drug Codes (NDCs) assigned to such 
product in the same manner as such paragraph is applied to drugs 
described in such paragraph; and 6 percent of the payment amount 
determined using the methodology in section 1847A(b)(4) of the Act for 
the corresponding reference biological product. The effective date for 
ASP statutory provisions on biosimilars was July 1, 2010. Separate 
sections of the Affordable Care Act also established a licensing 
pathway for biosimilar biological products.
    To implement these provisions, we published CY 2011 PFS final rule 
with comment period (75 FR 73393 and 73394) in the Federal Register on 
November 29, 2010. The relevant regulation text is found at Sec.  
414.902 and Sec.  414.904. At the time that the CY 2011 PFS final rule 
with comment period was published, it was not apparent how or when the 
new FDA abbreviated approval pathway would be implemented or when 
biosimilar products would be approved for marketing in the United 
States. The FDA approved the first biosimilar product under the new 
biosimilar approval pathway required by the Affordable Care Act on 
March 6, 2015.
    Since 2010, we have continued to follow the implementation of the 
FDA biosimilar approval process and the emerging biosimilar 
marketplace. As biosimilars are now beginning to enter the marketplace, 
we have also reviewed the existing guidance on Medicare payment for 
these products. Our review has revealed a potential inconsistency 
between our interpretation of the statutory language at section 
1847A(b)(8) of the Act and regulation text at Sec.  414.904(j). To make 
the regulation text more consistent with our interpretation of the 
statutory language, we are proposing to amend the regulation text at 
Sec.  414.904(j) to make clear that the payment amount for a biosimilar 
biological product is based on the ASP of all NDCs assigned to the 
biosimilar biological products included within the same billing and 
payment code. We are also proposing to amend the regulation text at 
Sec.  414.914(j) to update the effective date of this provision from 
July 1, 2010 to January 1, 2016, the anticipated effective date of the 
CY 2016 Physician Fee Schedule Final Rule with Comment Period. We 
welcome comments about these proposals.
    We would also like to take this opportunity to discuss and clarify 
some other details of Part B biosimilar payment policy. First, we plan 
to use a single ASP payment limit for biosimilar products that are 
assigned to a specific HCPCS code. In general, this means that products 
that rely on a common reference product's biologics license application 
will be grouped into the same payment calculation. This approach, which 
is similar to the ASP calculation for multiple source drugs, is 
authorized by section 1847A(b)(8)(A) of the Act, which states that the 
payment determination for a biosimilar biological product is determined 
using the methodology in paragraph 1847A(b)(6) applied to a biosimilar 
biological product for all NDCs assigned to such product in the same 
manner as such paragraph is applied to drugs described in such 
paragraph.
    Second, we would like to describe how payment for newly approved 
biosimilars will be determined. As we stated in the CY 2011 PFS final 
rule with comment period (75 FR 73393 and 73394), we anticipate that as 
subsequent biosimilar biological products are approved, we will receive 
manufacturers' ASP sales data through the ASP data submission process 
and publish national payment amounts in a manner that is consistent 
with our current approach to other drugs and

[[Page 41802]]

biologicals that are paid under section 1847A of the Act and set forth 
in 42 CFR part 414 subpart J. Until we have collected sufficient sales 
data as reported by manufacturers, payment limits will be determined in 
accordance with the provisions in section 1847A(c)(4) of the Act. If no 
manufacturer data is collected, prices will be determined by local 
contractors using any available pricing information, including provider 
invoices. As with newly approved drugs and biologicals (including 
biosimilars), Medicare part B payment would be available once the 
product is approved by the FDA. Payment for biosimilars (and other 
drugs and biologicals that are paid under part B) may be made before a 
HCPCS code has been released, provided that the claim is reasonable and 
necessary, and meets applicable coverage and claims submission 
criteria.
    We would also like to clarify how wholesale acquisition cost (WAC) 
data may be used by CMS for Medicare payment of biosimilars in 
accordance with the provisions in section 1847A(c)(4) of the Act. 
Section 1847A(c)(4) of the Act authorizes the use of a WAC-based 
payment amount in cases where the ASP during the first quarter of sales 
is not sufficiently available from the manufacturer to compute an ASP-
based payment amount. Once the wholesale acquisition cost (WAC) data is 
available from the pharmaceutical pricing compendia and when WAC-based 
payment amounts are utilized by CMS to determine the national payment 
limit for a biosimilar product, the payment limit will be 106 percent 
of the WAC of the biosimilar product; the reference biological product 
will not be factored into the WAC-based payment limit determination. 
This approach is consistent with partial quarter pricing that was 
discussed in rulemaking in the CY 2011 PFS final rule with comment 
period (75 FR 73465 and 73466) and with statutory language at section 
1847A(c)(4) of the Act. Once ASP information is available for a 
biosimilar product, and when partial quarter pricing requirements no 
longer apply, the Medicare payment limit for a biosimilar product will 
be determined based on ASP data.

F. Productivity Adjustment for the Ambulance, Clinical Laboratory, and 
DMEPOS Fee Schedules

    Section 3401 of the Affordable Care Act requires that the update 
factor under certain payment systems be annually adjusted by changes in 
economy-wide productivity. The year that the productivity adjustment is 
effective varies by payment system. Specifically, section 3401 of the 
Affordable Care Act requires that in CY 2011 (and in subsequent years) 
update factors under the ambulance fee schedule (AFS), the clinical 
laboratory fee schedule (CLFS) and the DMEPOS fee schedule be adjusted 
by changes in economy-wide productivity. Section 3401(a) of the 
Affordable Care Act amends section 1886(b)(3)(B) of the Act to add 
clause (xi)(II), which sets forth the definition of this productivity 
adjustment. The statute defines the productivity adjustment to be equal 
to the 10-year moving average of changes in annual economy-wide private 
nonfarm business multifactor productivity (MFP) (as projected by the 
Secretary for the 10-year period ending with the applicable fiscal 
year, year, cost reporting period, or other annual period). Historical 
published data on the measure of MFP is available on the Bureau of 
Labor Statistics (BLS) Web site at http://www.bls.gov/mfp.
    MFP is derived by subtracting the contribution of labor and capital 
inputs growth from output growth. The projection of the components of 
MFP are currently produced by IHS Global Insight, Inc. (IGI), a 
nationally recognized economic forecasting firm with which we contract 
to forecast the components of MFP. To generate a forecast of MFP, IGI 
replicates the MFP measure calculated by the BLS using a series of 
proxy variables derived from IGI's U.S. macroeconomic models. In the CY 
2011 and CY 2012 PFS final rules with comment period (75 FR 73394 
through 73396, 76 FR 73300 through 73301), we set forth the current 
methodology to generate a forecast of MFP. We identified each of the 
major MFP component series employed by the BLS to measure MFP as well 
as provided the corresponding concepts determined to be the best 
available proxies for the BLS series. Beginning with CY 2016, for the 
AFS, CLFS and DMEPOS fee schedule, the MFP adjustment is calculated 
using a revised series developed by IGI to proxy the aggregate capital 
inputs. Specifically, IGI has replaced the Real Effective Capital Stock 
used for Full Employment GDP with a forecast of BLS aggregate capital 
inputs recently developed by IGI using a regression model. This series 
provides a better fit to the BLS capital inputs, as measured by the 
differences between the actual BLS capital input growth rates and the 
estimated model growth rates over the historical time period. 
Therefore, we are using IGI's most recent forecast of the BLS capital 
inputs series in the MFP calculations beginning with CY 2016. A 
complete description of the MFP projection methodology is available on 
our Web site at http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch.html. Although we discuss the IGI changes to the 
MFP proxy series in this proposed rule, in the future, when IGI makes 
changes to the MFP methodology, we will announce them on our Web site 
rather than in the annual rulemaking.

G. Appropriate Use Criteria for Advanced Diagnostic Imaging Services

    Section 218(b) of the PAMA amended Title XVIII of the Act to add 
section 1834(q) directing us to establish a program to promote the use 
of appropriate use criteria (AUC) for advanced diagnostic imaging 
services. This proposed rule outlines the initial component of the new 
Medicare AUC program and our plan for implementing the remaining 
components.
1. Background
    In general, AUC are a set of individual criteria that present 
information in a manner that links a specific clinical condition or 
presentation, one or more services, and an assessment of the 
appropriateness of the service(s). Evidence-based AUC for imaging can 
assist clinicians in selecting the imaging study that is most likely to 
improve health outcomes for patients based on their individual context.
    We believe the goal of this statutory AUC program is to promote the 
evidence-based use of advanced diagnostic imaging to improve quality of 
care and reduce inappropriate imaging. Professional medical societies, 
health systems, and academic institutions have been designing and 
implementing AUC for decades. Experience and published studies alike 
show that results are best when AUC are built on an evidence base that 
considers patient health outcomes, weighing the benefits and harms of 
alternative care options, and integrated into broader care management 
and continuous quality improvement (QI) programs. Successful QI 
programs in turn have provider-led multidisciplinary teams collectively 
identify key clinical processes and then develop bottom-up, evidence-
based AUC or guidelines that are embedded into clinical workflows, and 
become the organizing principle of care delivery (Aspen 2013). Feedback 
loops, an essential component, compare provider performance and patient 
health outcomes to individual, regional and national benchmarks.

[[Page 41803]]

    There is also consensus that AUC programs built on evidence-based 
medicine and applied in a QI context are the best method to identify 
appropriate care and eliminate inappropriate care, and are preferable 
to across-the-board payment reductions that do not differentiate 
interventions that add value from those that cause harm or add no 
value.
2. Previous AUC Experience
    The first CMS experience with AUC, the Medicare Imaging 
Demonstration (MID), was required by section 135(b) of the Medicare 
Improvements for Patients and Providers Act of 2008 (MIPPA). Designed 
as an alternative to prior authorization, the MID's purpose was to 
examine whether provider exposure to appropriateness guidelines would 
reduce inappropriate utilization of advanced imaging services. In the 
2-year demonstration which began in October 2011, nearly 4,000 
physicians, grouped into one of five conveners across geographically 
and organizationally diverse practice settings, ordered a total of 
nearly 50,000 imaging studies.\1\
---------------------------------------------------------------------------

    \1\ Timbie J, Hussey P, Burgette L, et al. Medicare Imaging 
Demonstration Final Evaluation: Report to Congress. 2014 The Rand 
Corporation
---------------------------------------------------------------------------

    In addition to the outcomes of the MID (http://www.rand.org/content/dam/rand/pubs/research_reports/RR700/RR706/RAND_RR706.pdf), we 
considered others' experiences and results from implementation of 
imaging AUC and other evidence-based clinical guidelines at healthcare 
organizations such as Brigham & Women's, Intermountain Healthcare, 
Kaiser, Massachusetts General Hospital, and Mayo, and in states such as 
Minnesota. From these experiences, and analyses of them by medical 
societies and others, general agreement on at least two key points has 
emerged. First, AUC, and the clinical decision support (CDS) mechanisms 
through which providers access AUC, must be integrated into the 
clinical workflow and facilitate, not obstruct, evidence-based care 
delivery. Second, the ideal AUC is an evidence-based guide that starts 
with a patient's specific clinical condition or presentation (symptoms) 
and assists the provider in the overall patient workup, treatment and 
follow-up. Imaging would appear as key nodes within the clinical 
management decision tree. The end goal of using AUC is to improve 
patient health outcomes. In reality, however, many providers may 
encounter AUC through a CDS mechanism for the first time at the point 
of image ordering. The CDS would ideally bring the provider back to 
that specific clinical condition and work-up scenario to ensure and 
simultaneously document the appropriateness of the imaging test.
    However, there are different views about how best to roll out AUC 
into clinical practice. One opinion is that it is best to start with as 
comprehensive a library of individual AUC as possible to avoid the 
frustration, experienced and voiced by many practitioners participating 
in the MID, of spending time navigating the CDS tool only to find that, 
about 40 percent of the time, no AUC for their patient's specific 
clinical condition existed. The other opinion is that, based on decades 
of experience rolling out AUC in the context of robust QI programs, it 
is best to focus on a few priority clinical areas (for example, low 
back pain) at a time, to ensure that providers fully understand the AUC 
they are using, including when they do not apply to a particular 
patient. This same group also believes, based on experience with the 
MID, that too many low-evidence alerts or rules simply create ``alert 
fatigue.'' They envision that, rather than navigating through a CDS to 
find relevant AUC, providers would simply enter the patient's condition 
and a message would pop up stating whether AUC existed for that 
condition.
    We believe there is merit to both approaches, and it has been 
suggested to us that the best approach may depend on the particular 
care setting. The second, ``focused'' approach may work better for a 
large health system that produces and uses its own AUC. The first, 
``comprehensive'' approach may in turn work better for a smaller 
practice with broad image ordering patterns and fewer resources that 
wants to simply adopt and start using from day one a complete AUC 
system developed elsewhere. We believe a successful program would allow 
flexibility, and under section 1834(q) of the Act, we foresee competing 
sets of AUC developed by different provider-led entities, and competing 
CDS mechanisms, from which providers may choose.
3. Statutory Authority
    Section 218(b) of the PAMA amended the Medicare Part B statute by 
adding a new section 1834(q) of the Act entitled, ``Recognizing 
Appropriate Use Criteria for Certain Imaging Services,'' which directs 
us to establish a new program to promote the use of AUC. In section 
1834(q)(1)(B) of the Act, AUC are defined as criteria that are 
evidence-based (to the extent feasible) and assist professionals who 
order and furnish applicable imaging services to make the most 
appropriate treatment decision for a specific clinical condition for an 
individual.
4. Discussion of Statutory Requirements
    There are four major components of the AUC program under section 
1834(q) of the Act, each with its own implementation date: (1) 
Establishment of AUC by November 15, 2015 (section 1834(q)(2)); (2) 
mechanisms for consultation with AUC by April 1, 2016 (section 
1834(q)(3)); (3) AUC consultation by ordering professionals and 
reporting on AUC consultation by furnishing professionals by January 1, 
2017 (section 1834(q)(4)); and (4) annual identification of outlier 
ordering professionals for services furnished after January 1, 2017 
(section 1834(q)(5)). In this proposed rule, we primarily address the 
first component under section 1834(q)(2)--the process for establishment 
of AUC, along with relevant aspects of the definitions under section 
1834(q)(1).
    Section 1834(q)(1) of the Act describes the program and provides 
definitions of terms. The program is required to promote the use of AUC 
for applicable imaging services furnished in an applicable setting by 
ordering professionals and furnishing professionals. Section 1834(q)(1) 
of the Act provides definitions for AUC, applicable imaging service, 
applicable setting, ordering professional, and furnishing professional. 
An ``applicable imaging service'' under section 1834(q)(1)(C) of the 
Act must be an advanced imaging service as defined in section 
1834(e)(1)(B) of the Act, which defines ``advanced diagnostic imaging 
services'' to include diagnostic magnetic resonance imaging, computed 
tomography, and nuclear medicine (including positron emission 
tomography); and other diagnostic imaging services we may specify in 
consultation with physician specialty organizations and other 
stakeholders, but excluding x-ray, ultrasound and fluoroscopy services.
    Section 1834(q)(2)(A) of the Act requires the Secretary to specify 
applicable AUC for applicable imaging services, through rulemaking and 
in consultation with physicians, practitioners and other stakeholders, 
by November 15, 2015. Applicable AUC may be specified only from among 
AUC developed or endorsed by national professional medical specialty 
societies or other provider-led entities. Section 1834(q)(2)(B) of the 
Act identifies certain considerations the Secretary must take into 
account when specifying applicable AUC including whether the AUC have 
stakeholder consensus, are scientifically valid and evidence-based,

[[Page 41804]]

and are based on studies that are published and reviewable by 
stakeholders. Section 1834(q)(2)(C) of the Act requires the Secretary 
to review the specified applicable AUC each year to determine whether 
there is a need to update or revise them, and to make any needed 
updates or revisions through rulemaking. Section 1834(q)(2)(D) of the 
Act specifies that, if the Secretary determines that more than one AUC 
applies for an applicable imaging service, the Secretary shall apply 
one or more AUC for the service.
    The PAMA was enacted into law on April 1, 2014. Implementation of 
many aspects of the amendments made by section 218(b) requires 
consultation with physicians, practitioners, and other stakeholders, 
and notice and comment rulemaking. We believe the PFS rulemaking 
process is the most appropriate and administratively feasible 
implementation vehicle. Given the timing, we were not able to include 
proposals in the PFS proposed rule to begin implementation in the same 
year the PAMA was enacted. The PFS proposed rule is published in late 
June or early July each year. For the new Medicare AUC program to have 
been a part of last year's proposed rule (CY 2015), we would have had 
to interpret and analyze the new statutory language, and develop 
proposed plans for implementation in under one month. Additionally, 
given the complexity of the program to promote the use of AUC for 
advanced imaging services established under section 1834(q) of the Act, 
we believed it was imperative to consult with physicians, practitioners 
and other stakeholders in advance of developing proposals to implement 
the program. In the time since the legislation was enacted, we have met 
extensively with stakeholders to gain insight and hear their comments 
and concerns about the AUC program. Having this open door with 
stakeholders has greatly informed our proposed policy. In addition, 
before AUC can be specified as directed by section 1834(q)(2)(A) of the 
Act, there is first the need to define what AUC are and to specify the 
process for developing them. To ensure transparency and meet the 
requirements of the statute, we are proposing to implement section 
1834(q)(2) of the Act by first establishing through rulemaking a 
process for specifying applicable AUC and proposing the requirements 
for AUC development. Under our proposal, the specification of AUC under 
section 1834(q)(2)(A) of the Act will flow from this process.
    We are also proposing to define the term, ``provider-led entity,'' 
which is included in section 1834(q)(1)(B) of the Act so that the 
public has an opportunity to comment, and entities meeting the 
definition are aware of the process by which they may become qualified 
under Medicare to develop or endorse AUC. Under our proposed process, 
once a provider-led entity is qualified (which includes rigorous AUC 
development requirements involving evidence evaluation, as provided in 
section 1834(q)(2)(B) of the Act and proposed in this proposed rule) 
the AUC that are developed or endorsed by the entity would be 
considered to be specified applicable AUC under section 1834(q)(2)(A) 
of the Act.
    The second major component of the Medicare AUC program is the 
identification of qualified CDS mechanisms that could be used by 
ordering professionals for consultation with applicable AUC under 
section 1834(q)(3) of the Act. We envision a CDS mechanism for 
consultation with AUC as an interactive tool that communicates AUC 
information to the user. The ordering professional would input 
information regarding the clinical presentation of the patient into the 
CDS tool, which may be a feature of or accessible through an existing 
system, and the tool would provide immediate feedback to the ordering 
professional on the appropriateness of one or more imaging services. 
Ideally, multiple CDS mechanisms would be available that could 
integrate directly into, or be seamlessly interoperable with, existing 
health information technology (IT) systems. This would minimize burden 
on provider teams and avoid duplicate documentation.
    Section 1834(q)(3)(A) of the Act states that the Secretary must 
specify qualified CDS mechanisms in consultation with physicians, 
practitioners, health care technology experts, and other stakeholders. 
This paragraph authorizes the Secretary to specify mechanisms that 
could include: CDS modules within certified EHR technology; private 
sector CDS mechanisms that are independent of certified EHR technology; 
and a CDS mechanism established by the Secretary.
    However, all CDS mechanisms must meet the requirements under 
section 1834(q)(3)(B) of the Act which specifies that a mechanism must: 
Make available to the ordering professional applicable AUC and the 
supporting documentation for the applicable imaging service that is 
ordered; where there is more than one applicable AUC specified for an 
applicable imaging service, indicate the criteria it uses for the 
service; determine the extent to which an applicable imaging service 
that is ordered is consistent with the applicable AUC; generate and 
provide to the ordering professional documentation to demonstrate that 
the qualified CDS was consulted by the ordering professional; be 
updated on a timely basis to reflect revisions to the specification of 
applicable AUC; meet applicable privacy and security standards; and 
perform such other functions as specified by the Secretary (which may 
include a requirement to provide aggregate feedback to the ordering 
professional). Section 1834(q)(3)(C) of the Act specifies that the 
Secretary must publish an initial list of specified mechanisms no later 
than April 1, 2016, and that the Secretary must identify on an annual 
basis the list of specified qualified CDS mechanisms.
    We are not including proposals to implement section 1834(q)(3) of 
the Act in this proposed rule. We need to first establish, through 
notice and comment rulemaking, the process for specifying applicable 
AUC. Specified applicable AUC would serve as the inputs to any 
qualified CDS mechanism, therefore, these must first be identified so 
that prospective tool developers are able to establish relationships 
with AUC developers. In addition, we anticipate that in PFS rulemaking 
for CY 2017, we will provide clarifications, develop definitions and 
establish the process by which we will specify qualified CDS 
mechanisms. The requirements for qualified CDS mechanisms set forth in 
section 1834(q)(3)(B) of the Act will also be vetted through PFS 
rulemaking for CY 2017 so that mechanism developers have a clear 
understanding and notice regarding the requirements for their tools. 
The CY 2017 proposed rule would be published at the end of June or in 
early July of 2016, be open for a period of public comment, and then 
the final rule would be published by November 1, 2016. We anticipate 
that the initial list of specified applicable CDS mechanisms will be 
published sometime after the CY 2017 PFS final rule. In advance of 
these actions, we will continue to work with stakeholders to understand 
how to ensure that appropriate mechanisms are available, particularly 
with respect to standards for certified health IT, including EHRs, that 
can enable interoperability of AUC across systems.
    The third major component of the AUC program is in section 
1834(q)(4) of the Act, Consultation with Applicable Appropriate Use 
Criteria. This section establishes, beginning January 1, 2017, the 
requirement for an ordering professional to consult with a listed 
qualified CDS mechanism when ordering an applicable imaging service 
that would be furnished in an

[[Page 41805]]

applicable setting and paid for under an applicable payment system; and 
for the furnishing professional to include on the Medicare claim 
information about the ordering professional's consultation with a 
qualified CDS mechanism. The statute distinguishes between the ordering 
and furnishing professional, recognizing that the professional who 
orders the imaging service is usually not the same professional who 
bills Medicare for the test when furnished. Section 1834(q)(4)(C) of 
the Act provides for certain exceptions to the AUC consultation and 
reporting requirements including in the case of certain emergency 
services, inpatient services paid under Medicare Part A, and ordering 
professionals who obtain a hardship exemption. Section 1834(q)(4)(D) of 
the Act specifies that the applicable payment systems for the AUC 
consultation and reporting requirements are the physician fee schedule, 
hospital outpatient prospective payment system, and the ambulatory 
surgical center payment system.
    We are not including proposals to implement section 1834(q)(4) of 
the Act in this proposed rule. Again, it is important that we first 
establish through notice and comment rulemaking the process by which 
applicable AUC will be specified as well as the CDS mechanisms through 
which ordering providers would access them. We anticipate including 
further discussion and adopting policies regarding claims-based 
reporting requirements in the CY 2017 and CY 2018 rulemaking cycles.
    The fourth component of the AUC program is in section 1834(q)(5) of 
the Act, Identification of Outlier Ordering Professionals. The 
identification of outlier ordering professionals under this paragraph 
facilitates a prior authorization requirement for outlier professionals 
beginning January 1, 2020, as specified under section 1834(q)(6) of the 
Act. Although, we are not including proposals to implement these 
sections in this proposed rule, we are proposing to identify outlier 
ordering professionals from within priority clinical areas that would 
be established through subsequent rulemaking. In this rule, we propose 
a process to provide clarity around priority clinical areas.
    The concept of priority clinical areas allows CMS to implement an 
AUC program that combines two approaches to implementation. Under our 
proposed policy, while potentially large volumes of AUC would become 
specified across clinical conditions and advanced imaging technologies, 
we believe this rapid roll out of specified AUC should be balanced with 
a more focused approach to identifying outlier ordering professionals. 
We believe this will provide an opportunity for physicians and 
practitioners to become familiar with AUC in identified priority 
clinical areas prior to Medicare claims for those services being part 
of the input for calculating outlier ordering professionals.
    In future rulemaking, with the benefit of public comments, we will 
establish priority clinical areas and expand them over time. Also in 
future rulemaking, we will develop and clarify our policy to identify 
outlier ordering professionals.
5. Proposals for Implementation
    We are proposing to amend our regulations to add a new Sec.  
414.94, ``Appropriate Use Criteria for Certain Imaging Services.''
a. Definitions
    In Sec.  414.94 (b), we are proposing to codify and add language to 
clarify some of the definitions provided in section 1834(q)(1) of the 
Act as well as define terms that were not defined in statute but for 
which a definition would be helpful for program implementation. In this 
section of the proposed rule, we provide a description of the terms we 
are proposing to codify to facilitate understanding and encourage 
public comment on the proposed AUC program.
    Due to circumstances unique to imaging, it is important to note 
that there is an ordering professional (the physician or practitioner 
that orders that the imaging service be performed) and a furnishing 
professional (the physician or practitioner that actually performs the 
imaging service and provides the radiologic interpretation of the 
image) involved in imaging services. In some cases the ordering 
professional and the furnishing professional are the same.
    This proposed AUC program only applies in applicable settings. An 
applicable setting would include a physician's office, a hospital 
outpatient department (including an emergency department) and an 
ambulatory surgical center. The inpatient hospital setting, for 
example, is not an applicable setting. Further, the proposed program 
only applies to applicable imaging services. These are advanced 
diagnostic imaging services for which one or more applicable AUC apply, 
one or more qualified CDS mechanisms is available, and one of those 
mechanisms is available free of charge.
    We are proposing to clarify the definition for appropriate use 
criteria, which is defined in statute to include only criteria 
developed or endorsed by national professional medical specialty 
societies or other provider-led entities, to assist ordering 
professionals and furnishing professionals in making the most 
appropriate treatment decision for a specific clinical condition for an 
individual. To the extent feasible, such criteria shall be evidence-
based. To further describe AUC, we are proposing to add the following 
language to this definition: AUC are a collection of individual 
appropriate use criteria. Individual criteria are information presented 
in a manner that links: A specific clinical condition or presentation; 
one or more services; and, an assessment of the appropriateness of the 
service(s).
    For the purposes of implementing this program, we are proposing to 
define new terms in Sec.  414.94(b). A provider-led entity would 
include national professional medical specialty societies (for example 
the American College of Radiology and the American Academy of Family 
Physicians) or an organization that is comprised primarily of providers 
and is actively engaged in the practice and delivery of healthcare (for 
example hospitals and health systems). Applicable AUC become specified 
when they are developed, modified or endorsed by a qualified provider-
led entity. A provider-led entity is not considered qualified until CMS 
makes a determination via the qualification process discussed in this 
proposal. We are introducing priority clinical areas to inform ordering 
professionals and furnishing professionals of the clinical topics, 
clinical topics and imaging modalities or imaging modalities that may 
be identified by the agency through annual rulemaking and in 
consultation with stakeholders which may be used in the identification 
of outlier ordering professionals.
    The proposed definitions in Sec.  414.94 are important in 
understanding our proposals for implementation. Only AUC developed, 
modified or endorsed by organizations meeting the definition of 
provider-led entity would be considered specified applicable AUC. As 
required by the statute, specified applicable AUC, which encompass all 
AUC developed, modified or endorsed by qualified provider-led entities, 
must be consulted and such consultation must be reported on the claim 
for applicable imaging services. To assist in identification of outlier 
ordering professionals, we propose to focus on priority clinical areas. 
Priority clinical areas would be associated with a subset of specified 
AUC.

[[Page 41806]]

b. AUC Development by Provider-Led Entities
    In Sec.  414.94, we are proposing to include regulations to 
implement the first component of the Medicare AUC program--
specification of applicable AUC. We are first proposing a process by 
which provider-led entities (including national professional medical 
specialty societies) become qualified by Medicare to develop or endorse 
AUC. The cornerstone of this process is for provider-led entities to 
demonstrate that they engage in a rigorous evidence-based process for 
developing, modifying, or endorsing AUC. It is through this 
demonstration that we propose to meet the requirements of section 
1834(q)(2)(B) of the Act to take into account certain considerations 
for the AUC. Section 1834(q)(2)(B) specifies that the Secretary must 
consider whether AUC have stakeholder consensus, are scientifically 
valid and evidence-based, and are based on studies that are published 
and reviewable by stakeholders. It is not feasible for us to review 
every individual criterion. Rather, we propose to establish a 
qualification process and requirements for qualified provider-led 
entities in order to ensure that the AUC development or endorsement 
processes used by a provider-led entity result in high quality, 
evidence-based AUC in accordance with section 1834(q)(2)(B). Therefore, 
we propose that AUC developed, modified, or endorsed by qualified 
provider-led entities will constitute the specified applicable AUC that 
ordering professionals would be required to consult when ordering 
applicable imaging services.
    In order to become and remain a qualified provider-led entity, we 
propose to require a provider-led entity to demonstrate adherence to 
specific requirements when developing, modifying or endorsing AUC. The 
first proposed requirement is related to the evidentiary review process 
for individual criteria. Entities must engage in a systematic 
literature review of the clinical topic and relevant imaging studies. 
We would expect the literature review to include evidence on analytical 
validity, clinical validity, and clinical utility of the specific 
imaging study. In addition, the provider-led entity must assess the 
evidence using a formal, published, and widely recognized methodology 
for grading evidence. Consideration of relevant published evidence-
based guidelines and consensus statements by professional medical 
specialty societies must be part of the evidence assessment. Published 
consensus statements may form part of the evidence base of AUC and 
would be subject to the evidentiary grading methodology as any other 
evidence identified as part of a systematic review.
    In addition, we propose that the provider-led entity's AUC 
development process must be led by at least one multidisciplinary team 
with autonomous governance that is accountable for developing, 
modifying, or endorsing AUC. At a minimum, the team must be composed of 
three members including one with expertise in the clinical topic 
related to the criterion and one with expertise in imaging studies 
related to the criterion. We encourage such teams to be larger, and 
include experts in each of the following domains: Statistical analysis 
(such as biostatics, epidemiology, and applied mathematics); clinical 
trial design; medical informatics; and quality improvement. A given 
team member may be the team's expert in more than one domain. These 
experts should contribute substantial work to the development of the 
criterion, not simply review the team's work.
    Another important area to address that provides additional 
assurance regarding quality and evidence-based AUC development is the 
disclosure of conflicts of interest. We believe it is appropriate to 
impose relatively stringent requirements for public transparency and 
disclosure of potential conflicts of interest for anyone participating 
with a provider-led entity in the development of AUC. We propose that 
the provider-led entity must have a publicly transparent process for 
identifying and disclosing potential conflicts of interest of members 
on the multidisciplinary AUC development team. The provider-led entity 
must disclose any direct or indirect relationships, as well as 
ownership or investment interests, among the multidisciplinary team 
members or immediate family members and organizations that may 
financially benefit from the AUC that are being considered for 
development, modification or endorsement.
    For individual criteria to be available for practitioners to review 
prior to incorporation into a CDS mechanism, we propose that the 
provider-led entity must maintain on its Web site each criterion that 
is part of the AUC that the entity has considered or is considering for 
development, modification, or endorsement. This public transparency of 
individual criteria is critical not only to ordering and furnishing 
professionals, but also to patients and other health care providers who 
may wish to view all available AUC.
    Although evidence should be the foundation for the development, 
modification and endorsement of AUC, we recognize that not all aspects 
of a criterion will be evidence-based, and that a criterion does not 
exist for every clinical scenario. We believe it is important for AUC 
users to understand which aspects of a criterion are evidence-based and 
which are consensus-based. Therefore, we propose that key decision 
points in individual criteria be graded in terms of strength of 
evidence using a formal, published, and widely recognized methodology. 
This level of detail must be part of each AUC posted to the entity's 
Web site.
    It is critical that as provider-led entities develop large 
collections of AUC, they have a transparent process for the timely and 
continual review of each criterion, as there are sometimes rapid 
changes in the evidence base for certain clinical conditions and 
imaging studies.
    Finally, we propose that a provider-led entity's process for 
developing, modifying, or endorsing AUC (which would be inclusive of 
the requirements being proposed in this rule) must be publicly posted 
on the entity's Web site.
    We believe it is important to fit AUC to local circumstances and 
populations, while also ensuring a rigorous due process for doing so. 
Under our proposed AUC program, local adaptation of AUC might happen in 
three ways. First, compatibility with local practice is something that 
ordering professionals can assess when selecting AUC for consultation. 
Second, professional medical societies (many of which have state 
chapters) and large health systems (which incorporate diverse practice 
settings, both urban and rural) that become qualified provider-led 
entities can get local feedback at the outset and build alternative 
options into the design of their AUC. Third, local provider-led 
entities can themselves become qualified to develop, modify, or endorse 
AUC.
c. Process for Provider-Led Entities To Become Qualified To Develop, 
Endorse or Modify AUC
    We are proposing that provider-led entities must apply to CMS to 
become qualified. We are proposing that entities that believe they meet 
the definition of provider-led submit applications to us that document 
adherence to each of the qualification requirements. The application 
must include a statement as to how the entity meets the definition of a 
provider-led entity. Applications will be accepted each year but must 
be received by January 1. A list of all applicants that we determine to 
be

[[Page 41807]]

qualified provider-led entities will be posted to our Web site by the 
following June 30 at which time all AUC developed or endorsed by that 
provider-led entity will be considered to be specified AUC. All 
qualified provider-led entities must re-apply every 6 years and their 
applications must be received by January 1 during the 5th year of their 
approval. Note that the application is not a CMS form; rather it is 
created by the applicant entity.
d. Identifying Priority Clinical Areas
    Section 1834(q)(4) of the Act requires that, beginning January 1, 
2017, ordering professionals must consult applicable AUC using a 
qualified CDS mechanism when ordering applicable imaging services for 
which payment is made under applicable payment systems, and that 
furnishing professionals must report the results of this consultation 
on Medicare claims. Section 1834(q)(5) of the Act further provides for 
the identification of outlier ordering professionals based on a low 
adherence to applicable AUC. We are proposing to identify priority 
clinical areas of AUC that we will use in identifying outlier ordering 
professionals. Although there is no consequence to being identified as 
an outlier ordering professional until January 2020, it is important to 
allow ordering and furnishing professionals as much time as possible to 
use and familiarize themselves with the specified applicable AUC that 
will eventually become the basis for identifying outlier ordering 
professionals.
    To identify these priority clinical areas, we may consider 
incidence and prevalence of diseases, as well as the volume, 
variability of utilization, and strength of evidence for imaging 
services. We may also consider applicability of the clinical area to a 
variety of care settings, and to the Medicare population. We are 
proposing to annually solicit public comment and finalize clinical 
priority areas through the PFS rulemaking process beginning in CY 2017. 
To further assist us in developing the list of proposed priority 
clinical areas, we are proposing to convene the Medicare Evidence 
Development and Coverage Advisory Committee (MEDCAC), a CMS FACA 
compliant committee, as needed to examine the evidence surrounding 
certain clinical areas.
    Specified applicable AUC falling within priority clinical areas may 
factor into the low-adherence calculation when identifying outlier 
ordering professionals for the prior authorization component of this 
statute, which is slated to begin in 2020. Future rulemaking will 
address further details.
e. Identification of Non-Evidence Based AUC
    Despite our proposed provider-led entity qualification process that 
should ensure evidence-based AUC development, we remain concerned that 
non-evidence based criteria may be developed or endorsed by qualified 
provider-led entities. Therefore, we are proposing a process by which 
we would identify and review potentially non-evidence-based criteria 
that fall within one of our identified priority clinical areas. We are 
proposing to accept public comment through annual PFS rulemaking so 
that the public can assist in identifying AUC that potentially are not 
evidence-based. We foresee this being a standing request for comments 
in all future rules regarding AUC. We are proposing to use the MEDCAC 
to further review the evidentiary basis of these identified AUC, as 
needed. The MEDCAC has extensive experience in reviewing, interpreting, 
and translating evidence. If through this process, a number of criteria 
from an AUC library are identified as being insufficiently evidence-
based, and the provider-led entity that produced the library does not 
make a good faith attempt to correct these in a timely fashion, this 
information could be considered when the provider-led entity applies 
for re-qualification.
6. Summary
    Section 1834(q) of the Act includes rapid timelines for 
establishing a new Medicare AUC program for advanced imaging services. 
The number of clinicians impacted by the scope of this program is 
massive as it will apply to every physician and practitioner who orders 
applicable diagnostic imaging services. This crosses almost every 
medical specialty and could have a particular impact on primary care 
physicians since their scope of practice can be quite vast.
    We believe the best implementation approach is one that is 
diligent, maximizes the opportunity for public comment and stakeholder 
engagement, and allows for adequate advance notice to physicians and 
practitioners, beneficiaries, AUC developers, and CDS mechanism 
developers. It is for these reasons we are proposing a stepwise 
approach, adopted through rulemaking, to first define and lay out the 
process for the Medicare AUC program. However, we also recognize the 
importance of moving expeditiously to accomplish a fully implemented 
program.
    In summary, we are proposing definitions of terms necessary to 
implement the AUC program. We are particularly seeking comment on the 
proposed definition of provider-led entity as these are the 
organizations that have the opportunity to become qualified to develop, 
modify or endorse specified AUC. We are also proposing an AUC 
development process which allows some flexibility for provider-led 
entities but sets standards including an evidence-based development 
process and transparency. In addition, we are proposing the concept and 
definition of priority clinical areas and how they may contribute to 
the identification of outlier ordering professionals. Lastly, we are 
proposing to develop a process by which non-evidence-based AUC will be 
identified and discussed in the public domain. We invite the public to 
submit comments on these proposals.

H. Physician Compare Web Site

1. Background and Statutory Authority
    As required by section 10331(a)(1) of the Affordable Care Act, by 
January 1, 2011, we developed a Physician Compare Internet Web site 
with information on physicians enrolled in the Medicare program under 
section 1866(j) of the Act, as well as information on other eligible 
professionals (EPs) who participate in the Physician Quality Reporting 
System (PQRS) under section 1848 of the Act. We launched the first 
phase of Physician Compare on December 30, 2010 (http://www.medicare.gov/physiciancompare). In the initial phase, we posted the 
names of EPs that satisfactorily submitted quality data for the 2009 
PQRS, as required by section 1848(m)(5)(G) of the Act.
    We also implemented, consistent with section 10331(a)(2) of the 
Affordable Care Act, a plan for making publicly available through 
Physician Compare information on physician performance that provides 
comparable information on quality and patient experience measures for 
reporting periods beginning no earlier than January 1, 2012. We met 
this requirement in advance of the statutory deadline of January 1, 
2013, as outlined below, and plan to continue addressing elements of 
the plan through rulemaking.
    To the extent that scientifically sound measures are developed and 
are available, we are required to include, to the extent practicable, 
the following types of measures for public reporting:
     Measures collected under the Physician Quality Reporting 
System (PQRS).

[[Page 41808]]

     An assessment of patient health outcomes and functional 
status of patients.
     An assessment of the continuity and coordination of care 
and care transitions, including episodes of care and risk-adjusted 
resource use.
     An assessment of efficiency.
     An assessment of patient experience and patient, 
caregiver, and family engagement.
     An assessment of the safety, effectiveness, and timeliness 
of care.
     Other information as determined appropriate by the 
Secretary.
    In developing and implementing the plan, section 10331(b) requires 
that we include, to the extent practicable, the following:
     Processes to ensure that data made public are 
statistically valid, reliable, and accurate, including risk adjustment 
mechanisms used by the Secretary.
     Processes for physicians and EPs whose information is 
being publicly reported to have a reasonable opportunity, as determined 
by the Secretary, to review their results before posting to Physician 
Compare. We have established a 30-day preview period for all 
measurement performance data that will allow physicians and other EPs 
to view their data as it will appear on the Web site in advance of 
publication on Physician Compare (77 FR 69166, 78 FR 74450, and 79 FR 
67770). Details of the preview process will be communicated directly to 
those with measures to preview and will also be published on the 
Physician Compare Initiative page (http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/physician-compare-initiative/) in advance of the preview period.
     Processes to ensure the data published on Physician 
Compare provides a robust and accurate portrayal of a physician's 
performance.
     Data that reflects the care provided to all patients seen 
by physicians, under both the Medicare program and, to the extent 
applicable, other payers, to the extent such information would provide 
a more accurate portrayal of physician performance.
     Processes to ensure appropriate attribution of care when 
multiple physicians and other providers are involved in the care of the 
patient.
     Processes to ensure timely statistical performance 
feedback is provided to physicians concerning the data published on 
Physician Compare.
     Implementation of computer and data infrastructure and 
systems used to support valid, reliable and accurate reporting 
activities.
    Section 10331(d) of the Affordable Care Act requires us to consider 
input from multi-stakeholder groups, consistent with sections 
1890(b)(7) and 1890A of the Act, when selecting quality measures for 
Physician Compare. We also continue to get general input from 
stakeholders on Physician Compare through a variety of means, including 
rulemaking and different forms of stakeholder outreach (for example, 
Town Hall meetings, Open Door Forums, webinars, education and outreach, 
Technical Expert Panels, etc.).
    We submitted a report to the Congress in advance of the January 1, 
2015 deadline, as required by section 10331(f) of the Affordable Care 
Act, on Physician Compare development, including information on the 
efforts and plans to collect and publish data on physician quality and 
efficiency and on patient experience of care in support of value-based 
purchasing and consumer choice.
    We believe section 10331 of the Affordable Care Act supports our 
overarching goals of providing consumers with quality of care 
information that will help them make informed decisions about their 
health care, while encouraging clinicians to improve the quality of 
care they provide to their patients. In accordance with section 10331 
of the Affordable Care Act, we plan to continue to publicly report 
physician performance information on Physician Compare.
 2. Public Reporting of Performance and Other Data
    Since the initial launch of the Web site, we have continued to 
build on and improve Physician Compare, including a full redesign in 
2013. Currently, Web site users can view information about approved 
Medicare professionals such as name, primary and secondary specialties, 
practice locations, group affiliations, hospital affiliations that link 
to the hospital's profile on Hospital Compare as available, Medicare 
Assignment status, education, residency, and American Board of Medical 
Specialties (ABMS) board certification information. In addition, for 
group practices, users can view group practice names, specialties, 
practice locations, Medicare assignment status, and affiliated 
professionals.
    In addition, there is a section on each Medicare professional's 
profile page indicating with a green check mark the quality programs 
under which the EP satisfactorily or successfully reported. The Web 
site will continue to post annually the names of individual EPs who 
satisfactorily report under PQRS, EPs who successfully participate in 
the Medicare Electronic Health Record (EHR) Incentive Program as 
authorized by section 1848(o)(3)(D) of the Act, and EPs who report PQRS 
measures in support of Million Hearts (79 FR 67763). A proposed change 
to the Million Hearts indicator for 2016 data is discussed below.
    With the 2013 redesign of the Physician Compare Web site, we added 
a quality programs section to each group practice profile page, as 
well. We will continue to indicate which group practices are 
satisfactorily reporting in the Group Practice Reporting Option (GPRO) 
under PQRS (79 FR 67763). The Physician Compare Web site also contains 
a link to the Physician Compare downloadable database (https://data.medicare.gov/data/physician-compare), including information on 
this quality program participation.
    We continue to implement our plan for a phased approach to public 
reporting performance information on the Physician Compare Web site. 
Under the first phase of this plan, we established that GPRO measures 
collected under PQRS through the Web Interface for 2012 would be 
publicly reported on Physician Compare (76 FR 73419 through 73420). We 
further expanded the plan by including on the Physician Compare Web 
site the 2013 group practice-level PQRS measures for Diabetes Mellitus 
(DM) and Coronary Artery Disease (CAD) reported via the Web Interface, 
and planned to report composite measures for DM and CAD in 2014, as 
well (77 FR 69166).
    The 2012 GPRO measures were publicly reported on Physician Compare 
in February 2014. The 2013 PQRS GPRO DM and GPRO CAD measures collected 
via the Web Interface that met the minimum sample size of 20 patients 
and proved to be statistically valid and reliable were publicly 
reported on Physician Compare in December 2014. The composite measures 
were not reported, however, as some items included in the composites 
were no longer clinically relevant. If the minimum threshold is not met 
for a particular measure, or the measure is otherwise deemed not to be 
suitable for public reporting, the performance rate on that measure is 
not publicly reported. On the Physician Compare Web site, we only 
publish those measures that are statistically valid and reliable, and 
therefore, most likely to help consumers make informed decisions about 
the Medicare professionals they choose to meet their health care needs. 
In addition, we do not publicly report first year measures, meaning new 
PQRS and non-PQRS measures that have been available for

[[Page 41809]]

reporting for less than one year, regardless of reporting mechanism. 
After a measure's first year in use, we will evaluate the measure to 
see if and when the measure is suitable for public reporting.
    Measures must be based on reliable and valid data elements to be 
useful to consumers. Therefore, for all proposed measures available for 
public reporting, including both group and individual EP level 
measures--regardless of reporting mechanism, only those proposed 
measures that prove to be valid, reliable, and accurate upon analysis 
and review at the conclusion of data collection and that meet the 
established public reporting criteria of a minimum sample size of 20 
patients will be included on Physician Compare. For information on how 
we determine the validity and reliability of data and other statistical 
analyses we perform, refer to the CY 2015 PFS final rule with comment 
period (79 FR 67764 through 79 FR 67765).
    We will also continue to include an indicator of which reporting 
mechanism was used and to only include on the site measures deemed 
statistically comparable.\2\ We will continue to publicly report all 
measures submitted and reviewed and found to be statistically valid and 
reliable in the Physician Compare downloadable file. However, not all 
of these measures would necessarily be included on the Physician 
Compare profile pages. Consumer testing has shown profile pages with 
too much information and measures that are not well understood by 
consumers can negatively impact a consumer's ability to make informed 
decisions. Our analysis of the collected measure data, along with 
consumer testing and stakeholder feedback, will determine specifically 
which measures are published on Web site profile pages. Statistical 
analyses, like those specified above, will ensure the measures included 
are statistically valid and reliable and comparable across data 
collection mechanisms. Stakeholder feedback will help us to ensure that 
all publicly reported measures meet current clinical standards. When 
measures are finalized in advance of the time period in which they are 
collected, it is possible that clinical guidelines can change rendering 
a measure no longer relevant. Publishing that measure can lead to 
consumer confusion regarding what best practices their health care 
professional should be subscribing to. We will continue to reach out to 
stakeholders in the professional community, such as specialty 
societies, to ensure that the measures under consideration for public 
reporting remain clinically relevant and accurate.
---------------------------------------------------------------------------

    \2\ By statistically comparable, CMS means that the quality 
measures are analyzed and proven to measure the same phenomena in 
the same way regardless of the mechanism through which they were 
collected.
---------------------------------------------------------------------------

    The primary goal of Physician Compare is to help consumers make 
informed health care decisions. If a consumer does not properly 
interpret a quality measure and thus misunderstands what the quality 
score represents, the consumer cannot use this information to make an 
informed decision. Through concept testing, we will test with consumers 
how well they understand measures presented using plain language. Such 
consumer testing will help us gauge how measures are understood and the 
kinds of measures that are most relevant to consumers. This will be 
done to help ensure that the information included on Physician Compare 
is as consumer friendly and consumer focused as possible.
    As is the case for all measures published on Physician Compare, 
individual EPs and group practices will be given a 30-day preview 
period to view their measures as they will appear on Physician Compare 
prior to the measures being published. As in previous years, we will 
fully explain the process for the 30-day preview and provide a detailed 
timeline and instructions for preview in advance of the start of the 
preview period.
    We also report certain Accountable Care Organization (ACO) quality 
measures on Physician Compare (76 FR 67802, 67948). Because EPs that 
bill under the TIN of an ACO participant are considered to be a group 
practice for purposes of qualifying for a PQRS incentive under the 
Medicare Shared Savings Program (Shared Savings Program), we publicly 
report ACO performance on quality measures on the Physician Compare Web 
site in the same way as we report performance on quality measures for 
group practices participating under PQRS. Public reporting of 
performance on these measures is presented at the ACO level only. The 
first subset of ACO measures was also published on the Web site in 
February 2014. ACO measures can be viewed by following the 
``Accountable Care Organization (ACO) Quality Data'' link on the 
homepage of the Physician Compare Web site (http://medicare.gov/physiciancompare/aco/search.html ).
    ACOs will be able to preview their quality data that will be 
publicly reported on Physician Compare through the ACO Quality Reports, 
which will be made available to ACOs for review at least 30 days prior 
to the start of public reporting on Physician Compare. The quality 
reports will indicate the measures that are available for public 
reporting. ACO measures will be publicly reported in plain language, so 
a crosswalk linking the technical language included in the Quality 
Report and the plain language that will be publicly reported will be 
provided to ACOs at least 30 days prior to the start of public 
reporting.
    As part of our public reporting plan for Physician Compare, we also 
have available for public reporting patient experience measures, 
specifically reporting the CAHPS for PQRS measures, which relate to the 
Clinician and Group Consumer Assessment of Healthcare Providers and 
Systems (CG-CAHPS) data, for group practices of 100 or more EPs 
reporting data in 2013 under PQRS and for ACOs participating in the 
Shared Savings Program (77 FR 69166 and 69167). The 2013 CAHPS data for 
ACOs were publicly reported on Physician Compare in December 2014.
    We continued to expand our plan for publicly reporting data on 
Physician Compare in 2015. We plan to make all group practice-level 
measures collected through the Web Interface for groups of 25 or more 
EPs participating in 2014 under the PQRS and for ACOs participating in 
the Shared Savings Program available for public reporting in CY 2015 
(78 FR 74449). We also plan to publicly report performance on certain 
measures that group practices report via registries and EHRs for the 
2014 PQRS GPRO (78 FR 74451). Specifically, we finalized a decision to 
make available for public reporting on Physician Compare performance on 
16 registry measures and 13 EHR measures in CY 2015 (78 FR 74451). 
These measures are consistent with the measures available for public 
reporting via the Web Interface.
    In CY 2015, CAHPS measures for group practices of 100 or more EPs 
who participate in PQRS, regardless of data submission method, and for 
Shared Savings Program ACOs reporting through the Web Interface or 
other CMS-approved tool or interface are available for public reporting 
(78 FR 74452). In addition, twelve 2014 summary survey measures for 
groups of 25 to 99 EPs collected via any certified CAHPS vendor 
regardless of PQRS participation are available for public reporting (78 
FR 74452). For ACOs participating in the Shared Savings Program, the 
patient experience measures that are included in the Patient/Caregiver 
Experience domain of the Quality Performance Standard under the Shared 
Savings Program will be available for public reporting in CY 2015 (78 
FR 74452).

[[Page 41810]]

    In late CY 2015, certain 2014 individual PQRS measure data reported 
by individual EPs are also available for public reporting. 
Specifically, we will make available for public reporting 20 individual 
measures collected through a registry, EHR, or claims (78 FR 74453 
through 74454). These are measures that are in line with those measures 
reported by groups via the Web Interface.
    Finally, in support of the HHS-wide Million Hearts initiative, 
performance rates on measures in the PQRS Cardiovascular Prevention 
measures group at the individual EP level for data collected in 2014 
for the PQRS are available for public reporting in CY 2015 (78 FR 
74454).
    We continue to expand public reporting on Physician Compare by 
making an even broader set of quality measures available for 
publication on the Web site in CY 2016. All 2015 group-level PQRS 
measures across all group reporting mechanisms--Web Interface, 
registry, and EHR--are available for public reporting on Physician 
Compare in CY 2016 for groups of 2 or more EPs (79 FR 67769). 
Similarly, we decided that all measures reported by ACOs participating 
in the Shared Savings Program will be available for public reporting on 
Physician Compare.
    Understanding the value of patient experience data for Physician 
Compare, CMS decided to report twelve 2015 CAHPS for PQRS summary 
survey measures for all group practices of two or more EPs, who meet 
the specified sample size requirements and collect data via a CMS-
specified certified CAHPS vendor, are available for public reporting in 
CY 2016 (79 FR 67772).
    To provide the opportunity for more EPs to have measures included 
on Physician Compare, and to provide more information to consumers to 
make informed decisions about their health care, we will make available 
for public reporting in CY 2016 on Physician Compare all 2015 PQRS 
measures for individual EPs collected through a registry, EHR, or 
claims (79 FR 67773).
    Furthermore, in support of the HHS-wide Million Hearts initiative, 
we will publicly report the performance rates on the four, 2015 PQRS 
measures reported by individual EPs in support of Million Hearts with a 
minimum sample size of 20 patients.
    To further support the expansion of quality measure data available 
for public reporting on Physician Compare and to provide more quality 
data to consumers to help them make informed decisions, CMS finalized 
2015 Qualified Clinical Data Registry (QCDR) PQRS and non-PQRS measure 
data collected at the individual EP level are available for public 
reporting. The QCDR is required to declare during their self-nomination 
if they plan to post data on their own Web site and allow Physician 
Compare to link to it or if they will provide data to CMS for public 
reporting on Physician Compare. Measures collected via QCDRs must also 
meet the established public reporting criteria. Both PQRS and non-PQRS 
measures that are in their first year of reporting by a QCDR will not 
be available for public reporting (79 FR 67774 through 67775).
    See Table 18 for a summary of our previously finalized policies for 
public reporting data on Physician Compare.

          Table 18--Summary of Previously Finalized Policies for Public Reporting on Physician Compare
----------------------------------------------------------------------------------------------------------------
                                                                           Quality measures and data for public
 Data  collection year   Public reporting year    Reporting mechanism(s)                 reporting
----------------------------------------------------------------------------------------------------------------
2012..................  2013...................  Web Interface (WI),      Include an indicator for satisfactory
                                                  EHR, Registry, Claims.   reporters under PQRS, successful e-
                                                                           prescribers under eRx Incentive
                                                                           Program, and participants in the EHR
                                                                           Incentive Program.
2012..................  February 2014..........  WI.....................  5 Diabetes Mellitus (DM) and Coronary
                                                                           Artery Disease (CAD) measures
                                                                           collected via the WI for group
                                                                           practices reporting under PQRS with a
                                                                           minimum sample size of 25 patients
                                                                           and Shared Savings Program ACOs.
2013..................  2014...................  WI, EHR, Registry,       Include an indicator for satisfactory
                                                  Claims.                  reporters under PQRS, successful e-
                                                                           prescribers under eRx Incentive
                                                                           Program, and participants in the EHR
                                                                           Incentive Program. Include an
                                                                           indicator for EPs who earn a PQRS
                                                                           Maintenance of Certification
                                                                           Incentive and EPs who report the PQRS
                                                                           Cardiovascular Prevention measures
                                                                           group in support of Million Hearts.
2013..................  December 2014..........  WI.....................  3 DM and 1 CAD measures collected via
                                                                           the WI for groups of 25 or more EPs
                                                                           with a minimum sample size of 20
                                                                           patients.
2013..................  December 2014..........  Survey Vendor..........  6 CAHPS for ACO summary survey
                                                                           measures for Shared Savings Program
                                                                           ACOs.
2014..................  Expected to be 2015....  WI, EHR, Registry,       Include an indicator for satisfactory
                                                  Claims.                  reporters under PQRS and participants
                                                                           in the EHR Incentive Program. Include
                                                                           an indicator for EPs who earn a PQRS
                                                                           Maintenance of Certification
                                                                           Incentive and EPs who report the PQRS
                                                                           Cardiovascular Prevention measures
                                                                           group in support of Million Hearts.
2014..................  Expected to be late      WI, EHR, Registry......  All measures reported via the WI, 13
                         2015.                                             EHR, and 16 registry measures for
                                                                           group practices of 2 or more EPs
                                                                           reporting under PQRS with a minimum
                                                                           sample size of 20 patients.
                                                                          Include composites for DM and CAD, if
                                                                           available.
2014..................  Expected to be late      WI, Survey Vendor        All measures reported by Shared
                         2015.                    Administrative Claims.   Savings Program ACOs, including CAHPS
                                                                           for ACO and claims based measures.
2014..................  Expected to be late      WI, Certified Survey     Up to 12 CAHPS for PQRS summary
                         2015.                    Vendor.                  measures for groups of 100 or more
                                                                           EPs reporting via the WI and group
                                                                           practices of 25 to 99 EPs reporting
                                                                           via a CMS-approved certified survey
                                                                           vendor.
2014..................  Expected to be late      Registry, EHR, or        A sub-set of 20 PQRS measures
                         2015.                    Claims.                  submitted by individual EPs that
                                                                           align with those available for group
                                                                           reporting via the WI and that are
                                                                           collected through registry, EHR, or
                                                                           claims with a minimum sample size of
                                                                           20 patients.
2014..................  Expected to be late      Registry...............  Measures from the Cardiovascular
                         2015.                                             Prevention measures group reported by
                                                                           individual EPs in support of Million
                                                                           Hearts with a minimum sample size of
                                                                           20 patients.

[[Page 41811]]

 
2015..................  Expected to be late      WI, EHR, Registry,       Include an indicator for satisfactory
                         2016.                    Claims.                  reporters under PQRS and participants
                                                                           in the EHR Incentive Program. Include
                                                                           an indicator for EPs who report 4
                                                                           individual PQRS measures in support
                                                                           of Million Hearts.
2015..................  Expected to be late      WI, EHR, Registry......  All PQRS measures for group practices
                         2016.                                             of 2 or more EPs.
2015..................  Expected to be late      WI, Survey Vendor        All measures reported by Shared
                         2016.                    Administrative Claims.   Savings Program ACOs, including CAHPS
                                                                           for ACOs and claims based measures.
2015..................  Expected to be late      Certified Survey Vendor  All CAHPS for PQRS measures reported
                         2016.                                             for groups of 2 or more EPs who meet
                                                                           the specified sample size
                                                                           requirements and collect data via a
                                                                           CMS-specified certified CAHPS vendor.
2015..................  Expected to be late      Registry, EHR, or        All PQRS measures for individual EPs
                         2016.                    Claims.                  collected through a registry, EHR, or
                                                                           claims.
2015..................  Expected to be late      Registry, EHR, or        4 PQRS measures reported by individual
                         2016.                    Claims.                  EPs in support of Million Hearts with
                                                                           a minimum sample size of 20 patients.
2015..................  Expected to be late      QCDR...................  All individual EP QCDR measures,
                         2016.                                             including PQRS and non-PQRS measures.
----------------------------------------------------------------------------------------------------------------

3. Proposed Policies for Public Data Disclosure on Physician Compare
    We are expanding public reporting on Physician Compare by 
continuing to make a broad set of quality measures available for 
publication on the Web site. We started the phased approach with a 
small number of possible PQRS GPRO Web Interface measures for 2012 and 
have been steadily building on this to provide Medicare consumers with 
more information to help them make informed health care decisions. As a 
result, we are now proposing to add new data elements to the individual 
EP and/or group practice profile pages and to continue to publicly 
report a broad set of quality measures on the Web site.
a. Value Modifier
    We propose to expand the section on each individual EP and group 
practice profile page that indicates Medicare quality program 
participation with a green check mark to include the names of those 
individual EPs and group practices who received an upward adjustment 
for the Value Modifier (VM). We propose to include this on Physician 
Compare annually. For the 2018 VM, this information would be based on 
2016 data and included on the site no earlier than late 2017. The VM 
upward adjustment indicates that a physician or group has achieved one 
of the following: higher quality care at a lower cost; higher quality 
care at an average cost; or average quality care at a lower cost. The 
first goal of the HHS Strategic Plan is to strengthen health care. One 
of the ways to do this is to reduce the growth of health care costs 
while promoting high-value, effective care (Objective D, Strategic Goal 
1).\3\ This VM indicator can help consumers identify higher quality 
care provided at a lower cost. This means this type of quality 
information may be very useful to consumers as they work to choose the 
best possible health care available to them. Including the check mark 
is a way to share what can be a very complex concept in a user-friend, 
easy-to-understand format. We believe this is a positive first step in 
making this important information available to the public in a way that 
is most likely to be accurately interpreted and beneficial. We solicit 
comments on this proposal.
---------------------------------------------------------------------------

    \3\ http://www.hhs.gov/strategic-plan/goal1.html.
---------------------------------------------------------------------------

b. Million Hearts
    In support of the HHS-wide Million Hearts initiative, we include an 
indicator for individual EPs who choose to report on specific ``ABCS'' 
(Appropriate Aspirin Therapy for those who need it, Blood Pressure 
Control, Cholesterol Management, and Smoking Cessation) measures (79 FR 
67764). Based on available measures the criteria for this indicator 
have evolved over time. In 2015, an indicator was included if EPs 
satisfactorily reported four individual PQRS Cardiovascular Prevention 
measures. In previous years, the indicator was based on satisfactory 
reporting of the Cardiovascular Prevention measures group, which was 
not available via PQRS for 2015. To further support this initiative, we 
now propose to include on Physician Compare annually in the year 
following the year of reporting (for example, 2016 data will be 
included on Physician Compare in 2017) an indicator for individual EPs 
who satisfactorily report the new Cardiovascular Prevention measures 
group being proposed under PQRS, should this measures group be 
finalized. The Million Hearts initiative's primary goal is to improve 
cardiovascular heart health, and therefore, we believe it is important 
to continue supporting the program and acknowledging those physicians 
and other health care professionals working to excel in performance on 
the ABCS. We solicit comments on this proposal.
c. PQRS GPRO and ACO Reporting
    Understanding the importance of including quality data on Physician 
Compare to support the goals of section 10331(a) of the Affordable Care 
Act, we finalized in the CY 2015 PFS final rule with comment period (79 
FR 67547) a decision to publicly report on Physician Compare all PQRS 
GPRO measures collected in 2015 via the Web Interface, registry, or 
EHR. We propose to continue to make available for public reporting on 
Physician Compare on an annual basis all PQRS GPRO measures across all 
PQRS group practice reporting mechanisms--Web Interface, registry, and 
EHR- for groups of 2 or more EPs available in the year following the 
year the measures are reported. Similarly, all measures reported by 
Shared Savings Program ACOs, including CAHPS for ACO measures, would be 
available for public reporting on Physician Compare annually in the 
year following the year the measures are reported. For group practice 
and ACO measures, the measure performance rate will be represented on 
the Web site. We solicit comments on this proposal.
d. Individual EP PQRS Reporting
    Consumer testing indicates that consumers are looking for measures 
regarding individual doctors and other health care professionals. As a 
result, we plan to make available for public reporting on Physician 
Compare all 2015 PQRS measures for individual EPs collected through a 
registry, EHR, or claims (79 FR 67773). Through

[[Page 41812]]

stakeholder outreach and consumer testing we have learned that these 
PQRS quality data provide the public with useful information to help 
consumers make informed decisions about their health care. As a result, 
we propose to continue to make all PQRS measures across all individual 
EP reporting mechanisms available for public reporting on Physician 
Compare annually in the year following the year the measures are 
reported (for example, 2016 data will be included on Physician Compare 
in 2017). For individual EP measures, the measure performance rate will 
be represented on the Web site. We solicit comments on this proposal.
e. Individual EP and Group Practice QCDR Measure Reporting
    Stakeholder outreach and consumer testing have repeatedly shown 
that consumers find individual EP quality measures valuable and helpful 
when making health care decisions. Consumers want to know more about 
the individual EPs they can make an appointment to see for their health 
care needs. And expanding group practice-level public reporting ensures 
that more quality data are available to assist consumers with their 
decision making. We do appreciate, however, that not all specialties 
have a full complement of available quality measures specific to the 
work they do currently available through PQRS. As a result, we decided 
to make individual EP level Qualified Clinical Data Registry (QCDR) 
measures-both PQRS and non-PQRS measures--available for public 
reporting starting with 2015 data (79 FR 67774 through 67775). To 
further support the availability of quality measure data most relevant 
for all specialties, we propose to continue to make available for 
public reporting on Physician Compare all individual EP level QCDR PQRS 
and non-PQRS measure data that have been collected for at least a full 
year. In addition, we are now proposing to also make group practice 
level QCDR PQRS and non-PQRS measure data that have been collected for 
at least a full year available for public reporting. Previously, the 
PQRS program only included QCDR data at the individual EP level. In 
this proposed rule, CMS is proposing, under the PQRS, to expand QCDR 
data to be available to group practices as well. In this case, group 
practice refers to a group of 2 or more EPs billing under the same Tax 
Identification Number (TIN). We propose to publicly report these data 
annually in the year following the year the measures are reported. For 
both EP and group level measures, the measure performance rate will be 
represented on the Web site. We solicit comments on these proposals.
    The QCDR would be required to declare during its self-nomination if 
it plans to post data on its own Web site and allow Physician Compare 
to link to it or if the QDCR will provide data to us for public 
reporting on Physician Compare. After a QCDR declares a public 
reporting method, that decision is final for the reporting year. If a 
declaration is not made, the data would be considered available for 
public reporting on Physician Compare.
f. Benchmarking
    We previously proposed (79 FR 40389) a benchmark that aligned with 
the Shared Savings Program ACO benchmark methodology finalized in the 
November 2011 Shared Savings Program final rule (76 FR 67898) and 
amended in the CY 2014 PFS final rule with comment period (78 FR 
74759). Benchmarks are important to ensuring that the quality data 
published on Physician Compare are accurately understood. A benchmark 
will allow consumers to more easily evaluate the information published 
by providing a point of comparison between groups and between 
individuals. However, given shortcomings when trying to apply the 
Shared Savings Program methodology to the group practice or individual 
EP setting, this proposal was not finalized. We noted we would discuss 
more thoroughly potential benchmarking methodologies with our 
stakeholders and evaluate other programs' methodologies to identify the 
best possible option for a benchmark for Physician Compare (79 FR 
67772). To accomplish this, we reached out to stakeholders, including 
specialty societies, consumer advocacy groups, physicians and other 
health care professionals, measure experts, and quality measure 
specialists, as well as other CMS Quality Programs. Based on this 
outreach and the recommendation of our Technical Expert Panel (TEP), we 
propose to publicly report on Physician Compare an item or measure-
level benchmark derived using the Achievable Benchmark of Care 
(ABCTM) \4\ methodology annually based on the PQRS 
performance rates most recently available. For instance, in 2017 we 
would publicly report a benchmark derived from the 2016 PQRS 
performance rates. The specific measures the benchmark would be derived 
for would be determined once the data are available and analyzed. The 
benchmark would only be applied to those measures deemed valid and 
reliable and that are reported by enough EPs or group practices to 
produce a valid result (see 79 FR 67764 through 79 FR 67765 for a more 
detailed discussion regarding the types of analysis done to ensure data 
are suitable for public reporting). We solicit comments on this 
proposal.
---------------------------------------------------------------------------

    \4\ Kiefe CI, Weissman NW, Allison JJ, Farmer R, Weaver M, 
Williams OD. Identifying achievable benchmarks of care: concepts and 
methodology. International Journal of Quality Health Care. 1998 Oct; 
10(5):443-7.
---------------------------------------------------------------------------

    ABCTM is a well-tested, data-driven methodology that 
allows us to account for all of the data collected for a quality 
measure, evaluate who the top performers are, and then use that to set 
a point of comparison for all of those groups or individual EPs who 
report the measure.
    ABCTM starts with the pared-mean, which is the mean of 
the best performers on a given measure for at least 10 percent of the 
patient population--not the population of reporters. To find the pared-
mean, we will rank order physicians or groups (as appropriate per the 
measure being evaluated) in order from highest to lowest performance 
score. We will then subset the list by taking the best performers 
moving down from best to worst until we have selected enough reporters 
to represent 10 percent of all patients in the denominator across all 
reporters for that measure.
    We will derive the benchmark by calculating the total number of 
patients in the highest scoring subset receiving the intervention or 
the desired level of care, or achieving the desired outcome, and 
dividing this number by the total number of patients that were measured 
by the top performing doctors. This produces a benchmark that 
represents the best care provided to the top 10 percent of patients.
    An Example: A doctor reports which of her patients with diabetes 
have maintained their blood pressure at a healthy level. There are four 
steps to establishing the benchmark for this measure.
    (1) We look at the total number of patients with diabetes for all 
doctors who reported this diabetes measure.
    (2) We rank doctors that reported this diabetes measure from 
highest performance score to lowest performance score to identify the 
set of top doctors who treated at least 10 percent of the total number 
of patients with diabetes.
    (3) We count how many of the patients with diabetes who were 
treated by the top doctors also had blood pressure at a healthy level.
    (4) This number is divided by the total number of patients with 
diabetes

[[Page 41813]]

who were treated by the top doctors, producing the ABCTM 
benchmark.
    To account for low denominators, ABCTM calls for the 
calculation of an adjusted performance fraction (AFP), a Bayesian 
Estimator. The AFP is calculated by dividing the actual number of 
patients receiving the intervention or the desired level of care plus 1 
by the total number of patients in the total sample plus 2. This 
ensures that very small sample sizes do not over influence the 
benchmark and allows all data to be included in the benchmark 
calculation. To ensure that a sufficient number of cases are included 
by mean performance percent, ABCTM provides a minimum 
sufficient denominator (MSD) for each performance level. Together this 
ensures that all cases are appropriately accounted for and adequately 
figured in to the benchmark.
    The ABCTM methodology for a publicly reported benchmark 
on Physician Compare would be based on the current year's data, so the 
benchmark would be appropriate regardless of the unique circumstances 
of data collection or the measures available in a given reporting year. 
We also propose to use the ABCTM methodology to generate a 
benchmark which can be used to systematically assign stars for the 
Physician Compare 5 star rating. ABCTM has been historically 
well received by the health care professionals and entities it is 
measuring because the benchmark represents quality while being both 
realistic and achievable; it encourages continuous quality improvement; 
and, it is shown to lead to improved quality of care.5 6 7
---------------------------------------------------------------------------

    \5\ Kiefe CI, Weissman NW, Allison JJ, Farmer R, Weaver M, 
Williams OD. Identifying achievable benchmarks of care: concepts and 
methodology. International Journal of Quality Health Care. 1998 Oct; 
10(5):443-7.
    \6\ Kiefe CI, Allison JJ, Williams O, Person SD, Weaver MT, 
Weissman NW. Improving Quality Improvement Using Achievable 
Benchmarks For Physician Feedback: A Randomized Controlled Trial. 
JAMA. 2001;285(22):2871-2879.
    \7\ Wessell AM, Liszka HA, Nietert PJ, Jenkins RG, Nemeth LS, 
Ornstein S. Achievable benchmarks of care for primary care quality 
indicators in a practice-based research network. American Journal of 
Medical Quality 2008 Jan-Feb;23(1):39-46.
---------------------------------------------------------------------------

    To summarize, we propose to publicly report on Physician Compare an 
item or measure-level benchmark derived using the Achievable Benchmark 
of Care (ABCTM) methodology annually based on the PQRS 
performance rates most recently available (that is, in 2017 we would 
publicly report a benchmark derived from the 2016 PQRS performance 
rates), and use this benchmark to systematically assign stars for the 
Physician Compare 5 star rating. We solicit comments on this proposal.
g. Patient Experience of Care Measures
    In the CY 2015 PFS final rule with comment period (79 FR 67547), we 
adopted a policy to publicly report patient experience data for all 
group practices of two or more EPs. Consumer testing shows that other 
patients' assessments of their experience resonate with consumers 
because it is important to them to hear about positive and negative 
experiences others have with physicians and other health care 
professionals. As a result, consumers report these patient experience 
data help them make an informed health care decision. Understanding the 
value consumers place on patient experience data and our commitment to 
reporting these data on Physician Compare, we propose to continue to 
make available for public reporting all patient experience data for all 
group practices of two or more EPs, who meet the specified sample size 
requirements and collect data via a CMS-specified certified CAHPS 
vendor, annually in the year following the year the measures are 
reported (for example, 2016 PQRS reported data will be included on the 
Web site in 2017). The patient experience data available that we 
propose to make available for public reporting are the CAHPS for PQRS 
measures, which include the CG-CAHPS core measures. For group 
practices, we propose to annually make available for public reporting a 
representation of the top box performance rate \8\ for these 12 summary 
survey measures:
---------------------------------------------------------------------------

    \8\ Top Box score refers to the most favorable response category 
for a given measure. If the measure has a scale of ``always,'' 
``sometimes,'' ``never,'' the Top Box score is ``always'' if this 
represents the most favorable response. For the CAHPS for PQRS 
doctor rating, the Top Box score is a rating of 9 or 10.
---------------------------------------------------------------------------

     Getting Timely Care, Appointments, and Information.
     How Well Providers Communicate.
     Patient's Rating of Provider.
     Access to Specialists.
     Health Promotion & Education.
     Shared Decision Making.
     Health Status/Functional Status.
     Courteous and Helpful Office Staff.
     Care Coordination.
     Between Visit Communication.
     Helping You to Take Medication as Directed.
     Stewardship of Patient Resources.
    We solicit comments on this proposal.
h. Downloadable Database
(a) Addition of VM Information
    To further aid in transparency, we also propose to add new data 
elements to the Physician Compare downloadable database (https://data.medicare.gov/data/physician-compare). Currently, the downloadable 
database includes all quality information publicly reported on 
Physician Compare, including quality program participation, and all 
measures submitted and reviewed and found to be statistically valid and 
reliable. We propose to add to the Physician Compare downloadable 
database for group practices and individual EPs the 2018 VM quality 
tiers for cost and quality, based on the 2016 data, noting if the group 
practice or EP is high, low, or average on cost and quality per the VM. 
We also propose to include a notation of the payment adjustment 
received based on the cost and quality tiers, and an indication if the 
individual EP or group practice was eligible to but did not report 
quality measures to CMS. The profile pages on Physician Compare are 
meant to provide information to average Medicare consumers that can 
help them identify quality health care and choose a quality clinician, 
while this database is geared toward health care professionals, 
industry insiders, and researchers who are more able to accurately use 
more complex data. Therefore, adding this information to the 
downloadable database promotes transparency and provides useful data to 
the public while we conduct consumer testing to ensure VM data beyond 
the indication for an upward adjustment discussed above can be packaged 
and explained in such a way that it is accurately interpreted, 
understood, and useful to average consumers. We solicit comments on 
this proposal.
(b) Addition of Utilization Data
    In addition, we propose to add utilization data to the Physician 
Compare downloadable database. Utilization data is information 
generated from Medicare Part B claims on services and procedures 
provided to Medicare beneficiaries by physicians and other health care 
professionals; and are currently available at (http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/Physician-and-Other-Supplier.html ). It 
provides counts of services and procedures rendered by health care 
professionals by Healthcare Common Procedure Coding System (HCPCS) 
code. Under section 104(e) of the Medicare Access and CHIP 
Reauthorization Act of 2015 (MACRA), Pub. L. 114-10, Sec.  104, signed 
into law April 16, 2015; beginning with 2016, the Secretary shall 
integrate utilization data information on Physician Compare. This

[[Page 41814]]

section of the law discusses data that can help empower people enrolled 
in Medicare by providing access to information about physician 
services. These data are very useful to the health care industry and to 
health care researchers and other stakeholders who can accurately 
interpret these data and use them in meaningful analysis. These data 
are less immediately useable in their raw form by the average Medicare 
consumer. As a result, we propose that the data be added to the 
downloadable database versus the consumer-focused Web site profile 
pages. Including these data in the Physician Compare downloadable 
database provides transparency without taking away from the information 
of most use to consumers on the main Web site. We solicit comments on 
this proposal.
(i) Board Certification
    Finally, we propose adding additional Board Certification 
information to the Physician Compare Web site. Board Certification is 
the process of reviewing and certifying the qualifications of a 
physician or other health care professional by a board of specialists 
in the relevant field. We currently include American Board of Medical 
Specialties (ABMS) data as part of individual EP profiles on Physician 
Compare. We appreciate that there are additional, well respected boards 
that are not included in the ABMS data currently available on Physician 
Compare that represent EPs and specialties represented on the Web site. 
Such board certification information is of interest to consumers as it 
provides additional information to use to evaluate and distinguish 
between EPs on the Web site, which can help in making an informed 
health care decision. The more data of immediate interest that is 
included on Physician Compare, the more users will come to the Web site 
and find quality data that can help them make informed decisions. 
Specifically, we are now proposing to add to the Web site board 
certification information from the American Board of Optometry (ABO) 
and American Osteopathic Association (AOA). Please note we are not 
endorsing any particular boards. These two specific boards showed 
interest in being added to the Web site and have demonstrated that they 
have the data to facilitate inclusion of this information on the Web 
site. These two boards also fill a gap, as the ABMS does not certify 
Optometrists and only certain types of DOs are covered by AMBS 
Osteopathic certification. In general, we will review interest from 
boards as it is brought to our attention, and if the necessary data are 
available and appropriate arrangements and agreements can be made to 
share the needed information with Physician Compare, additional board 
information could be added to the Web site in future. At this time, 
however, we are specifically proposing to include ABO and AOA Board 
Certification information on Physician Compare. We solicit comments on 
this proposal.
    We solicit comments on all proposals. Increasing the measures and 
data elements for public reporting on Physician Compare at both the 
individual and group level will help accomplish the Web site's twofold 
purpose:
     To provide more information for consumers to encourage 
informed patient choice.
     To create explicit incentives for physicians to maximize 
performance.
    Table 19 summarizes the Physician Compare measure and participation 
data proposals detailed in this section.

                Table 19--Summary of Proposed Measure and Participation Data for Public Reporting
----------------------------------------------------------------------------------------------------------------
                                                                                            Proposed quality
  Data collection year *    Publication year       Data type       Reporting mechanism    measures and data for
                                   *                                                        public reporting
----------------------------------------------------------------------------------------------------------------
2016.....................  2017               PQRS, PQRS, GPRO,    Web Interface, EHR,  Include an indicator for
                                               EHR, and Million     Registry, Claims.    satisfactory reporters
                                               Hearts.                                   under PQRS,
                                                                                         participants in the EHR
                                                                                         Incentive Program, and
                                                                                         EPs who satisfactorily
                                                                                         report the
                                                                                         Cardiovascular
                                                                                         Prevention measures
                                                                                         group proposed under
                                                                                         PQRS in support of
                                                                                         Million Hearts.
2016.....................  2018               PQRS, PQRS, GPRO...  Web Interface, EHR,  Include an indicator for
                                                                    Registry, Claims.    individual EPs and
                                                                                         group practices who
                                                                                         receive an upward
                                                                                         adjustment for the VM.
2016.....................  2017               PQRS, GPRO.........  Web Interface, EHR,  All PQRS GPRO measures
                                                                    Registry.            reported via the Web
                                                                                         Interface, EHR, and
                                                                                         registry that are
                                                                                         available for public
                                                                                         reporting for group
                                                                                         practices of 2 or more
                                                                                         EPs.
                                                                                        Publicly report an item-
                                                                                         level benchmark, as
                                                                                         appropriate.
2016.....................  2017               ACO................  Web Interface,       All measures reported by
                                                                    Survey Vendor        Shared Savings Program
                                                                    Claims.              ACOs, including CAHPS
                                                                                         for ACOs.
2016.....................  2017               CAHPS for PQRS.....  CMS-Specified        All CAHPS for PQRS
                                                                    Certified CAHPS      measures for groups of
                                                                    Vendor.              2 or more EPs who meet
                                                                                         the specified sample
                                                                                         size requirements and
                                                                                         collect data via a CMS-
                                                                                         specified certified
                                                                                         CAHPS vendor.
2016.....................  2017               PQRS...............  Registry, EHR, or    All PQRS measures for
                                                                    Claims.              individual EPs
                                                                                         collected through a
                                                                                         registry, EHR, or
                                                                                         claims.
                                                                                        Publicly report an item-
                                                                                         level benchmark, as
                                                                                         appropriate.
2016.....................  2017               QCDR data..........  QCDR...............  All individual EP and
                                                                                         group practice QCDR
                                                                                         measures.
2016.....................  2017               Utilization data...  Claims.............  Utilization data for
                                                                                         individual EPs in the
                                                                                         downloadable database.
2016.....................  2017               PQRS, PQRS, GPRO...  Web Interface, EHR,  The following data for
                                                                    Registry, Claims.    group practices and
                                                                                         individual EPs in the
                                                                                         downloadable database:
                                                                                         The VM quality
                                                                                         tiers for cost and
                                                                                         quality, noting if the
                                                                                         group practice or EP is
                                                                                         high, low, or neutral
                                                                                         on cost and quality per
                                                                                         the VM.
                                                                                         A notation of
                                                                                         the payment adjustment
                                                                                         received based on the
                                                                                         cost and quality tiers.
                                                                                         An indication
                                                                                         if the individual EP or
                                                                                         group practice was
                                                                                         eligible to but did not
                                                                                         report quality measures
                                                                                         to CMS.
----------------------------------------------------------------------------------------------------------------
* Note that these data are proposed to be reported annually. The table only provides the first year in which
  these proposals would begin on an annual basis, and such dates also serve to illustrate the data collection
  year in relation to the publication year. Therefore, after 2016, 2017 data would be publicly reported in 2018,
  2018 data would be publicly reported in 2019, etc.


[[Page 41815]]

4. Seeking Public Comment for Possible Future Rulemaking
a. Quality Measures
    In addition to these proposals, we seek comment on several new data 
elements for possible inclusion on the individual EP and group profile 
pages of Physician Compare. In future years, we will consider expanding 
public reporting to include additional quality measures. We know there 
are gaps in the measures currently available for public reporting on 
Physician Compare. Understanding this, we would like to hear from 
stakeholders about the types of quality measures that will help us fill 
these gaps and meet the needs of consumers and stakeholders. Therefore, 
we seek comment on potential measures that would benefit future public 
reporting on Physician Compare. We are working to identify possible 
data sources and we seek comment on the measure concepts, as well as 
potential specific measures of interest. The quality measures that 
would be considered for future posting on Physician Compare are those 
that have been comprehensively vetted and tested, and are trusted by 
the physician community.
b. Medicare Advantage
    We also seek comment on adding Medicare Advantage information to 
Physician Compare individual EP and group practice profile pages. 
Specifically, we are seeking comment on adding information on the 
relevant EP and group practice profile pages about which Medicare 
Advantage health plans the EP or group accepts and making this 
information a link to more information about that plan on the 
Medicare.gov Plan Finder Web site. An increasing number of Medicare 
clinicians provide services via Medicare Advantage. Medicare Advantage 
quality data is reported via Plan Finder at the plan level. As a 
result, physicians and other health care professionals who participate 
in Medicare Advantage do not have quality measure data available for 
public reporting on Physician Compare. Adding a link between Physician 
Compare clinicians participating in Medicare Advantage plans and the 
associated quality data available for those plans on Plan Finder 
ensures that consumers have access to all of the quality data available 
to make an informed health care decision.
c. Value Modifier
    We also seek comment on including additional VM cost and quality 
data on Physician Compare. Specifically, we seek comment on including 
in future years an indicator for a downward and neutral VM adjustment 
on group practice and individual EP profile pages. We also seek comment 
on including the VM quality composite or other VM quality performance 
data on Physician Compare group practice and individual EP profile 
pages and/or the Physician Compare downloadable database. Similarly, we 
seek comment on including the VM cost composite or other VM cost 
measure data on Physician Compare group practice and individual EP 
profile pages and/or the downloadable database. These VM quality and 
cost measures ultimately help determine the payment adjustment and are 
an indication of whether the individual or group is meeting the 
Affordable Care Act goals of improving quality while lowering cost. 
Specifically, including this cost data is consistent with the section 
10331(a)(2) of the Affordable Care Act as it is an assessment of 
efficiency. However, these data are complex and we need time to 
establish the best method for public reporting and to ensure this 
information is accurately understood and interpreted by consumers. 
Therefore, we only seek comment at this time.
d. Open Payments Data
    We currently make Open Payments data available at http://www.cms.gov/openpayments/. Consumer testing has indicated that these 
data are of great interest to consumers. Consumers have indicated that 
this level of transparency is important to them and access to this 
information on Physician Compare increases their ability to find and 
evaluate the information. We seek comment about including Open Payments 
data on individual EP profile pages. Although these data are already 
publicly available, consumer testing has also indicated that additional 
context, wording, and data display considerations can help consumers 
better understand the information. We are now seeking comment on adding 
these data to Physician Compare; to the extent it is feasible and 
appropriate. Prior to considering a formal proposal, we can continue to 
test these data with consumers to establish the context and framing 
needed to best ensure these data are accurately understood and 
presented in a way that assists decision making. Therefore, we only 
seek comment at this time.
e. Measure Stratification
    Finally, we seek comment on including individual EP and group 
practice-level quality measure data stratified by race, ethnicity, and 
gender on Physician Compare, if feasible and appropriate (i.e. 
statistically appropriate, etc.). By stratification we mean that we 
will report quality measures for each group of a given category. For 
example, if we were to report a measure for blood pressure control 
stratified by sex, we would report a performance score for women and 
one for men. We also seek comment on potential quality measures, 
including composite measures, for future postings on Physician Compare 
that could help consumers and stakeholders monitor trends in health 
equity. Inclusion of data stratified by race and ethnicity and gender, 
as well as the inclusion of other measures of health equity would help 
ensure that HHS is beginning to work to fulfill one of the Affordable 
Care Act goals of reporting data on race, ethnicity, sex, primary 
language, and disability status through public postings on HHS Web 
sites and other dissemination strategies (see ACA Section 4302).
    We are specifically seeking comment on these issues. Any data 
recommended in these areas for public disclosure on Physician Compare 
would be addressed through separate notice-and-comment rulemaking.

I. Physician Payment, Efficiency, and Quality Improvements--Physician 
Quality Reporting System

    This section contains the proposed requirements for the Physician 
Quality Reporting System (PQRS). The PQRS, as set forth in sections 
1848(a), (k), and (m) of the Act, is a quality reporting program that 
provides incentive payments (which ended in 2014) and payment 
adjustments (which began in 2015) to eligible professionals (EPs) and 
group practices based on whether they satisfactorily report data on 
quality measures for covered professional services furnished during a 
specified reporting period or to individual EPs based on whether they 
satisfactorily participate in a qualified clinical data registry 
(QCDR). Please note that section 101(b)(2)(A) of the Medicare Access 
and CHIP Reauthorization Act of 2015 (Pub. L. 114-10, enacted on April 
16, 2015) (MACRA) amends section 1848(a)(8)(A) by striking ``2015 or 
any subsequent year'' and inserting ``each of 2015 through 2018.'' This 
amendment authorizes the end of the PQRS in 2018 and beginning of a new 
program, which may incorporate aspects of the PQRS, the Merit-based 
Incentive Payment System (MIPS).
    The proposed requirements primarily focus on our proposals related 
to the 2018 PQRS payment adjustment, which will be based on an EP's or 
a group practice's reporting of quality measures

[[Page 41816]]

data during the 12-month calendar year reporting period occurring in 
2016 (that is, January 1 through December 31, 2016). Please note that, 
in developing these proposals, we focused on aligning our requirements, 
to the extent appropriate and feasible, with other quality reporting 
programs, such as the Medicare Electronic Health Record (EHR) Incentive 
Program for EPs, the Physician Value-Based Payment Modifier (VM), and 
the Medicare Shared Savings Program. In previous years, we have made 
various strides in our ongoing efforts to align the reporting 
requirements in CMS' quality reporting programs to reduce burden on the 
EPs and group practices that participate in these programs. We continue 
to focus on alignment as we develop our proposals for the 2018 PQRS 
payment adjustment below.
    In addition, please note that, in our quality programs, we are 
beginning to emphasize the reporting of certain types of measures, such 
as outcome measures, as well as measures within certain NQS domains. 
Indeed, in its March 2015 report (available at http://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=79068) the Measure Applications 
Partnership (MAP) has suggested that CMS place an emphasis on higher 
quality measures, such as functional outcome measures. For example, in 
the PQRS, we have placed an emphasis on the reporting of the Consumer 
Assessment of Healthcare Providers and Systems (CAHPS) for PQRS survey 
and cross-cutting measures that promote the health of larger 
populations and that are applicable to a larger number of patients. As 
discussed further in this section, we are proposing to require the 
reporting of the CAHPS for PQRS survey for groups of 25 or more EPs who 
register to participate in the PQRS Group Practice Reporting Option 
(GPRO) and select the GPRO web interface as the reporting mechanism. In 
addition, we are proposing to continue to require the reporting of at 
least 1 applicable cross-cutting measure if an EP sees at least 1 
Medicare patient. Furthermore, when reporting measures via a QCDR, we 
emphasize the reporting of outcome measures, as well as resource use, 
patient experience of care, efficiency/appropriate use, or patient 
safety measures.
    The PQRS regulations are specified in Sec.  414.90. The program 
requirements for the 2007 through 2014 PQRS incentives and the 2015 
through 2017 PQRS payment adjustments that were previously established, 
as well as information on the PQRS, including related laws and 
established requirements, are available at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/index.html. In 
addition, the 2013 PQRS and eRx Experience Report, which provides 
information about EP participation in PQRS, is available for download 
at http://cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/2013_PQRS_eRx_Experience_Report_zip.zip.
1. The Definition of EP for Purposes of Participating in the PQRS
    CMS implemented the first PQRS payment adjustment on January 1, 
2015. Specifically, EPs who did not satisfactorily report data on 
quality measures during the 12-month calendar year reporting period 
occurring in 2013 are receiving a 1.5 percent negative adjustment 
during CY 2015 on all of the EPs' Part B covered professional services 
under the Medicare Physician Fee Schedule (PFS). The 2015 PQRS payment 
adjustment applies to payments for all of the EPs' Part B covered 
professional services furnished under the PFS. We received many 
questions surrounding who must participate in the PQRS to avoid the 
PQRS payment adjustment. As such, we seek to clarify here who is 
required to participate in the PQRS for purposes of the payment 
adjustments in this rule.
    Please note that there are no hardship or low volume exemptions for 
the PQRS payment adjustment. All EPs who furnish covered professional 
services must participate in the PQRS each year by meeting the criteria 
for satisfactory reporting--or, in lieu of satisfactory reporting, 
satisfactory participation in a QCDR--to avoid the PQRS payment 
adjustments.
    The PQRS payment adjustment applies to EPs who furnish covered 
professional services. The definition of an EP for purposes of 
participating in the PQRS is specified in section 1848(k)(3)(B) of the 
Act. Specifically, the term ``eligible professional'' (EP) means any of 
the following: (i) A physician; (ii) a practitioner described in 
section 1842(b)(18)(C); (iii) a physical or occupational therapist or a 
qualified speech-language pathologist; or (iv) beginning with 2009, a 
qualified audiologist (as defined in section 1861(ll)(3)(B)). The term 
``covered professional services'' is defined in section 1848(k)(3)(A) 
of the Act to mean services for which payment is made under, or is 
based on, the Medicare PFS established under section 1848 and which are 
furnished by an EP.
    EPs in Critical Access Hospitals Billing under Method II (CAH-IIs): 
We note that EPs in critical access hospitals billing under Method II 
(CAH-IIs) were previously not able to participate in the PQRS. Due to a 
change we made in the manner in which EPs in CAH-IIs are reimbursed by 
Medicare, it is now feasible for EPs in CAH-IIs to participate in the 
PQRS. EPs in CAH-IIs may participate in the PQRS using ALL reporting 
mechanisms available, including the claims-based reporting mechanism.
    EPs Who Practice in Rural Health Clinics (RHCs) and/or Federally 
Qualified Health Centers (FQHCs): Services furnished at RHCs and/or 
FQHCs for which payment is not made under, or based on, the Medicare 
PFS, or which are not furnished by an EP, are not subject to the PQRS 
negative payment adjustment. With respect to EPs who furnish covered 
professional services at RHCs and/or FQHCs that are paid under the 
Medicare PFS, we note that we are currently unable to assess PQRS 
participation for these EPs due to the way in which these EPs bill for 
services under the PFS. Therefore, EPs who practice in RHCs and/or 
FQHCs would not be subject to the PQRS payment adjustment.
    EPs Who Practice in Independent Diagnostic Testing Facilities 
(IDTFs) and Independent Laboratories (ILs): We note that due to the way 
IDTF and IL suppliers and their employee EPs are enrolled with Medicare 
and claims are submitted for services furnished by these suppliers and 
billed by the IDTF or IL, we are unable to assess PQRS participation 
for these EPs. Therefore, claims submitted for services performed by 
EPs who perform services as employee of, or on a reassignment basis to, 
IDTFs or ILs would not be subject to the PQRS payment adjustment.
2. Requirements for the PQRS Reporting Mechanisms
    The PQRS includes the following reporting mechanisms: Claims; 
qualified registry; EHR (including direct EHR products and EHR data 
submission vendor products); the GPRO web interface; certified survey 
vendors, for CAHPS for PQRS survey measures; and the QCDR. Under the 
existing PQRS regulation, Sec.  414.90(h) through (k) govern which 
reporting mechanisms are available for use by individuals and group 
practices for the PQRS incentive and payment adjustment. This section 
contains our proposals to change the QCDR and qualified registry 
reporting mechanisms. Please note that we are not proposing to make 
changes to the other PQRS reporting mechanisms.
    One of our goals, as indicated in the Affordable Care Act, is to 
report data on

[[Page 41817]]

race, ethnicity, sex, primary language, and disability status. A 
necessary step toward fulfilling this mission is the collection and 
reporting of quality data, stratified by race, ethnicity, sex, primary 
language, and disability status. The agency intends to require the 
collection of these data elements within each of the PQRS reporting 
mechanisms. Although we are not proposing in this proposed rule to 
require the collection of these data elements, we are seeking comments 
regarding the facilitators and obstacles providers and vendors may face 
in collecting and reporting these attributes. Additionally, we seek 
comments on preference for a phased-in approach, perhaps starting with 
a subset of measures versus a requirement across all possible measures 
and mechanisms with an adequate timeline for implementation.
a. Proposed Changes to the Requirements for the QCDR
    We are required, under section 1848(m)(3)(E)(i) of the Act, to 
establish requirements for an entity to be considered a QCDR. Such 
requirements must include a requirement that the entity provide the 
Secretary with such information, at such times, and in such manner as 
the Secretary determines necessary to carry out this subsection. 
Section 1848(m)(3)(E)(iv) of the Act, as added by section 601(b)(1)(B) 
of the American Taxpayer Relief Act of 2012 (ATRA), requires CMS to 
consult with interested parties in carrying out this provision. Below, 
we seek to clarify issues related to QCDR self-nomination, as well as 
propose a change related to the requirements for an entity to become a 
QCDR.
    Who May Apply to Self-Nominate to Become a QCDR: We have received 
many questions related to what entities may participate in the PQRS as 
a QCDR. We note that Sec.  414.90(b) defines a QCDR as a CMS-approved 
entity that has self-nominated and successfully completed a 
qualification process showing that it collects medical and/or clinical 
data for the purpose of patient and disease tracking to foster 
improvement in the quality of care provided to patients. A QCDR must 
perform the following functions:
     Submit quality measures data or results to CMS for 
purposes of demonstrating that, for a reporting period, its EPs have 
satisfactorily participated in PQRS. A QCDR must have in place 
mechanisms for the transparency of data elements and specifications, 
risk models, and measures.
     Submit to CMS, for purposes of demonstrating satisfactory 
participation, quality measures data on multiple payers, not just 
Medicare patients.
     Provide timely feedback, at least four times a year, on 
the measures at the individual participant level for which the QCDR 
reports on the EP's behalf for purposes of the individual EP's 
satisfactory participation in the QCDR.
     Possess benchmarking capacity that compares the quality of 
care an EP provides with other EPs performing the same or similar 
functions.
    We established further details regarding the requirements to become 
a QCDR in the CYs 2014 and 2015 PFS final rules (78 FR 74467 through 
74473 and 79 FR 67779 through 67782). Please note that the requirements 
we established were not meant to prohibit entities that meet the basic 
definition of a QCDR outlined in Sec.  414.90(b) from self-nominating 
to participate in the PQRS as a QCDR. As long as the entity meets the 
basic definition of a QCDR provided in Sec.  414.90(b), we encourage 
the entity to self-nominate to become a QCDR.
    Self-Nomination Period: We established a deadline for an entity 
becoming a QCDR to submit a self-nomination statement--specifically, 
self-nomination statements must be received by CMS by 5:00 p.m., 
eastern standard time (e.s.t.), on January 31 of the year in which the 
clinical data registry seeks to be qualified (78 FR 74473). However, we 
did not specify when the QCDR self-nomination period opens. We received 
feedback from entities that believed they needed more time to self-
nominate. Typically, we open the self-nomination period on January 1 of 
the year in which the clinical data registry seeks to be qualified. 
While it is not technically feasible for us to extend the self-
nomination deadline past January 31, we will open the QCDR self-
nomination period on December 1 of the prior year to allow more time 
for entities to self-nominate. This would provide entities with an 
additional month to self-nominate.
    Proposed Establishment of a QCDR Entity: In the CY 2014 PFS final 
rule (78 FR 74467), we established the requirement that, for an entity 
to become qualified for a given year, the entity must be in existence 
as of January 1 the year prior to the year for which the entity seeks 
to become a QCDR (for example, January 1, 2013, to be eligible to 
participate for purposes of data collected in 2014). We established 
this criterion to ensure that an entity seeking to become a QCDR is 
well-established prior to self-nomination. We have received feedback 
from entities that this requirement is overly burdensome, as it delays 
entities otherwise fully capable of becoming a QCDR from participating 
in the PQRS. To address these concerns while still ensuring that an 
entity seeking to become a QCDR is well-established, beginning in 2016, 
we propose to modify this requirement to require the following: For an 
entity to become qualified for a given year, the entity must be in 
existence as of January 1 the year for which the entity seeks to become 
a QCDR (for example, January 1, 2016, to be eligible to participate for 
purposes of data collected in 2016). We invite public comment on this 
proposal.
    Attestation Statements for QCDRs Submitting Quality Measures Data 
during Submission: In the CY 2014 PFS final rule, to ensure that the 
data provided by the QCDR is correct, we established the requirement 
that QCDRs provide CMS a signed, written attestation statement via 
email which states that the quality measure results and any and all 
data, including numerator and denominator data, provided to CMS are 
accurate and complete (78 FR 74472). In lieu of submitting an 
attestation statement via email, beginning in 2016, we propose to allow 
QCDRs to attest during the data submission period that the quality 
measure results and any and all data including numerator and 
denominator data provided to CMS will be accurate and complete using a 
web-based check box mechanism available at https://www.qualitynet.org/portal/server.pt/community/pqri_home/212. We believe it is less 
burdensome for QCDRs to check a box acknowledging and attesting to the 
accuracy of the data they provide, rather than having to email a 
statement to CMS. Please note that, if this proposal is finalized, 
QCDRs will no longer be able to submit this attestation statement via 
email. We invite public comment on this proposal.
    In addition, we noted in the CY 2015 PFS final rule (79 FR 67903) 
that entities wishing to become QCDRs would have until March 31 of the 
year in which it seeks to become a QCDR to submit measure information 
the entity intends to report for the year, which included submitting 
the measure specifications for non-PQRS measures the QCDR intends to 
report for the year. However, we have experienced issues related to the 
measures data we received during the 2013 reporting year. These issues 
prompt us to more closely analyze the measures for which an entity 
intends to report as a QCDR. Therefore, so that we may vet and analyze 
these vendors to determine whether they are fully ready to be qualified 
to participate in the PQRS as a QCDR, we propose to require that all

[[Page 41818]]

other documents that are necessary to analyze the vendor for 
qualification be provided to CMS at the time of self-nomination, that 
is, by no later than January 31 of the year in which the vendor intends 
to participate in the PQRS as a QCDR (that is, January 31, 2016 to 
participate as a QCDR for the reporting periods occurring in 2016). 
This includes, but is not limited to, submission of the vendor's data 
validation plan as well as the measure specifications for the non-PQRS 
measures the entity intends to report. In addition, please note that 
after the entity submits this information on January 31, it cannot 
later change any of the information it submitted to us for purposes of 
qualification. For example, once an entity submits measure 
specifications on non-PQRS measures, it cannot later modify the 
measures specifications the entity submitted. Please note that this 
does not prevent the entity from providing supplemental information if 
requested by CMS.
    Data Validation Requirements: A validation strategy details how the 
qualified registry will determine whether EPs and GPRO group practices 
have submitted data accurately and satisfactorily on the minimum number 
of their eligible patients, visits, procedures, or episodes for a given 
measure. Acceptable validation strategies often include such provisions 
as the qualified registry being able to conduct random sampling of 
their participant's data, but may also be based on other credible means 
of verifying the accuracy of data content and completeness of reporting 
or adherence to a required sampling method. The current guidance on 
validation strategy is available at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/2015_RegistryVendorCriteria.pdf. In analyzing our requirements, we 
believe adding the following additional requirements will help mitigate 
issues that may occur when collecting, calculating, and submitting 
quality measures data to CMS. Therefore, we propose that, beginning in 
2016, a QCDR must provide the following information to CMS at the time 
of self-nomination to ensure that QCDR data is valid:
     Organization Name (Specify Sponsoring Organization name 
and qualified registry name if the two are different).
     Program Year.
     Vendor Type (for example, qualified registry).
     Provide the method(s) by which the entity obtains data 
from its customers: claims, web-based tool, practice management system, 
EHR, other (please explain). If a combination of methods (Claims, Web 
Based Tool, Practice Management System, EHR, and/or other) is utilized, 
please state which method(s) the entity utilizes to collect reporting 
numerator and denominator data.
     Indicate the method the entity will use to verify the 
accuracy of each Tax Identification Number (TIN) and National Provider 
Identifier's (NPI) it is intending to submit (that is, National Plan 
and Provider Enumeration System (NPPES), CMS claims, tax 
documentation).
     Describe the method that the entity will use to accurately 
calculate both reporting rates and performance rates for measures and 
measures groups based on the appropriate measure type and 
specification. For composite measures or measures with multiple 
performance rates, the entity must provide us with the methodology the 
entity uses for these composite measures and measures with multiple 
performance rates.
     Describe the process that the entity will use for 
completion of a randomized audit of a subset of data prior to the 
submission to CMS. Periodic examinations may be completed to compare 
patient record data with submitted data and/or ensure PQRS measures 
were accurately reported based on the appropriate Measure 
Specifications (that is, accuracy of numerator, denominator, and 
exclusion criteria).
     If applicable, provide information on the entity's 
sampling methodology. For example, it is encouraged that 3 percent of 
the TIN/NPIs be sampled with a minimum sample of 10 TIN/NPIs or a 
maximum sample of 50 TIN/NPIs. For each TIN/NPI sampled, it is 
encouraged that 25 percent of the TIN/NPI's patients (with a minimum 
sample of 5 patients or a maximum sample of 50 patients) should be 
reviewed for all measures applicable to the patient.
     Define a process for completing a detailed audit if the 
qualified registry's validation reveals inaccuracy and describe how 
this information will be conveyed to CMS.
    QCDRs must perform the validation outlined in the validation 
strategy and send evidence of successful results to CMS for data 
collected in the reporting periods occurring in 2016. The Data 
Validation Execution Report must be sent via email to the QualityNet 
Help Desk at [email protected] by 5:00 p.m. ET on June 30, 2016. The 
email subject should be ``PY2015 Qualified Registry Data Validation 
Execution Report.''
    Submission of Quality Measures Data for Group Practices: Section 
101(d)(1)(B) of the MACRA amends section 1848(m)(3)(D) of the Act by 
inserting ``and, for 2016 and subsequent years, subparagraph (A) or 
(C)'' after ``subparagraph (A)''. This change authorizes CMS to create 
an option for EPs participating in the GPRO to report quality measures 
via a QCDR. As such, in addition to being able to submit quality 
measures data for individual EPs, we propose that QCDRs also have the 
ability to submit quality measures data for group practices.
b. Proposed Changes to the Requirements for Qualified Registries
    Attestation Statements for Registries Submitting Quality Measures 
Data: In the CY 2013 PFS final rule, we finalized the following 
requirement to ensure that the data provided by a registry is correct: 
We required that the registry provide CMS a signed, written attestation 
statement via mail or email which states that the quality measure 
results and any and all data including numerator and denominator data 
provided to CMS are accurate and complete for each year the registry 
submits quality measures data to CMS (77 FR 69180). In lieu of 
submitting an attestation statement via email or mail, beginning in 
2016, we propose to allow registries to attest during the submission 
period that the quality measure results and any and all data including 
numerator and denominator data provided to CMS will be accurate and 
complete using a web-based check box mechanism available at https://www.qualitynet.org/portal/server.pt/community/pqri_home/212. We believe 
it is less burdensome for registries to check a box acknowledging and 
attesting to the accuracy of the data they provide, rather than having 
to email a statement to CMS. Please note that, if this proposal is 
finalized, qualified registries will no longer be able to submit this 
attestation statement via email or mail. We invite public comment on 
this proposal.
    In addition, so that we may vet and analyze these vendors to 
determine whether they are fully ready to be qualified to participate 
in the PQRS as a qualified registry, we propose to require that all 
other documents that are necessary to analyze the vendor for 
qualification be provided to CMS at the time of self-nomination, that 
is, by no later than January 31 of the year in which the vendor intends 
to participate in the PQRS as a qualified registry (that is, January 
31, 2016 to participate as a qualified registry for the reporting 
periods occurring in 2016). This

[[Page 41819]]

includes, but is not limited to, submission of the vendor's data 
validation plan. Please note that this does not prevent the entity from 
providing supplemental information if requested by CMS.
    Data Validation Requirements: A validation strategy details how the 
qualified registry will determine whether EPs and GPRO group practices 
have submitted accurately and satisfactorily on the minimum number of 
their eligible patients, visits, procedures, or episodes for a given 
measure. Acceptable validation strategies often include such provisions 
as the qualified registry being able to conduct random sampling of 
their participant's data, but may also be based on other credible means 
of verifying the accuracy of data content and completeness of reporting 
or adherence to a required sampling method. The current guidance on 
validation strategy is available at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/2015_RegistryVendorCriteria.pdf. In analyzing our requirements, we 
believe adding the following additional requirements will help mitigate 
issues that may occur when collecting, calculating, and submitting 
quality measures data to CMS. Therefore, we propose that, beginning in 
2016, a QCDR must provide the following information to CMS at the time 
of self-nomination to ensure that data submitted by a qualified 
registry is valid:
     Organization Name (specify the sponsoring entity name and 
qualified registry name if the two are different).
     Program Year.
     Vendor Type (for example, qualified registry).
     Provide the method(s) by which the entity obtains data 
from its customers: claims, web-based tool, practice management system, 
EHR, other (please explain). If a combination of methods (Claims, Web 
Based Tool, Practice Management System, EHR, and/or other) is utilized, 
please state which method(s) the entity utilizes to collect its 
reporting numerator and denominator data.
     Indicate the method the entity will use to verify the 
accuracy of each TIN and NPI it is intending to submit (that is, NPPES, 
CMS claims, tax documentation).
     Describe how the entity will verify that EPs or group 
practices report on at least 1 measure contained in the cross-cutting 
measure set if the EP or group practice sees at least 1 Medicare 
patient in a face-to-face encounter. Describe how the entity will 
verify that the data provided is complete and contains the entire 
cohort of data.
     Describe the method that the entity will use to accurately 
calculate both reporting rates and performance rates for measures and 
measures groups based on the appropriate measure type and 
specification.
     Describe the method the entity will use to verify that 
only the measures in the applicable PQRS Claims and Registry Individual 
Measure Specifications (that is, the 2016 PQRS Claims and Registry 
Individual Measure Specifications for data submitted for reporting 
periods occurring in 2016) and applicable PQRS Claims and Registry 
Measures Groups Specifications (that is, the 2016 PQRS Claims and 
Registry Measures Groups Specifications for data submitted for 
reporting periods occurring in 2016) are utilized for submission.
     Describe the process that the entity will use for 
completion of a randomized audit of a subset of data prior to the 
submission to CMS. Periodic examinations may be completed to compare 
patient record data with submitted data and/or ensure PQRS measures 
were accurately reported based on the appropriate Measure 
Specifications (that is, accuracy of numerator, denominator, and 
exclusion criteria).
     If applicable, provide information on the entity's 
sampling methodology. For example, it is encouraged that 3 percent of 
the TIN/NPIs be sampled with a minimum sample of 10 TIN/NPIs or a 
maximum sample of 50 TIN/NPIs. For each TIN/NPI sampled, it is 
encouraged that 25 percent of the TIN/NPI's patients (with a minimum 
sample of 5 patients or a maximum sample of 50 patients) should be 
reviewed for all measures applicable to the patient.
     Define a process for completing a detailed audit if the 
qualified registry's validation reveals inaccuracy and describe how 
this information will be conveyed to CMS.
     Registries must maintain the ability to randomly request 
and receive documentation from providers to verify accuracy of data. 
Registries must also provide CMS access to review the Medicare 
beneficiary data on which the applicable PQRS registry-based 
submissions are based or provide to CMS a copy of the actual data (if 
requested for validation purposes).
    Qualified registries must perform the validation outlined in the 
validation strategy and send evidence of successful results to CMS for 
data collected for the applicable reporting periods. The Data 
Validation Execution Report must be sent via email to the QualityNet 
Help Desk at [email protected] by 5:00 p.m. ET on June 30 of the 
year in which the reporting period occurs (that is, June 30, 2016 for 
reporting periods occurring in 2016). The email subject should be 
``PY2015 Qualified Registry Data Validation Execution Report.''
c. Auditing of Entities Submitting PQRS Quality Measures Data
    We are in the process of auditing PQRS participants, including 
vendors who submit quality measures data. We believe it is essential 
for vendors to corporate with this audit process. In order to ensure 
that CMS has adequate information to perform an audit of a vendor, we 
are proposing that, beginning in 2016, any vendor submitting quality 
measures data for the PQRS (for example, entities participating the 
PQRS as a qualified registry, QCDR, direct EHR, or DSV) comply with the 
following requirements:
     The vendor make available to CMS the contact information 
of each EP on behalf of whom it submits data. The contact information 
will include, at a minimum, the EP practice's phone number, address, 
and, if applicable email.
     The vendor must retain all data submitted to CMS for the 
PQRS program for a minimum of seven years.
    We invite public comment on these proposals.
3. Proposed Criteria for the Satisfactory Reporting for Individual EPs 
for the 2018 PQRS Payment Adjustment
    Section 1848(a)(8) of the Act, as added by section 3002(b) of the 
Affordable Care Act, provides that for covered professional services 
furnished by an EP during 2015 or any subsequent year, if the EP does 
not satisfactorily report data on quality measures for covered 
professional services for the quality reporting period for the year, 
the fee schedule amount for services furnished by such professional 
during the year (including the fee schedule amount for purposes of 
determining a payment based on such amount) shall be equal to the 
applicable percent of the fee schedule amount that would otherwise 
apply to such services. For 2016 and subsequent years, the applicable 
percent is 98.0 percent.
a. Proposed Criterion for the Satisfactory Reporting of Individual 
Quality Measures via Claims and Registry for Individual EPs for the 
2018 PQRS Payment Adjustment
    We finalized the following criteria for satisfactory reporting for 
the submission of individual quality measures via

[[Page 41820]]

claims and registry for 2017 PQRS payment adjustment (see Table 50 at 
79 FR 67796): For the applicable 12-month reporting period, the EP 
would report at least 9 measures, covering at least 3 of the NQS 
domains, OR, if less than 9 measures apply to the EP, report on each 
measure that is applicable, AND report each measure for at least 50 
percent of the Medicare Part B FFS patients seen during the reporting 
period to which the measure applies. Measures with a 0 percent 
performance rate would not be counted. For an EP who reports fewer than 
9 measures covering less than 3 NQS domains via the claims- or 
registry-based reporting mechanism, the EP would be subject to the 
measure application validity (MAV) process, which would allow us to 
determine whether the EP should have reported quality data codes for 
additional measures. To meet the criteria for the 2017 PQRS payment 
adjustment, we added the following requirement: Of the measures 
reported, if the EP sees at least 1 Medicare patient in a face-to-face 
encounter, as we propose to define that term below, the EP would report 
on at least 1 measure contained in the PQRS cross-cutting measure set.
    To be consistent with the satisfactory reporting criterion we 
finalized for the 2017 PQRS payment adjustment, we are proposing to 
amend Sec.  414.90(j) to specify the same criterion for individual EPs 
reporting via claims and registry for the 2018 PQRS payment adjustment. 
Specifically, for the 12-month reporting period for the 2018 PQRS 
payment adjustment, the EP would report at least 9 measures, covering 
at least 3 of the NQS domains AND report each measure for at least 50 
percent of the EP's Medicare Part B FFS patients seen during the 
reporting period to which the measure applies. Of the measures 
reported, if the EP sees at least 1 Medicare patient in a face-to-face 
encounter, as we propose to define that term below, the EP would report 
on at least 1 measure contained in the PQRS cross-cutting measure set. 
If less than 9 measures apply to the EP, the EP would report on each 
measure that is applicable, AND report each measure for at least 50 
percent of the Medicare Part B FFS patients seen during the reporting 
period to which the measure applies. Measures with a 0 percent 
performance rate would not be counted.
    For what defines a ``face-to-face'' encounter, for purposes of 
proposing to require reporting of at least 1 cross-cutting measure, we 
propose to determine whether an EP had a ``face-to-face'' encounter by 
assessing whether the EP billed for services under the PFS that are 
associated with face-to-face encounters, such as whether an EP billed 
general office visit codes, outpatient visits, and surgical procedures. 
We would not include telehealth visits as face-to-face encounters for 
purposes of the proposal requiring reporting of at least 1 cross-
cutting measure. For our current list of face-to-face encounter codes 
for the requirement to report a cross-cutting measure, please see 
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/FacetoFace_Encounter_CodeList_01302015.zip.
    In addition, we understand that there may be instances where an EP 
may not have at least 9 measures applicable to an EP's practice. In 
this instance, like the criterion we finalized for the 2017 payment 
adjustment (see Table 50 at 79 FR 67796), an EP reporting on less than 
9 measures would still be able to meet the satisfactory reporting 
criterion via claims and registry if the EP reports on each measure 
that is applicable to the EP's practice. If an EP reports on less than 
9 measures, the EP would be subject to the MAV process, which would 
allow us to determine whether an EP should have reported quality data 
codes for additional measures. In addition, the MAV process will also 
allow us to determine whether an EP should have reported on any of the 
PQRS cross-cutting measures. The MAV process we are proposing to 
implement for claims and registry is the same process that was 
established for reporting periods occurring in 2015 for the 2017 PQRS 
payment adjustment. For more information on the claims and registry MAV 
process, please visit the measures section of the PQRS Web site at 
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/MeasuresCodes.html.
    We seek public comment on our proposed satisfactory reporting 
criteria for individual EPs reporting via claims or registry for the 
2018 PQRS payment adjustment.
b. Proposed Criterion for Satisfactory Reporting of Individual Quality 
Measures via EHR for Individual EPs for the 2018 PQRS Payment 
Adjustment
    We finalized the following criterion for the satisfactory reporting 
for individual EPs reporting individual measures via a direct EHR 
product or an EHR data submission vendor product for the 2017 PQRS 
payment adjustment (see Table 50 at 79 FR 67796): For the applicable 
12-month reporting period, report at least 9 measures covering at least 
3 of the NQS domains. If an EP's direct EHR product or EHR data 
submission vendor product does not contain patient data for at least 9 
measures covering at least 3 domains, then the EP must report all of 
the measures for which there is Medicare patient data. Although all-
payer data may be included in the file, an EP must report on at least 1 
measure for which there is Medicare patient data for their submission 
to be considered for PQRS.
    To be consistent with the criterion we finalized for the 2017 PQRS 
payment adjustment, as well as to continue to align with the final 
criterion for meeting the clinical quality measure (CQM) component of 
achieving meaningful use under the Medicare EHR Incentive Program, we 
are proposing to amend Sec.  414.90(j) to specify the criterion for the 
satisfactory reporting for individual EPs to report individual measures 
via a direct EHR product or an EHR data submission vendor product for 
the 2018 PQRS payment adjustment. Specifically, the EP would report at 
least 9 measures covering at least 3 of the NQS domains. If an EP's 
direct EHR product or EHR data submission vendor product does not 
contain patient data for at least 9 measures covering at least 3 
domains, then the EP would be required to report all of the measures 
for which there is Medicare patient data. An EP would be required to 
report on at least 1 measure for which there is Medicare patient data.
    We seek public comment on this proposal.
c. Proposed Criterion for Satisfactory Reporting of Measures Groups via 
Registry for Individual EPs for the 2018 PQRS Payment Adjustment
    We finalized the following criterion for the satisfactory reporting 
for individual EPs to report measures groups via registry for the 2017 
PQRS payment adjustment (see Table 50 at 79 FR 67796): For the 
applicable 12-month reporting period, report at least 1 measures group 
AND report each measures group for at least 20 patients, the majority 
(11 patients) of which must be Medicare Part B FFS patients. Measures 
groups containing a measure with a 0 percent performance rate will not 
be counted.
    To be consistent with the criterion we finalized for the 2017 PQRS 
payment adjustment, we are proposing to amend Sec.  414.90(j) to 
specify the same criterion for the satisfactory reporting for 
individual EPs to report measures groups via registry for the 2018 PQRS 
payment adjustment. Specifically, for the 12-month reporting period for 
the 2018 PQRS payment adjustment, the EP would report at least 1 
measures group AND report each measures group for at

[[Page 41821]]

least 20 patients, the majority (11 patients) of which would be 
required to be Medicare Part B FFS patients. Measures groups containing 
a measure with a 0 percent performance rate would not be counted.
    We seek public comment on our proposed satisfactory reporting 
criterion for individual EPs reporting measures groups via registry for 
the 2018 PQRS payment adjustment.
4. Satisfactory Participation in a QCDR by Individual EPs
    Section 601(b) of the ATRA amended section 1848(m)(3) of the Act, 
by redesignating subparagraph (D) as subparagraph (F) and adding new 
subparagraphs (D) and (E), to provide for a new standard for individual 
EPs to satisfy the PQRS beginning in 2014, based on satisfactory 
participation in a QCDR.
a. Proposed Criterion for the Satisfactory Participation for Individual 
EPs in a QCDR for the 2018 PQRS Payment Adjustment
    Section 1848(a)(8) of the Act provides that for covered 
professional services furnished by an EP during 2015 or any subsequent 
year, if the EP does not satisfactorily report data on quality measures 
for covered professional services for the quality reporting period for 
the year, the fee schedule amount for services furnished by such 
professional during the year shall be equal to the applicable percent 
of the fee schedule amount that would otherwise apply to such services. 
For 2016 and subsequent years, the applicable percent is 98.0 percent.
    Section 1848(m)(3)(D) of the Act, as added by section 601(b) of the 
ATRA, authorizes the Secretary to treat an individual EP as 
satisfactorily submitting data on quality measures under section 
1848(m)(3)(A) of the Act if, in lieu of reporting measures under 
section 1848(k)(2)(C) of the Act, the EP is satisfactorily 
participating in a QCDR for the year. ``Satisfactory participation'' is 
a relatively new standard under the PQRS and is an analogous standard 
to the standard of ``satisfactory reporting'' data on covered 
professional services that EPs who report through other mechanisms must 
meet to avoid the PQRS payment adjustment. Currently, Sec.  
414.90(e)(2) states that individual EPs must be treated as 
satisfactorily reporting data on quality measures if the individual EP 
satisfactorily participates in a QCDR.
    To be consistent with the number of measures reported for the 
satisfactory participation criterion we finalized for the 2017 PQRS 
payment adjustment (see Table 50 at 79 FR 67796), for purposes of the 
2018 PQRS payment adjustment (which would be based on data reported 
during the 12-month period that falls in CY 2016), we propose to revise 
Sec.  414.90(k) to use the same criterion for individual EPs to 
satisfactorily participate in a QCDR for the 2018 PQRS payment 
adjustment. Specifically, for the 12-month reporting period for the 
2018 PQRS payment adjustment, the EP would report at least 9 measures 
available for reporting under a QCDR covering at least 3 of the NQS 
domains, AND report each measure for at least 50 percent of the EP's 
patients. Of these measures, the EP would report on at least 2 outcome 
measures, OR, if 2 outcomes measures are not available, report on at 
least 1 outcome measures and at least 1 of the following types of 
measures--resource use, patient experience of care, efficiency/
appropriate use, or patient safety.
    We seek public comment on this proposal.
5. Proposed Criteria for Satisfactory Reporting for Group Practices 
Participating in the GPRO
    In lieu of reporting measures under section 1848(k)(2)(C) of the 
Act, section 1848(m)(3)(C) of the Act provides the Secretary with the 
authority to establish and have in place a process under which EPs in a 
group practice (as defined by the Secretary) shall be treated as 
satisfactorily submitting data on quality measures. Accordingly, this 
section III.K.4 contains our proposed satisfactory reporting criteria 
for group practices participating in the GPRO. Please note that, for a 
group practice to participate in the PQRS GPRO in lieu of participating 
as individual EPs, a group practice is required to register to 
participate in the PQRS GPRO. For more information on GPRO 
participation, please visit http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Group_Practice_Reporting_Option.html. For more information on 
registration, please visit http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeedbackProgram/Self-Nomination-Registration.html.
a. The CAHPS for PQRS Survey
    In the CY 2015 PFS final rule, we required group practices of 100 
or more EPs that register to participate in the GPRO for 2015 reporting 
to select a CMS-certified survey vendor to report the CAHPS for PQRS 
survey, regardless of the reporting mechanism the group practice 
chooses (79 FR 67794). We also stated that group practices would bear 
the cost of administering the CAHPS for PQRS survey. To collect CAHPS 
for PQRS data from smaller groups, for purposes of the 2018 PQRS 
payment adjustment (which would be based on data reported during the 
12-month period that falls in CY 2016), we propose to require group 
practices of 25 or more EPs that register to participate in the GPRO 
and select the GPRO web interface as the reporting mechanism to select 
a CMS-certified survey vendor to report CAHPS for PQRS. We believe this 
proposal is consistent with our effort to collect CAHPS for PQRS data 
whenever possible. However, we are excluding from this proposal group 
practices that report measures using the qualified registry, EHR, and 
QCDR reporting mechanisms, because we have discovered that certain 
group practices reporting through these mechanisms may be highly 
specialized or otherwise unable to report CAHPS for PQRS. Please note 
that we are still proposing to keep CAHPS for PQRS reporting as an 
option for all group practices. We note that all group practices that 
would be required to report or voluntarily elect to report CAHPS for 
PQRS would need to continue to select and pay for a CMS-certified 
survey vendor to administer the CAHPS for PQRS survey on their behalf. 
We invite public comment on this proposal.
    We understand that this proposed requirement may cause concern for 
smaller group practices who choose to participate in the PQRS via the 
GPRO web interface, particularly those who have not yet administered 
the CAHPS for PQRS survey (as we introduced reporting of the CAHPS for 
PQRS survey in 2014) or those group practices who do not believe the 
CAHPS for PQRS survey applies to their practice. Since the introduction 
of the CAHPS for PQRS survey, we have received questions as on when the 
CAHPS for PQRS survey applies to a group practice. In this section 
below, we seek to clarify questions we have received regarding the 
administration of the CAHPS for PQRS survey. We note that this proposed 
requirement would only apply to group practices of 25 or more EPs for 
whom CAHPS for PQRS applies.
    In addition, we note that we finalized a 12-month reporting period 
for the administration of the CAHPS for PQRS survey. However, as group 
practice s have until June of the applicable reporting period (that is, 
June 30, 2016 for the 12-month reporting period occurring January 1, 
2016-December 31, 2016) to elect to participate in the PQRS as a GPRO 
and administer CAHPS for PQRS, it is not technically feasible for us to 
collect data for purposes of CAHPS for PQRS until the close of the GPRO

[[Page 41822]]

registration period. As such, the administration of the CAHPS for PQRS 
survey only contains 6-months of data. We do not believe this 
significantly alters the administration of CAHPS for PQRS, as we 
believe that 6-months of data provides an adequate sample of the 12-
month reporting period.
    The CAHPS for PQRS survey consists of the core CAHPS Clinician & 
Group Survey developed by AHRQ, plus additional survey questions to 
meet CMS' information and program needs. The survey questions are 
aggregated into 12 content domains called Summary Survey Measures 
(SSMs). SSMs contain one or more survey questions. The CAHPS for PQRS 
survey consists of the following survey measures: (1) Getting timely 
care, appointments, & information; (2) How well your providers 
communicate; (3) Patient's rating of provider; (4) Access to 
specialists; (5) Health promotion and education; (6) Shared decision 
making; (7) Health status & functional status; (8) Courteous & helpful 
office staff; (9) Care coordination; (10) Between visit communication; 
(11) Helping you take medications as directed; and (12) Stewardship of 
patient resources. For the CAHPS for PQRS survey to apply to a group 
practice, the group practice must have an applicable focal provider as 
well as meet the minimum beneficiary sample for the CAHPS for PQRS 
survey.
    Identifying Focal Providers: Which provider does the survey ask 
about? The provider named in the survey provided the beneficiary with 
the plurality of the beneficiary's primary care services delivered by 
the group practice. Plurality of care is based on the number of primary 
care service visits to a provider. The provider named in the survey can 
be a physician (primary care provider or specialist), nurse 
practitioner (NP), physician's assistant (PA), or clinical nurse 
specialist (CNS).
    Exclusion Criteria for Focal Providers: Several specialty types are 
excluded from selection as focal provider such as anesthesiology, 
pathology, psychiatry optometry, diagnostic radiology, chiropractic, 
podiatry, audiology, physical therapy, occupational therapy, clinical 
psychology, diet/nutrition, emergency medicine, addiction medicine, 
critical care, and clinical social work. Hospitalists are also excluded 
from selection as a focal provider.
    Beneficiary Sample Selection: CMS retrospectively assigns Medicare 
beneficiaries to your group practice based on whether the group 
provided a wide range of primary care services. Assigned beneficiaries 
must have a plurality of their primary care claims delivered by the 
group practice. Assigned beneficiaries have at least one month of both 
Part A and Part B enrollment and no months of Part A only enrollment or 
Part B only enrollment. Assigned beneficiaries cannot have any months 
of enrollment in a Medicare Advantage plan. Regardless of the number of 
EPs, some group practices may not have a sufficient number of assigned 
beneficiaries to participate in the CAHPS for PQRS survey.
    We draw a sample of Medicare beneficiaries assigned to a practice. 
For practices with 100 or more eligible providers, the desired sample 
is 860, and the minimum sample is 416. For practices with 25 to 99 
eligible providers, the desired sample is 860, and the minimum sample 
is 255. For practices with 2 to 24 eligible providers, the desired 
sample is 860, and the minimum sample is 125. The following 
beneficiaries are excluded in the practice's patient sample: 
Beneficiaries under age 18 at the time of the sample draw; 
beneficiaries known to be institutionalized at the time of the sample 
draw; and beneficiaries with no eligible focal provider. For more 
information on CAHPS for PQRS, please visit the PQRS Web site at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/CMS-Certified-Survey-Vendor.html.
b. Proposed Criteria for Satisfactory Reporting on PQRS Quality 
Measures via the GPRO Web Interface for the 2018 PQRS Payment 
Adjustment
    Under our authority specified for the group practice reporting 
requirements under section 1848(m)(3)(C) of the Act--to be consistent 
with the criterion we finalized for the satisfactory reporting of PQRS 
quality measures for group practices registered to participate in the 
GPRO for the 2017 PQRS payment adjustment using the GPRO web interface 
(see Table 51 at 79 FR 67797)--we propose to amend Sec.  414.90(j) to 
specify criteria for the satisfactory reporting of PQRS quality 
measures for group practices registered to participate in the GPRO for 
the 12-month reporting period for the 2018 PQRS payment adjustment 
using the GPRO web interface for groups practices of 25 or more EPs for 
which the CAHPS for PQRS survey does not apply. Specifically, the group 
practice would report on all measures included in the web interface; 
AND populate data fields for the first 248 consecutively ranked and 
assigned beneficiaries in the order in which they appear in the group's 
sample for each module or preventive care measure. If the pool of 
eligible assigned beneficiaries is less than 248, then the group 
practice would report on 100 percent of assigned beneficiaries. In 
other words, we understand that, in some instances, the sampling 
methodology CMS provides will not be able to assign at least 248 
patients on which a group practice may report, particularly those group 
practices on the smaller end of the range of 25-99 EPs. If the group 
practice is assigned less than 248 Medicare beneficiaries, then the 
group practice would report on 100 percent of its assigned 
beneficiaries. A group practice would be required to report on at least 
1 measure in the GPRO web interface. Although the criteria proposed 
above are specified for groups practices of 25 or more EPs, please note 
that, given our proposal below to require that group practices of 25 or 
more EPs report the CAHPS for PQRS survey, the criteria proposed above 
would apply to a group practices of 25 or more EPs only if the CAHPS 
for PQRS survey does not apply to the group practice.
    Furthermore, similar to the criteria we established for the 2017 
PQRS payment adjustment (see Table 51 at 79 FR 67797), as we specified 
in section III.K.4.a., we propose to require that group practices of 25 
or more EPs who elect to report quality measures via the GPRO web 
interface report the CAHPS for PQRS survey, if applicable. Therefore, 
similar to the criteria we established for the 2017 PQRS payment 
adjustment in accordance with section 1848(m)(3)(C) of the Act (see 
Table 51 at 79 FR 67797), we propose to amend Sec.  414.90(j) to 
specify criteria for the satisfactory reporting of PQRS quality 
measures for group practices of 25 or more EPs that registered to 
participate in the GPRO for the 12-month reporting period for the 2018 
PQRS payment adjustment using the GPRO web interface and for which the 
CAHPS for PQRS survey applies. Specifically, if a group practice 
chooses to use the GPRO web interface in conjunction with reporting the 
CAHPS for PQRS survey measures, we propose to specify the criterion for 
satisfactory reporting for the 2018 PQRS payment adjustment. For the 
12-month reporting period for the 2018 PQRS payment adjustment, the 
group practice would report all CAHPS for PQRS survey measures via a 
certified survey vendor. In addition, the group practice would report 
on all measures included in the GPRO web interface; AND populate data 
fields for the first 248 consecutively ranked and assigned 
beneficiaries in the order in which they appear in the group's sample 
for each

[[Page 41823]]

module or preventive care measure. If the pool of eligible assigned 
beneficiaries is less than 248, then the group practice would report on 
100 percent of assigned beneficiaries. A group practice would be 
required to report on at least 1 measure for which there is Medicare 
patient data.
    For assignment of patients for group practices reporting via the 
GPRO web interface, in previous years, we have aligned with the 
Medicare Shared Savings Program methodology of beneficiary assignment 
(see 77 FR 69195). However, for the 2017 PQRS payment adjustment, we 
used a beneficiary attribution methodology utilized within the VM for 
the claims-based quality measures and cost measures that is slightly 
different from the Medicare Shared Savings Program assignment 
methodology that applied in 2015, namely (1) eliminating the primary 
care service pre-step that is statutorily required for the Shared 
Savings Program and (2) including NPs, PAs, and CNSs in step 1 rather 
than in step 2 of the attribution process. We believe that aligning 
with the VM's method of attribution is appropriate, as the VM is 
directly tied to participation in the PQRS (79 FR 67790). Therefore, to 
be consistent with the sampling methodology we used for the 2017 PQRS 
payment adjustment, we propose to continue using the attribution 
methodology used for the VM for the GPRO web interface beneficiary 
assignment methodology for the 2018 PQRS payment adjustment and future 
years.
    As we clarified in the CY 2015 PFS final rule with comment period 
(79 FR 67790), if a group practice has no Medicare patients for which 
any of the GPRO measures are applicable, the group practice will not 
meet the criteria for satisfactory reporting using the GPRO web 
interface. Therefore, to meet the criteria for satisfactory reporting 
using the GPRO web interface, a group practice must be assigned and 
have sampled at least 1 Medicare patient for any of the applicable GPRO 
web interface measures. If a group practice does not typically see 
Medicare patients for which the GPRO web interface measures are 
applicable, or if the group practice does not have adequate billing 
history for Medicare patients to be used for assignment and sampling of 
Medicare patients into the GPRO web interface, we advise the group 
practice to participate in the PQRS via another reporting mechanism.
    We invite public comment on these proposals.
c. Proposed Criteria for Satisfactory Reporting on Individual PQRS 
Quality Measures for Group Practices Registered To Participate in the 
GPRO via Registry for the 2018 PQRS Payment Adjustment
    We finalized the following satisfactory reporting criteria for the 
submission of individual quality measures via registry for group 
practices of 2-99 EPs in the GPRO for the 2017 PQRS payment adjustment 
(see Table 51 at 79 FR 67797): Report at least 9 measures, covering at 
least 3 of the NQS domains, OR, if less than 9 measures covering at 
least 3 NQS domains apply to the group practice, report up to 8 
measures covering 1-3 NQS domains for which there is Medicare patient 
data, AND report each measure for at least 50 percent of the group 
practice's Medicare Part B FFS patients seen during the reporting 
period to which the measure applies.
    Consistent with the group practice reporting criteria we finalized 
for the 2017 PQRS payment adjustment in accordance with section 
1848(m)(3)(C) of the Act, for those group practices that choose to 
report using a qualified registry, we propose to amend Sec.  414.90(j) 
to specify satisfactory reporting criteria via qualified registry for 
group practices of 2+ EPs who select to participate in the GPRO for the 
2018 PQRS payment adjustment. Specifically, for the 12-month 2018 PQRS 
payment adjustment reporting period, the group practice would report at 
least 9 measures, covering at least 3 of the NQS domains. Of these 
measures, if a group practice has an EP that sees at least 1 Medicare 
patient in a face-to-face encounter, the group practice would report on 
at least 1 measure in the PQRS cross-cutting measure set. If the group 
practice reports on less than 9 measures covering at least 3 NQS 
domains, the group practice would report on each measure that is 
applicable to the group practice, AND report each measure for at least 
50 percent of the EP's Medicare Part B FFS patients seen during the 
reporting period to which the measure applies. Measures with a 0 
percent performance rate would not be counted.
    In addition, if a group practice of 2+ EPs chooses instead to use a 
qualified registry in conjunction with reporting the CAHPS for PQRS 
survey measures, for the 12-month reporting period for the 2018 PQRS 
payment adjustment, the group practice would report all CAHPS for PQRS 
survey measures via a certified survey vendor, and report at least 6 
additional measures, outside of the CAHPS for PQRS survey, covering at 
least 2 of the NQS domains using the qualified registry. If less than 6 
measures apply to the group practice, the group practice must report on 
each measure that is applicable to the group practice. Of the non-CAHPS 
for PQRS measures, if any EP in the group practice sees at least 1 
Medicare patient in a face-to-face encounter, the group practice would 
be required to report on at least 1 measure in the PQRS cross-cutting 
measure set. We note that this proposed option to report 6 additional 
measures, including at least 1 cross-cutting measure if a group 
practice sees at least 1 Medicare patient in a face-to-face encounter, 
is consistent with the proposed criterion for satisfactory reporting 
for the 2018 PQRS payment adjustment via qualified registry.
    As with individual reporting, we understand that there may be 
instances where a group practice may not have at least 9 measures 
applicable to a group practice's practice. In this instance, like the 
criterion we finalized for the 2017 PQRS payment adjustment (see Table 
51 at 79 FR 67797), a group practice reporting on less than 9 measures 
would still be able to meet the satisfactory reporting criterion via 
registry if the group practice reports on each measure that is 
applicable to the group practice's practice. If a group practice 
reports on less than 9 measures, the group practice would be subject to 
the MAV process, which would allow us to determine whether a group 
practice should have reported quality data codes for additional 
measures and/or measures covering additional NQS domains. In addition, 
if a group practice does not report on at least 1 cross-cutting measure 
and the group practice has at least 1 EP who sees at least 1 Medicare 
patient in a face-to-face encounter, the MAV will also allow us to 
determine whether a group practice should have reported on any of the 
PQRS cross-cutting measures. The MAV process we are proposing to 
implement for registry reporting is a similar process that was 
established for reporting periods occurring in 2015 for the 2017 PQRS 
payment adjustment. However, please note that the MAV process for the 
2018 PQRS payment adjustment will now allow us to determine whether a 
group practice should have reported on at least 1 cross-cutting 
measure. For more information on the registry MAV process, please visit 
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/2014_PQRS_Registry_MeasureApplicabilityValidation_12132013.zip.
    We invite public comment on these proposals.

[[Page 41824]]

d. Proposed Criteria for Satisfactory Reporting on Individual PQRS 
Quality Measures for Group Practices Registered To Participate in the 
GPRO via EHR for the 2018 PQRS Payment Adjustment
    For EHR reporting, consistent with the criterion finalized for the 
2017 PQRS payment adjustment (see Table 51 at 79 FR 67797) that aligns 
with the criteria established for meeting the CQM component of 
meaningful use under the Medicare EHR Incentive Program and in 
accordance with the group practice reporting requirements under section 
1848(m)(3)(C) of the Act, for those group practices that choose to 
report using an EHR, we propose to amend Sec.  414.90(j) to specify 
satisfactory reporting criteria via a direct EHR product or an EHR data 
submission vendor product for group practices of 2+ EPs who select to 
participate in the GPRO for the 2018 PQRS payment adjustment. 
Specifically, for the 12-month reporting period for the 2018 PQRS 
payment adjustment, the group practice would report 9 measures covering 
at least 3 domains. If the group practice's direct EHR product or EHR 
data submission vendor product does not contain patient data for at 
least 9 measures covering at least 3 domains, then the group practice 
must report all of the measures for which there is Medicare patient 
data. A group practice must report on at least 1 measure for which 
there is Medicare patient data.
    In addition, if a group practice of 2+ EPs chooses instead to use a 
direct EHR product or EHR data submission vendor in conjunction with 
reporting the CAHPS for PQRS survey measures, for the 12-month 
reporting period for the 2018 PQRS payment adjustment, the group 
practice would report all CAHPS for PQRS survey measures via a 
certified survey vendor, and report at least 6 additional measures, 
outside of the CAHPS for PQRS survey, covering at least 2 of the NQS 
domains using the direct EHR product or EHR data submission vendor 
product. If less than 6 measures apply to the group practice, the group 
practice must report all applicable measures. Of the non-CAHPS for PQRS 
measures that must be reported in conjunction with reporting the CAHPS 
for PQRS survey measures, a group practice would be required to report 
on at least 1 measure for which there is Medicare patient data. We note 
that this proposed option to report 6 additional measures is consistent 
with the proposed criterion for satisfactory reporting for the 2018 
PQRS payment adjustment via EHR without CAHPS for PQRS, since both 
criteria assess a total of 3 domains.
    We invite public comment on these proposals.
e. Satisfactory Participation in a QCDR for Group Practices Registered 
To Participate in the GPRO via a QCDR for the 2018 PQRS Payment 
Adjustment
    Section 101(d)(1)(B) of the MACRA amends section 1848(m)(3)(D) of 
the Act by inserting ``and, for 2016 and subsequent years, subparagraph 
(A) or (C)'' after ``subparagraph (A)''. This change authorizes CMS to 
create an option for EPs participating in the GPRO to report quality 
measures via a QCDR.
    As such, please note that we are modifying Sec.  414.90(k) to 
indicate that group practices may also use a QCDR to participate in the 
PQRS.
f. Proposed Reporting Period for the Satisfactory Participation by 
Individual EPs in a QCDR for the 2018 PQRS Payment Adjustment
    Section 1848(m)(3)(D) of the Act, as redesignated and added by 
section 601(b) of the America Taxpayer Relief Act of 2012 and further 
amended by MACRA, authorizes the Secretary to treat a group practice as 
satisfactorily submitting data on quality measures under section 
1848(m)(3)(A) of the Act if the group practice is satisfactorily 
participating in a QCDR for the year. Given that satisfactory 
participation is with regard to the year, and to provide consistency 
with the reporting period applicable to individual EPs who participate 
in the PQRS via a QCDR, we propose to revise Sec.  414.90(k) to specify 
a 12-month, CY reporting period from January 1, 2016 through December 
31, 2016 for group practices participating in the GPRO to 
satisfactorily participate in a QCDR for purposes of the 2018 PQRS 
payment adjustment. We are proposing a 12-month reporting period. Based 
on our experience with the 12 and 6-month reporting periods for the 
PQRS incentives, we believe that data on quality measures collected 
based on 12-months provides a more accurate assessment of actions 
performed in a clinical setting than data collected based on shorter 
reporting periods. In addition, we believe a 12-month reporting period 
is appropriate given that the full calendar year would be utilized with 
regard to the participation by the group practice in the QCDR. We 
invite public comment on the proposed 12-month, CY 2016 reporting 
period for the satisfactory participation of group practices in a QCDR 
for the 2018 PQRS payment adjustment.
g. Proposed Criteria for Satisfactory Participation in a QCDR for Group 
Practices Registered To Participate in the GPRO via a QCDR for the 2018 
PQRS Payment Adjustment
    To be consistent with individual reporting criteria that we 
finalized for the 2017 PQRS payment adjustment (see Table 50 at 79 FR 
67796) as well as our proposed individual reporting criteria for the 
2018 PQRS payment adjustment, for purposes of the 2018 PQRS payment 
adjustment (which would be based on data reported during the 12-month 
period that falls in CY 2016), we propose to amend Sec.  414.90(j) to 
use the same criterion for group practices as individual EPs to 
satisfactorily participate in a QCDR for the 2018 PQRS payment 
adjustment. Specifically, for the 12-month reporting period for the 
2018 PQRS payment adjustment, the group practice would report at least 
9 measures available for reporting under a QCDR covering at least 3 of 
the NQS domains, AND report each measure for at least 50 percent of the 
group practice's patients. Of these measures, the group practice would 
report on at least 2 outcome measures, OR, if 2 outcomes measures are 
not available, report on at least 1 outcome measures and at least 1 of 
the following types of measures--resource use, patient experience of 
care, efficiency/appropriate use, or patient safety.
    Tables 20 and 21 reflect our proposed criteria for satisfactory 
reporting--or, in lieu of satisfactory reporting, satisfactory 
participation in a QCDR--for the 2018 PQRS payment adjustment:

[[Page 41825]]



 Table 20--Summary of Proposed Requirements for the 2018 PQRS Payment Adjustment: Individual Reporting Criteria
      for the Satisfactory Reporting of Quality Measures Data via Claims, Qualified Registry, and EHRS and
                                  Satisfactory Participation Criterion in QCDRS
----------------------------------------------------------------------------------------------------------------
                                                       Reporting          Satisfactory reporting/satisfactory
       Reporting period            Measure type        mechanism                participation criteria
----------------------------------------------------------------------------------------------------------------
12-month (Jan 1-Dec 31, 2016).  Individual         Claims...........  Report at least 9 measures, covering at
                                 Measures.                             least 3 of the NQS domains AND report
                                                                       each measure for at least 50 percent of
                                                                       the EP's Medicare Part B FFS patients
                                                                       seen during the reporting period to which
                                                                       the measure applies. Of the measures
                                                                       reported, if the EP sees at least 1
                                                                       Medicare patient in a face-to-face
                                                                       encounter, the EP will report on at least
                                                                       1 measure contained in the PQRS cross-
                                                                       cutting measure set. If less than 9
                                                                       measures apply to the EP, the EP would
                                                                       report on each measure that is
                                                                       applicable), AND report each measure for
                                                                       at least 50 percent of the Medicare Part
                                                                       B FFS patients seen during the reporting
                                                                       period to which the measure applies.
                                                                       Measures with a 0 percent performance
                                                                       rate would not be counted.
12-month (Jan 1-Dec 31, 2016).  Individual         Qualified          Report at least 9 measures, covering at
                                 Measures.          Registry.          least 3 of the NQS domains AND report
                                                                       each measure for at least 50 percent of
                                                                       the EP's Medicare Part B FFS patients
                                                                       seen during the reporting period to which
                                                                       the measure applies. Of the measures
                                                                       reported, if the EP sees at least 1
                                                                       Medicare patient in a face-to-face
                                                                       encounter, the EP will report on at least
                                                                       1 measure contained in the PQRS cross-
                                                                       cutting measure set. If less than 9
                                                                       measures apply to the EP, the EP would
                                                                       report on each measure that is
                                                                       applicable, AND report each measure for
                                                                       at least 50 percent of the Medicare Part
                                                                       B FFS patients seen during the reporting
                                                                       period to which the measure applies.
                                                                       Measures with a 0 percent performance
                                                                       rate would not be counted.
12-month (Jan 1-Dec 31, 2016).  Individual         Direct EHR         Report 9 measures covering at least 3 of
                                 Measures.          Product or EHR     the NQS domains. If an EP's direct EHR
                                                    Data Submission    product or EHR data submission vendor
                                                    Vendor Product.    product does not contain patient data for
                                                                       at least 9 measures covering at least 3
                                                                       domains, then the EP would be required to
                                                                       report all of the measures for which
                                                                       there is Medicare patient data. An EP
                                                                       would be required to report on at least 1
                                                                       measure for which there is Medicare
                                                                       patient data.
12-month (Jan 1-Dec 31, 2016).  Measures Groups..  Qualified          Report at least 1 measures group AND
                                                    Registry.          report each measures group for at least
                                                                       20 patients, the majority (11 patients)
                                                                       of which are required to be Medicare Part
                                                                       B FFS patients. Measures groups
                                                                       containing a measure with a 0 percent
                                                                       performance rate will not be counted.
12-month (Jan 1-Dec 31, 2016).  Individual PQRS    Qualified          Report at least 9 measures available for
                                 measures and/or    Clinical Data      reporting under a QCDR covering at least
                                 non-PQRS           Registry (QCDR).   3 of the NQS domains, AND report each
                                 measures                              measure for at least 50 percent of the
                                 reportable via a                      EP's patients. Of these measures, the EP
                                 QCDR.                                 would report on at least 2 outcome
                                                                       measures, OR, if 2 outcomes measures are
                                                                       not available, report on at least 1
                                                                       outcome measures and at least 1 of the
                                                                       following types of measures--resource
                                                                       use, patient experience of care,
                                                                       efficiency/appropriate use, or patient
                                                                       safety.
----------------------------------------------------------------------------------------------------------------


    Table 21--Summary of Proposed Requirements for the 2018 PQRS Payment Adjustment: Group Practice Reporting
                    Criteria for Satisfactory Reporting of Quality Measures Data via the GPRO
----------------------------------------------------------------------------------------------------------------
                                Group practice                      Reporting         Satisfactory reporting
       Reporting period              size         Measure type      mechanism                criteria
----------------------------------------------------------------------------------------------------------------
12-month (Jan 1-Dec 31, 2016)  25+ EPs (if      Individual GPRO  GPRO Web         Report on all measures
                                CAHPS for PQRS   Measures in      Interface.       included in the web
                                does not         the GPRO Web                      interface; AND populate data
                                apply).          Interface.                        fields for the first 248
                                                                                   consecutively ranked and
                                                                                   assigned beneficiaries in the
                                                                                   order in which they appear in
                                                                                   the group's sample for each
                                                                                   module or preventive care
                                                                                   measure. If the pool of
                                                                                   eligible assigned
                                                                                   beneficiaries is less than
                                                                                   248, then the group practice
                                                                                   must report on 100 percent of
                                                                                   assigned beneficiaries. In
                                                                                   other words, we understand
                                                                                   that, in some instances, the
                                                                                   sampling methodology we
                                                                                   provide will not be able to
                                                                                   assign at least 248 patients
                                                                                   on which a group practice may
                                                                                   report, particularly those
                                                                                   group practices on the
                                                                                   smaller end of the range of
                                                                                   25-99 EPs. If the group
                                                                                   practice is assigned less
                                                                                   than 248 Medicare
                                                                                   beneficiaries, then the group
                                                                                   practice must report on 100
                                                                                   percent of its assigned
                                                                                   beneficiaries. A group
                                                                                   practice must report on at
                                                                                   least 1 measure for which
                                                                                   there is Medicare patient
                                                                                   data.

[[Page 41826]]

 
12-month (Jan 1-Dec 31, 2016)  25+ EPs (if      Individual GPRO  GPRO Web         The group practice must have
                                CAHPS for PQRS   Measures in      Interface +      all CAHPS for PQRS survey
                                applies).        the GPRO Web     CMS-Certified    measures reported on its
                                                 Interface +      Survey Vendor.   behalf via a CMS-certified
                                                 CAHPS for PQRS.                   survey vendor. In addition,
                                                                                   the group practice must
                                                                                   report on all measures
                                                                                   included in the GPRO web
                                                                                   interface; AND populate data
                                                                                   fields for the first 248
                                                                                   consecutively ranked and
                                                                                   assigned beneficiaries in the
                                                                                   order in which they appear in
                                                                                   the group's sample for each
                                                                                   module or preventive care
                                                                                   measure. If the pool of
                                                                                   eligible assigned
                                                                                   beneficiaries is less than
                                                                                   248, then the group practice
                                                                                   must report on 100 percent of
                                                                                   assigned beneficiaries. A
                                                                                   group practice will be
                                                                                   required to report on at
                                                                                   least 1 measure for which
                                                                                   there is Medicare patient
                                                                                   data.
                                                                                  Please note that, if the CAHPS
                                                                                   for PQRS survey is applicable
                                                                                   to a group practice who
                                                                                   reports quality measures via
                                                                                   the GPRO web interface, the
                                                                                   group practice must
                                                                                   administer the CAHPS for PQRS
                                                                                   survey in addition to
                                                                                   reporting the GPRO web
                                                                                   interface measures.
12-month (Jan 1-Dec 31, 2016)  2+ EPs.........  Individual       Qualified        Report at least 9 measures,
                                                 Measures.        Registry.        covering at least 3 of the
                                                                                   NQS domains. Of these
                                                                                   measures, if a group practice
                                                                                   sees at least 1 Medicare
                                                                                   patient in a face-to-face
                                                                                   encounter, the group practice
                                                                                   would report on at least 1
                                                                                   measure in the PQRS cross-
                                                                                   cutting measure set. If less
                                                                                   than 9 measures covering at
                                                                                   least 3 NQS domains apply to
                                                                                   the group practice, the group
                                                                                   practice would report on each
                                                                                   measure that is applicable to
                                                                                   the group practice, AND
                                                                                   report each measure for at
                                                                                   least 50 percent of the
                                                                                   group's Medicare Part B FFS
                                                                                   patients seen during the
                                                                                   reporting period to which the
                                                                                   measure applies. Measures
                                                                                   with a 0 percent performance
                                                                                   rate would not be counted.
12-month (Jan 1-Dec 31, 2016)  2+ EPs that      Individual       Qualified        The group practice must have
                                elect CAHPS      Measures +       Registry + CMS-  all CAHPS for PQRS survey
                                for PQRS.        CAHPS for PQRS.  Certified        measures reported on its
                                                                  Survey Vendor.   behalf via a CMS-certified
                                                                                   survey vendor, and report at
                                                                                   least 6 additional measures,
                                                                                   outside of the CAHPS for PQRS
                                                                                   survey, covering at least 2
                                                                                   of the NQS domains using the
                                                                                   qualified registry. If less
                                                                                   than 6 measures apply to the
                                                                                   group practice, the group
                                                                                   practice must report on each
                                                                                   measure that is applicable to
                                                                                   the group practice. Of the
                                                                                   additional measures that must
                                                                                   be reported in conjunction
                                                                                   with reporting the CAHPS for
                                                                                   PQRS survey measures, if any
                                                                                   EP in the group practice sees
                                                                                   at least 1 Medicare patient
                                                                                   in a face-to-face encounter,
                                                                                   the group practice must
                                                                                   report on at least 1 measure
                                                                                   in the PQRS cross-cutting
                                                                                   measure set.
12-month (Jan 1-Dec 31, 2016)  2+ EPs.........  Individual       Direct EHR       Report 9 measures covering at
                                                 Measures.        Product or EHR   least 3 domains. If the group
                                                                  Data             practice's direct EHR product
                                                                  Submission       or EHR data submission vendor
                                                                  Vendor Product.  product does not contain
                                                                                   patient data for at least 9
                                                                                   measures covering at least 3
                                                                                   domains, then the group
                                                                                   practice must report all of
                                                                                   the measures for which there
                                                                                   is Medicare patient data. A
                                                                                   group practice must report on
                                                                                   at least 1 measure for which
                                                                                   there is Medicare patient
                                                                                   data.
12-month (Jan 1-Dec 31, 2016)  2+ EPs that      Individual       Direct EHR       The group practice must have
                                elect CAHPS      Measures +       Product or EHR   all CAHPS for PQRS survey
                                for PQRS.        CAHPS for PQRS.  Data             measures reported on its
                                                                  Submission       behalf via a CMS-certified
                                                                  Vendor Product   survey vendor, and report at
                                                                  + CMS-           least 6 additional measures,
                                                                  Certified        outside of CAHPS for PQRS,
                                                                  Survey Vendor.   covering at least 2 of the
                                                                                   NQS domains using the direct
                                                                                   EHR product or EHR data
                                                                                   submission vendor product. If
                                                                                   less than 6 measures apply to
                                                                                   the group practice, the group
                                                                                   practice must report all of
                                                                                   the measures for which there
                                                                                   is Medicare patient data. Of
                                                                                   the additional 6 measures
                                                                                   that must be reported in
                                                                                   conjunction with reporting
                                                                                   the CAHPS for PQRS survey
                                                                                   measures, a group practice
                                                                                   would be required to report
                                                                                   on at least 1 measure for
                                                                                   which there is Medicare
                                                                                   patient data.

[[Page 41827]]

 
12-month (Jan 1-Dec 31, 2016)  2+ EPs.........  Individual PQRS  Qualified        Report at least 9 measures
                                                 measures and/    Clinical Data    available for reporting under
                                                 or non-PQRS      Registry         a QCDR covering at least 3 of
                                                 measures         (QCDR).          the NQS domains, AND report
                                                 reportable via                    each measure for at least 50
                                                 a QCDR.                           percent of the group
                                                                                   practice's patients. Of these
                                                                                   measures, the group practice
                                                                                   would report on at least 2
                                                                                   outcome measures, OR, if 2
                                                                                   outcomes measures are not
                                                                                   available, report on at least
                                                                                   1 outcome measures and at
                                                                                   least 1 of the following
                                                                                   types of measures--resource
                                                                                   use, patient experience of
                                                                                   care, efficiency/appropriate
                                                                                   use, or patient safety.
----------------------------------------------------------------------------------------------------------------

6. Statutory Requirements and Other Considerations for the Selection of 
PQRS Quality Measures for Meeting the Criteria for Satisfactory 
Reporting for 2016 and Beyond for Individual EPs and Group Practices
    Annually, we solicit or ``Call for Measures'' from the public for 
possible inclusion in the PQRS. During the Call for Measures, we 
request measures for inclusion in PQRS that meet the following 
statutory and other criteria.
    Sections 1848(k)(2)(C) and 1848(m)(3)(C)(i) of the Act, 
respectively, govern the quality measures reported by individual EPs 
and group practices under the PQRS. Under section 1848(k)(2)(C)(i) of 
the Act, the PQRS quality measures shall be such measures selected by 
the Secretary from measures that have been endorsed by the entity with 
a contract with the Secretary under section 1890(a) of the Act, which 
is currently the National Quality Forum (NQF). However, in the case of 
a specified area or medical topic determined appropriate by the 
Secretary for which a feasible and practical measure has not been 
endorsed by the NQF, section 1848(k)(2)(C)(ii) of the Act authorizes 
the Secretary to specify a measure that is not so endorsed as long as 
due consideration is given to measures that have been endorsed or 
adopted by a consensus organization identified by the Secretary. In 
light of these statutory requirements, we believe that, except in the 
circumstances specified in the statute, each PQRS quality measure must 
be endorsed by the NQF. Additionally, section 1848(k)(2)(D) of the Act 
requires that for each PQRS quality measure, the Secretary shall ensure 
that EPs have the opportunity to provide input during the development, 
endorsement, or selection of measures applicable to services they 
furnish. The statutory requirements under section 1848(k)(2)(C) of the 
Act, subject to the exception noted previously, require only that the 
measures be selected from measures that have been endorsed by the 
entity with a contract with the Secretary under section 1890(a) of the 
Act (that is, the NQF) and are silent as to how the measures that are 
submitted to the NQF for endorsement are developed.
    The steps for developing measures applicable to physicians and 
other EPs prior to submission of the measures for endorsement may be 
carried out by a variety of different organizations. We do not believe 
there needs to be special restrictions on the type or make-up of the 
organizations carrying out this process of development of physician 
measures, such as restricting the initial development to physician-
controlled organizations. Any such restriction would unduly limit the 
development of quality measures and the scope and utility of measures 
that may be considered for endorsement as voluntary consensus standards 
for purposes of the PQRS.
    In addition to section 1848(k)(2)(C) of the Act, section 1890A of 
the Act, which was added by section 3014(b) of the Affordable Care Act, 
requires that the Secretary establish a pre-rulemaking process under 
which certain steps occur for the selection of certain categories of 
quality and efficiency measures, one of which is that the entity with a 
contract with the Secretary under section 1890(a) of the Act (that is, 
the NQF) convene multi-stakeholder groups to provide input to the 
Secretary on the selection of such measures. These categories are 
described in section 1890(b)(7)(B) of the Act, and include such 
measures as the quality measures selected for reporting under the PQRS. 
In accordance with section 1890A(a)(1) of the Act, the NQF convened 
multi-stakeholder groups by creating the MAP. Section 1890A(a)(2) of 
the Act requires that the Secretary must make publicly available by 
December 1st of each year a list of the quality and efficiency measures 
that the Secretary is considering for selection through rulemaking for 
use in the Medicare program. The NQF must provide CMS with the MAP's 
input on the selection of measures by February 1st of each year. The 
lists of measures under consideration for selection through rulemaking 
in 2015 are available at http://www.qualityforum.org/map/.
    As we noted above, section 1848(k)(2)(C)(ii) of the Act provides an 
exception to the requirement that the Secretary select measures that 
have been endorsed by the entity with a contract under section 1890(a) 
of the Act (that is, the NQF). We may select measures under this 
exception if there is a specified area or medical topic for which a 
feasible and practical measure has not been endorsed by the entity, as 
long as due consideration is given to measures that have been endorsed 
or adopted by a consensus organization identified by the Secretary. 
Under this exception, aside from NQF endorsement, we requested that 
stakeholders apply the following considerations when submitting 
measures for possible inclusion in the PQRS measure set:
     Measures that are not duplicative of another existing or 
proposed measure.
     Measures that are further along in development than a 
measure concept.
     We are not accepting claims-based-only reporting measures 
in this process.
     Measures that are outcome-based rather than clinical 
process measures.
     Measures that address patient safety and adverse events.
     Measures that identify appropriate use of diagnosis and 
therapeutics.
     Measures that include the NQS domain for care coordination 
and communication.
     Measures that include the NQS domain for patient 
experience and patient-reported outcomes.
     Measures that address efficiency, cost and resource use.

[[Page 41828]]

a. Proposed PQRS Quality Measures
    Taking into consideration the statutory and non-statutory criteria 
we described previously, this section contains our proposals for the 
inclusion or removal of measures in PQRS for 2016 and beyond. We are 
classifying all proposed measures against six domains based on the 
NQS's six priorities, as follows:
    (1) Patient Safety. These are measures that reflect the safe 
delivery of clinical services in all healthcare settings. These 
measures may address a structure or process that is designed to reduce 
risk in the delivery of healthcare or measure the occurrence of an 
untoward outcome such as adverse events and complications of procedures 
or other interventions.
    (2) Person and Caregiver-Centered Experience and Outcomes. These 
are measures that reflect the potential to improve patient-centered 
care and the quality of care delivered to patients. They emphasize the 
importance of collecting patient-reported data and the ability to 
impact care at the individual patient level, as well as the population 
level. These are measures of organizational structures or processes 
that foster both the inclusion of persons and family members as active 
members of the health care team and collaborative partnerships with 
providers and provider organizations or can be measures of patient-
reported experiences and outcomes that reflect greater involvement of 
patients and families in decision making, self-care, activation, and 
understanding of their health condition and its effective management.
    (3) Communication and Care Coordination. These are measures that 
demonstrate appropriate and timely sharing of information and 
coordination of clinical and preventive services among health 
professionals in the care team and with patients, caregivers, and 
families to improve appropriate and timely patient and care team 
communication. They may also be measures that reflect outcomes of 
successful coordination of care.
    (4) Effective Clinical Care. These are measures that reflect 
clinical care processes closely linked to outcomes based on evidence 
and practice guidelines or measures of patient-centered outcomes of 
disease states.
    (5) Community/Population Health. These are measures that reflect 
the use of clinical and preventive services and achieve improvements in 
the health of the population served. They may be measures of processes 
focused on primary prevention of disease or general screening for early 
detection of disease unrelated to a current or prior condition.
    (6) Efficiency and Cost Reduction. These are measures that reflect 
efforts to lower costs and to significantly improve outcomes and reduce 
errors. These are measures of cost, resource use and appropriate use of 
healthcare resources or inefficiencies in healthcare delivery.
    Please note that the PQRS quality measure specifications for any 
given proposed PQRS individual quality measure may differ from 
specifications for the same quality measure used in prior years. For 
example, for the proposed PQRS quality measures that were selected for 
reporting in 2016 and beyond, please note that detailed measure 
specifications, including the measure's title, for the proposed 
individual PQRS quality measures for 2016 and beyond may have been 
updated or modified during the NQF endorsement process or for other 
reasons.
    In addition, due to our desire to align measure titles with the 
measure titles that have been finalized for 2013, 2014, 2015 reporting, 
and potentially subsequent years of the Medicare EHR Incentive Program, 
we note that the measure titles for measures available for reporting 
via EHR-based reporting mechanisms may change. To the extent that the 
Medicare EHR Incentive Program updates its measure titles to include 
version numbers (see 77 FR 13744), we will use these version numbers to 
describe the PQRS EHR measures that will also be available for 
reporting for the EHR Incentive Program. We will continue to work 
toward complete alignment of measure specifications across programs 
whenever possible.
    Through NQF's measure maintenance process, NQF-endorsed measures 
are sometimes updated to incorporate changes that we believe do not 
substantively change the nature of the measure. Examples of such 
changes may include updated diagnosis or procedure codes or changes to 
exclusions to the patient population or definitions. While we address 
such changes on a case-by-case basis, we generally believe these types 
of maintenance changes are distinct from substantive changes to 
measures that result in what are considered new or different measures. 
Further, we believe that non-substantive maintenance changes of this 
type do not trigger the same agency obligations under the 
Administrative Procedure Act.
    In the CY 2013 PFS final rule with comment period, we finalized our 
proposal providing that if the NQF updates an endorsed measure that we 
have adopted for the PQRS in a manner that we consider to not 
substantively change the nature of the measure, we would use a 
subregulatory process to incorporate those updates to the measure 
specifications that apply to the program (77 FR 69207). We believe this 
adequately balances our need to incorporate non-substantive NQF updates 
to NQF-endorsed measures in the most expeditious manner possible, while 
preserving the public's ability to comment on updates that change an 
endorsed measure such that it is no longer the same measure that we 
originally adopted. We also note that the NQF process incorporates an 
opportunity for public comment and engagement in the measure 
maintenance process. We will revise the Specifications Manual and post 
notices to clearly identify the updates and provide links to where 
additional information on the updates can be found. Updates will also 
be available on the CMS PQRS Web site at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/index.html.
    We are not the measure steward for most of the measures available 
for reporting under the PQRS. We rely on outside measure stewards and 
developers to maintain these measures. In Table 25, we are proposing 
that certain measures be removed from the PQRS measure set due to the 
measure steward indicating that it will not be able to maintain the 
measure. We note that this proposal is contingent upon the measure 
steward not being able to maintain the measure. Should we learn that a 
certain measure steward is able to maintain the measure, or that 
another entity is able to maintain the measure in a manner that allows 
the measure to be available for reporting under the PQRS for the CY 
2018 PQRS payment adjustment, we propose to keep the measure available 
for reporting under the PQRS and therefore not finalize our proposal to 
remove the measure. In addition, if, after the display of this proposed 
rule and before the display of the CY 2016 PFS final rule, we discover 
additional measures within the current PQRS measure set that a measure 
steward can no longer maintain, we propose to remove these measures 
from reporting for the PQRS beginning in 2016. We will discuss any such 
instances in the CY 2016 PFS final rule with comment period.
    In addition, we note that we have received feedback from 
stakeholders, particularly first-time participants who find it 
difficult to understand which measures are applicable to their

[[Page 41829]]

particular practice. In an effort to aide EPs and group practices to 
determine what measures best fit their practice, and in collaboration 
with specialty societies, we are beginning to group our final measures 
available for reporting according to specialty. The current listing of 
our measures by specialty can be found on our Web site at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/index.html. Please note that these groups of measures 
are meant to provide guidance to those EPs seeking to determine what 
measures to report. EPs are not required to report measures according 
to these suggested groups of measures. As measures are adopted or 
revised, we will continue to update these groups to reflect the 
measures available under the PQRS, as well as add more specialties.
    In Tables 22 through 30, we propose changes to the PQRS measures 
set. The current PQRS measures list is available at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/PQRS_2015_Measure-List_111014.zip.
b. Proposed Cross-Cutting Measures for 2016 Reporting and Beyond
    In the CY 2015 PFS final rule with comment period, we finalized a 
set of 19 cross-cutting measures for reporting in the PQRS for 2015 and 
beyond (see Table 52 at 79 FR 67801). The current PQRS cross-cutting 
measure set is available at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/2015_PQRS_CrosscuttingMeasures_12172014.pdf. In Table 22, we propose 
the following measures to be added to the current PQRS cross-cutting 
measure set. Please note that our rationale for proposing each of these 
measures is found below the measure description.

[[Page 41830]]

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[[Page 41831]]


c. Proposed New PQRS Measures Available for Reporting for 2016 and 
Beyond and Proposed Changes to Existing PQRS Measures
    Table 23 contains additional measures we propose to include in the 
PQRS measure set for CY 2016 and beyond. We have also indicated the 
PQRS reporting mechanism or mechanisms through which each measure could 
be submitted, as well as the MAP recommendations. Additional comments 
and measure information from the MAP review can be found at http://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=78711.
    Please note that, in some cases specified below, we propose adding 
a measure to the PQRS measure set that the MAP believes requires 
further development prior to inclusion or does not support a measure 
for inclusion in the PQRS measure set. Please note that, while CMS 
takes these recommendations into consideration, in these instances, CMS 
believes the rationale provided for proposing the addition of a measure 
outweighs the MAP's recommendation.

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    In Table 24, we provide our proposals for a NQS domain change for 
measures that are currently available for reporting under the PQRS.

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    In Table 25, we propose to remove the following measures from 
reporting under the PQRS.

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    In Table 26, we propose to change the mechanism(s) by which an EP 
or group practice may report a respective PQRS measure beginning in 
2016.

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d. PQRS Measures Groups
    Section 414.90(b) defines a measures group as a subset of six or 
more PQRS measures that have a particular clinical condition or focus 
in common. The denominator definition and coding of the measures group 
identifies the condition or focus that is shared across the measures 
within a particular measures group.
    We propose to add the following 3 new measures groups as shown in 
Tables 27, 28 and 29 that will be available for reporting in the PQRS 
beginning in 2016. Please note that, in these tables, we provide the 
PQRS measure numbers for the measures within these proposed measures 
groups that were previously finalized in the PQRS. New measures within 
these proposed measures groups that are proposed to be added, as 
indicated in Table 23 above, do not have a PQRS number. Therefore, in 
lieu of a PQRS number, an ``NA'' is indicated.
     Multiple Chronic Conditions Measures Group: We propose to 
add the Multiple Chronic Conditions Measures Group in the CY 2016 
proposed rule. A large proportion of the Medicare population are 
impacted by Multiple Chronic Conditions, and providers that treat this 
population are often not recognized for the complexity of treatment for 
a patient with multiple chronic conditions. The addition of this 
measures group would specifically identify those providers that address 
the exponential complexity of treating the combination of these 
conditions rather than a sum of the individual conditions. This 
measures group addresses the

[[Page 41873]]

complexity of care that is required for patients that may have multiple 
disease processes that require clinical management and treatment.
     Cardiovascular Prevention Measures Group (Millions 
Hearts): We propose to add the Cardiovascular Prevention Measures Group 
in the CY 2016 proposed rule. Prior to 2015, the PQRS included a 
Cardiovascular Prevention Measures Group (Measures 2, 204, 226, 236, 
241 and 317 in 2014 (78 FR 74741)). The measures group was removed for 
2015 PQRS reporting due to clinical guideline changes that affected 
many of the measures. Given the efficacy of cardiovascular prevention 
on cardiovascular health, this measures group is being re-considered 
with an adjustment to align with current clinical guidelines. This 
measures group is also fully supported by the Million Hearts 
Initiative.
     Diabetic Retinopathy Measures Group: We propose to add the 
Diabetic Retinopathy Measures Group in the CY 2016 proposed rule. An 
increase in the frequency of Type 2 diabetes in the pediatric age group 
is associated with increased childhood obesity. The implications are 
significantly increased burdens of disability and complications 
associated with diabetes, including diabetic retinopathy, which has a 
projected prevalence of 6 million individuals with diabetic retinopathy 
by the year 2020 in the United States, and a prevalence rate of 28.5% 
in all adults with diabetes aged 40 and older. The addition of the 
Diabetic Retinopathy Measures Group would help to address this 
significant public health problem by allowing for the comprehensive 
evaluation of provider performance and patient outcomes related to a 
disease that threatens the eyesight of a very large population, and by 
supporting improvements in quality of care and outcomes related to 
diabetic retinopathy.

                     Table 27--Cardiovascular Prevention Measures Group for 2016 and Beyond
                                                [Millions Hearts]
----------------------------------------------------------------------------------------------------------------
              NQF/PQRS                        Measure title and description                Measure developer
----------------------------------------------------------------------------------------------------------------
0419/130...........................  Documentation of Current Medications in the      Centers for Medicare &
                                      Medical Record: Percentage of visits for         Medicaid Services/Quality
                                      patients aged 18 years and older for which the   Insights of Pennsylvania.
                                      EP attests to documenting a list of current
                                      medications using all immediate resources
                                      available on the date of the encounter. This
                                      list must include ALL known prescriptions,
                                      over-the-counters, herbals, and vitamin/
                                      mineral/dietary (nutritional) supplements AND
                                      must contain the medications' name, dosage,
                                      frequency and route of administration.
0028/226...........................  Preventive Care and Screening: Tobacco use:      American Medical
                                      Screening and Cessation Intervention:            Association--Physician
                                      Percentage of patients aged 18 years and older   Consortium for
                                      who were screened for tobacco use one or more    Performance Improvement.
                                      times within 24 months AND who received
                                      cessation counseling intervention if
                                      identified as a tobacco user.
0068/204...........................  Ischemic Vascular Disease (IVD): Use of Aspirin  National Committee for
                                      or Another Antithrombotic: Percentage of         Quality Assurance.
                                      patients 18 years of age and older who were
                                      discharged alive for acute myocardial
                                      infarction (AMI), coronary artery bypass graft
                                      (CABG) or percutaneous coronary interventions
                                      (PCI) in the 12 months prior to the
                                      measurement period, or who had an active
                                      diagnosis of ischemic vascular disease (IVD)
                                      during the measurement period and who had
                                      documentation of use of aspirin or another
                                      antithrombotic during the measurement period.
0018/236...........................  Controlling High Blood Pressure: Percentage of   National Committee for
                                      patients 18-85 years of age who had a            Quality Assurance
                                      diagnosis of hypertension and whose blood
                                      pressure was adequately controlled (<140/90
                                      mmHg) during the measurement period.
N/A/317............................  Preventive Care and Screening: Screening for     Centers for Medicare &
                                      High Blood Pressure and Follow-Up Documented:    Medicaid Services/Quality
                                      Percentage of patients aged 18 years and older   Insights of Pennsylvania.
                                      seen during the reporting period who were
                                      screened for high blood pressure AND a
                                      recommended follow-up plan is documented based
                                      on the current blood pressure (BP) reading as
                                      indicated.
N/A/N/A............................  Statin Therapy for the Prevention and Treatment  Centers for Medicare &
                                      of Cardiovascular Disease: Percentage of high-   Medicaid Services/Quality
                                      risk adult patients aged >=21 years who were     Insights of Pennsylvania/
                                      previously diagnosed with or currently have an   Mathematica.
                                      active diagnosis of clinical atherosclerotic
                                      cardiovascular disease (ASCVD); OR adult
                                      patients aged >=21 years with a fasting or
                                      direct Low-Density Lipoprotein Cholesterol
                                      (LDL-C) level >=190 mg/dL; OR patients aged 40-
                                      75 years with a diagnosis of diabetes with a
                                      fasting or direct Low-Density Lipoprotein
                                      Cholesterol (LDL-C) level of 70-189 mg/dL who
                                      were prescribed or are already on statin
                                      medication therapy during the measurement
                                      period.
                                     This is a new measure described in Table 23
                                      above.
----------------------------------------------------------------------------------------------------------------


                        Table 28--Diabetic Retinopathy Measures Group for 2016 and Beyond
----------------------------------------------------------------------------------------------------------------
              NQF/PQRS                        Measure title and description                Measure developer
----------------------------------------------------------------------------------------------------------------
0059/001...........................  Diabetes: Hemoglobin A1c Poor Control:           National Committee for
                                      Percentage of patients 18-75 years of age with   Quality Assurance.
                                      diabetes who had hemoglobin A1c >9.0% during
                                      the measurement period.
0088/018...........................  Diabetic Retinopathy: Documentation of Presence  American Medical
                                      or Absence of Macular Edema and Level of         Association-Physician
                                      Severity of Retinopathy: Percentage of           Consortium for
                                      patients aged 18 years and older with a          Performance Improvement/
                                      diagnosis of diabetic retinopathy who had a      National Committee for
                                      dilated macular or fundus exam performed which   Quality Assurance.
                                      included documentation of the level of
                                      severity of retinopathy and the presence or
                                      absence of macular edema during one or more
                                      office visits within 12 months.

[[Page 41874]]

 
0089/019...........................  Diabetic Retinopathy: Communication with the     American Medical
                                      Physician Managing Ongoing Diabetes Care:        Association-Physician
                                      Percentage of patients aged 18 years and older   Consortium for
                                      with a diagnosis of diabetic retinopathy who     Performance Improvement/
                                      had a dilated macular or fundus exam performed   National Committee for
                                      with documented communication to the physician   Quality Assurance.
                                      who manages the ongoing care of the patient
                                      with diabetes mellitus regarding the findings
                                      of the macular or fundus exam at least once
                                      within 12 months.
0055/117...........................  Diabetes: Eye Exam: Percentage of patients 18    National Committee for
                                      through 75 years of age with a diagnosis of      Quality Assurance.
                                      diabetes (type 1 and type 2) who had a retinal
                                      or dilated eye exam by an eye care
                                      professional in the measurement period or a
                                      negative retinal or dilated eye exam (negative
                                      for retinopathy) in the year prior to the
                                      measurement period.
0419/130...........................  Documentation of Current Medications in the      Centers for Medicare &
                                      Medical Record: Percentage of visits for         Medicaid Services/Quality
                                      patients aged 18 years and older for which the   Insights of Pennsylvania.
                                      EP attests to documenting a list of current
                                      medications using all immediate resources
                                      available on the date of the encounter. This
                                      list must include ALL known prescriptions,
                                      over-the-counters, herbals, and vitamin/
                                      mineral/dietary (nutritional) supplements AND
                                      must contain the medications' name, dosage,
                                      frequency and route of administration.
0028/226...........................  Preventive Care and Screening: Tobacco Use:      American Medical
                                      Screening and Cessation Intervention:            Association-Physician
                                      Percentage of patients 18 years and older who    Consortium for
                                      were screened for tobacco use one or more        Performance Improvement.
                                      times within 24 months AND who received
                                      cessation counseling intervention if
                                      identified as a tobacco user.
N/A/317............................  Preventive Care and Screening: Screening for     Centers for Medicare &
                                      High Blood Pressure and Follow-Up Documented:    Medicaid Services/Quality
                                      Percentage of patients aged 18 years and older   Insights of Pennsylvania.
                                      seen during the reporting period who were
                                      screened for high blood pressure AND a
                                      recommended follow-up plan is documented based
                                      on the current blood pressure (BP) reading as
                                      indicated.
----------------------------------------------------------------------------------------------------------------


                    Table 29--Multiple Chronic Conditions Measures Group for 2016 and Beyond
----------------------------------------------------------------------------------------------------------------
              NQF/PQRS                        Measure title and description                Measure developer
----------------------------------------------------------------------------------------------------------------
0326/047...........................  Care Plan: Percentage of patients aged 65 years  National Committee for
                                      and older who have an advance care plan or       Quality Assurance/
                                      surrogate decision maker documented in the       American Medical
                                      medical record or documentation in the medical   Association-Physician
                                      record that an advance care plan was discussed   Consortium for
                                      but the patient did not wish or was not able     Performance Improvement.
                                      to name a surrogate decision maker or provide
                                      an advance care plan.
0041/110...........................  Preventive Care and Screening: Influenza         American Medical
                                      Immunization: Percentage of patients aged 6      Association-Physician
                                      months and older seen for a visit between        Consortium for
                                      October 1 and March 31 who received an           Performance Improvement.
                                      influenza immunization OR who reported
                                      previous receipt of an influenza immunization.
0421/128...........................  Preventive Care and Screening: Body Mass Index   Centers for Medicare &
                                      (BMI) Screening and Follow-Up Plan: Percentage   Medicaid Services/Quality
                                      of patients aged 18 years and older with a BMI   Insights of Pennsylvania.
                                      documented during the current encounter or
                                      during the previous six months AND with a BMI
                                      outside of normal parameters, a follow-up plan
                                      is documented during the encounter or during
                                      the previous six months of the current
                                      encounter.
                                     Normal Parameters: Age 65 years and older BMI
                                      >=23 and <30 kg/m2; Age 18-64 years BMI >=18.5
                                      and <25 kg/m2.
0419/130...........................  Documentation of Current Medications in the      Centers for Medicare &
                                      Medical Record: Percentage of visits for         Medicaid Services/Quality
                                      patients aged 18 years and older for which the   Insights of Pennsylvania.
                                      EP attests to documenting a list of current
                                      medications using all immediate resources
                                      available on the date of the encounter. This
                                      list must include ALL known prescriptions,
                                      over-the-counters, herbals, and vitamin/
                                      mineral/dietary (nutritional) supplements AND
                                      must contain the medications' name, dosage,
                                      frequency and route of administration.
0420/131...........................  Pain Assessment and Follow-Up: Percentage of     Centers for Medicare &
                                      visits for patients aged 18 years and older      Medicaid Services/Quality
                                      with documentation of a pain assessment using    Insights of Pennsylvania.
                                      a standardized tool(s) on each visit AND
                                      documentation of a follow-up plan when pain is
                                      present.
0418/134...........................  Preventive Care and Screening: Screening for     Centers for Medicare &
                                      Clinical Depression and Follow-Up Plan:          Medicaid Services/Quality
                                      Percentage of patients aged 12 years and older   Insights of Pennsylvania.
                                      screened for clinical depression on the date
                                      of the encounter using an age appropriate
                                      standardized depression screening tool AND if
                                      positive, a follow-up plan is documented on
                                      the date of the positive screen.
0101/154...........................  Falls: Risk Assessment: Percentage of patients   National Committee for
                                      aged 65 years and older with a history of        Quality Assurance/
                                      falls who had a risk assessment for falls        American Medical
                                      completed within 12 months.                      Association-Physician
                                                                                       Consortium for
                                                                                       Performance Improvement.

[[Page 41875]]

 
0101/155...........................  Falls: Plan of Care: Percentage of patients      National Committee for
                                      aged 65 years and older with a history of        Quality Assurance/
                                      falls who had a plan of care for falls           American Medical
                                      documented within 12 months.                     Association-Physician
                                                                                       Consortium for
                                                                                       Performance Improvement.
0022/238...........................  Use of High-Risk Medications in the Elderly:     National Committee for
                                      Percentage of patients 66 years of age and       Quality Assurance.
                                      older who were ordered high-risk medications.
                                      Two rates are reported.
                                     a. Percentage of patients who were ordered at
                                      least one high-risk medication.
                                     b. Percentage of patients who were ordered at
                                      least two different high-risk medications.
----------------------------------------------------------------------------------------------------------------

    We propose to amend the following previously finalized measures 
groups for reporting in the PQRS beginning in 2016. Please note that, 
in these tables, we provide the PQRS measure numbers for the measures 
within these proposed measures groups that were previously finalized in 
the PQRS. New measures within these proposed measures groups that are 
proposed to be added, as indicated in Table 23 above, do not have a 
PQRS number. Therefore, in lieu of a PQRS number, an ``NA'' is 
indicated.

                Table 29A--Coronary Artery Bypass Graft (CABG) Measures Group for 2016 and Beyond
----------------------------------------------------------------------------------------------------------------
              NQF/PQRS                        Measure title and description                Measure developer
----------------------------------------------------------------------------------------------------------------
0134/043...........................  Coronary Artery Bypass Graft (CABG): Use of      Society of Thoracic
                                      Internal Mammary Artery (IMA) in Patients with   Surgeons.
                                      Isolated CABG Surgery: Percentage of patients
                                      aged 18 years and older undergoing isolated
                                      Coronary Artery Bypass Graft surgery who
                                      received an Internal Mammary Artery graft.
0236/044...........................  Coronary Artery Bypass Graft (CABG):             Center for Medicare &
                                      Preoperative Beta-Blocker in Patients with       Medicaid Services/Quality
                                      Isolated CABG Surgery: Percentage of isolated    Insights of Pennsylvania.
                                      Coronary Artery Bypass Graft (CABG) surgeries
                                      for patients aged 18 years and older who
                                      received a beta-blocker within 24 hours prior
                                      to surgical incision.
0129/164...........................  Coronary Artery Bypass Graft (CABG): Prolonged   Society of Thoracic
                                      Intubation: Percentage of patients aged 18       Surgeons.
                                      years and older undergoing isolated Coronary
                                      Artery Bypass Graft (CABG) surgery who require
                                      postoperative intubation >24 hours.
0130/165...........................  Coronary Artery Bypass Graft (CABG): Deep        Society of Thoracic
                                      Sternal Wound Infection Rate: Percentage of      Surgeons.
                                      patients aged 18 years and older undergoing
                                      isolated Coronary Artery Bypass Graft surgery
                                      who, within 30 days postoperatively, develop
                                      deep sternal wound infection involving muscle,
                                      bone, and/or mediastinum requiring operative
                                      intervention.
0131/166...........................  Coronary Artery Bypass Graft (CABG): Stroke:     Society of Thoracic
                                      Percentage of patients aged 18 years and older   Surgeons.
                                      undergoing isolated Coronary Artery Bypass
                                      Graft surgery who have a postoperative stroke
                                      (i.e., any confirmed neurological deficit of
                                      abrupt onset caused by a disturbance in blood
                                      supply to the brain) that did not resolve
                                      within 24 hours.
0114/167...........................  Coronary Artery Bypass Graft (CABG):             Society of Thoracic
                                      Postoperative Renal Failure: Percentage of       Surgeons.
                                      patients aged 18 years and older undergoing
                                      isolated Coronary Artery Bypass Graft surgery
                                      (without pre-existing renal failure) who
                                      develop postoperative renal failure or require
                                      dialysis.
0115/168...........................  Coronary Artery Bypass Graft (CABG): Surgical    Society of Thoracic
                                      Re-Exploration: Percentage of patients aged 18   Surgeons.
                                      years and older undergoing isolated Coronary
                                      Artery Bypass Graft surgery who require a
                                      return to the operating room (OR) during the
                                      current hospitalization for mediastinal
                                      bleeding with or without tamponade, graft
                                      occlusion, valve dysfunction, or other cardiac
                                      reason.
----------------------------------------------------------------------------------------------------------------

    We propose to amend the following measures groups for reporting in 
the PQRS beginning in 2016.

                             Table 29B--Dementia Measures Group for 2016 and Beyond
    [CMS proposes to add PQRS #134 preventive care and screening and delete PQRS #285 dementia: Screening for
                                  depressive symptoms from this measures group]
----------------------------------------------------------------------------------------------------------------
              NQF/PQRS                        Measure title and description                Measure developer
----------------------------------------------------------------------------------------------------------------
0326/047...........................  Care Plan: Percentage of patients aged 65 years  National Committee for
                                      and older who have an advance care plan or       Quality Assurance/
                                      surrogate decision maker documented in the       American Medical
                                      medical record or documentation in the medical   Association-Physician
                                      record that an advance care plan was discussed   Consortium for
                                      but the patient did not wish or was not able     Performance Improvement.
                                      to name a surrogate decision maker or provide
                                      an advance care plan.

[[Page 41876]]

 
0418/134...........................  Preventive Care and Screening: Screening for     Center for Medicare &
                                      Clinical Depression and Follow-Up Plan:          Medicaid Services/Quality
                                      Percentage of patients aged 12 years and older   Insights of Pennsylvania.
                                      screened for clinical depression on the date
                                      of the encounter using an age appropriate
                                      standardized depression screening tool AND if
                                      positive, a follow-up plan is documented on
                                      the date of the positive screen.
N.A/280............................  Dementia: Staging of Dementia: Percentage of     American Academy of
                                      patients, regardless of age, with a diagnosis    Neurology/American
                                      of dementia whose severity of dementia was       Psychological
                                      classified as mild, moderate or severe at        Association.
                                      least once within a 12 month period.
N/A/281............................  Dementia: Cognitive Assessment: Percentage of    American Medical
                                      patients, regardless of age, with a diagnosis    Association-Physician
                                      of dementia for whom an assessment of            Consortium for
                                      cognition is performed and the results           Performance Improvement.
                                      reviewed at least once within a 12 month
                                      period.
N/A/282............................  Dementia: Functional Status Assessment:          American Academy of
                                      Percentage of patients, regardless of age,       Neurology/American
                                      with a diagnosis of dementia for whom an         Psychological
                                      assessment of functional status is performed     Association.
                                      and the results reviewed at least once within
                                      a 12 month period.
N/A/283............................  Dementia: Neuropsychiatric Symptom Assessment:   American Academy of
                                      Percentage of patients, regardless of age,       Neurology/American
                                      with a diagnosis of dementia and for whom an     Psychological
                                      assessment of neuropsychiatric symptoms is       Association.
                                      performed and results reviewed at least once
                                      in a 12 month period.
N/A/284............................  Dementia: Management of Neuropsychiatric         American Academy of
                                      Symptoms: Percentage of patients, regardless     Neurology/American
                                      of age, with a diagnosis of dementia who have    Psychological
                                      one or more neuropsychiatric symptoms who        Association.
                                      received or were recommended to receive an
                                      intervention for neuropsychiatric symptoms
                                      within a 12 month period.
N/A/286............................  Dementia: Counseling Regarding Safety Concerns:  American Academy of
                                      Percentage of patients, regardless of age,       Neurology/American
                                      with a diagnosis of dementia or their            Psychological
                                      caregiver(s) who were counseled or referred      Association.
                                      for counseling regarding safety concerns
                                      within a 12 month period.
N/A/287............................  Dementia: Counseling Regarding Risks of          American Academy of
                                      Driving: Percentage of patients, regardless of   Neurology/American
                                      age, with a diagnosis of dementia or their       Psychological
                                      caregiver(s) who were counseled regarding the    Association.
                                      risks of driving and the alternatives to
                                      driving at least once within a 12 month period.
N/A/288............................  Dementia: Caregiver Education and Support:       American Academy of
                                      Percentage of patients, regardless of age,       Neurology/American
                                      with a diagnosis of dementia whose               Psychological
                                      caregiver(s) were provided with education on     Association.
                                      dementia disease management and health
                                      behavior changes AND referred to additional
                                      sources for support within a 12 month period.
----------------------------------------------------------------------------------------------------------------


                             Table 29C--Diabetes Measures Group for 2016 and Beyond
[CMS Proposes to Add PQRS #126 Diabetes Mellitus: Diabetic Foot and Ankle Care, Peripheral Neuropathy and Delete
                             PQRS #163 Diabetes: Foot Exam From This Measures Group]
----------------------------------------------------------------------------------------------------------------
              NQF/PQRS                        Measure title and description                Measure developer
----------------------------------------------------------------------------------------------------------------
0059/001...........................  Diabetes: Hemoglobin A1c Poor Control:           National Committee for
                                      Percentage of patients 18-75 years of age with   Quality Assurance.
                                      diabetes who had hemoglobin A1c >9.0% during
                                      the measurement period.
0041/110...........................  Preventive Care and Screening: Influenza         American Medical
                                      Immunization: Percentage of patients aged 6      Association-Physician
                                      months and older seen for a visit between        Consortium for
                                      October 1 and March 31 who received an           Performance Improvement.
                                      influenza immunization OR who reported
                                      previous receipt of an influenza immunization.
0055/117...........................  Diabetes: Eye Exam: Percentage of patients 18    National Committee for
                                      through 75 years of age with a diagnosis of      Quality Assurance.
                                      diabetes (type 1 and type 2) who had a retinal
                                      or dilated eye exam in the measurement period
                                      or a negative retinal or dilated eye exam
                                      (negative for retinopathy) in the year prior
                                      to the measurement period.
0062/119...........................  Diabetes: Medical Attention for Neuropathy: The  National Committee for
                                      percentage of patients 18-75 years of age with   Quality Assurance.
                                      diabetes who had a nephropathy screening test
                                      or evidence of nephropathy during the
                                      measurement period.
0417/126...........................  Diabetes Mellitus: Diabetic Foot and Ankle       American Podiatric Medical
                                      Care, Peripheral Neuropathy--Neurological        Association.
                                      Evaluation: Percentage of patients aged 18
                                      years and older with a diagnosis of diabetes
                                      mellitus who had a neurological examination of
                                      their lower extremities within 12 months.
0028/226...........................  Preventive Care and Screening: Tobacco Use:      American Medical
                                      Screening and Cessation Intervention:            Association-Physician
                                      Percentage of patients 18 years and older who    Consortium for
                                      were screened for tobacco use one or more        Performance Improvement.
                                      times within 24 months AND who received
                                      cessation counseling intervention if
                                      identified as a tobacco user.
----------------------------------------------------------------------------------------------------------------


[[Page 41877]]


                          Table 29D--Preventive Care Measures Group for 2016 and Beyond
     [CMS Proposes to Add NQF #2152 Preventive Care and Screening: Unhealthy Alcohol Use: Screening & Brief
    Counseling and Delete PQRS #173 Preventive Care and Screening: Unhealthy Alcohol Use--Screening From This
                                                 Measures Group]
----------------------------------------------------------------------------------------------------------------
              NQF/PQRS                        Measure title and description                Measure developer
----------------------------------------------------------------------------------------------------------------
0046/039...........................  Screening or Therapy for Osteoporosis for Women  National Committee for
                                      Aged 65 Years and Older: Percentage of female    Quality Assurance/
                                      patients aged 65 years and older who have a      American Medical
                                      central dual-energy X-ray absorptiometry (DXA)   Association-Physician
                                      measurement ordered or performed at least once   Consortium for
                                      since age 60 or pharmacologic therapy            Performance Improvement.
                                      prescribed within 12 months.
N/A/048............................  Urinary Incontinence: Assessment of Presence or  National Committee for
                                      Absence of Urinary Incontinence in Women Aged    Quality Assurance/
                                      65 Years and Older: Percentage of female         American Medical
                                      patients aged 65 years and older who were        Association-Physician
                                      assessed for the presence or absence of          Consortium for
                                      urinary incontinence within 12 months.           Performance Improvement.
0041/110...........................  Preventive Care and Screening: Influenza         American Medical
                                      Immunization: Percentage of patients aged 6      Association-Physician
                                      months and older seen for a visit between        Consortium for
                                      October 1 and March 31 who received an           Performance Improvement.
                                      influenza immunization OR who reported
                                      previous receipt of an influenza immunization.
0043/111...........................  Pneumonia Vaccination Status for Older Adults:   National Committee for
                                      Percentage of patients 65 years of age and       Quality Assurance.
                                      older who have ever received a pneumococcal
                                      vaccine.
2372/112...........................  Breast Cancer Screening: Percentage of women 50  National Committee for
                                      through 74 years of age who had a mammogram to   Quality Assurance.
                                      screen for breast cancer within 27 months.
0034/113...........................  Colorectal Cancer Screening: Percentage of       National Committee for
                                      patients 50 through 75 years of age who had      Quality Assurance.
                                      appropriate screening for colorectal cancer.
0421/128...........................  Preventive Care and Screening: Body Mass Index   Center for Medicare &
                                      (BMI) Screening and Follow-Up Plan: Percentage   Medicaid Services/Quality
                                      of patients aged 18 years and older with a BMI   Insights of Pennsylvania.
                                      documented during the current encounter or
                                      during the previous six months AND with a BMI
                                      outside of normal parameters, a follow-up plan
                                      is documented during the encounter or during
                                      the previous six months of the encounter
                                      Normal Parameters: Age 65 years and older BMI
                                      >=23 and <30 kg/m2; Age 18-64 years BMI >=18.5
                                      and <25 kg/m2.
0418/134...........................  Preventive Care and Screening: Screening for     Center for Medicare &
                                      Clinical Depression and Follow-Up Plan:          Medicaid Services/Quality
                                      Percentage of patients aged 12 years and older   Insights of Pennsylvania.
                                      screened for clinical depression on the date
                                      of the encounter using an age appropriate
                                      standardized depression screening tool AND if
                                      positive, a follow-up plan is documented on
                                      the date of the positive screen.
0028/226...........................  Preventive Care and Screening: Tobacco Use:      American Medical
                                      Screening and Cessation Intervention:            Association-Physician
                                      Percentage of patients 18 years and older who    Consortium for
                                      were screened for tobacco use one or more        Performance Improvement.
                                      times within 24 months AND who received
                                      cessation counseling intervention if
                                      identified as a tobacco user.
2152/N/A...........................  Preventive Care and Screening: Unhealthy         American Medical
                                      Alcohol Use: Screening & Brief Counseling:       Association-Physician
                                      Percentage of patients aged 18 years and older   Consortium for
                                      who were screened at least once within the       Performance Improvement.
                                      last 24 months for unhealthy alcohol use using
                                      a systematic screening method AND who received
                                      brief counseling if identified as an unhealthy
                                      alcohol user. This is a new measure described
                                      in Table 23 above.
----------------------------------------------------------------------------------------------------------------


                       Table 29E--Rheumatoid Arthritis Measures Group for 2016 and Beyond
     [CMS Proposes to Add PQRS 337 Tuberculosis Prevention for Psoriasis, Psoriatic Arthritis and Rheumatoid
               Arthritis Patients on a Biological Immune Response Modifier to This Measures Group]
----------------------------------------------------------------------------------------------------------------
              NQF/PQRS                        Measure title and description                Measure developer
----------------------------------------------------------------------------------------------------------------
0054/108...........................  Rheumatoid Arthritis (RA): Disease Modifying     National Committee for
                                      Anti-Rheumatic Drug (DMARD) Therapy:             Quality Assurance.
                                      Percentage of patients aged 18 years and older
                                      who were diagnosed with RA and were
                                      prescribed, dispensed, or administered at
                                      least one ambulatory prescription for a
                                      disease-modifying anti-rheumatic drug (DMARD).
0421/128...........................  Preventive Care and Screening: Body Mass Index   Center for Medicare &
                                      (BMI) Screening and Follow-Up Plan: Percentage   Medicaid Services/Quality
                                      of patients aged 18 years and older with a BMI   Insights of Pennsylvania.
                                      documented during the current encounter or
                                      during the previous six months AND with a BMI
                                      outside of normal parameters, a follow-up plan
                                      is documented during the encounter or during
                                      the previous six months of the encounter
                                      Normal Parameters: Age 65 years and older BMI
                                      >=23 and <30 kg/m2; Age 18-64 years BMI >=18.5
                                      and <25 kg/m2.
0420/131...........................  Pain Assessment and Follow-Up: Percentage of     Center for Medicare &
                                      visits for patients aged 18 years and older      Medicaid Services/Quality
                                      with documentation of a pain assessment using    Insights of Pennsylvania.
                                      a standardized tool(s) on each visit AND
                                      documentation of a follow-up plan when pain is
                                      present.
N/A/176............................  Rheumatoid Arthritis (RA): Tuberculosis          American College of
                                      Screening: Percentage of patients aged 18        Rheumatology.
                                      years and older with a diagnosis of rheumatoid
                                      arthritis (RA) who have documentation of a
                                      tuberculosis (TB) screening performed and
                                      results interpreted within 6 months prior to
                                      receiving a first course of therapy using a
                                      biologic disease-modifying anti-rheumatic drug
                                      (DMARD).
N/A/177............................  Rheumatoid Arthritis (RA): Periodic Assessment   American College of
                                      of Disease Activity: Percentage of patients      Rheumatology.
                                      aged 18 years and older with a diagnosis of
                                      rheumatoid arthritis (RA) who have an
                                      assessment and classification of disease
                                      activity within 12 months.

[[Page 41878]]

 
N/A/178............................  Rheumatoid Arthritis (RA): Functional Status     American College of
                                      Assessment: Percentage of patients aged 18       Rheumatology.
                                      years and older with a diagnosis of rheumatoid
                                      arthritis (RA) for whom a functional status
                                      assessment was performed at least once within
                                      12 months.
N/A/179............................  Rheumatoid Arthritis (RA): Assessment and        American College of
                                      Classification of Disease Prognosis:             Rheumatology.
                                      Percentage of patients aged 18 years and older
                                      with a diagnosis of rheumatoid arthritis (RA)
                                      who have an assessment and classification of
                                      disease prognosis at least once within 12
                                      months.
N/A/180............................  Rheumatoid Arthritis (RA): Glucocorticoid        American College of
                                      Management: Percentage of patients aged 18       Rheumatology.
                                      years and older with a diagnosis of rheumatoid
                                      arthritis (RA) who have been assessed for
                                      glucocorticoid use and, for those on prolonged
                                      doses of prednisone >=10 mg daily (or
                                      equivalent) with improvement or no change in
                                      disease activity, documentation of
                                      glucocorticoid management plan within 12
                                      months.
N/A/337............................  Tuberculosis Prevention for Psoriasis,           American College of
                                      Psoriatic Arthritis and Rheumatoid Arthritis     Rheumatology.
                                      Patients on a Biological Immune Response
                                      Modifier: Percentage of patients whose
                                      providers are ensuring active tuberculosis
                                      prevention either through yearly negative
                                      standard tuberculosis screening tests or are
                                      reviewing the patient's history to determine
                                      if they have had appropriate management for a
                                      recent or prior positive test.
----------------------------------------------------------------------------------------------------------------

e. Measures Available for Reporting in the GPRO Web Interface
    We finalized the measures that are available for reporting in the 
GPRO web interface for 2015 and beyond in the CY 2015 PFS final rule 
(79 FR 67893 through 67902). The current measures available for 
reporting under the GPRO web interface are available at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/2014_GPROWebInterface_MeasuresList_NarrativeSpecs_ReleaseNotes_12132013.zip. We are proposing to adopt the following measure in Table 30 for 
reporting via the GPRO web interface beginning in 2016:

Table 30--Measure for Addition to the Group Practice Reporting Option Web Interface Beginning in 2016 and Beyond
----------------------------------------------------------------------------------------------------------------
                                                 Measure and title                              Other  quality
       NQF/PQRS             GPRO Module          description [yen]        Measure steward    reporting  programs
----------------------------------------------------------------------------------------------------------------
                                                    Additions
----------------------------------------------------------------------------------------------------------------
N/A/N/A..............  STAT-1 (Statin).....  Statin Therapy for the     Centers for          MSSP.
                                              Prevention and Treatment   Medicare &
                                              of Cardiovascular          Medicaid Services/
                                              Disease: Percentage of     Quality Insights
                                              high-risk adult patients   of Pennsylvania/
                                              aged >=21 years who were   Mathematica.
                                              previously diagnosed
                                              with or currently have
                                              an active diagnosis of
                                              clinical atherosclerotic
                                              cardiovascular disease
                                              (ASCVD); OR adult
                                              patients aged >=21 years
                                              with a fasting or direct
                                              Low-Density Lipoprotein
                                              Cholesterol (LDL-C)
                                              level >=190 mg/dL; OR
                                              patients aged 40-75
                                              years with a diagnosis
                                              of diabetes with a
                                              fasting or direct Low-
                                              Density Lipoprotein
                                              Cholesterol (LDL-C)
                                              level of 70-189 mg/dL
                                              who were prescribed or
                                              are already on statin
                                              medication therapy
                                              during the measurement
                                              period.
                                             Rationale: Although this
                                              measure is not NQF-
                                              endorsed, we are
                                              exercising our exception
                                              authority under section
                                              1848(k)(2)(C)(ii) of the
                                              Act to propose this
                                              measure because a
                                              feasible and practical
                                              measure has not been
                                              endorsed by the NQF that
                                              has been submitted to
                                              the measures application
                                              partnership. This is a
                                              new measure that is
                                              proposed for the GPRO
                                              Web Interface in the
                                              PQRS for the CY 2016 PFS
                                              proposed rule. This
                                              measure addresses statin
                                              therapy, which is an
                                              important treatment
                                              option for patients with
                                              cardiovascular disease,
                                              which includes up-to-
                                              date clinical guidelines.
----------------------------------------------------------------------------------------------------------------


[[Page 41879]]

7. Request for Input on the Provisions Included in the Medicare Access 
and CHIP Reauthorization Act of 2015 (MACRA)
    The primary purpose of the Medicare Access and CHIP Reauthorization 
Act of 2015 (Pub. L. 114-10, enacted on April 16, 2015) (MACRA) was to 
repeal the Medicare sustainable growth rate (SGR) and strengthen 
Medicare access by improving physician payments and making other 
improvements, as well as to reauthorize the Children's Health Insurance 
Program. In this section of the proposed rule, we are seeking public 
input on the following provisions of MACRA:

 Section 101(b): Consolidation of Certain Current Law 
Performance Programs with New Merit-based Incentive Payment System 
(hereinafter MIPS)
 Section 101(c): Merit-based Incentive Payment System
 Section 101(e): Promoting Alternative Payment Models
a. The Merit-Based Incentive Payment System (MIPS)
    Section 1848(q) of the Act, added by section 101(c) of the MACRA, 
requires creation of the MIPS, applicable beginning with payments for 
items and services furnished on or after January 1, 2019, under which 
the Secretary shall: (1) Develop a methodology for assessing the total 
performance of each MIPS eligible professional according to performance 
standards for a performance period for a year; (2) using the 
methodology, provide for a composite performance score for each 
eligible professional for each performance period; and (3) use the 
composite performance score of the MIPS eligible professional for a 
performance period for a year to determine and apply a MIPS adjustment 
factor (and, as applicable, an additional MIPS adjustment factor) to 
the professional for the year. To aid in the planning and 
implementation of the MIPS, we are seeking public input on provisions 
related to the MIPS, including, but not limited to:
     Low-volume threshold: Section 1848(q)(1)(C)(iv) of the Act 
requires the Secretary to select a low-volume threshold to apply for 
purposes of excluding certain eligible professionals (as defined in 
section 1848(k)(3)(B) of the Act) from the definition of a MIPS 
eligible professional. The low-volume threshold may include one or more 
or a combination of the following: (1) The minimum number (as 
determined by the Secretary) of individuals enrolled under Medicare 
Part B who are treated by the eligible professional for the performance 
period involved; (2) the minimum number (as determined by the 
Secretary) of items and services furnished to individuals enrolled 
under Medicare Part B by such professional for such performance period; 
and (3) the minimum amount (as determined by the Secretary) of allowed 
charges billed by such professional under Medicare Part B for such 
performance period. We seek comment as to what would be an appropriate 
low-volume threshold for purposes of excluding certain eligible 
professionals (as defined in section 1848(k)(3)(B) of the Act) from the 
definition of a MIPS eligible professional. We also seek comment as to 
whether CMS should consider establishing a low-volume threshold using 
more than one or a combination of factors or, alternatively, whether 
CMS should focus on establishing a low-volume threshold based on one 
factor. We invite comments on which factors to include, individually or 
in combination, in determining a low-volume threshold.
    Low-volume thresholds are currently used in other CMS reporting 
programs. For example, as required by section 1903(t)(2) of the Act, 
eligible professionals and acute care hospitals must meet certain 
Medicaid patient volume thresholds (in general, 30 percent for eligible 
professionals and 10 percent for acute care hospitals) to be eligble 
for the Medicaid EHR Incentive Program. We would consider proposing 
similar thresholds, such as to exclude eligible professionals that do 
not have at least 10 percent of their patient volume derived from 
Medicare Part B encounters from participating in the MIPs. We seek 
comment as to whether this would be an appropriate low-volume threshold 
for the MIPS. In addition, we invite comments on the applicability of 
existing low-volume thresholds used in other CMS reporting programs 
toward MIPs.
     Clinical practice improvement activities: Section 
1848(q)(2)(A)(iii) of the Act provides for clinical practice 
improvement activities as one of the performance categories used in 
determining the composite performance score under the MIPS. In section 
1848(q)(2)(C)(v)(III) of the Act, clinical practice improvement 
activities are defined as activities that relevant eligible 
professional organizations and other relevant stakeholders identify as 
improving clinical practice or care delivery and that the Secretary 
determines, when effectively executed, are likely to result in improved 
outcomes. Section 1848(q)(2)(B)(iii) of the Act provides that the 
clinical practice improvement activities under subcategories specified 
by the Secretary for a performance period for a year must include at 
least the following subcategories:
    (1) Expanded practice access, such as same day appointments for 
urgent needs and after-hours access to clinician advice.
    (2) Population management, such as monitoring health conditions of 
individuals to provide timely health care interventions or 
participation in a qualified clinical data registry.
    (3) Care coordination, such as timely communication of test 
results, timely exchange of clinical information to patients and other 
providers, and use of remote monitoring or telehealth.
    (4) Beneficiary engagement, such as the establishment of care plans 
for individuals with complex care needs, beneficiary self-management 
assessment and training, and using shared decision-making mechanisms.
    (5) Patient safety and practice assessment, such as through use of 
clinical or surgical checklists and practice assessments related to 
maintaining certification.
    (6) Participation in an alternative payment model (as defined in 
section 1833(z)(3)(C) of the Act).
    We seek comment on what activities could be classified as clinical 
practice improvement activities according to this definition.
b. Alternative Payment Models
    Section 101(e) of MACRA, Promoting Alternative Payment Models, 
introduces a framework for promoting and developing alternative payment 
models (APMs) and providing incentive payments for eligible 
professionals who participate in APMs. The statutory amendments made by 
this section have payment implications for eligible professionals 
beginning in 2019. We are broadly seeking public comment on the topics 
in this section through this proposed rule.
    In preparation to implement the changes introduced by section 
101(e) of MACRA, we intend to publish questions for public comment on 
these amendments through a forthcoming Request for Information (RFI). 
Section 101(e) of MACRA includes the following provisions: Increasing 
Transparency of Physician-Focused Payment Models and Criteria and 
Process for Submission and Review of Physician-focused Payment Models 
(section 101(e)(1) of MACRA adds new section 1868(c) of the Act), 
Incentive Payments for Participation in Eligible Alternative Payment 
Models (section 101(e)(2) of MACRA adds new section 1833(z) of the 
Act), Encouraging

[[Page 41880]]

Development and Testing of Certain Models (section 101(e)(4) of MACRA 
amends section 1115A(b)(2) of the Act), a study on Integrating Medicare 
Alternative Payment Models in the Medicare Advantage payment system 
(section 101(e)(6) of MACRA), and Study and Report on Fraud Related to 
Alternative Payment Models under the Medicare Program (section 
101(e)(7) of MACRA).
    We intend to publish specific questions in the forthcoming RFI on 
topics within these provisions, including the following: The criteria 
for assessing physician-focused payment models; the criteria and 
process for the submission of physician-focused payment models eligible 
APMS, qualifying APM participants; the Medicare payment threshold 
option and the combination all-payer and Medicare payment threshold 
option for qualifying and partial-qualifying APM participants; the time 
period to use to calculate eligibility for qualifying and partial-
qualifying APM participants, eligible APM entities, quality measures 
and EHR use requirements; and the definition of nominal financial risk 
for eligible APM entities. In anticipation of the future RFI and 
subsequent notice and comment rulemaking, we welcome comments on 
approaches to implementing any of the topics listed in this section, 
including in provisions not enumerated above, and any other related 
concerns.

J. Electronic Clinical Quality Measures (eCQM) and Certification 
Criteria; and Electronic Health Record (EHR) Incentive Program-
Comprehensive Primary Care (CPC) Initiative and Medicare Meaningful Use 
Aligned Reporting

1. Background
    The Health Information Technology for Economic and Clinical Health 
(HITECH) Act (Title IV of Division B of the ARRA, together with Title 
XIII of Division A of the ARRA) authorizes incentive payments under 
Medicare and Medicaid for the adoption and meaningful use of certified 
EHR technology (CEHRT). Section 1848(o)(2)(B)(iii) of the Act requires 
that in selecting clinical quality measures (CQMs) for eligible 
professionals (EPs) to report under the EHR Incentive Program, and in 
establishing the form and manner of reporting, the Secretary shall seek 
to avoid redundant or duplicative reporting otherwise required. As 
such, we have taken steps to establish alignments among various quality 
reporting and payment programs that include the submission of CQMs.
    Under section 1848(o)(2)(A)(iii) of the Act and the definition of 
``meaningful EHR user'' under Sec.  495.4, EPs must report on CQMs 
selected by CMS using CEHRT, as part of being a meaningful EHR user 
under the Medicare EHR Incentive Program. For CY 2012 and subsequent 
years, Sec.  495.8(a)(2)(ii) requires an EP to successfully report the 
CQMs selected by CMS to CMS or the states, as applicable, in the form 
and manner specified by CMS or the states, as applicable.
    In the CY 2014 PFS final rule with comment period (78 FR 74756), we 
finalized our proposal to require EPs who seek to report CQMs 
electronically under the Medicare EHR Incentive Program to use the most 
recent version of the electronic specifications for the CQMs and have 
CEHRT that is tested and certified to the most recent version of the 
electronic specifications for the CQMs. We stated that we believe it is 
important for EPs to electronically report the most recent versions of 
the electronic specifications for the CQMs as updated measure versions 
to correct minor inaccuracies found in prior measure versions. We 
stated that to ensure that CEHRT products can successfully transmit CQM 
data using the most recent version of the electronic specifications for 
the CQMs, it is important that the product be tested and certified to 
the most recent version of the electronic specifications for the CQMs.
2. Certification Requirements for Reporting Electronic Clinical Quality 
Measures (eCQMs) in the EHR Incentive Program and PQRS
    In the CY 2015 PFS final rule with comment period (79 FR 67906), we 
finalized our proposal for the Medicare EHR Incentive Program that, 
beginning in CY 2015, EPs are not required to ensure that their CEHRT 
products are recertified to the most recent version of the electronic 
specifications for the CQMs. Although we are not requiring 
recertification, EPs must still report the most recent version of the 
electronic specifications for the CQMs if they choose to report CQMs 
electronically for the Medicare EHR Incentive Program.
    In the FY 2016 IPPS proposed rule (80 FR 24611 through 24615), HHS' 
Office of the National Coordinator for Health Information Technology 
(ONC) proposed a certification criterion for ``CQMs--report'' at 45 CFR 
170.315(c)(3). This proposal would require that health information 
technology enable users to electronically create a data file for 
transmission of clinical quality measurement data in accordance with 
the Quality Reporting Document Architecture (QRDA) Category I 
(individual patient-level report) and Category III (aggregate report) 
standards, at a minimum. As part of the ``CQMs--report'' criterion, ONC 
also proposed to offer optional certification for EHRs according to the 
``form and manner'' that CMS requires for electronic submission to 
participate in the EHR Incentive Programs and PQRS. These requirements 
are published annually as the ``CMS QRDA Implementation Guide'' and 
posted on CMS' Web site at http://www.cms.gov/Regulations-and-Guidance/Legislation/EHRIncentivePrograms/eCQM_Library.html. The latest set of 
requirements (2015 CMS QRDA Implementation Guide for Eligible 
Professional Programs and Hospital Quality Reporting) combines the 
requirements for EPs, eligible hospitals, and CAHs. For a complete 
discussion of these proposals, we refer readers to 80 FR 24611 through 
24615.
    In the FY 2016 IPPS proposed rule (80 FR 24323 through 24629), we 
stated that we anticipate proposing to require EPs, eligible hospitals, 
and CAHs seeking to report CQMs electronically as part of meaningful 
use under the EHR Incentive Programs for 2016 to adhere to the 
additional standards and constraints on the QRDA standards for 
electronic reporting as described in the CMS QRDA Implementation Guide. 
We stated that we anticipate proposing to revise the definition of 
``certified electronic health record technology'' at Sec.  495.4 to 
require certification to the optional portion of the 2015 Edition CQM 
reporting criterion (proposed at 45 CFR 170.315(c)(3)) in the CY 2016 
Medicare PFS proposed rule later this year.
    Accordingly, to allow providers to upgrade to 2015 Edition CEHRT 
before 2018, we propose to revise the CEHRT definition for 2015 through 
2017 to require that EHR technology is certified to report CQMs, in 
accordance with the optional certification, in the format that CMS can 
electronically accept (CMS' ``form and manner'' requirements) if 
certifying to the 2015 Edition ``CQMs--report'' certification criterion 
at Sec.  170.315(c)(3). Specifically, this would require technology to 
be certified to Sec.  170.315(c)(3)(i) (the QRDA Category I and III 
standards) and Sec.  170.315(c)(3)(ii) (the optional CMS ``form and 
manner''). We note that the proposed CEHRT definition for 2015 through 
2017 included in the Stage 3 proposed rule published on March 30, 2014 
(80 FR 16732 through 16804) allows providers to use 2014 Edition or 
2015 Edition certified EHR technology. These

[[Page 41881]]

proposed revisions would apply for EPs, eligible hospitals, and CAHs.
    We also propose to revise the CEHRT definition for 2018 and 
subsequent years to require that EHR technology is certified to report 
CQMs, in accordance with the optional certification, in the format that 
CMS can electronically accept. Specifically, this would require 
technology to be certified to Sec.  170.315(c)(3)(i) (the QRDA Category 
I and III standards) and Sec.  170.315(c)(3)(ii) (the optional CMS 
``form and manner''). These proposed revisions would apply for EPs, 
eligible hospitals, and CAHs.
    We are proposing these amendments at Sec.  495.4 to ensure that 
providers participating in PQRS and the EHR Incentive Programs under 
the 2015 Edition possess EHRs that have been certified to report CQMs 
according to the format that CMS requires for submission. We invite 
comment on our proposals.
3. Electronic Health Record (EHR) Incentive Program-Comprehensive 
Primary Care (CPC) Initiative Aligned Reporting
    The Comprehensive Primary Care (CPC) initiative, under the 
authority of section 3021 of the Affordable Care Act, is a multi-payer 
initiative fostering collaboration between public and private health 
care payers to strengthen primary care. Under this initiative, we pay 
participating primary care practices a care management fee to support 
enhanced, coordinated services. Simultaneously, participating 
commercial, state, and other federal insurance plans are also offering 
enhanced support to primary care practices that provide high-quality 
primary care. There are approximately 480 CPC practice sites across 
seven health care markets in the U.S.
    Under the CPC initiative, CPC practice sites are required to report 
to CMS a subset of the CQMs that were selected in the EHR Incentive 
Program Stage 2 final rule for EPs to report under the EHR Incentive 
Program beginning in CY 2014 (for a list of CQMs that were selected in 
the EHR Incentive Program Stage 2 final rule for EPs to report under 
the EHR Incentive Program beginning in CY 2014, see 77 FR 54069 through 
54075).
    In the CY 2015 PFS final rule with comment period (79 FR 67906 
through 67907), we finalized a group reporting option for CQMs for the 
Medicare EHR Incentive Program under which EPs who are part of a CPC 
practice site that successfully reports at least nine electronically 
specified CQMs across two domains for the relevant reporting period in 
accordance with the requirements established for the CPC Initiative and 
using CEHRT would satisfy the CQM reporting component of meaningful use 
for the Medicare EHR Incentive Program. If a CPC practice site is not 
successful in reporting, EPs who are part of the site would still have 
the opportunity to report CQMs in accordance with the requirements 
established for the Medicare EHR Incentive Program in the Stage 2 final 
rule. Additionally, only those EPs who are beyond their first year of 
demonstrating meaningful use may use this CPC group reporting option. 
The CPC practice sites must submit the CQM data in the form and manner 
required by the CPC Initiative. Therefore, whether CPC required 
electronic submission or attestation of CQMs, the CPC practice site 
must submit the CQM data in the form and manner required by the CPC 
Initiative.
    We propose to retain the group reporting option for CPC practice 
sites as finalized in the CY 2015 PFS final rule, but for CY 2016, to 
require CPC practice sites to submit at least 9 CPC CQMs that cover 3 
domains. In CY 2015, the CPC CQM subset was increased from a total of 
11 to 13 measures, of which 8 measures fall in the clinical process/
effectiveness domain, 3 in the population health domain, and 2 in the 
safety domain. Additionally, the CPC practice sites have had ample time 
to obtain measures from the CPC eCQM subset of meaningful use measures. 
Given the increased number of measures in the CPC eCQM set the addition 
of one measure to the safety domain, and the sufficient time that CPC 
practice sites have had to upgrade their EHR systems, it is reasonable 
to expect that CPC practice sites would have enough measures to report 
across the three domains as required for the Medicare EHR Incentive 
Program CQM reporting requirement. If a CPC practice site is not 
successful in reporting, EPs who are part of the site would still have 
the opportunity to report CQMs in accordance with the current 
requirements established for the Medicare EHR Incentive Program. As 
proposed in the Medicare and Medicaid Programs; Electronic Health 
Record Incentive Program-Modifications to Meaningful Use in 2015 
through 2017 proposed rule (80 FR 20375), EPs in any year of 
participation may electronically report clinical quality measures for a 
reporting period in 2016. Therefore, we are proposing that for CY 2016, 
EPs who are part of CPC practice site and are in their first year of 
demonstrating meaningful use may also use this CPC group reporting 
option to report their CQMs electronically instead of reporting CQMs by 
attestation through the EHR Incentive Program's Registration and 
Attestation System. However, we note that EPs who choose this CPC group 
reporting option must use a reporting period for CQMs of one full year 
(not 90 days), and that the data must be submitted during the 
submission period from January 1, 2017 through February 28, 2017. This 
means that EPs who elect to electronically report through the CPC 
practice site cannot successfully attest to meaningful use prior to 
October 1, 2016 (the deadline established for EPs who are first-time 
meaningful users in CY 2016) and therefore will receive reduced 
payments under the PFS in CY 2017 for failing to demonstrate meaningful 
use, if they have not applied and been approved for a significant 
hardship exception under the EHR Incentive Program. We invite public 
comment on these proposals.

K. Potential Expansion of the Comprehensive Primary Care (CPC) 
Initiative

1. Background
    As we discussed in the CY 2013 PFS final rule (77 FR 68978) and the 
CY 2014 PFS proposed rule (78 FR 43337), we are committed to supporting 
advanced primary care, including the recognition of care management as 
one of the critical components of primary care that contributes to 
better health for individuals and reduced expenditure growth. In 
January 2015, the Secretary announced the vision of ``Better Care; 
Smarter Spending; Healthier People,'' with emphases on incentives 
(``promote value based payment systems; bring proven models to 
scale''); care delivery (``encourage the integration and coordination 
of clinical care services; improve population health; promote patient 
engagement through shared decision making''); and information (``create 
transparency on cost and quality information; bring electronic health 
information to the point of care for meaningful use''). More 
information on the Secretary's January 2015 announcement is available 
at http://www.hhs.gov/news/press/2015pres/01/20150126a.html. 
Accordingly, we are continuing to prioritize the development and 
implementation of initiatives designed to improve payment for, and 
encourage long-term investment in, primary care and care management 
services. These initiatives include the following payment policies, 
programs, and demonstrations:
     The Comprehensive Primary Care (CPC) initiative (described 
in this section of this proposed rule).

[[Page 41882]]

     Separate payment under the Medicare PFS beginning January 
1, 2015, for new CPT code 99490. Under this CPT code, the fee-for-
service program now pays separately for non-face-to-face care 
coordination services furnished to Medicare beneficiaries with multiple 
chronic conditions, as provided in the CY 2014 and 2015 PFS final rules 
with comment period (78 FR 74414-74427, and 79 FR 67715-67730 and 80 FR 
14853, respectively).
     Medicare participation in multi-payer reform initiatives 
conducted by states in the Multi-payer Advanced Primary Care Practice 
(MAPCP) Demonstration (described on CMS' Center for Medicare and 
Medicaid Innovation's (Innovation Center's) Web site at http://innovation.cms.gov/initiatives/Multi-Payer-Advanced-Primary-Care-Practice/).
     The Medicare Shared Savings Program (described in the 
``Medicare Program; Medicare Shared Savings Program; Accountable Care 
Organizations; Final Rule'' that appeared in the November 2, 2011 
Federal Register (76 FR 67802) and the subsequent final rule that 
addressed changes to the program, that appeared in the June 9, 2015 
Federal Register (80 FR 32692).
     The testing of the Pioneer ACO Model, designed for 
experienced health care organizations (described on the Innovation 
Center's Web site at http://innovation.cms.gov/initiatives/Pioneer-ACO-Model/).
     The testing of the ACO Investment Model, designed to 
support organizations participating in the Medicare Shared Savings 
Program (described on the Innovation Center's Web site at http://innovation.cms.gov/initiatives/ACO-Investment-Model/).
    The CPC initiative is a multi-payer initiative fostering 
collaboration between public and private health care payers to 
strengthen primary care. It is being conducted under the authority of 
section 1115A of the Act (added by section 3021 of the Affordable Care 
Act) (42 U.S.C. 1315a). The Act authorizes the Innovation Center to 
test innovative health care payment and service delivery models that 
have the potential to reduce Medicare, Medicaid, and Children's Health 
Insurance Program (CHIP) expenditures while preserving or enhancing the 
quality of patient care. The CPC initiative began on October 1, 2012, 
and is scheduled to end on December 31, 2016. The initiative is being 
implemented in seven U.S. regions: statewide in Arkansas, Colorado, New 
Jersey, and Oregon; and regionally in Capital District-Hudson Valley, 
New York; Cincinnati-Dayton Region, Ohio/Kentucky; and Greater Tulsa, 
Oklahoma. There are approximately 480 participating practices spread 
across the regions, and 38 participating payers.
    In the CPC initiative, we are collaborating with commercial payers 
and state Medicaid offices to test a payment model consisting of non-
visit based per beneficiary per month care management payments and 
shared savings opportunities. Practices receive a monthly non-visit 
based care management fee for each Medicare FFS beneficiary and, in 
cases where the state Medicaid agency is participating, for each 
Medicaid FFS beneficiary. The monthly payment for each Medicare 
beneficiary averaged $20 per beneficiary per month during years 1 and 2 
of the initiative (CY 2013-14), and averages $15 per beneficiary per 
month in years 3 and 4 (CY 2015 and CY 2016). The per beneficiary per 
month care management fee is in addition to the usual FFS payments that 
practitioners at the practice receive for furnishing services to their 
Medicare patients. Practices also receive non-visit based care 
management payments from other participating CPC payers and are 
expected to combine CPC revenues across payers to support a whole-
practice care delivery transformation strategy. Additionally, we are 
offering each CPC practice the opportunity to share net savings 
generated from improved care to Medicare beneficiaries attributable to 
the practice. For each of three separate performance periods (that is, 
CY 2014, CY 2015, and CY 2016), we will calculate savings to the 
Medicare program generated by all CPC practices within each region, 
taken as a group. A portion of any savings accomplished at the level of 
each region will be distributed to practices in that region according 
to each practice's performance on quality metrics (patient experience 
measures, claims-based measures and electronic CQMs). Practices have 
similar shared savings opportunities with other CPC payers in their 
region.
    The payment model is designed to support the provision by practices 
of the following five comprehensive primary care functions:
    (1) Risk Stratified Care Management: The provision of intensive 
care management of appropriate intensity for high-risk, high-need, 
high-cost patients.
    (2) Access and Continuity: 24/7 access to the care team; use of 
asynchronous communication; designation of a provider or care team for 
patients to build continuity of care.
    (3) Planned Care for Chronic Conditions and Preventive Care: 
Proactive, appropriate care based on systematic assessment of patients' 
needs and personalized care plans.
    (4) Patient and Caregiver Engagement: Active support of patients in 
managing their health care to meet their personal health goals; 
establishment of systems of care that include engagement of patients 
and caregivers in goal-setting and decision making, creating 
opportunities for patient and caregiver engagement throughout the care 
delivery process.
    (5) Coordination of Care across the Medical Neighborhood: 
Management by the primary care practice of communication and 
information flow in support of referrals, transitions of care, and when 
care is received in other settings.
    The CPC initiative is testing whether provision of these five 
comprehensive primary care functions by each practice site--supported 
by multi-payer payment reform, the continuous use of data to guide 
improvement, and meaningful use of health information technology--can 
achieve improved care, better health for populations, and lower costs, 
and can inform Medicare and Medicaid policy. Participating practices 
must demonstrate progress towards the provision of the five 
comprehensive primary care functions by meeting nine annual Milestones. 
These Milestones are: (1) Budget; (2) care management for high risk 
patients; (3) access and continuity; (4) patient experience; (5) 
quality improvement; (6) care coordination across the medical 
neighborhood; (7) shared decision making; (8) participate in learning 
collaborative; (9) health information technology. Full requirements of 
each Milestone are available at http://innovation.cms.gov/Files/x/CPCI-Implementation-GuidePY2015.pdf.
    Practices must also report at least 9 of 13 specified electronic 
clinical quality measures (eCQMs) at the level of the practice site 
population as a method of measuring the quality of care delivered to 
all patients served by the practice, regardless of payer. We have aimed 
to align CPC clinical quality measures and reporting with other CMS 
programs to reduce burden on providers from having to report the same 
measures to multiple CMS programs through various reporting mechanisms. 
Under the CPC initiative, EPs participating in the CPC initiative who 
would otherwise need to report PQRS measures individually, or who are 
part of TINs that are participating as a whole in CPC, are able to 
satisfy their PQRS reporting requirements by successfully reporting 
data in accordance with the requirements for the CPC initiative. The 
decision to elect this waiver must be

[[Page 41883]]

made at the level of the CPC practice site (that is, all EPs at the 
site must elect the waiver). Additionally, completion of eCQM reporting 
in accordance with CPC requirements allows practices to satisfy the CQM 
reporting component of meaningful use for the Medicare EHR Incentive 
Program. This alignment between CPC and the Medicare EHR Incentive 
Program is described in section III.L. of this proposed rule.
    We provide resources to help practices address the five 
comprehensive primary care functions through the CPC learning system, 
which includes regular webinars (regional and national), two in-person 
regional learning collaborative meetings per year, opportunities for 
moderated online collaboration with CPC practices across the country on 
specific issues, and access to providers of technical assistance 
(Regional Learning Faculty) in each region. Additionally, we support 
regular, professionally moderated collaborative meetings in each region 
between participating payers, practices and other interested parties 
(for example, hospital systems), to monitor the progress of the 
initiative at the regional level and ensure regional support to help 
participating practices succeed in the CPC initiative.
    The first independent evaluation report of the CPC initiative was 
released on January 23, 2015, and covered impacts in the first four 
payment quarters of the initiative. The evaluator's report concluded 
that in these first four payment quarters, the initiative appears to 
have reduced total monthly Medicare Parts A and B expenditures per 
beneficiary (compared to what they would have been absent the CPC 
initiative) by $14, or 2 percent (not including care management fees 
paid). Results from this first year suggest that CPC has generated 
nearly enough savings in Medicare health care expenditures to offset 
care management fees paid by CMS. There were also statistically 
significant declines in hospitalizations and emergency department 
utilization. However, the report found that expenditure and service use 
impact estimates differed significantly across regions. No 
statistically significant impacts were seen in early measurements of 
quality. Further information about the CPC initiative, including the 
first independent evaluation report, is available on the Innovation 
Center's Web site at http://innovation.cms.gov/initiatives/comprehensive-primary-care-initiative/.
2. Interaction With the Chronic Care Management Code
    The CPC initiative includes per beneficiary per month payments for 
care management services that closely overlap with the scope of service 
for the new chronic care management (CCM) services code under the PFS. 
To avoid duplicative payment for substantially the same services, 
practitioners participating in the CPC initiative may not bill Medicare 
for CCM services furnished to patients attributed to the practice for 
purposes of the practice's participation in the CPC initiative, as the 
payment for CCM services would be a duplicative payment for 
substantially the same services for which payment is made through the 
per beneficiary per month payment under CPC. Practitioners may bill 
Medicare for CCM services furnished to eligible beneficiaries who are 
not attributed to the practice for the purpose of the practice's 
participation as part of the CPC initiative.
3. Considerations for Potential Model Expansion
    Section 1115A(c) of the Act provides the Secretary with the 
authority to expand (including implementation on a nationwide basis) 
through rulemaking the duration and scope of a model that is being 
tested under section 1115A(b) of the Act if the following findings are 
made, taking into account the evaluation of the model under section 
1115A(b)(4): (1) The Secretary determines that the expansion is 
expected to either reduce Medicare spending without reducing quality of 
care or improve the quality of patient care without increasing 
spending; (2) the CMS Chief Actuary certifies that the expansion would 
reduce (or would not result in any increase in) net Medicare program 
spending; and (3) the Secretary determines that the expansion would not 
deny or limit the coverage or provision of Medicare benefits. We are 
not proposing to expand the CPC initiative at this time. The decision 
of whether or not to expand the CPC initiative will be made by the 
Secretary in coordination with CMS and the Office of the Chief Actuary 
based on whether findings about the initiative meet the statutory 
criteria for expansion under section 1115A(c) of the Act. The primary 
goal for this solicitation of public comments is to receive information 
about issues surrounding a potential expansion of the CPC initiative. 
Furthermore, consistent with our ongoing commitment to developing new 
models and refining existing models based on additional information and 
experience, CMS may modify existing models or test additional models 
under its testing authority under section 1115A of the Act. We may 
possibly do so, taking into consideration stakeholder input, including 
feedback received through public comments submitted in response to the 
discussion in this section.
    The following list is not an exhaustive list of issues on which we 
are requesting public comments, and the inclusion of the list of issues 
is not, in any way, meant to imply that all of these issues would be 
addressed in any expanded model. The solicitation of public comments is 
for planning purposes, and we would use additional rulemaking if we 
decide to expand the initiative. We are soliciting input from the 
public on the following considerations for any potential expansion of 
the CPC initiative:
     Practice readiness: CPC practices currently are asked to 
reorganize their work flows to accomplish the five comprehensive 
primary care functions. Practices must use the most recent edition of 
Office of the National Coordinator Certified Electronic Health Records 
Technology (CEHRT), to perform and deliver comprehensive primary care 
and to monitor and report practice level electronic clinical quality 
measures (eCQMs) (full details of these requirements are available at 
http://innovation.cms.gov/Files/x/CPCI-Implementation-GuidePY2015.pdf). 
We are interested in understanding the proportion of primary care 
practices ready for these transformation expectations and whether 
readiness varies systematically for differently structured practices 
(for example, small primary care practices, multi-specialty practices, 
and employed primary care practices within integrated health systems).
     Practice standards and reporting: We seek input on the 
value and operational burden of the current CPC Milestones approach, 
including the current system of quarterly reporting via a web portal 
(full details of these requirements are available at http://innovation.cms.gov/Files/x/CPCI-Implementation-GuidePY2015.pdf).
     Practice groupings: We seek input as to whether any 
potential expansion should be limited to existing CPC regions, or 
include new geographic regions. We are also interested in whether 
multi-site group practices would be willing to involve all their 
primary care sites in a potential expansion of the CPC initiative 
(practice sites currently participating in the CPC initiative were 
selected for the model individually), and how practices could

[[Page 41884]]

best be grouped for the purposes of calculating shared savings.
     Interaction with state primary care transformation 
initiatives: Though many primary care transformation efforts predated 
the start of the CPC initiative, the number of such efforts has grown 
significantly during the existence of this initiative. Various states 
are leading their own efforts to transform primary care practices. 
Although these efforts may have processes and goals that are similar to 
those in the CPC initiative, requirements and outcomes can differ in 
important ways. We are interested in whether a potential expansion of 
the CPC initiative could and should exist in parallel in a state with a 
separate state-led primary care transformation effort, especially if 
Medicare is participating in that effort.
     Learning activities: The CPC initiative currently offers a 
range of live, telephone, and online support through national and 
regional ``learning communities.'' In the first 2 years of the model 
these efforts have been focused on building practices' capability to 
deliver comprehensive primary care through fulfilment of the CPC 
Milestones. In the remaining period of the model, these learning 
activities are aimed at adapting and optimizing clinical services 
within the five CPC comprehensive primary care functions to achieve the 
aims of the CPC initiative. We are interested in what support practices 
would require to provide the five comprehensive primary care CPC 
functions in a potential expansion of the CPC initiative, and the 
readiness of the private sector to respond to the need for this 
support. We are also interested in the willingness and ability of 
existing state and regional primary care or patient centered medical 
home learning collaboratives to support practices in an a potential 
expansion of the CPC initiative.
     Payer and self-insured employer readiness: We seek input 
on the readiness of currently participating payers in the CPC 
initiative to expand their current investment in CPC; and the readiness 
of new payers, including self-insured employers, to enter the 
initiative under a potential expansion. We are interested in thresholds 
for payer participation, for example, whether there should be a minimum 
threshold of payer participation for a region, or at the level of an 
individual practice, in order for a payer to be eligible for 
participation in a potential expansion of the CPC initiative. We also 
seek input about the best methods for payers to engage with one 
another, participating practices, and CMS under a potential expansion.
     Medicaid: The CPC initiative is a multi-payer initiative 
that seeks to include as many payers as possible to provide practices 
with sufficient resources for a practice-level transformation that 
benefits their entire patient population. A number of state Medicaid 
agencies currently participate as payers in the CPC initiative for 
their fee-for-service enrollees. We are interested in whether state 
Medicaid agencies would be willing to participate in a potential 
expanded CPC initiative for their fee-for-service enrollees. We are 
also interested in whether Medicaid managed care plans would be willing 
to participate in a potential expanded CPC initiative.
     Quality reporting: We are interested in comment on 
practice readiness to report eCQMs, and payer interest in using 
practice site level data rather than their own enrollees' information 
for performance based payments, including shared savings, in a 
potential expansion of the CPC initiative.
     Interaction with the CCM fee: The CY 2015 PFS final rule 
with comment period (79 FR 67729) discussed the policy for the billing 
of CCM services when a practitioner is participating in the CPC 
initiative, as described earlier in this proposed rule. We seek input 
on how payment for CCM services might interact with a potential 
expansion of the CPC initiative and affect practice interest in 
participation.
     Provision of data feedback to practices: We currently send 
quarterly feedback reports to practices including cost and utilization 
information for the Medicare FFS attributed population of that 
practice. We seek comment about how we can best provide actionable data 
to support quality improvement and promote attention to total cost of 
care under a potential expansion.

L. Medicare Shared Savings Program

    Under section 1899 of the Act, we established the Medicare Shared 
Savings Program (Shared Savings Program) to facilitate coordination and 
cooperation among providers to improve the quality of care for Medicare 
Fee-For-Service (FFS) beneficiaries and reduce the rate of growth in 
health care costs. Eligible groups of providers and suppliers, 
including physicians, hospitals, and other health care providers, may 
participate in the Shared Savings Program by forming or participating 
in an Accountable Care Organization (ACO). The final rule establishing 
the Shared Savings Program appeared in the November 2, 2011 Federal 
Register (Medicare Shared Savings Program: Accountable Care 
Organizations Final Rule (76 FR 67802)).
    We identified the following policies under the Shared Savings 
Program that we are addressing in this proposed rule.
1. Quality Measures and Performance Standard
    Section 1899(b)(3)(A) of the Act requires the Secretary to 
determine appropriate measures to assess the quality of care furnished 
by ACOs, such as measures of clinical processes and outcomes; patient, 
and, wherever practicable, caregiver experience of care; and 
utilization such as rates of hospital admission for ambulatory 
sensitive conditions. Section 1899(b)(3)(B) of the Act requires ACOs to 
submit data in a form and manner specified by the Secretary on measures 
that the Secretary determines necessary for ACOs to report to evaluate 
the quality of care furnished by ACOs. Section 1899(b)(3)(C) of the Act 
requires the Secretary to establish quality performance standards to 
assess the quality of care furnished by ACOs, and to seek to improve 
the quality of care furnished by ACOs over time by specifying higher 
standards, new measures, or both for the purposes of assessing the 
quality of care. Additionally, section 1899(b)(3)(D) of the Act gives 
the Secretary authority to incorporate reporting requirements and 
incentive payments related to the PQRS, EHR Incentive Program and other 
similar initiatives under section 1848 of the Act. Finally, section 
1899(d)(1)(A) of the Act states that an ACO is eligible to receive 
payment for shared savings, if they are generated, only after meeting 
the quality performance standards established by the Secretary.
    In the November 2011 final rule establishing the Shared Savings 
Program and recent CY PFS final rules with comment period (77 FR 69301 
through 69304; 78 FR 74757 through 74764; and 79 FR 67907 through 
67931), we established the quality performance standards that ACOs must 
meet to be eligible to share in savings that are generated. In the CY 
2015 PFS final rule with comment period, we made a number of updates to 
the quality requirements within the program, such as updates to the 
quality measure set, the addition of a quality improvement reward, and 
the establishment of benchmarks that will apply for 2 years. Through 
these previous rulemakings, we worked to improve the alignment of 
quality performance measures, submission methods, and incentives under 
the Shared Savings Program and PQRS. Currently, eligible professionals 
participating in an ACO may qualify for the PQRS incentive payment 
under the

[[Page 41885]]

Shared Savings Program or avoid the downward PQRS payment adjustment 
when the ACO satisfactorily reports the ACO GPRO measures on their 
behalf using the GPRO web interface.
    We identified a few policies related to the quality measures and 
quality performance standard that we are proposing in this rule. 
Specifically, we are proposing to add a new quality measure to be 
reported through the CMS web interface and to adopt a policy for 
addressing quality measures that no longer align with updated clinical 
guidelines or where the application of the measure may result in 
patient harm.
a. Existing Quality Measures and Performance Standard
    Section 1899(b)(3)(C) of the Act states that the Secretary shall 
establish quality performance standards to assess the quality of care 
furnished by ACOs and ``seek to improve the quality of care furnished 
by ACOs over time by specifying higher standards, new measures, or both 
. . . .'' In the November 2011 Shared Savings Program Final Rule, we 
established a quality performance standard consisting of 33 measures 
across four domains, including patient experience of care, care 
coordination/patient safety, preventive health, and at-risk population. 
In the CY 2015 PFS final rule with comment period, we made a number of 
updates to the quality performance standard, including adding new 
measures that ACOs must report, retiring measures that no longer 
aligned with updated clinical guidelines, reducing the sample size for 
measures reported through the CMS web interface, establishing a 
schedule for the phase in of new quality measures, and establishing an 
additional reward for quality improvement. In the CY 2015 PFS final 
rule with comment period, we finalized an updated measure set of 33 
measures.
    Quality measures are submitted by the ACO through the GPRO web 
interface, calculated by CMS from administrative and claims data, and 
collected via a patient experience of care survey based on the 
Clinician and Group Consumer Assessment of Healthcare Providers and 
Systems (CG-CAHPS) survey. The CAHPS for ACOs patient experience of 
care survey used for the Shared Savings Program includes the core CG-
CAHPS modules, as well as some additional modules. The measures 
collected through the GPRO web interface are also used to determine 
whether eligible professionals participating in an ACO avoid the PQRS 
and automatic Value Modifier payment adjustments for 2015 and 
subsequent years. Eligible professionals in an ACO may avoid the 
downward PQRS payment adjustment when the ACO satisfactorily reports 
all of the ACO GPRO measures on their behalf using the GPRO web 
interface. Beginning with the 2017 Value Modifier, performance on the 
ACO GPRO web interface measures and all cause readmission measure will 
be used in calculating the quality component of the Value Modifier for 
eligible professionals participating within an ACO (79 FR 67941 through 
67947).
    As we previously stated (76 FR 67872), our principal goal in 
selecting quality measures for ACOs has been to identify measures of 
success in the delivery of high-quality health care at the individual 
and population levels with a focus on outcomes. We believe endorsed 
measures have been tested, validated, and clinically accepted, and 
therefore, when selecting the original 33 measures, we had a preference 
for NQF-endorsed measures. However, the statute does not limit us to 
using endorsed measures in the Shared Savings Program. As a result, we 
also exercised our discretion to include certain measures that we 
believe to be high impact but that are not currently endorsed, 
including for example, ACO#11, Percent of PCPs Who Successfully Qualify 
for an EHR Incentive Program Payment.
    In selecting the 33 measure set, we balanced a wide variety of 
important considerations. Our measure selection emphasized prevention 
and management of chronic diseases that have a high impact on Medicare 
FFS beneficiaries, such as heart disease, diabetes mellitus, and 
chronic obstructive pulmonary disease. We believed that the quality 
measures used in the Shared Savings Program should be tested, evidence-
based, target conditions of high cost and high prevalence in the 
Medicare FFS population, reflect priorities of the National Quality 
Strategy, address the continuum of care to reflect the requirement that 
ACOs accept accountability for their patient populations, and align 
with existing quality programs and value-based purchasing initiatives.
    In selecting the set of 33 measures finalized in the CY 2015 PFS 
final rule with comment period, we sought to include both process and 
outcome measures, including patient experience of care (79 FR 67907 
through 67931). We believe it is important to retain a combination of 
both process and outcomes measures, because ACOs are charged with 
improving and coordinating care and delivering high quality care, but 
also need time to form, acquire infrastructure and develop clinical 
care processes. We noted, however, that as other CMS quality reporting 
programs, such as PQRS, move to more outcomes-based measures and fewer 
process measures over time, we might also revise the quality 
performance standard for the Shared Savings Program to incorporate more 
outcomes-based measures and fewer process measures over time.
    In the CY 2015 PFS final rule with comment period, we finalized a 
number of changes to the quality measures used in establishing the 
quality performance standard to better align with PQRS, retire measures 
that no longer align with updated clinical practice, and add new 
outcome measures that support the CMS Quality Strategy and National 
Quality Strategy goals. We are continuing to work with the measures 
community to ensure that the specifications for the measures used under 
the Shared Savings Program are up-to-date. We believe that it is 
important to balance the timing of the release of specifications so 
they are as up-to-date as possible, while also giving ACOs sufficient 
time to review specifications. Our intention is to issue the 
specifications annually, prior to the start of the reporting period for 
which they will apply.
b. Proposed New Measure To Be Used in Establishing Quality Standards 
That ACOs Must Meet To Be Eligible for Shared Savings
    Since the November 2011 Shared Savings Program final rule, we have 
continued to review the quality measures used for the Shared Savings 
Program to ensure that they are up to date with current clinical 
practice and are aligned with the GPRO web interface reporting for 
PQRS. Based on these reviews, in the CY 2015 PFS final rule with 
comment period, we retired several measures that no longer aligned with 
updated clinical guidelines regarding cholesterol targets. As a result 
of retiring measures that did not align with updated clinical practice, 
we identified a gap in the Shared Savings Program measure set for 
measures that address treatment for patients at high risk of 
cardiovascular disease due to high cholesterol. Cardiovascular disease 
affects a high volume of Medicare beneficiaries and the prevention of 
cardiovascular disease as well as its treatment is important. Following 
further analysis and coordination with agencies such as the Centers for 
Disease Control and Prevention and the Agency for Healthcare Research & 
Quality, we are proposing to add a new statin therapy measure for the 
Shared Savings

[[Page 41886]]

Program that has been developed to align with the updated clinical 
guidelines and PQRS reporting. We are proposing to add one new measure 
to the Preventive Health domain, which would increase our current total 
number of measures from 33 to 34 measures. Data collection for the new 
measure would occur through the CMS web interface. Table 31 lists the 
Shared Savings Program quality measure set, including the one measure 
we are proposing to add, that would be used to assess ACO quality 
starting in 2016.

 Statin Therapy for the Prevention and Treatment of 
Cardiovascular Disease

    We propose to add the Statin Therapy for the Prevention and 
Treatment of Cardiovascular Disease to the Preventive Health domain. 
The measure was developed by CMS in collaboration with other federal 
agencies and the Million Hearts[reg] Initiative and is 
intended to support the prevention and treatment of cardiovascular 
disease by measuring the use of statin therapies according to the 
updated clinical guidelines for patients with high cholesterol. The 
measure reports the percentage of beneficiaries who were prescribed or 
were already on statin medication therapy during the measurement year 
and who fall into any of the following three categories:
    1. High-risk adult patients aged greater than or equal to 21 years 
who were previously diagnosed with or currently have an active 
diagnosis of clinical atherosclerotic cardiovascular disease (ASCVD);
    2. Adult patients aged greater than or equal to 21 years with any 
fasting or direct Low-Density Lipoprotein Cholesterol (LDL-C) level 
that is greater than or equal to 190 mg/dL; or
    3. Patients aged 40 to 75 years with a diagnosis of diabetes with a 
fasting or direct LDL-C level of 70 to 189 mg/dL who were prescribed or 
were already on statin medication therapy during the measurement year.
    The measure contains multiple denominators to align with the 
updated clinical guidelines for cholesterol targets and would replace 
the low-density lipid control measures previously retired from the 
measure set. We are proposing this measure to continue Shared Savings 
Program alignment with the PQRS program (Table 30) and Million Hearts 
Initiative. We propose that the multiple denominators will be equally 
weighted when calculating the performance rate. The measure was 
reviewed by the NQF Measure Applications Partnership (MAP) and the MAP 
encouraged further development (Measures Under Consideration (MUC) ID: 
X3729).
    As a result, we are seeking public comment on the implementation of 
the measure for the Shared Savings Program. We are seeking comment on 
whether the measure should be considered a single measure with weighted 
denominators or three measures given the multiple denominators were 
developed to adhere to the updated clinical guidelines. In addition, 
the use of multiple denominators raises questions on how the measure 
should be benchmarked for the Shared Savings Program. Therefore, we are 
seeking public feedback on the benchmarking approach for the measure, 
such as whether the measure should be benchmarked as a single measure 
or three measures. The measure specifications that were submitted to 
the NQF MAP include multiple denominators, which may require larger 
sample sizes to accommodate exclusions when identifying relevant 
beneficiaries for each of the denominators used for CMS web interface 
reporting. Due to the multiple denominators, there may be a large 
number of beneficiaries who may not meet each denominator for reporting 
and would result in a low number of beneficiaries meeting the measure 
denominators. Hence, we are proposing to increase the size of the 
oversample for this measure from the normal 616 beneficiaries for CMS 
web interface reporting to an oversample of 750 or more beneficiaries. 
We are proposing such an oversample size for this measure to account 
for reporting on the multiple denominators and to ensure a sufficient 
number of beneficiaries meet the measure denominators for reporting. 
The consecutive reporting requirement for measures reported through the 
CMS web interface would remain at 248 beneficiaries. We are proposing 
that the measure will be pay for reporting for 2 years and then phase 
into pay for performance in the third year of the agreement period, as 
seen in Table 31. Previously, we finalized that new measures will have 
a 2-year transition period before being phased in as pay for 
performance (79 FR 67910). However, we are also seeking comment on 
whether stakeholders believe the measure should be pay for reporting 
for the entire agreement period due to the application of multiple 
denominators for a single measure. In summary, we seek comment on our 
proposal to include this measure in the Preventive Health domain, 
whether it should be treated as a single or multiple measures for 
reporting and benchmarking, the transition of the measure into pay for 
performance or if they measure should remain pay for reporting for the 
entire agreement period, and the size of the oversample to ensure 
sufficient identification of beneficiaries for reporting.

                     Table 31--Measures for Use in Establishing Quality Performance Standards That ACOS Must Meet for Shared Savings
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                         Pay for performance phase-in R--
                                 ACO  Measure                              New       NQF  #/measure     Method of data       Reporting P--Performance
             Domain                   No.           Measure title        measure        steward           submission    --------------------------------
                                                                                                                            PY1        PY2        PY3
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            AIM: Better Care for Individuals
--------------------------------------------------------------------------------------------------------------------------------------------------------
Patient/.......................  ACO-1.......  CAHPS: Getting Timely   ..........  NQF #0005, AHRQ..  Survey...........         R          P          P
Caregiver......................                 Care, Appointments,
Experience.....................                 and Information.
                                 ACO-2.......  CAHPS: How Well Your    ..........  NQF #0005, AHRQ..  Survey...........         R          P          P
                                                Doctors Communicate.
                                 ACO-3.......  CAHPS: Patients'        ..........  NQF #0005, AHRQ..  Survey...........         R          P          P
                                                Rating of Doctor.
                                 ACO-4.......  CAHPS: Access to        ..........  NQF #N/A, CMS/     Survey...........         R          P          P
                                                Specialists.                        AHRQ.
                                 ACO-5.......  CAHPS: Health           ..........  NQF #N/A, CMS/     Survey...........         R          P          P
                                                Promotion and                       AHRQ.
                                                Education.

[[Page 41887]]

 
                                 ACO-6.......  CAHPS: Shared Decision  ..........  NQF #N/A, CMS/     Survey...........         R          P          P
                                                Making.                             AHRQ.
                                 ACO-7.......  CAHPS: Health Status/   ..........  NQF #N/A, CMS/     Survey...........         R          R          R
                                                Functional Status.                  AHRQ.
                                 ACO-34......  CAHPS: Stewardship of   ..........  NQF #N/A, CMS/     Survey...........         R          P          P
                                                Patient Resources.                  AHRQ.
Care Coordination/Safety.......  ACO-8.......  Risk-Standardized, All  ..........  Adapted NQF        Claims...........         R          R          P
                                                Condition Readmission.              #1789, CMS.
                                 ACO-35......  Skilled Nursing         ..........  NQF #TBD, CMS....  Claims...........         R          R          P
                                                Facility 30-Day All-
                                                Cause Readmission
                                                Measure (SNFRM).
                                 ACO-36......  All-Cause Unplanned     ..........  NQF#TBD, CMS.....  Claims...........         R          R          P
                                                Admissions for
                                                Patients with
                                                Diabetes.
                                 ACO-37......  All-Cause Unplanned     ..........  NQF#TBD, CMS.....  Claims...........         R          R          P
                                                Admissions for
                                                Patients with Heart
                                                Failure.
                                 ACO-38......  All-Cause Unplanned     ..........  NQF#TBD, CMS.....  Claims...........         R          R          P
                                                Admissions for
                                                Patients with
                                                Multiple Chronic
                                                Conditions.
                                 ACO-9.......  Ambulatory Sensitive    ..........  Adapted NQF        Claims...........         R          P          P
                                                Conditions                          #0275, AHRQ.
                                                Admissions: Chronic
                                                Obstructive Pulmonary
                                                Disease or Asthma in
                                                Older Adults (AHRQ
                                                Prevention Quality
                                                Indicator (PQI) #5).
                                 ACO-10......  Ambulatory Sensitive    ..........  Adapted NQF        Claims...........         R          P          P
                                                Conditions                          #0277, AHRQ.
                                                Admissions: Heart
                                                Failure (AHRQ
                                                Prevention Quality
                                                Indicator (PQI) #8 ).
                                 ACO-11......  Percent of PCPs who     ..........  NQF #N/A, CMS....  EHR Incentive             R          P          P
                                                Successfully Meet                                      Program
                                                Meaningful Use                                         Reporting.
                                                Requirements.
                                 ACO-39......  Documentation of        ..........  NQF #0419, CMS...  CMS Web Interface         R          P          P
                                                Current Medications
                                                in the Medical Record.
                                 ACO-13......  Falls: Screening for    ..........  NQF #0101, NCQA..  CMS Web Interface         R          P          P
                                                Future Fall Risk.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           AIM: Better Health for Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Preventive Health..............  ACO-14......  Preventive Care and     ..........  NQF #0041, AMA-    CMS Web Interface         R          P          P
                                                Screening: Influenza                PCPI.
                                                Immunization.
                                 ACO-15......  Pneumonia Vaccination   ..........  NQF #0043, NCQA..  CMS Web Interface         R          P          P
                                                Status for Older
                                                Adults.
                                 ACO-16......  Preventive Care and     ..........  NQF #0421, CMS...  CMS Web Interface         R          P          P
                                                Screening: Body Mass
                                                Index (BMI) Screening
                                                and Follow Up.
                                 ACO-17......  Preventive Care and     ..........  NQF #0028, AMA-    CMS Web Interface         R          P          P
                                                Screening: Tobacco                  PCPI.
                                                Use: Screening and
                                                Cessation
                                                Intervention.
                                 ACO-18......  Preventive Care and     ..........  NQF #0418, CMS...  CMS Web Interface         R          P          P
                                                Screening: Screening
                                                for Clinical
                                                Depression and Follow-
                                                up Plan.
                                 ACO-19......  Colorectal Cancer       ..........  NQF #0034, NCQA..  CMS Web Interface         R          R          P
                                                Screening.
                                 ACO-20......  Breast Cancer           ..........  NQF #NA, NCQA....  CMS Web Interface         R          R          P
                                                Screening.
                                 ACO-21......  Preventive Care and     ..........  CMS..............  CMS Web Interface         R          R          P
                                                Screening: Screening
                                                for High Blood
                                                Pressure and Follow-
                                                up Documented.
                                 ACO-42......  Statin Therapy for the          X   NQF #TBD, MUC ID:  CMS Web Interface         R          R          P
                                                Prevention and                      X3729, CMS.
                                                Treatment of
                                                Cardiovascular
                                                Disease.

[[Page 41888]]

 
Clinical Care for At Risk        ACO-40......  Depression Remission    ..........  NQF #0710, MNCM..  CMS Web Interface         R          R          R
 Population--Depression.                        at Twelve Months.
Clinical Care for At Risk        ACO-27......  Diabetes Composite      ..........  NQF #0059, NCQA    CMS Web Interface         R          P          P
 Population--Diabetes.                          (All or Nothing                     (individual
                                                Scoring): ACO-27:                   component).
                                                Diabetes Mellitus:
                                                Hemoglobin A1c Poor
                                                Control.
                                 ACO-41......  ACO-41: Diabetes: Eye   ..........  NQF #0055, NCQA    CMS Web Interface         R          P          P
                                                Exam.                               (individual
                                                                                    component).
Clinical Care for At Risk        ACO-28......  Hypertension (HTN):     ..........  NQF #0018, NCQA..  CMS Web Interface         R          P          P
 Population--Hypertension.                      Controlling High
                                                Blood Pressure.
Clinical Care for At Risk        ACO-30......  Ischemic Vascular       ..........  NQF #0068, NCQA..  CMS Web Interface         R          P          P
 Population--Ischemic Vascular                  Disease (IVD): Use of
 Disease.                                       Aspirin or Another
                                                Antithrombotic.
Clinical Care for At Risk        ACO-31......  Heart Failure (HF):     ..........  NQF #0083, AMA-    CMS Web Interface         R          R          P
 Population --Heart Failure.                    Beta-Blocker Therapy                PCPI.
                                                for Left Ventricular
                                                Systolic Dysfunction
                                                (LVSD).
Clinical Care for At Risk        ACO-33......  Angiotensin-Converting  ..........  NQF # 0066, ACC..  CMS Web Interface         R          R          P
 Population--Coronary Artery                    Enzyme (ACE)
 Disease.                                       Inhibitor or
                                                Angiotensin Receptor
                                                Blocker (ARB)
                                                Therapy--for patients
                                                with CAD and Diabetes
                                                or Left Ventricular
                                                Systolic Dysfunction
                                                (LVEF<40%).
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The quality scoring methodology is explained in the regulations at 
Sec.  425.502 and in the preamble to the November 2011 final rule with 
comment period (76 FR 67895 through 67900). As a result of this 
proposed addition, each of the four domains will include the following 
number of quality measures (See Table 32 for details.):

 Patient/Caregiver Experience of Care--8 measures
 Care Coordination/Patient Safety--10 measures
 Preventive Health--9 measures
 At Risk Population--7 measures (including 6 individual 
measures and a 2-component diabetes composite measure)
    Table 32 provides a summary of the number of measures by domain and 
the total points and domain weights that will be used for scoring 
purposes with the proposed additional measure in the At-Risk Population 
domain. The total possible points for the Preventive Health domain 
would increase from 16 points to 18 points. Otherwise, the current 
methodology for calculating an ACO's overall quality performance score 
would continue to apply. We are also seeking comment on whether the 
proposed Statin Therapy measure, with multiple denominators, should be 
scored at more than 2 points if commenters believe this measure should 
be treated as multiple measures within the Preventive Health domain 
instead of a single measure. For instance, the measure could be scored 
as 3 points, 1 point for each of the three denominators, due to the 
clinical importance of prevention and treatment of cardiovascular 
disease and the complexity of the measure. The EHR measure is currently 
the only measure scored more than 2 points in the current measure set, 
but given the multiple denominators that exist within the Statin 
Therapy measure, it could be scored greater than 2 points as well.

      Table 32--Number of Measures and Total Points for Each Domain Within the Quality Performance Standard
----------------------------------------------------------------------------------------------------------------
                                               Number of                                     Total      Domain
                   Domain                     individual    Total measures for scoring     possible     weight
                                               measures              purposes               points        (%)
----------------------------------------------------------------------------------------------------------------
Patient/Caregiver Experience................           8  8 individual survey module              16          25
                                                           measures.
Care Coordination/Patient Safety............          10  10 measures. Note that the EHR          22          25
                                                           measure is double-weighted (4
                                                           points).
Preventive Health...........................           9  9 measures....................          18          25

[[Page 41889]]

 
At-Risk Population..........................           7  6 individual measures, plus a           12          25
                                                           2-component diabetes
                                                           composite measure, scored as
                                                           one.
                                             -------------------------------------------------------------------
    Total in all Domains....................          34  33............................          68         100
----------------------------------------------------------------------------------------------------------------

    We believe that the proposed addition of the Statin Therapy quality 
measure to the quality measure set for the Shared Savings Program would 
further enhance the quality of care patients receive from ACO 
participants and ACO providers/suppliers, better reflect clinical 
practice guidelines and high quality care, enhance alignment with PQRS 
and the Million Hearts [supreg] Initiative, and focus on important 
preventive care and effective treatments for high prevalence 
conditions.
c. Proposed Policy for Measures No Longer Aligning With Clinical 
Guidelines, High Quality Care or Outdated Measure May Cause Patient 
Harm
    We have encountered circumstances where changes in clinical 
guidelines result in quality measures within the Shared Savings Program 
quality measure set no longer aligning with best clinical practice. For 
instance, in the CY 2015 PFS final rule with comment period we retired 
measures that were no longer consistent with updated clinical 
guidelines for cholesterol targets, but we were unable to finalize 
retirement of the measures for the 2014 reporting year due to the 
timing of the guideline updates and rulemaking cycle. We issued an 
update in the 2014 Shared Savings Program benchmark guidance document 
that maintained these measures as pay-for-reporting for the 2014 
reporting year due to the measures not aligning with updated clinical 
evidence.
    However, given the frequency of changes that occur in scientific 
evidence and clinical practice, we are proposing to adopt a general 
policy under which we will maintain measures as pay-for-reporting, or 
revert pay-for-performance measures to pay-for-reporting measures, if 
the measure owner determines the measure no longer meets best clinical 
practices due to clinical guideline updates or when clinical evidence 
suggests that continued measure compliance and collection of the data 
may result in harm to patients. This flexibility will enable us to 
respond more quickly to clinical guideline updates that affect measures 
without waiting until a future rulemaking cycle to retire a measure or 
revert to pay for reporting. We expect that we will continue to retire 
measures through the annual PFS final rule with comment period as 
clinical guidelines change; however, the timing of clinical guideline 
updates may not always correspond with the rulemaking cycle. Under this 
proposal, if a guideline update is published during a reporting year 
and the measure owner determines the measure specifications do not 
align with the updated clinical practice, we would have the authority 
to maintain a measure as pay for reporting or revert a pay-for-
performance measure to pay for reporting and finalize changes in the 
subsequent PFS final rule with comment period. Therefore, we are 
proposing to add a new provision at Sec.  425.502(a)(5) to reserve the 
right to maintain a measure as pay for reporting, or revert a pay-for-
performance measure to pay for reporting, if a measure owner determines 
the measure no longer meets best clinical practices due to clinical 
guideline updates or clinical evidence suggests that continued 
application of the measure may result in harm to patients. The measure 
owner will inform CMS if a measure's specification does not align with 
updated guidelines or if continued application of the measure may 
result in patient harm. We would then implement any necessary change to 
the measure in the next PFS rulemaking cycle by either retiring the 
measure or maintaining it as pay for reporting. We seek comment on this 
proposal and whether there may be additional criteria we should 
consider in deciding when it may be appropriate to maintain a measure 
as pay-for-reporting or revert from pay-for-performance back to pay-
for-reporting.
d. Request for Comment Related to Use of Health Information Technology
    In the November 2011 final rule, we included a measure related to 
the use of health information technology under the Care Coordination/
Patient Safety domain: the percent of PCPs within an ACO who 
successfully qualify for an EHR Incentive Program incentive (76 FR 
67878). In finalizing this measure, we included eligible professionals 
that qualified for payments to adopt, implement, or upgrade EHR 
technology, in addition to those receiving a payment for meeting 
Meaningful use Requirements. We selected this measure as opposed to 
other proposed measures in order to focus on EHR adoption among the 
primary care physicians within an ACO. Finally, we chose to focus on 
this measure because it represented a structural measure of EHR program 
participation that is not duplicative of measures within the EHR 
Incentive program for which providers may already qualify for incentive 
payments or face penalties. Although this was the only measure we 
finalized related to use of health information technology, we chose to 
double weight this measure for scoring purposes in order to signal the 
importance of health information technology for ACOs (76 FR 67895).
    In the CY 2015 PFS final rule with comment period, we finalized a 
proposal to change the name and specification of this measure to 
``Percent of PCPs who Successfully Meet Meaningful Use Requirements'' 
in order to reflect the transition from incentive payments to downward 
payment adjustments in 2015 (79 FR 67912). We believe this name will 
more accurately depict successful use and adoption of EHR technology.
    We continue to believe that measures which encourage the effective 
adoption and use of health information technology among participants in 
accountable care initiatives are an important way to signal the 
importance of technology infrastructure in supporting successful ACOs, 
especially as they mature and assume additional risk. Since the initial 
EHR quality measure was finalized in 2011, the EHR Incentive Program 
and Meaningful Use requirements have shifted from an initial focus on 
technology adoption and data capture to interoperable exchange of data 
across systems and the use of more advanced health IT functions to 
support care coordination and quality

[[Page 41890]]

improvement. A notice of proposed rulemaking for ``Stage 3'' of the EHR 
Incentive program, was released in March 2015 (80 FR 16731), along with 
a related proposed 2015 Edition of ONC certification criteria (80 FR 
16804), which aim to support providers' ability to exchange a common 
clinical dataset across the continuum of care. In addition, ONC has 
released a document entitled ``Connecting Health and Care for the 
Nation: A Shared Nationwide Interoperability Roadmap (available at 
http://www.healthit.gov/sites/default/files/nationwide-interoperability-roadmap-draft-version-1.0.pdf) which focuses on 
actions that will enable a majority of individuals and providers across 
the care continuum to send, receive, find and use a common set of 
electronic clinical information at the nationwide level by the end of 
2017.
    We believe that the widespread inclusion of these capabilities 
within health IT systems, and their adoption and effective use by 
providers, will greatly enhance ACOs' ability to coordinate care for 
beneficiaries with practitioners both within and outside their ACO and 
more effectively manage the total cost of care for attributed patients. 
While we are not proposing any changes to the current measure ``Percent 
of PCPs who Successfully Meet Meaningful Use Requirements'' (ACO-11) at 
this time, we are seeking comment on how this measure might evolve in 
the future to ensure we are incentivizing and rewarding providers for 
continuing to adopt and use more advanced health IT functionality as 
described above, and broadening the set of providers across the care 
continuum that have adopted these tools. We welcome comments on the 
following questions:
     Although the current measure focuses only on primary care 
physicians, should this measure be expanded in the future to include 
all eligible professionals, including specialists?
     How could the current measure be updated to reward 
providers who have achieved higher levels of health IT adoption?
     Should we substitute or add another measure that would 
focus specifically on the use of health information technology, rather 
than meeting overall Meaningful Use requirements, for instance, the 
transitions of care measure required for the EHR Incentives Program?
     What other measures of IT-enabled processes would be most 
relevant to participants within ACOs? How could we seek to minimize the 
administrative burden on providers in collecting these measures?
e. Conforming Changes To Align With PQRS
    Under the Shared Savings Program rules at Sec.  425.504, ACOs, on 
behalf of their ACO providers/suppliers who are eligible professionals, 
must submit quality measures using a CMS web interface (currently the 
CMS Group Practice Reporting Option Web Interface) to satisfactorily 
report on behalf of their eligible professionals for purposes of the 
PQRS payment adjustment under the Shared Savings Program. Under Sec.  
425.118(a)(4), all Medicare enrolled individuals and entities that have 
reassigned their right to receive Medicare payment to the TIN of the 
ACO participant must be included on the ACO provider/supplier list and 
must agree to participate in the ACO and comply with the requirements 
of the Shared Savings Program, including the quality reporting 
requirements. Thus, each eligible professional that bills under the TIN 
of an ACO participant must be included on the ACO provider/supplier 
list in accordance with the requirements in Sec.  425.118.
    The methodology for applying the PQRS adjustment to group practices 
takes into account the services billed by all eligible professionals 
through the TIN of the group practice, however, the references to ``ACO 
providers/suppliers who are eligible professionals'' in Sec.  425.504 
indicate that the ACO provider/supplier list should be used to 
determine the eligible professionals. Our intent and current practice 
is to treat the ACO and its ACO participants the same as any other 
physician group electing to report for purposes of PQRS through the 
GPRO Web Interface. We therefore have determined that it is necessary 
to modify the language in Sec.  425.504 for clarity and to bring it 
into alignment with the methodology used to determine the applicability 
of the payment adjustment under the PQRS GPRO methodology so that it is 
consistently applied to eligible professionals billing through an ACO 
participant TIN. We propose to revise Sec.  425.504(a) to replace the 
phrase ``ACO providers/suppliers who are eligible professionals'' and 
``ACO providers/suppliers that are eligible professionals'' with the 
phrase ``eligible professionals who bill under the TIN of an ACO 
participant'' along with conforming changes anywhere the term ACO 
providers/suppliers appears in Sec.  425.504. We believe these changes 
are necessary to clarify that the requirement that the ACO report on 
behalf of these eligible professionals applies in a way that is 
consistent with the PQRS GPRO policies and also addresses mid-year 
updates to and deletions from the ACO provider/supplier list. For 
example, this change clarifies that an ACO must still report quality 
data for services billed under the TIN of an ACO participant by an 
eligible professional that was an ACO provider/supplier for a portion 
of the performance year, but was removed from the ACO provider/supplier 
list mid-year when he or she started a new job and ceased billing under 
the TIN of the ACO participant.
2. Assignment of Beneficiaries to ACOs
    Section 1899(c) of the Act requires the Secretary to ``determine an 
appropriate method to assign Medicare fee-for-service beneficiaries to 
an ACO based on their utilization of primary care services provided 
under this title by an ACO professional described in paragraph 
(h)(1)(A).'' As we have explained in detail elsewhere (79 FR 72792), we 
established the current list of codes that constitute primary care 
services under the Shared Savings Program at Sec.  425.20 because we 
believed the listed codes represented a reasonable approximation of the 
kinds of services that are described by the statutory language which 
refers to assignment of ``Medicare fee for service beneficiaries to an 
ACO based on their utilization of primary care services'' furnished by 
physicians. We propose the following revisions to the assignment of 
beneficiaries to ACOs under the Shared Savings Program.
a. Assignment of Beneficiaries Based on Certain Evaluation and 
Management Services in SNFs
    As discussed in detail in the November 2014 proposed rule for the 
Shared Savings Program (79 FR 72792 through 72793), we welcomed comment 
from stakeholders on the implications of retaining certain evaluation 
and management codes used for physician services furnished in SNFs and 
other nursing facility settings (CPT codes 99304 through 99318) in the 
definition of primary care services. As we noted in the proposed rule, 
in some cases, hospitalists that perform evaluation and management 
services in SNFs have requested that these codes be excluded from the 
definition of primary care services so that their ACO participant TIN 
need not be exclusive to only one ACO based on the exclusivity policy 
established in the November 2011 final rule (76 FR 67810 through 
67811). The requirement under Sec.  425.306(b) that an ACO participant 
TIN be exclusive to a single ACO applies when the ACO

[[Page 41891]]

participant TIN submits claims for primary care services that are 
considered in the assignment process. However, ACO participant TINs 
upon which beneficiary assignment is not dependent (that is, ACO 
participant TINs that do not submit claims for primary care services 
that are considered in the assignment process) are not required to be 
exclusive to a single ACO.
    In response to the discussion in the Shared Savings Program 
proposed rule of our policy of including the codes for SNF visits, CPT 
codes 99304 through 99318, in the definition of primary care services, 
some commenters objected to inclusion of SNF visit codes, believing a 
SNF is more of an extension of the inpatient setting rather than a 
component of the community based primary care setting. As a result, 
these commenters believe that ACOs are often inappropriately assigned 
patients who have had long SNF stays but would not otherwise be aligned 
to the ACO and with whom the ACO has no clinical contact after their 
SNF stay. Some commenters draw a distinction between such services 
provided in two different places of service, POS 31 (SNF) and POS 32 
(NF). Although the same CPT visit codes are used to describe these 
services in SNFs (POS 31) and NFs (POS 32), the patient population is 
arguably quite different. These commenters suggest excluding SNF visit 
codes furnished in POS 31 to potentially relieve hospitalists from the 
requirement that these ACO professionals must be exclusive to a single 
ACO if their services are considered in assignment. Patients in SNFs 
(POS 31) are shorter stay patients who are receiving continued acute 
medical care and rehabilitative services. While their care may be 
coordinated during their time in the SNF, they are then transitioned 
back in the community. Patients in a SNF (POS 31) require more frequent 
practitioner visits--often from 1 to 3 times a week. In contrast, 
patients in NFs (POS 32) are almost always permanent residents and 
generally receive their primary care services in the facility for the 
duration of their life. Patients in the NF (POS 32) are usually seen 
every 30 to 60 days unless medical necessity dictates otherwise.
    We agree that it would be feasible to use POS 31 to identify claims 
for services furnished in a SNF. Therefore, we are proposing to amend 
our definition of primary care services at Sec.  425.20, for purposes 
of the Shared Savings Program, to exclude services billed under CPT 
codes 99304 through 99318 when the claim includes the POS 31 modifier. 
We recognize that SNF patients are shorter stay patients who are 
generally receiving continued acute medical care and rehabilitative 
services. While their care may be coordinated during their time in the 
SNF, they are then transitioned back in the community to the primary 
care professionals who are typically responsible for providing care to 
meet their true primary needs. If we finalize this proposal, we 
anticipate applying this revised definition of primary care services 
for purposes of determining ACO eligibility during the application 
cycle for the 2017 performance year, which occurs during 2016, and the 
revision would be then be applicable for all ACOs starting with the 
2017 performance year. This would align the assignment algorithms for 
both new ACOs entering the program and existing ACOs ensuring that 
beneficiaries are being assigned to the most appropriate ACO and that 
assigned beneficiary populations are determined using consistent 
assignment algorithms for all ACOs, as well as aligning our program 
operations with the application cycle. We propose to make a conforming 
change to the definition of primary care services in paragraph (2) by 
indicating that the current definition will be in use for the 2016 
performance year and to add a new definition of primary care services 
in paragraph (4), which excludes SNFs from the definition of primary 
care services effective starting with the 2017 performance year. We 
believe that excluding services furnished in SNFs from the definition 
of primary care services will complement our goal to assign 
beneficiaries to an ACO based on their utilization of primary care 
services. Further, based on preliminary analysis, we do not expect 
removal of these claims from the assignment process would result in a 
significant reduction in the number of beneficiaries assigned to ACOs, 
although we recognize that assignment to some ACOs may be more affected 
than others, depending on the practice patterns of their ACO 
professionals. We invite comments on these issues.
b. Assignment of Beneficiaries to ACOs That Include ETA Hospitals
    We have developed special operational instructions and processes 
(79 FR 72801 through 72802) that enable us to include primary care 
services performed by physicians at ETA hospitals in the assignment of 
beneficiaries to ACOs under Sec.  425.402. ETA hospitals are hospitals 
that, under section 1861(b)(7) of the Act and Sec.  415.160, have 
voluntarily elected to receive payment on a reasonable cost basis for 
the direct medical and surgical services of their physicians in lieu of 
Medicare PFS payments that might otherwise be made for these services. 
We use institutional claims submitted by ETA hospitals in the 
assignment process under the Shared Savings Program because ETA 
hospitals are paid for physician professional services on a reasonable 
cost basis through their cost reports and no other claim is submitted 
for such services. However, ETA hospitals bill us for their separate 
facility services when physicians and other practitioners provide 
services in the ETA hospital and the institutional claims submitted by 
ETA hospitals include the HCPCS code for the services provided. To 
determine the rendering physician for ETA institutional claims, we use 
the NPI listed in the ``other provider'' NPI field on the institutional 
claim. Then we use PECOS to obtain the CMS specialty for the NPI listed 
on the ETA institutional claim.
    These institutional claims do not include allowed charges, which 
are necessary to determine where a beneficiary received the plurality 
of primary care services as part of the assignment process. 
Accordingly, we use the amount that would otherwise be payable under 
the PFS for the applicable HCPCS code, in the applicable geographic 
area as a proxy for the allowed charges for the service.
    The definition of primary care services at Sec.  425.20 includes 
CPT codes in the range 99201 through 99205 and 99211 through 99215, and 
certain other codes. For services furnished prior to January 1, 2014, 
we use the HCPCS code included on this institutional claim to identify 
whether the primary care service was rendered to a beneficiary in the 
same way as for any other claim. However, we implemented a change in 
coding policy under the Outpatient Hospital Prospective Payment System 
(OPPS) that inadvertently affects the assignment of beneficiaries to an 
ACO when the beneficiary receives care at an ETA hospital. Effective 
for services furnished on or after January 1, 2014, outpatient 
hospitals, including ETA hospitals, were instructed to use the single 
HCPCS code G0463 and to no longer use CPT codes in the ranges of 99201 
through 99205 and 99211 through 99215. (For example, see our Web site 
at http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM8572.pdf, page 3). In other words, 
for ETA hospitals, G0463 is a replacement code for CPT codes in the 
ranges of 99201 through 99205 and 99211 through 99215.

[[Page 41892]]

    We continue to believe that it is appropriate to use ETA 
institutional claims for purposes of identifying primary care services 
furnished by physicians in ETA hospitals and to allow these services to 
be included in the stepwise methodology for assigning beneficiaries to 
ACOs. We believe including these claims increases the accuracy of the 
assignment process by helping ensure that beneficiaries are assigned to 
the ACO or other entity that is actually managing the beneficiary's 
care. ETA hospitals are often located in underserved areas and serve as 
providers of primary care for the beneficiaries they serve. Therefore, 
we are proposing to consider HCPCS code G0463 when submitted by ETA 
hospitals as a code designated by us as a primary care service for 
purposes of the Shared Savings Program. We recently updated our 
existing operational guidance on this issue so that we can continue to 
consider services furnished in ETA hospitals for beneficiary assignment 
purposes using the new G code until we codify a change to our 
definition of primary care services. This approach will allow us to 
continue to accurately assign Medicare FFS beneficiaries based on their 
utilization of primary care services furnished by ACO professionals, 
including those ACOs that may include ETA hospitals.
    We would note that in order to promote flexibility for the Shared 
Savings Program and to allow the definition of primary care services 
used in the Shared Savings Program to respond more quickly to HCPCS/CPT 
coding changes made in the annual PFS rulemaking process, we recently 
adopted a policy of making revisions to the definition of primary care 
service codes for the Shared Savings Program through the annual PFS 
rulemaking process, and we amended the definition of primary care 
services at Sec.  425.20 to include additional codes designated by CMS 
as primary care services for purposes of the Shared Savings Program, 
including new HCPCS/CPT codes or revenue codes and any subsequently 
modified or replacement codes. Therefore, we propose to amend the 
definition of primary care services at Sec.  425.20 by adding HCPCS 
code G0463 for services furnished in an ETA hospital to the definition 
of primary care services that will be applicable for performance year 
2016 and subsequent performance years.
    We also propose to revise Sec.  425.402 by adding a new paragraph 
(d) to provide that when considering services furnished by physicians 
in ETA hospitals in the assignment methodology, we would use an 
estimated amount based on the amounts payable under the PFS for similar 
services in the geographic location in which the ETA hospital is 
located as a proxy for the amount of the allowed charges for the 
service. In this case, because G0463 is not payable under the PFS, we 
are proposing to use the weighted mean amount payable under the PFS for 
CPT codes in the range 99201 through 99205 and 99211 through 99215 as a 
proxy for the amount of the allowed charges for HCPCS code G0463 when 
submitted by ETA hospitals. The weights needed to impute the weighted 
mean PFS payment rate for HCPCS code G0463 would be derived from the 
relative number of services furnished at the national level for CPT 
codes 99201 through 99205 and 99211 through 99215. This is consistent 
with our current practice and guidance and would continue to allow for 
beneficiaries to be attributed to the ACO responsible for their care. 
Additional details regarding computation of the proxy amount for G0463 
would be provided through sub-regulatory guidance.
    In addition, because we are able to consider claims submitted by 
ETA hospitals as part of the assignment process, we also propose to 
amend Sec.  425.102(a) to add ETA hospitals to the list of ACO 
participants that are eligible to form an ACO that may apply to 
participate in the Shared Savings Program.

M. Value-Based Payment Modifier and Physician Feedback Program

1. Overview
    Section 1848(p) of the Act requires that we establish a value-based 
payment modifier (VM) and apply it to specific physicians and groups of 
physicians the Secretary determines appropriate starting January 1, 
2015, and to all physicians and groups of physicians by January 1, 
2017. On or after January 1, 2017, section 1848(p)(7) of the Act 
provides the Secretary discretion to apply the VM to eligible 
professionals (EPs) as defined in section 1848(k)(3)(B) of the Act. 
Section 1848(p)(4)(C) of the Act requires the VM to be budget neutral. 
The VM program continues CMS's initiative to increase the transparency 
of health care quality information and to assist providers and 
beneficiaries in improving medical decision-making and health care 
delivery.\9\
---------------------------------------------------------------------------

    \9\ Kate Goodrich, et al. ``A History and a Vision for CMS 
Quality Measurement Programs''. Joint Comm'n J. Quality & Patient 
Safety. 2012. 38,465, available at http://www.ingentaconnect.com/content/jcaho/jcjqs/2012/00000038/00000010/art00006.
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2. Governing Principles for VM Implementation.
    In the CY 2013 PFS final rule with comment period, we discussed the 
goals of the VM and also established that specific principles should 
govern the implementation of the VM (77 FR 69307). We refer readers to 
that rule for a detailed discussion and list those principles here for 
reference.
     A focus on measurement and alignment. Measures for the VM 
should consistently reflect differences in performance among groups or 
solo practitioners, reflect the diversity of services furnished, and 
should be consistent with the National and CMS Quality Strategies and 
other CMS quality initiatives, including PQRS, the Medicare Shared 
Savings Program (Shared Savings Program), and the Medicare EHR 
Incentive Program.
     A focus on physician and eligible professional choice. 
Physicians and other nonphysician EPs should be able to choose the 
level (individual or group) at which their quality performance will be 
assessed, reflecting EPs' choice over their practice configurations. 
The choice of level should align with the requirements of other 
physician quality reporting programs.
     A focus on shared accountability. The VM can facilitate 
shared accountability by assessing performance at the group level and 
by focusing on the total costs of care, not just the costs of care 
furnished by an individual professional.
     A focus on actionable information. The Quality and 
Resource Use Reports (QRURs) should provide meaningful and actionable 
information to help groups and solo practitioners identify clinical, 
efficiency and effectiveness areas where they are doing well, as well 
as areas in which performance could be improved by providing groups and 
solo practitioners with QRURs on the quality and cost of care they 
furnish to their patients.
     A focus on a gradual implementation. The VM should focus 
initially on identifying high and low performing groups and solo 
practitioners. As we gain more experience with physician measurement 
tools and methodologies, we can broaden the scope of measures assessed, 
refine physician peer groups, create finer payment distinctions, and 
provide greater payment incentives for high performance.

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3. Overview of Existing Policies for the Physician VM.
    In the CY 2013 PFS final rule with comment period (77 FR 69310), we 
finalized policies to phase-in the VM by applying it beginning January 
1, 2015, to Medicare PFS payments to physicians in groups of 100 or 
more EPs. A summary of the existing policies that we finalized for the 
CY 2015 VM can be found in the CY 2014 PFS proposed rule (78 FR 43486 
through 43488). Subsequently, in the CY 2014 PFS final rule with 
comment period (78 FR 74765 through 74787), we finalized policies to 
continue the phase-in of the VM by applying it starting January 1, 
2016, to payments under the Medicare PFS for physicians in groups of 10 
or more EPs. Then, in the CY 2015 PFS final rule with comment period 
(79 FR 67931 through 67966), we finalized policies to complete the 
phase-in of the VM by applying it starting January 1, 2017, to payments 
under the Medicare PFS for physicians in groups of 2 or more EPs and to 
physician solo practitioners. We also finalized that beginning in 
January 1, 2018, the VM will apply to nonphysician EPs in groups with 2 
or more EPs and to nonphysician EPs who are solo practitioners.
4. Provisions of This Proposed Rule
    As a general summary, we are proposing the following VM policies:
     Beginning with the CY 2016 payment adjustment period, a 
TIN's size would be determined based on the lower of the number of EPs 
indicated by the Medicare Provider Enrollment, Chain, and Ownership 
System (PECOS)-generated list or our analysis of the claims data for 
purposes of determining the payment adjustment amount under the VM.
     For the CY 2018 payment adjustment period, to apply the VM 
to nonphysician EPs who are physician assistants (PAs), nurse 
practitioners (NPs), clinical nurse specialists (CNSs), and certified 
registered nurse anesthetists (CRNAs) in groups and those who are solo 
practitioners, and not to other types of professionals who are 
nonphysician EPs.
     For the CY 2018 payment adjustment period, to identify 
TINs as those that consist of nonphysician EPs if either the PECOS-
generated list or our analysis of the claims data shows that the TIN 
consists of nonphysician EPs and no physicians.
     For the CY 2018 payment adjustment period, to not apply 
the VM to groups and solo practitioners if either the PECOS-generated 
list or claims analysis shows that the groups and solo practitioners 
consist only of nonphysician EPs who are not PAs, NPs, CNSs, and CRNAs.
     To continue apply a two-category approach for the CY 2018 
VM based on participation in the PQRS by groups and solo practitioners.
     For the CY 2018 payment adjustment period, to apply the 
quality-tiering methodology to all groups and solo practitioners in 
Category 1. Groups and solo practitioners would be subject to upward, 
neutral, or downward adjustments derived under the quality-tiering 
methodology, with the exception finalized in the CY 2015 PFS final rule 
with comments period (79 FR 67937), that groups consisting only of 
nonphysician EPs and solo practitioners who are nonphysician EPs will 
be held harmless from downward adjustments under the quality-tiering 
methodology in CY 2018.
     Beginning with the CY 2017 payment adjustment period, to 
apply the VM adjustment percentage for groups and solo practitioners 
that participate in two or more ACOs during the applicable performance 
period based on the performance of the ACO with the highest quality 
composite score.
     For the CY 2018 payment adjustment period, to apply the VM 
for groups and solo practitioners that participate in an ACO under the 
Shared Savings Program during the applicable performance period as 
described under Sec.  414.1210(b)(2), regardless of whether any EPs in 
the group or the solo practitioner also participated in an Innovation 
Center model during the performance period.
     For the CY 2018 payment adjustment period, if the ACO does 
not successfully report quality data as required by the Shared Savings 
Program, all groups and solo practitioners participating in the ACO 
will fall in Category 2 for the VM and will be subject to a downward 
payment adjustment.
     Beginning in the CY 2017 payment adjustment period, to 
apply an additional upward payment adjustment of +1.0x to Shared 
Savings ACO Program participant TINs that are classified as ``high 
quality'' under the quality-tiering methodology, if the ACOs in which 
the TINs participated during the performance period have an attributed 
patient population that has an average beneficiary risk score that is 
in the top 25 percent of all beneficiary risk scores nationwide as 
determined under the VM methodology.
     Beginning with the CY 2017 payment adjustment period, to 
waive application of the VM for groups and solo practitioners, as 
identified by TIN, if at least one EP who billed for PFS items and 
services under the TIN during the applicable performance period for the 
VM participated in the Pioneer ACO Model, CPC Initiative, or other 
similar Innovation Center models during the performance period.
     To set the maximum upward adjustment under the quality-
tiering methdology for the CY 2018 VM to +4.0 times an upward payment 
adjustment factor (to be determined after the performance period has 
ended) for groups with 10 or more EPs; +2.0 times an adjustment factor 
for groups with between 2 to 9 EPs and physician solo practitioners; 
and +2.0 times an adjustment factor for groups and solo practitioners 
that consist of nonphysician EPs who are PAs, NPs, CNSs, and CRNAs.
     To set the amount of payment at risk under the CY 2018 VM 
to 4.0 percent for groups with 10 or more EPs, 2 percent for groups 
with between 2 to 9 EPs and physician solo practitioners, and 2 percent 
for groups and solo practitioners that consist of nonphysician EPs who 
are PAs, NPs, CNSs, and CRNAs.
     To not recalculate the VM upward payment adjustment factor 
after it is made public unless there was a significant error made in 
the calculation of the adjustment factor.
     To use CY 2016 as the performance period for the CY 2018 
VM.
     To align the quality measures and quality reporting 
mechanisms for the CY 2018 VM with those available to groups and 
individuals under the PQRS during the CY 2016 performance period.
     To separately benchmark the PQRS electronic clinical 
quality measures (eCQMs) beginning with the CY 2018 VM.
     To include Consumer Assessment of Healthcare Providers and 
Systems (CAHPS) Surveys in the VM for Shared Savings Program ACOs 
beginning with the CY 2018 VM.
     To apply the VM to groups for which the PQRS program 
removes individual EPs from that program's unsuccessful participants 
list beginning with the 2016 VM.
     Beginning with the CY 2017 payment adjustment period, to 
increase the minimum number of episodes for inclusion of the MSPB 
measure in the cost composite to 100 episodes.
     Beginning with the 2018 VM, to include hospitalizations at 
Maryland hospitals as an index admission for the MSPB measure for the 
purposes of the VM program.
     Beginning in the CY 2016 payment adjustment period, a 
group or solo

[[Page 41894]]

practitioner subject to the VM would receive a quality composite score 
that is classified as average under the quality-tiering methodology if 
the group or solo practitioner does not have at least one quality 
measure that meets the minimum number of cases required for the measure 
to be included in the calculation of the quality composite.
     To make technical changes to Sec.  414.1255 and Sec.  
414.1235.
    We also seek comment on, but make no proposals regarding 
stratifying cost measure benchmarks by beneficiary risk score.
a. Group Size
    The policies to identify groups and solo practitioners that are 
subject to the VM during a specific payment adjustment period are 
described in Sec.  414.1210(c). Beginning with the CY 2016 payment 
adjustment period, the list of groups and solo practitioners subject to 
the VM is based on a query of the PECOS that occurs within 10 days of 
the close of the PQRS group registration process during the applicable 
performance period described at Sec.  414.1215. Groups are removed from 
the PECOS-generated list if, based on our analysis of claims, the group 
did not have the required number of EPs that submitted claims during 
the performance period for the applicable calendar year payment 
adjustment period. Solo practitioners are removed from the PECOS-
generated list if, based on a claims analysis, the solo practitioner 
did not submit claims during the performance period for the applicable 
CY payment adjustment period. In the CY 2013 PFS final rule with 
comment period, we stated that for the CY 2015 payment adjustment 
period, we will not add groups to the PECOS-generated list based on the 
analysis of claims (77 FR 69309 through 69310). In the CY 2014 PFS 
final rule with comment period, we finalized that we will continue to 
follow this procedure for the CY 2016 payment adjustment period and 
subsequent adjustment period (78 FR 74767).
    In the CY 2014 PFS final rule with comment period (78 FR 74767 to 
74771), we established different payment adjustment amounts under the 
2016 VM for (1) groups with between 10 to 99 EPs, and (2) groups with 
100 or more EPs. Similarly, in the CY 2015 PFS final rule with comment 
period (79 FR 67938 to 67941 and 67951 to 67954), we established 
different payment adjustment amounts under the 2017 VM for: (1) Groups 
with between 2 to 9 EPs and physician solo practitioners; and (2) 
groups with 10 or more EPs. However, we have not addressed how we would 
handle scenarios where the size of a TIN as indicated on the PECOS-
generated list is not consistent with the size of the TIN based on our 
analysis of the claims data. Therefore, we propose that, beginning with 
the CY 2016 payment adjustment period, the TIN's size would be 
determined based on the lower of the number of EPs indicated by the 
PECOS-generated list or by our analysis of the claims data for purposes 
of determining the payment adjustment amount under the VM. In the event 
that our analysis of the claims data indicates that a TIN had fewer EPs 
during the performance period than indicated by the PECOS-generated 
list, and the TIN is still subject to the VM based on its size, then we 
would apply the payment adjustment amount under the VM that is 
applicable to the size of the TIN as indicated by our analysis of the 
claims data. In the event that our analysis of the claims data 
indicates that a TIN had more EPs during the performance period than 
indicated by the PECOS-generated list, then we would apply the payment 
adjustment amount under the VM that is applicable to the size of the 
TIN as indicated by the PECOS-generated list.
    For example, for the CY 2016 payment adjustment period, if the 
PECOS list indicates that a TIN had 100 EPs in the CY 2014 performance 
period, but our analysis of claims shows that the TIN had 90 EPs based 
in CY 2014, then we would apply the payment policies to the TIN that 
are applicable to groups with between 10 to 99 EPs, instead of the 
policies applicable to groups with 100 or more EPs. Alternatively, if 
the PECOS list indicates that a TIN had 90 EPs in the CY 2014 
performance period, but our analysis of claims shows that the TIN had 
100 EPs based in CY 2014, then we would apply the payment policies to 
the TIN that are applicable to groups with between 10 to 99 EPs, 
instead of the policies applicable to groups with 100 or more EPs. We 
propose to update Sec.  414.1210(c) accordingly.
    In section III.M.4.b. of this proposed rule, we propose to apply 
the VM in the CY 2018 payment adjustment period to nonphysician EPs who 
are PAs, NPs, CNSs, and CRNAs in groups with two or more EPs and to 
those who are solo practitioners. In section III.M.4.f. of this 
proposed rule, we propose to apply different payment adjustment amounts 
under the CY 2018 VM based on the composition of a group. Specifically, 
in that section we propose that the PAs, NPs, CNSs, and CRNAs in groups 
that consist of nonphysician EPs (in other words, groups that do not 
include any physicians) and those who are solo practitioners would be 
subject to different payment adjustment amounts under the CY 2018 VM 
than would groups composed of physicians and nonphysician EPs and 
physician solo practitioners. We propose to identify TINs that consist 
of nonphysician EPs as those TINs for which either the PECOS-generated 
list or our analysis of the claims data shows that the TIN consists of 
nonphysician EPs and no physicians. We note that under our proposal the 
VM would only apply to the PAs, NPs, CNSs, and CRNAs who bill under 
these TINs, and not to the other types of nonphysician EPs who may also 
bill under these TINs. We propose that the VM would not apply to a TIN 
if either the PECOS-generated list or our analysis of the claims data 
shows that the TIN consists of only nonphysician EPs who are not PAs, 
NPs, CNSs, and CRNAs. The following examples illustrate these 
proposals. If the PECOS-generated list shows that a TIN consists of 
physicians and NPs and the claims data show that only NPs billed under 
the TIN, then we would apply the payment adjustments proposed in 
section III.M.4.f. of this proposed rule that are applicable to PAs, 
NPs, CNSs, and CRNAs in TINs that consist of nonphysician EPs. If the 
PECOS-generated list shows that a TIN consists of PAs, NPs, CNSs, or 
CRNAs, and no physicians, and the claims data show that the TIN also 
consists of physicians, then we would apply the payment adjustments 
applicable to PAs, NPs, CNSs, and CRNAs in TINs that consist of 
nonphysician EPs. This would be consistent with our policy to apply the 
payment adjustments applicable to the lower group size when there is a 
discrepancy in the group size between PECOS and claims analysis, in 
that it would result in the group being subject to the lower amount at 
risk and lower possible upward payment adjustment, when there is a 
difference between the PECOS and claims analyses.
    If the PECOS-generated list shows that a TIN consists of physicians 
and the claims data shows, for example, that PAs and physicians billed 
under the TIN, then we would apply the payment adjustments proposed in 
section III.M.4.f. of this proposed rule for TINs with physicians and 
nonphysician EPs depending on the size of the TIN. If the PECOS-
generated list shows, for example, that a TIN consists of PAs and the 
claims data shows that only physical therapists billed under the group, 
then the TIN would not be subject to the VM in CY 2018. Conversely, if 
the PECOS-generated list shows, for example, that a TIN consists of 
physical therapists and the claims data shows that only PAs

[[Page 41895]]

billed under the group, then the TIN would not be subject to the VM in 
CY 2018. We welcome public comment on these proposals. We propose to 
revise Sec.  414.1210(c) accordingly.
b. Application of the VM to Nonphysician EPs Who Are PAs, NPs, CNSs, 
and CRNAs
    Section 1848(p)(7) of the Act provides the Secretary discretion to 
apply the VM on or after January 1, 2017 to EPs as defined in section 
1848(k)(3)(B) of the Act. In the CY 2015 PFS final rule with comment 
period (79 FR 67937), we finalized that we will apply the VM beginning 
in the CY 2018 payment adjustment period to nonphysician EPs in groups 
with two or more EPs and to nonphysician EPs who are solo 
practitioners. We added Sec.  414.1210(a)(4) to reflect this policy. 
Under this policy, we will apply the VM beginning in CY 2018 to the 
items and services billed under the PFS by all of the physicians and 
nonphysician EPs who bill under a group's TIN. Beginning in CY 2018, 
the VM will apply to all of the EPs, as specified in section 
1848(k)(3)(B) of the Act, that bill under a group's TIN based on the 
TIN's performance during the applicable performance period. During the 
payment adjustment period, all of the nonphysician EPs who bill under a 
group's TIN will be subject to the same VM that will apply to the 
physicians who bill under that TIN. We finalized the modification to 
the definition of ``group of physicians'' under Sec.  414.1205 to also 
include the term ``group'' to reflect these policies. Additionally, we 
finalized that beginning in CY 2018, physicians and nonphysician EPs 
will be subject to the same VM policies established in earlier 
rulemakings and under subpart N. For example, nonphysician EPs will be 
subject to the same amount of payment at risk and quality-tiering 
policies as physicians. We finalized modifications to the regulations 
under subpart N accordingly.
    Under section 1848(p)(4)(B)(iii) of the Act, as amended by section 
101(b)(3) of MACRA, the VM shall not be applied to payments for items 
and services furnished on or after January 1, 2019. Section 1848(q) of 
the Act, as added by section 101(c) of MACRA, establishes the Merit-
based Incentive Payment System (MIPS) that shall apply to payments for 
items and services furnished on or after January 1, 2019. Under section 
1848(q)(1)(C)(i)(I) of the Act, with regard to payments for items and 
services furnished in 2019 and 2020, the MIPS will only apply to:
     A physician (as defined in section 1861(r) of the Act);
     A PA, NP, and CNS (as defined in section 1861(aa)(5) of 
the Act);
     A CRNA (as defined in section 1861(bb)(2) of the Act); and
     A group that includes such professionals.
    Then, under section 1848(q)(1)(C)(i)(II) of the Act, beginning with 
payments for items and services furnished in 2021, the MIPS will apply 
to such other EPs as defined in section 1848(k)(3)(B) of the Act as 
specified by the Secretary. As noted above, section 1848(p)(7) of the 
Act provides the Secretary discretion to apply the VM on or after 
January 1, 2017 to EPs as defined in section 1848(k)(3)(B) of the Act. 
In the CY 2015 PFS final rule with comment period (79 FR 67937), we 
finalized that we will apply the VM beginning in the CY 2018 payment 
adjustment period to all nonphysician EPs in groups with two or more 
EPs and to nonphysician EPs who are solo practitioners. However, after 
the enactment of MACRA in April 2015, we believe it would not be 
appropriate to apply the VM in CY 2018 to any nonphysician EP who is 
not a PA, NP, CNS, or CRNA since payment adjustments under the MIPS 
would not apply to them until 2021. Therefore, we propose to apply the 
VM in the CY 2018 payment adjustment period to nonphysician EPs who are 
PAs, NPs, CNSs, and CRNAs in groups with two or more EPs and to PAs, 
NPs, CNSs, and CRNAs who are solo practitioners. We propose to revise 
Sec.  414.1210(a)(4) to reflect this proposed policy. We propose to 
define PAs, NPs, and CNSs as defined in section 1861(aa)(5) of the Act 
and to define CRNAs as defined in section 1861(bb)(2) of the Act. We 
propose to add these definitions under Sec.  414.1205.
    Under our proposal, we would apply the VM in CY 2018 to the items 
and services billed under the PFS by all of the PAs, NPs, CNSs, and 
CRNAs who bill under a group's TIN based on the TIN's performance 
during the applicable performance period. We note that the VM would not 
apply to other types of nonphysician EPs (that is, nonphysician EPs who 
are not PAs, NPs, CNSs, or CRNAs) who may also bill under the TIN.
    As noted above, we finalized in the CY 2015 PFS final rule with 
comment period (79 FR 67937) that beginning in CY 2018, all of the 
nonphysician EPs who bill under a group's TIN will be subject to the 
same VM that will apply to the physicians who bill under that TIN, and 
physicians and nonphysician EPs will be subject to the same VM policies 
established in earlier rulemakings and under subpart N. For example, 
nonphysician EPs who are in groups containing one or more physicians 
will be subject to the same amount of payment at risk and quality-
tiering policies as physicians. We are not proposing to revise these 
policies; however, we note that if a group is composed of physicians 
and nonphysician EPs, only the physicians and the nonphysician EPs who 
are PAs, NPs, CNSs, and CRNAs would be subject to the VM in CY 2018.
    In the CY 2015 PFS final rule with comment period (79 FR 67937), we 
also finalized that we will apply the VM beginning in CY 2018 to groups 
that consist only of nonphysician EPs (for example, groups with only 
NPs or PAs) and to nonphysician EPs who are solo practitioners. 
However, since CY 2018 will be the first year that groups that consist 
only of nonphysician EPs and solo practitioners who are nonphysician 
EPs will be subject to the VM, we finalized a policy to hold these 
groups and solo practitioners harmless from downward adjustments under 
the quality-tiering methodology in CY 2018. We stated that we will add 
regulation text under Sec.  414.1270 to reflect this policy when we 
establish the policies for the VM for the CY 2018 payment adjustment 
period in future rulemaking. Accordingly, we propose to add Sec.  
414.1270(d) to codify that PAs, NPs, CNSs, and CRNAs in groups that 
consist of nonphysician EPs and PAs, NPs, CNSs, and CRNAs who are solo 
practitioners will be held harmless from downward adjustments under the 
quality-tiering methodology in CY 2018. In section III.M.4.f. of this 
proposed rule, we discuss the proposed CY 2018 payment adjustment 
amounts for groups that consist of nonphysician EPs and solo 
practitioners who are nonphysician EPs that fall in Category 1 and 
Category 2 for the CY 2018 VM. As discussed above, we are proposing to 
apply the VM in CY 2018 only to nonphysician EPs who are PAs, NPs, 
CNSs, and CRNAs.
c. Approach to Setting the VM Adjustment Based on PQRS Participation
    Section 1848(p)(4)(B)(iii)(II) of the Act requires the Secretary to 
apply the VM to items and services furnished under the PFS beginning 
not later than January 1, 2017, for all physicians and groups of 
physicians. Therefore, in the CY 2015 PFS final rule with comment 
period (79 FR 67936), we established that, beginning with the CY 2017 
payment adjustment period, the VM will apply to physicians in groups 
with two or more EPs and to physicians who are solo practitioners based 
on the applicable performance period. In the CY 2015 PFS

[[Page 41896]]

final rule with comment period (79 FR 67938 to 67939), we adopted a 
two-category approach for the CY 2017 VM based on participation in the 
PQRS by groups and solo practitioners. For purposes of the CY 2017 VM, 
we finalized that Category 1 includes those groups that meet the 
criteria for satisfactory reporting of data on PQRS quality measures 
via the GPRO (through use of the web-interface, EHR, or registry 
reporting mechanism) for the CY 2017 PQRS payment adjustment. We 
finalized that Category 1 also includes groups that do not register to 
participate in the PQRS as a group practice participating in the PQRS 
GPRO in CY 2015 and that have at least 50 percent of the group's EPs 
meet the criteria for satisfactory reporting of data on PQRS quality 
measures as individuals (through the use of claims, EHR, or registry 
reporting mechanism) for the CY 2017 PQRS payment adjustment, or in 
lieu of satisfactory reporting, satisfactorily participate in a PQRS-
qualified clinical data registry (QCDR) for the CY 2017 PQRS payment 
adjustment. Lastly, we finalized that Category 1 includes those solo 
practitioners that meet the criteria for satisfactory reporting of data 
on PQRS quality measures as individuals (through the use of claims, 
registry, or EHR reporting mechanism) for the CY 2017 PQRS payment 
adjustment, or in lieu of satisfactory reporting, satisfactorily 
participate in a PQRS QCDR for the CY 2017 PQRS payment adjustment. We 
finalized that Category 2 includes those groups and solo practitioners 
that are subject to the CY 2017 VM and do not fall within Category 1. 
The CY 2017 VM payment adjustment amount for groups and solo 
practitioners in Category 2 is -4.0 percent for groups with 10 or more 
EPs and -2.0 percent for groups with between 2 to 9 EPs and solo 
practitioners.
    We propose to use a similar two-category approach for the CY 2018 
VM based on participation in the PQRS by groups and solo practitioners. 
However, we note that during the 2014 PQRS submission period, we 
received feedback from groups who experienced difficulty reporting 
through the reporting mechanism they had chosen at the time of 2014 
PQRS GPRO registration. For example, some groups registered for the 
group EHR reporting mechanism and were subsequently informed that their 
EHR vendor could not support submission of group data for the group EHR 
reporting mechanism. To address these concerns and continue to 
accommodate the various ways in which EPs and groups can participate in 
the PQRS, for purposes of the CY 2018 VM, we propose that Category 1 
would include those groups that meet the criteria to avoid the PQRS 
payment adjustment for CY 2018 as a group practice participating in the 
PQRS GPRO, as proposed in table 21 of this proposed rule. We also 
propose to include in Category 1 groups that have at least 50 percent 
of the group's EPs meet the criteria to avoid the PQRS payment 
adjustment for CY 2018 as individuals, as proposed in table 20 of this 
proposed rule. We propose to add corresponding regulation text to Sec.  
414.1270(d)(1).
    We note that the proposed criteria for groups to be included in 
Category 1 for the CY 2018 VM differ from the criteria we finalized for 
the CY 2017 VM in the CY 2015 PFS final rule with comment period. Under 
the policy for the CY 2017 VM, we would only consider whether at least 
50 percent of a group's EPs met the criteria to avoid the PQRS payment 
adjustment as individuals if the group did not register to participate 
in a PQRS GPRO. In contrast, under our proposal for the CY 2018 VM, in 
determining whether a group would be included in Category 1, we would 
consider whether the 50 percent threshold has been met regardless of 
whether the group registers for a PQRS GPRO. We believe this proposal 
would allow groups that register for a PQRS GPRO but fail as a group to 
meet the criteria to avoid the PQRS payment adjustment an additional 
opportunity for the quality data reported by individual EPs in the 
group to be taken into account for purposes of applying the CY 2018 VM.
    We also propose to revise the criteria for groups to be included in 
Category 1 for the CY 2017 VM, if it is operationally feasible for our 
systems to utilize data reported through a mechanism other than the one 
through which a group registered to report under PQRS GPRO. At this 
time, it is unclear whether CMS systems can support this type of 
assessment as soon as the CY 2017 VM, and thus our proposal is 
contingent upon operational feasibility. For the CY 2017 VM, we propose 
that Category 1 would include those groups that meet the criteria to 
avoid the PQRS payment adjustment for CY 2017 as a group practice 
participating in the PQRS GPRO in CY 2015. We also propose to include 
in Category 1 groups that have at least 50 percent of the group's EPs 
meet the criteria to avoid the PQRS payment adjustment for CY 2017 as 
individuals. We propose that if operationally feasible, we would apply 
these criteria to identify which groups would fall in Category 1 for 
the CY 2017 VM regardless of whether or how the group registered to 
participate in the PQRS as a group practice in CY 2015. If our systems 
are not able to accomplish this, then we will apply our existing policy 
for the CY 2017 VM, as finalized in the CY 2015 PFS final rule with 
comment period (79 FR 67938 through 67939), to consider whether at 
least 50 percent of a group's EPs meet the criteria to avoid the PQRS 
payment adjustment for CY 2017 as individuals only in the event that 
the group did not register to report as a group under the PQRS GPRO. We 
seek comments on these proposals.
    Lastly, we propose to include in Category 1 for the CY 2018 VM 
those solo practitioners that meet the criteria to avoid the CY 2018 
PQRS payment adjustment as individuals, as proposed in table 20 of this 
proposed rule.
    Category 2 would include those groups and solo practitioners that 
are subject to the CY 2018 VM and do not fall within Category 1. As 
discussed in section III.M.4.f. of this proposed rule, we are proposing 
to apply the following VM adjustment to payments for groups and solo 
practitioners that fall in Category 2 for the CY 2018 VM: A -4.0 
percent VM to physicians, PAs, NPs, CNSs, and CRNAs in groups with 10 
or more EPs; a -2.0 percent VM to physicians, PAs, NPs, CNSs, and CRNAs 
in groups with between 2 to 9 EPs and to physician solo practitioners; 
and a -2.0 percent VM to PAs, NPs, CNSs, and CRNAs in groups that 
consist of nonphysician EPs and solo practitioners who are PAs, NPs, 
CNSs, and CRNAs. As discussed in section III.M.4.b. of this proposed 
rule, we propose to apply the VM in CY 2018 to the nonphysician EPs who 
are PAs, NPs, CNSs, and CRNAs. We seek comment on these proposals.
    For a group or solo practitioner that would be subject to the CY 
2018 VM to be included in Category 1, the criteria for satisfactory 
reporting (or the criteria for satisfactory participation, in the case 
of solo practitioners and the 50 percent option described above for 
groups) would need to be met during the reporting periods occurring in 
CY 2016 for the CY 2018 PQRS payment adjustment. In section III.M.4.h. 
of this proposed rule, we propose to use CY 2016 as the performance 
period for the VM adjustments that will apply during CY 2018. In the 
event that the criteria that are finalized for the CY 2018 PQRS payment 
adjustment differ from what is proposed for the PQRS in this proposed 
rule, our intention is to align the criteria for inclusion in Category 
1 to the extent possible with the criteria that are

[[Page 41897]]

ultimately established for the CY 2018 PQRS payment adjustment.
    In the CY 2015 PFS final rule with comment period (79 FR 67939 to 
67941), we finalized that the quality-tiering methodology will apply to 
all groups and solo practitioners in Category 1 for the VM for CY 2017, 
except that groups with between 2 to 9 EPs and solo practitioners would 
be subject only to upward or neutral adjustments derived under the 
quality-tiering methodology, while groups with 10 or more EPs would be 
subject to upward, neutral, or downward adjustments derived under the 
quality-tiering methodology. In other words, groups with between 2 to 9 
EPs and solo practitioners in Category 1 would be held harmless from 
any downward adjustments derived from the quality-tiering methodology 
for the CY 2017 VM.
    As stated earlier in this proposed rule, in CY 2018, the same VM 
would apply to all of the physicians, PAs, NPs, CNSs, and CRNAs who 
bill under a TIN. The VM would not apply to other types of nonphysician 
EPs who may also bill under the TIN. For the CY 2018 VM, we propose to 
continue to apply the quality-tiering methodology to all groups and 
solo practitioners in Category 1. We propose that groups and solo 
practitioners would be subject to upward, neutral, or downward 
adjustments derived under the quality-tiering methodology, with the 
exception finalized in the CY 2015 PFS final rule with comments period 
(79 FR 67937), that groups consisting only of nonphysician EPs and solo 
practitioners who are nonphysician EPs will be held harmless from 
downward adjustments under the quality-tiering methodology in CY 2018. 
Based on our proposal to apply the CY 2018 VM only to certain types of 
nonphysician EPs, only the PAs, NPs, CNSs, and CRNAs in groups 
consisting of nonphysician EPs and those who are solo practitioners 
will be held harmless from downward adjustments under the quality-
tiering methodology in CY 2018. We propose to revise Sec.  414.1270 to 
reflect these proposals. We seek comments on these proposals. In 
section III.M.4.f. of this proposed rule, we discuss the proposed CY 
2018 payment adjustment amounts for groups and solo practitioners that 
fall in Category 1 and Category 2 for the CY 2018 VM.
    For groups with between 2 to 9 EPs and physician solo 
practitioners, we believe it is appropriate to begin both the upward 
and downward payment adjustments under the quality-tiering methodology 
for the CY 2018 VM. As stated in the CY 2015 PFS final rule with 
comment period (79 FR 67935), in September 2014, we made available 
QRURs based on CY 2013 data to all groups of physicians and physicians 
who are solo practitioners. These QRURs contain performance information 
on the quality and cost measures used to calculate the quality and cost 
composites of the VM and show how all TINs fare under the policies 
established for the VM for the CY 2015 payment adjustment period. As 
discussed in section III.M.5.a. of this proposed rule, in April 2015, 
we made available 2014 Mid-Year QRURs to groups of physicians and 
physician solo practitioners nationwide. The Mid-Year QRURs provide 
interim information about performance on the claims-based quality 
outcome measures and cost measures that are a subset of the measures 
that will be used to calculate the CY 2016 VM and are based on 
performance from July 1, 2013 through June 30, 2014. Then, during the 
Fall of 2015, we intend to disseminate QRURs based on CY 2014 data to 
all groups and solo practitioners, and the reports would show all TINs 
their performance during CY 2014 on all of the quality and cost 
measures that will be used to calculate the CY 2016 VM. Thus, we 
believe groups with between 2 to 9 EPs and physician solo practitioners 
will have adequate data to improve performance on the quality and cost 
measures that will be used to calculate the VM in CY 2018. We note that 
the quality and cost measures in the QRURs that these groups will 
receive are similar to the measures that will be used to calculate the 
CY 2018 VM. In addition, we believe that these groups and solo 
practitioners have had sufficient time to understand how the VM works 
and how to participate in the PQRS. As a result, we believe it is 
appropriate to apply both upward and downward adjustments under the 
quality-tiering methodology to groups with between 2 to 9 EPs and 
physician solo practitioners in CY 2018.
    We will continue to monitor the VM program and continue to examine 
in the VM Experience Report the characteristics of those groups and 
solo practitioners that would be subject to an upward or downward 
payment adjustment under our quality-tiering methodology to determine 
whether our policies create anomalous effects in ways that do not 
reflect consistent differences in performance among physicians and 
physician groups.
d. Application of the VM to Physicians and Nonphysician EPs Who 
Participate in ACOs Under the Shared Savings Program
    In the CY 2015 PFS final rule with comment period, we finalized a 
policy to apply the VM, beginning with the CY 2017 payment adjustment 
period, to physicians in groups with two or more EPs and physicians who 
are solo practitioners that participate in an ACO under the Shared 
Savings Program, and beginning with the CY 2018 payment adjustment 
period, to nonphysician EPs in groups with two or more EPs and 
nonphysician EPs who are solo practitioners that participate in an ACO 
under the Shared Savings Program. We finalized that the determination 
of whether a group or solo practitioner is considered to be in an ACO 
under the Shared Savings Program would be based on whether that group 
or solo practitioner, as identified by TIN, was an ACO participant in 
the performance period for the applicable payment adjustment period for 
the VM. For groups and solo practitioners determined to be ACO 
participants, we finalized a policy that we would classify the group or 
solo practitioner's cost composite as ``average'' and calculate its 
quality composite based on the quality-tiering methodology using 
quality data submitted by the Shared Savings Program ACO for the 
performance period and apply the same quality composite to all of the 
groups and solo practitioners, as identified by TIN, under that ACO. 
For further explanation of the final policies for applying the VM to 
ACO participants in Shared Savings Program ACOs, we refer readers to 79 
FR 67941 through 67947 and 67956 through 67957.
(1) Application of the VM to Groups and Solo Practitioners Who 
Participate in Multiple Shared Savings Program ACOs
    Under the Shared Savings Program regulations (Sec.  425.306(b)), an 
ACO participant TIN upon which beneficiary assignment is dependent may 
only participate in one Shared Savings Program ACO. ACO participant 
TINs that do not bill for primary care services, however, are not 
required to be exclusive to one Shared Savings Program ACO. As a 
result, there are a small number of TINs that are ACO participants in 
multiple Shared Savings Program ACOs. We did not previously address how 
the VM will be applied to these TINs.
    Beginning with the CY 2017 payment adjustment period, we propose 
that TINs that participate in multiple Shared Savings Program ACOs in 
the applicable

[[Page 41898]]

performance period would receive the quality composite score of the ACO 
that has the highest numerical quality composite score. For this 
determination, we will only consider the quality data of an ACO that 
completes quality reporting under the Shared Savings Program. We 
propose to apply this policy in situations where the VM is determined 
based on quality-tiering or the ACO's failure to successfully report 
quality data as required by the Shared Savings Program. Below are 
several examples to illustrate the proposal:

    Example A:  TIN A participates in ACO 1 and ACO 2 in the 2015 
performance period. ACO 1 fails to complete quality reporting under 
the Shared Savings Program as required under Sec.  425.504(a)(1), 
and therefore, the ACO 1 participants would be classified as 
Category 2 and subject to the automatic downward adjustment under 
the VM. ACO 2 completes quality reporting as required under Sec.  
425.504(a)(1), and applying the quality-tiering methodology as 
described at Sec.  414.1210(b)(2)(i)(B) using ACO 2's quality data, 
the TIN would be classified as average quality. Under our proposal, 
TIN A would receive a neutral (0 percent) VM in 2017 based on a 
quality composite determined using ACO 2's quality reporting and a 
cost composite of average.
    Example B:  TIN B participates in ACO 2 and ACO 3 in the 2015 
performance period. ACO 2 and ACO 3 complete quality reporting under 
the Shared Savings Program, and ACO 3 has a higher numerical quality 
composite score than ACO 2. Under our proposal, TIN B would receive 
a VM in 2017 based on a quality composite determined using ACO 3's 
quality reporting and a cost composite of average.
    Example C:  TIN C participates in ACO 1 and ACO 4 in the 2015 
performance period. Both ACO 1 and ACO 4 fail to complete quality 
reporting under the Shared Savings Program. TIN C would still be 
classified as Category 2 and would receive an automatic downward 
adjustment because both ACOs failed to report. This scenario is not 
affected by our proposal.

    Under the VM, any TIN's quality composite score must be at least 
one standard deviation away from and statistically significantly 
different from the mean, for it to be classified as other than average 
quality (77 FR 69325). Because of this requirement, it is possible for 
any TIN's quality composite to be categorized as ``average,'' due to 
its being either within one standard deviation of the mean or not 
statistically significant from it. Similarly, it is possible that 
including performance data for the ACO with the higher quality 
composite score in a given TIN's VM calculation would not result in a 
higher VM adjustment percentage than would inclusion of data from 
another ACO with a lower quality composite score that is also at least 
1 standard deviation away from the mean. Given the requirement that a 
Shared Savings Program ACO must have at least 5,000 assigned 
beneficiaries, we do not expect that this situation is likely to occur, 
though it is possible. The following example illustrates how this 
situation could occur:

    Example D:  TIN B participates in ACO 2 and ACO 3 in the 2015 
performance period. ACO 2 completes quality reporting and the 
quality composite score using ACO 2's quality data is two standard 
deviations below the mean but is not statistically below the mean, 
in the sense of being both below the mean and statistically 
significantly different from the mean. Under Sec.  414.1275(b)(1), 
the quality composite score would be classified as average because 
it is not statistically below the mean. ACO 3 completes quality 
reporting and the quality composite score using ACO 3's quality data 
is one and a half standard deviations below the mean and, is 
statistically significantly below the mean. Under Sec.  
414.1275(b)(1), the quality composite score would be classified as 
low. The quality composite score that is one and a half standard 
deviations below the mean is numerically higher than the quality 
composite score that is two standard deviations below the mean, so 
under our proposal, TIN B would receive a negative VM in 2017 based 
on a quality composite determined using ACO 3's quality reporting 
and a cost composite of average.

    We believe our proposed approach is appropriate because it is 
straightforward for TINs participating in multiple Shared Savings 
Program ACOs to understand. The proposed policy is transparent and 
would allow Shared Savings Program ACO participant TINs the ability to 
compare the performance of the highest-performing ACO in which they 
participate to national benchmarks. Given that we did not make 
proposals for applying the VM to these TINs prior to the start of the 
2015 performance period for the 2017 VM, we do not believe it would be 
fair to give ACO participants in multiple Shared Savings Program ACOs 
the lower of the quality composite scores for which they may have been 
eligible. We propose to make corresponding changes to Sec.  
414.1210(b)(2). We are seeking comment on this proposal.
    In developing this proposed policy, we considered several 
alternative options. We considered proposing that the above policy 
would apply as long as all ACOs in which the TIN participates complete 
reporting under the Shared Savings Program. If one of the ACOs failed 
to report, the TIN would be categorized as Category 2 even though it 
participated in another ACO that successfully reported. We believe this 
would create unnecessary complexity and would not be fair to TINs that 
were not made aware of this policy prior to the start of the CY 2015 
performance period for the 2017 payment adjustment period. We also 
considered proposing a policy under which the TIN would be required to 
indicate which ACO it wanted to be associated with for purposes of the 
VM. We did not make this proposal because we believed it created 
additional operational complexity for the TINs and us, and would put 
the TIN in a position of having to predict which ACO would perform 
better under the VM, which we do not believe would be appropriate. We 
welcome feedback on these alternatives we considered.
(2) Application of VM to Participant TINs in Shared Savings Program 
ACOs That Also Include EPs Who Participate in Innovation Center Models
    Under the Shared Savings Program statute and regulations, ACO 
participants may not participate in another Medicare initiative that 
involves shared savings payments (Sec.  425.114(b)). However, there are 
Medicare initiatives, including models authorized by the Innovation 
Center, that do not involve shared savings payments, and in some cases 
a TIN that is a Shared Savings Program participant may also include EPs 
who participate in an Innovation Center model. Because the Shared 
Savings Program identifies participants by a TIN and many Innovation 
Center models allow some EPs under a TIN to participate in the model 
while other EPs under that TIN do not, we believe it is more 
appropriate to apply the VM policies finalized for Shared Savings 
Program participants to these TINs than to apply the policies for 
Innovation Center models proposed in section III.M.4.e. of this 
proposed rule. We are proposing that, beginning with the 2017 payment 
adjustment period for the VM, we would determine the VM for groups and 
solo practitioners (as identified by TIN) who participated in a Shared 
Savings Program ACO in the performance period in accordance with the VM 
policies for Shared Savings Program participants under Sec.  
414.1210(b)(2), regardless of whether any EPs under the TIN also 
participated in an Innovation Center model during the performance 
period. We propose to make corresponding changes to Sec.  
414.1210(b)(2)(i)(E). We are seeking comment on this proposal.
(3) Application of VM to Participant TINs in Shared Savings Program 
ACOs That Do Not Complete Quality Reporting
    In the CY 2015 PFS proposed rule, we did not specifically address 
the scenario in which a Shared Savings Program ACO does not 
successfully report on

[[Page 41899]]

quality as required under the Shared Savings Program during the 
performance period for the VM. We clarified in the CY 2015 PFS final 
rule with comment period that we intended to adopt for groups and solo 
practitioners that participate in a Shared Savings Program ACO the same 
policy that is generally applicable to groups and solo practitioners 
that fail to satisfactorily report or participate under PQRS and thus 
fall in Category 2 and are subject to an automatic downward adjustment 
under the VM in CY 2017 (79 FR 67946). We stated that, consistent with 
the application of the VM to other groups and solo practitioners that 
report under PQRS, if the ACO does not successfully report quality data 
as required by the Shared Savings Program under Sec.  425.504, all 
groups and solo practitioners participating in the ACO will fall in 
Category 2 for the VM, and therefore, will be subject to a downward 
payment adjustment. We finalized this policy for the 2017 payment 
adjustment period for the VM at Sec.  414.1210(b)(2)(i)(C). We propose 
to continue this policy in the CY 2018 payment adjustment period for 
all groups and solo practitioners subject to the VM, including groups 
composed of nonphysician EPs and solo practitioners who are 
nonphysician EPs. We propose corresponding revisions to Sec.  
414.1210(b)(2)(i)(D). This policy is consistent with our policy for 
groups and solo practitioners who are subject to the VM and do not 
participate in the Shared Savings Program, and we believe it would 
further encourage quality reporting. We are seeking comment on this 
proposal.
(4) Application of an Additional Upward Payment Adjustment to High 
Quality Participant TINs in Shared Savings Program ACOs for Treating 
High-Risk Beneficiaries
    In the CY 2015 PFS final rule with comment period, we finalized in 
the regulation text at Sec.  414.1275(d)(2) that groups and solo 
practitioners that are classified as high quality/low cost, high 
quality/average cost, or average quality/low cost under the quality-
tiering methodology for the CY 2017 payment adjustment period would 
receive an additional upward payment adjustment of +1.0x, if their 
attributed patient population has an average beneficiary risk score 
that is in the top 25 percent of all beneficiary risk scores 
nationwide. We are proposing a similar policy for the CY 2018 payment 
adjustment period as discussed in section III.M.4.f. of this proposed 
rule.
    Beginning in the CY 2017 payment adjustment period, we propose to 
apply a similar additional upward adjustment to groups and solo 
practitioners that participated in high performing Shared Savings 
Program ACOs that cared for high-risk beneficiaries (as evidenced by 
the average HCC risk score of the ACO's attributed beneficiary 
population as determined under the VM methodology) during the 
performance period. We finalized in the CY 2015 PFS final rule with 
comment period that the quality composite score for TINs that 
participated in Shared Savings Program ACOs during the performance 
period will be calculated using the quality data reported by the ACO 
through the ACO GPRO Web Interface and the ACO all-cause hospital 
readmission measure, and the cost composite will be classified as 
``average'' (79 FR 67941 through 67947). We believe this policy would 
be appropriate because attribution on the quality measures used in the 
VM calculation for Shared Savings Program ACO TINs is done at the ACO 
level. Further, under the Shared Savings Program ACO participants are 
responsible for coordinating the care of beneficiaries assigned to the 
ACO, so it is appropriate to determine whether those beneficiaries are 
in the highest risk category, at the ACO level. Therefore, beginning in 
the CY 2017 payment adjustment period, we propose to apply an 
additional upward payment adjustment of +1.0x to Shared Savings Program 
ACO participant TINs that are classified as ``high quality'' under the 
quality-tiering methodology, if the attributed patient population of 
the ACO in which the TINs participated during the performance period 
has an average beneficiary risk score that is in the top 25 percent of 
all beneficiary risk scores nationwide as determined under the VM 
methodology. We propose corresponding revisions to the regulation text 
at Sec.  414.1210(b)(2). We are seeking comment on this proposal.
    In the CY 2015 PFS proposed rule (79 FR 40500), we proposed that 
groups and solo practitioners participating in ACOs under the Shared 
Savings Program would be eligible for the additional upward payment 
adjustment +1.0x for caring for high-risk beneficiaries; however, the 
proposal was not finalized in the CY 2015 PFS final rule with comment 
period. We note that our proposal above is based on using the ACO's 
assigned beneficiary population; whereas, our proposal in the CY 2015 
PFS Proposed Rule was based on using the group or solo practitioner's 
attributed beneficiary population.
e. Application of the VM to Physicians and Nonphysician EPs That 
Participate in the Pioneer ACO Model, the CPC Initiative, or Other 
Similar Innovation Center Models or CMS Initiatives
    We established a policy in the CY 2013 PFS final rule with comment 
period (77 FR 69313) to not apply the VM in the CY 2015 and CY 2016 
payment adjustment periods to groups of physicians that participate in 
Shared Savings Program ACOs, the Pioneer ACO Model, the Comprehensive 
Primary Care (CPC) initiative, or other similar Innovation Center 
models or CMS initiatives. We stated in the CY 2014 PFS final rule with 
comment period (78 FR 74766) that from an operational perspective, we 
will apply this policy to any group of physicians that otherwise would 
be subject to the VM, if one or more physician(s) in the group 
participate(s) in one of these programs or initiatives during the 
relevant performance period (CY 2013 for the CY 2015 payment adjustment 
period, and CY 2014 for the CY 2016 payment adjustment period). In the 
CY 2015 PFS final rule with comment period (79 FR 67949), we finalized 
a policy that for solo practitioners and groups subject to the VM with 
at least one EP participating in the Pioneer ACO Model or CPC 
Initiative during the performance period, we will classify the cost 
composite as ``average cost'' and the quality composite as ``average 
quality'' for the CY 2017 payment adjustment period. We did not 
finalize a policy for any payment adjustment period after CY 2017. We 
believed this policy was appropriate because it would enable groups and 
solo practitioners participating in these Innovation Center models to 
focus on the goals of the models and would minimize the risk of 
potentially creating conflicting incentives with regard to the 
evaluation of the quality and cost of care furnished for the VM and 
evaluation of cost and quality under these models. In addition, given 
that these models include groups in which some EPs participate in the 
model and others do not participate, it is challenging to meaningfully 
evaluate the quality of care furnished by these groups.
(1) Application of the VM to Solo Practitioners and Groups With EPs Who 
Participate in the Pioneer ACO Model and CPC Initiative
    We received many comments on the proposals made in the CY 2015 PFS 
proposed rule indicating that we should exempt Pioneer ACO Model and 
CPC Initiative participants from the VM. As we noted in response to 
comments in

[[Page 41900]]

the CY 2015 final rule with comment period (79 FR 67947), a few 
commenters also suggested that the application of the VM to Innovation 
Center initiatives should be waived under section 1115A of the Act. In 
considering potential policy options to include in this proposed rule, 
we agree with the commenters that it would be appropriate to use the 
waiver authority with regard to the Pioneer ACO Model and CPC 
Initiative. Accordingly, under section 1115A(d)(1) of the Act, we are 
proposing to waive application of the VM as required by section 1848(p) 
of the Act for groups and solo practitioners, as identified by TIN, if 
at least one EP who billed for PFS items and services under the TIN 
during the applicable performance period for the VM participated in the 
Pioneer ACO Model or CPC Initiative during the performance period. This 
policy, as well as the use of the waiver authority under section 
1115A(d)(1) for this purpose, will no longer apply in CY 2019 when the 
Value Modifier program is incorporated into the new Merit-based 
Incentive Payment System. We believe a waiver is necessary to test 
these models because their effectiveness would be impossible to isolate 
from the confounding variables of quality and cost metrics and 
contrasting payment incentives utilized under the VM.
     CPC Initiative: CPC practice sites are assessed on and 
have the opportunity to receive shared savings based on their quality 
and cost performance. CPC practice sites are assessed on quality 
measures at the practice site level and, for utilization measures, at 
the regional level (all practice sites within a CPC region), rather 
than at the TIN level as for the VM. The cost evaluation methodology 
used by the CPC Initiative is significantly different from the cost 
measures and benchmarks used to calculate the cost composite for the 
VM. In addition, it is difficult to evaluate the quality of care 
furnished by groups that participate in the CPC Initiative in order to 
calculate a quality composite for the VM because the CPC Initiative 
includes ``split TINs'' (groups where some eligible professionals in 
the group participate in the model while others do not participate), 
whereas the VM is applied to an entire TIN. As we noted in the CY 2015 
PFS proposed rule (79 FR 40501), we do not believe that we can 
reasonably use the quality data submitted under the CPC Initiative for 
purposes of calculating a quality composite score under the VM. For 
these reasons, we believe it is necessary to waive the VM for purposes 
of testing the CPC Initiative. We believe a waiver would allow CPC 
model participants to focus on the aims of and measures assessed in the 
model, diminish the potential for methodological differences between 
the model and the VM, and would avoid the potential for inequitable 
comparisons of cost and quality that could arise as a result of 
differences between VM and CPC.
     Pioneer ACO Model: The Pioneer ACO Model combines two-
sided financial risk with quality outcomes. Participants in the Pioneer 
ACO Model are required to report quality, and their savings or loss 
determination is affected by their quality score. Similar to the CPC 
Initiative, the Pioneer ACO Model includes split TINs, and we do not 
believe that we can reasonably use the quality data reported under the 
Pioneer ACO Model for purposes of calculating a quality composite score 
for the VM. The Pioneer ACO Model's methodology for evaluating costs is 
also significantly different from the VM methodology, which could 
create conflicting incentives for model participants. We believe a 
waiver of the VM is necessary to test the Pioneer ACO Model for these 
reasons. We also note that Pioneer ACOs are in their final performance 
years of the Model. Changing the quality component of the Model at this 
stage would confound multiple variables of quality and cost metrics 
within the model.
    We believe we could have waived application of the VM for these 
models with regard to the CY 2017 payment adjustment period, and we are 
proposing the waiver would apply beginning with the CY 2017 payment 
adjustment period. We note that in practice, this proposal would not 
affect a TIN's payments differently as compared with the current policy 
for the CY 2017 payment adjustment period. A TIN that is classified as 
``average cost'' and ``average quality'' would receive a neutral (0 
percent) adjustment, and thus its payments during the CY would not 
increase or decrease as a result of the application of the VM. We also 
note that we have established a policy to apply the VM at the TIN level 
(77 FR 69308-69310), and as a result, this proposed waiver would affect 
the payments for items and services billed under the PFS for the CY 
2017 and 2018 payment adjustment periods for the EPs who participate in 
the Pioneer ACO Model and the CPC Initiative during the performance 
period, as well as the EPs who do not participate in one of these 
models but bill under the same TIN as the EPs who do participate. We 
are proposing to revise Sec.  414.1210(b)(3) to reflect these 
proposals. We are seeking comment on these proposals. We continue to 
explore how to address practices that only have some physicians 
participating in a model and plan to seek stakeholder input on these 
'split TIN' practices and related issues in an upcoming Request for 
Information.
(2) Application of the VM to Solo Practitioners and Groups With EPs Who 
Participate in Similar Innovation Center Models
    In the CY 2015 PFS final rule with comment period (79 FR 67949-
67950), we finalized criteria that we will use to determine if future 
Innovation Center models or CMS initiatives are ``similar'' to the 
Pioneer ACO Model and CPC Initiative. We finalized that we will apply 
the same VM policies adopted for participants in the Pioneer ACO Model 
and CPC Initiative to groups and solo practitioners who participate in 
similar Innovation Center models and CMS initiatives. The criteria are: 
(1) The model or initiative evaluates the quality of care and/or 
requires reporting on quality measures; (2) the model or initiative 
evaluates the cost of care and/or requires reporting on cost measures; 
(3) participants in the model or initiative receive payment based at 
least in part on their performance on quality measures and/or cost 
measures; (4) potential for conflict between the methodologies used for 
the VM and the methodologies used for the model or initiative; or (5) 
other relevant factors specific to a model or initiative. We noted that 
a model or initiative would not have to satisfy or address all of these 
criteria to be considered a similar model or initiative.
    We are proposing that in the event we finalize our proposal to 
waive application of the VM under section 1115A(d)(1) of the Act for 
the Pioneer ACO Model and CPC Initiative as discussed in the preceding 
section, we would also waive application of the VM for Innovation 
Center models that we determine are similar models based on the 
criteria above and for which we determine such a waiver is necessary 
for purposes of testing the model in accordance with section 
1115A(d)(1) of the Act. For models that we determine are similar and 
require a waiver, we would waive application of the VM as required by 
section 1848(p) of the Act for groups and solo practitioners, as 
identified by TIN, if at least one EP who billed for PFS items and 
services under the TIN during the applicable performance period for the 
VM participated in the model during the performance period. We again 
note that this policy and use of the waiver

[[Page 41901]]

authority under section 1115A(d)(1) would sunset prior to CY 2019 when 
the VM is replaced by MIPS. We would publish a notice of the waiver in 
the Federal Register and also provide notice to participants in the 
model through the methods of communication that are typically used for 
the model. We are proposing to revise Sec.  414.1210(b)(4) to reflect 
this proposal. We are seeking comment on this proposal.
(a) Application of the VM to Solo Practitioners and Groups With EPs Who 
Participate in the Comprehensive ESRD Care Initiative, Oncology Care 
Model, and the Next Generation ACO Model
    There are several new Innovation Center models starting in 2015 or 
2016, including the Comprehensive ESRD Care Initiative, Oncology Care 
Model, and the Next Generation ACO Model. We have evaluated these 
models based on the criteria for ``similar'' models and initiatives 
described in the preceding section and determined that they are similar 
to the Pioneer ACO Model and CPC Initiative. We believe a waiver of the 
VM under section 1115A(d)(1) of the Act is necessary to test these 
models. These new models may include groups in which some EPs 
participate in the model and others do not, which will make it 
challenging to meaningfully calculate the quality and cost composite 
for these TINs needed for the application of the VM. The following 
bullets describe these models, including ways in which these models are 
similar to the Pioneer ACO Model and the CPC Initiative, and provide a 
brief explanation of our belief that a waiver is necessary to test the 
models:
     The Next Generation ACO Model: The Next Generation ACO 
Model builds upon CMS ACO initiatives with ACOs taking on even greater 
financial risk than they have in the Pioneer ACO Model. Next Generation 
ACOs may receive waivers related to coverage for telehealth services, 
post-discharge home visits, and skilled nursing without prior 
hospitalization. The first performance period for this model is 2016, 
and we want to minimize conflicting incentives with regard to the 
evaluation of the quality and cost of care furnished for the VM and 
evaluation of cost and quality under this model.
     The Oncology Care Model: The Oncology Care Model (OCM) is 
an episode-based model that provides an incentive for participating 
practices to reduce the total cost of care for 6-month episodes 
triggered by either an initial chemotherapy administration claim or 
initial Part D chemotherapy claim. The first performance period of this 
model will start in 2016. OCM will use a set of measures that are 
specific to oncology and may not be included in existing federal 
quality reporting programs, such as the PQRS. Additionally, OCM will 
use a quarterly reporting period that is different than the calendar 
year performance period for the VM. Due to the specialty-specific 
measure set and alternative reporting period, we believe that waiving 
the VM would minimize conflicting incentives between programs with 
regard to the evaluation of quality of cost and care.
     The Comprehensive ESRD Care Initiative: The Comprehensive 
ESRD Care (CEC) Initiative is planning to start an 18-month performance 
period in August 2015 and is seeking to use the authority under section 
1899(b)(3)(D) of the Act to utilize alternative measures, namely the 
CEC Initiative quality measure set, to serve as satisfactory reporting 
for the PQRS program beginning in CY 2016. The use of the alternative 
CEC measure set would result in insufficient PQRS quality data to 
reliably calculate a quality composite score for the VM. While the CEC 
Initiative may have TINs that include non-participants that choose to 
report separately to the PQRS program, their PQRS data may not be 
representative of the TIN, and therefore we believe it would be 
inappropriate for calculating the VM. As with other CMMI models, we 
believe waiving the application of the VM would minimize conflicting 
incentives with regard to the evaluation of the quality and cost of 
care.
    We are proposing that in the event we finalize our proposal to 
waive application of the VM as required by section 1848(p) of the Act 
under section 1115A(d)(1) of the Act for the Pioneer ACO Model and CPC 
Initiative, we would also waive application of the VM for the Next 
Generation ACO Model, the Oncology Care Model, and the Comprehensive 
ESRD Care Initiative as similar models. Specifically, we would waive 
application of the VM for the CY 2018 payment adjustment period for 
groups and solo practitioners, as identified by TIN, if at least one EP 
who billed for PFS items and services under the TIN during the CY 2016 
performance period for the VM participated in the Next Generation ACO 
Model, the Oncology Care Model, or the Comprehensive ESRD Care 
Initiative during the CY 2016 performance period. We are seeking 
comment on this proposal.
(b) Application of VM to Similar CMS Initiatives That Are Not 
Innovation Center Models
    In the CY 2015 PFS final rule with comment period (79 FR 67949-
67950), we finalized criteria that we will use to determine if future 
Innovation Center models or CMS initiatives are ``similar'' to the 
Pioneer ACO Model and CPC Initiative. We finalized that we will apply 
the same VM policies adopted for participants in the Pioneer ACO Model 
and CPC Initiative to groups and solo practitioners who participate in 
similar Innovation Center models and CMS initiatives. We are proposing 
in section III.M.4.e.1. of this proposed rule to waive the VM for solo 
practitioners and groups with at least one EP participating in the 
Pioneer ACO Model or CPC Initiative under section 1115A(d)(1) of the 
Act. The waiver authority under section 1115A(d)(1) of the Act does not 
apply to CMS initiatives that are not Innovation Center models. 
Therefore, in the event that we finalize the waiver, we propose to 
remove the references to ``CMS initiatives'' from Sec.  414.1210(b)(4). 
To the extent that any CMS initiatives that are not Innovation Center 
models would require alternative policies for application of the VM, we 
would address those policies through future rulemaking. We are seeking 
comment on this proposal.
f. Payment Adjustment Amount
    Section 1848(p) of the Act does not specify the amount of payment 
that should be subject to the adjustment for the VM; however, section 
1848(p)(4)(C) of the Act requires the VM be implemented in a budget 
neutral manner. Budget neutrality means that payments will increase for 
some groups and solo practitioners based on high performance and 
decrease for others based on low performance, but the aggregate 
expected amount of Medicare spending in any given year for physician 
and nonphysician EP services paid under the Medicare PFS will not 
change as a result of application of the VM.
    In the CY 2015 PFS final rule with comment period (79 FR 67952 to 
67954), we finalized that we will apply a -2.0 percent VM to groups 
with between 2 to 9 EPs and physician solo practitioners that fall in 
Category 2 for the CY 2017 VM. We also finalized that the maximum 
upward adjustment under the quality-tiering methodology in CY 2017 for 
groups with between 2 to 9 EPs and physician solo practitioners that 
fall in Category 1 will be +2.0x if a group or solo practitioner is 
classified as high quality/low cost and +1.0x if a group or solo 
practitioner is classified as either average quality/low cost or high 
quality/average cost. These groups and solo practitioners will be held 
harmless from any downward adjustments under the quality-tiering 
methodology in CY 2017,

[[Page 41902]]

if classified as low quality/high cost, low quality/average cost, or 
average quality/high cost.
    For groups with 10 or more EPs, we finalized for CY 2017 that we 
will apply a -4.0 percent VM to a group that falls in Category 2. In 
addition, we finalized that we will set the maximum downward adjustment 
under the quality-tiering methodology in CY 2017 to -4.0 percent for 
groups with 10 or more EPs classified as low quality/high cost and set 
the adjustment to -2.0 percent for groups classified as either low 
quality/average cost or average quality/high cost. We finalized that we 
will also set the maximum upward adjustment under the quality-tiering 
methodology in CY 2017 to +4.0x for groups with 10 or more EPs 
classified as high quality/low cost and set the adjustment to +2.0x for 
groups classified as either average quality/low cost or high quality/
average cost. We also finalized that we will continue to provide an 
additional upward payment adjustment of +1.0x to groups with two or 
more EPs and solo practitioners that care for high-risk beneficiaries 
(as evidenced by the average HCC risk score of the attributed 
beneficiary population).
    As noted in section III.M.4.b. of this proposed rule, under section 
1848(p)(4)(B)(iii) of the Act, as amended by section 101(b)(3) of 
MACRA, the VM shall not be applied to payments for items and services 
furnished on or after January 1, 2019. Section 1848(q) of the Act, as 
added by section 101(c) of MACRA, establishes the Merit-based Incentive 
Payment System (MIPS) that shall apply to payments for items and 
services furnished on or after January 1, 2019. To maintain stability 
in the payment adjustment amounts applicable under the VM as we 
transition to the MIPS in 2019, we propose to maintain the payment 
adjustment amounts in CY 2018 that we finalized for the CY 2017 VM in 
the CY 2015 PFS final rule with comment period for groups with 2 or 
more EPs and physician solo practitioners, with the exception discussed 
in section III.M.4.c. of this proposed rule that in CY 2018 we propose 
to apply both the upward and downward adjustments under the quality-
tiering methodology to groups with 2 to 9 EPs and physician solo 
practitioners that are in Category 1.
    For CY 2018, we propose to apply a -4.0 percent VM to physicians, 
PAs, NPs, CNSs, and CRNAs in groups with 10 or more EPs that fall in 
Category 2. In addition, we propose to set the maximum downward 
adjustment under the quality-tiering methodology in CY 2018 to -4.0 
percent for physicians, PAs, NPs, CNSs, and CRNAs in groups with 10 or 
more EPs classified as low quality/high cost and to set the adjustment 
to -2.0 percent for groups classified as either low quality/average 
cost or average quality/high cost. We also propose to set the maximum 
upward adjustment under the quality-tiering methodology in CY 2018 to 
+4.0x for physicians, PAs, NPs, CNSs, and CRNAs in groups with 10 or 
more EPs classified as high quality/low cost and to set the adjustment 
to +2.0x for groups classified as either average quality/low cost or 
high quality/average cost. Table 33 shows the proposed quality-tiering 
payment adjustment amounts for CY 2018 for physicians, PAs, NPs, CNSs, 
and CRNAs in groups with 10 or more EPs. These proposed payment amounts 
would be applicable to all of the physicians, NPs, PAs, CNSs, and CRNAs 
who bill under a group's TIN in CY 2018.
    For CY 2018, we propose to apply a -2.0 percent VM to physicians, 
PAs, NPs, CNSs, and CRNAs in groups with between 2 to 9 EPs and 
physician solo practitioners that fall in Category 2. In addition, we 
propose to set the maximum downward adjustment under the quality-
tiering methodology in CY 2018 to -2.0 percent for physicians, PAs, 
NPs, CNSs, and CRNAs in groups with between 2 to 9 EPs and physician 
solo practitioners classified as low quality/high cost and to set the 
adjustment to -1.0 percent for groups and physciain solo practitioners 
classified as either low quality/average cost or average quality/high 
cost. We also propose to set the maximum upward adjustment under the 
quality-tiering methodology in CY 2018 to +2.0x for physicians, PAs, 
NPs, CNSs, and CRNAs in groups with between 2 to 9 EPs and physician 
solo practitioners classified as high quality/low cost and to set the 
adjustment to +1.0x for groups and physician solo practitioners 
classified as either average quality/low cost or high quality/average 
cost. Table 34 shows the proposed quality-tiering payment adjustment 
amounts for CY 2018 for physicians, PAs, NPs, CNSs, and CRNAs in groups 
with between 2 to 9 EPs and physician solo practitioners. These 
proposed payment adjustment amounts would be applicable to all of the 
physicians, NPs, PAs, CNSs, and CRNAs who bill under a group's TIN and 
to physician solo practitioners in CY 2018.
    For CY 2018, we propose to apply a -2.0 percent VM to PAs, NPs, 
CNSs, and CRNAs in groups that consist of nonphysician EPs and solo 
practitioners who are PAs, NPs, CNSs, and CRNAs that fall in Category 2 
for the CY 2018 VM. As proposed in section III.M.4.b. of this proposed 
rule, the nonphysician EPs to which the CY 2018 VM payment adjustments 
would apply are PAs, NPs, CNSs, and CRNAs. We also propose that the 
maximum upward adjustment under the quality-tiering methodology in CY 
2018 for PAs, NPs, CNSs, and CRNAs in groups that consist of 
nonphysician EPs and solo practitioners who are PAs, NPs, CNSs, and 
CRNAs that fall in Category 1 would be +2.0x if a group or solo 
practitioner is classified as high quality/low cost and +1.0x if a 
group or solo practitioner is classified as either average quality/low 
cost or high quality/average cost. As established in the CY 2015 PFS 
final rule with comment period (79 FR 67937), these groups and solo 
practitioners will be held harmless from any downward adjustments under 
the quality-tiering methodology in CY 2018, if classified as low 
quality/high cost, low quality/average cost, or average quality/high 
cost. Table 35 shows the proposed quality-tiering payment adjustment 
amounts for CY 2018 for PAs, NPs, CNSs, and CRNAs in groups that 
consist of nonphysician EPs and PAs, NPs, CNSs, and CRNAs who are solo 
practitioners. These groups and solo practitioners will have had less 
time to become familiar with the QRURs since they will receive QRURs 
for the first time in the Fall of 2015; whereas, groups consisting of 
both physicians and nonphysician EPs and physician solo practitioners 
received QRURs in the Fall of 2014 or in previous years, which enable 
them to understand and improve performance on the measures used in the 
VM. We believe our proposed approach would reward groups and solo 
practitioners that provide high-quality/low-cost care. In addition, a 
smaller increase in the maximum amount of payment at risk would be 
consistent with our stated focus on gradual implementation of the VM.
    We also propose to continue to provide an additional upward payment 
adjustment of +1.0x to groups and solo practitioners that are eligible 
for upward adjustments under the quality-tiering methodology and have 
average beneficiary risk score that is in the top 25 percent of all 
beneficiary risk scores. Lastly, we propose to revise Sec.  414.1270, 
and Sec.  414.1275(c)(4) and (d)(3) to reflect the proposed changes to 
the payment adjustments under the VM for the CY 2018 payment adjustment 
period. We seek comments on all of these proposals.

[[Page 41903]]



    Table 33--CY 2018 VM Amounts for the Quality-Tiering Approach for
  Physicians, PAs, NPs, CNSs, and CRNAs in Groups With Ten or More EPS
------------------------------------------------------------------------
                                               Low     Average    High
               Cost/quality                  quality   quality   quality
------------------------------------------------------------------------
Low cost..................................     +0.0%   * +2.0x   * +4.0x
Average cost..............................     -2.0%     +0.0%   * +2.0x
High cost.................................     -4.0%     -2.0%     +0.0%
------------------------------------------------------------------------
* Groups eligible for an additional +1.0x if reporting PQRS quality
  measures and average beneficiary risk score is in the top 25 percent
  of all beneficiary risk scores, where `x' represents the upward
  payment adjustment factor.


    TABLE 34--CY 2018 VM Amounts for the Quality-Tiering Approach for
   Physicians, PAs, NPs, CNSs, and CRNAs in Groups With 2 to 9 EPs and
                      Physician Solo Practitioners
------------------------------------------------------------------------
                                               Low     Average    High
               Cost/quality                  quality   quality   quality
------------------------------------------------------------------------
Low cost..................................     +0.0%   * +1.0x   * +2.0x
Average cost..............................     -1.0%     +0.0%   * +1.0x
High cost.................................     -2.0%     -1.0%     +0.0%
------------------------------------------------------------------------
* Groups and solo practitioners eligible for an additional +1.0x if
  reporting PQRS quality measures and average beneficiary risk score is
  in the top 25 percent of all beneficiary risk scores, where `x'
  represents the upward payment adjustment factor.


 Table 35--CY 2018 VM Amounts for the Quality-Tiering Approach for PAs,
 NPS, CNSs, and CRNAs in Groups Consisting of Nonphysician EPs and PAs,
             NPs, CNSs, and CRNAs Who Are Solo Practitioners
------------------------------------------------------------------------
                                               Low     Average    High
               Cost/quality                  quality   quality   quality
------------------------------------------------------------------------
Low cost..................................     +0.0%    *+1.0x    *+2.0x
Average cost..............................     +0.0%     +0.0%    *+1.0x
High cost.................................     +0.0%     +0.0%     +0.0%
------------------------------------------------------------------------
* Groups and solo practitioners are eligible for an additional +1.0x if
  reporting PQRS quality measures and average beneficiary risk score is
  in the top 25 percent of all beneficiary risk scores, where `x'
  represents the upward payment adjustment factor.

    Consistent with the policy adopted in the CY 2013 PFS final rule 
with comment period (77 FR 69324 through 69325), we note that the 
estimated funds derived from the application of the downward 
adjustments to groups and solo practitioners in Category 1 and Category 
2 would be available to all groups and solo practitioners eligible for 
upward adjustments under the VM. Consequently, the upward payment 
adjustment factor (``x'' in Tables 33, 34, and 34) would be determined 
after the performance period has ended based on the aggregate amount of 
downward payment adjustments.
g. Finality of the VM Upward Payment Adjustment Factor
    Beginning with the CY 2015 VM (77 FR 69324 through 69325), we 
established that the upward payment adjustment factor (``x'') would be 
determined after the performance period has ended based on the 
aggregate amount of downward payment adjustments. We are also proposing 
a similar policy for the CY 2018 VM as discussed in section III.M.4.h. 
of this proposed rule. In the interest of providing EPs that are 
eligible for an upward payment adjustment under the VM with finality, 
and to minimize the cost of reprocessing claims, we propose that we 
would not recalculate the upward payment adjustment factor for an 
applicable payment adjustment period after the adjustment factor is 
made public, unless CMS determines that a significant error was made in 
the calculation of the adjustment factor. We seek public comment on 
this proposal.
h. Performance Period
    In the CY 2014 PFS final rule with comment period (78 FR 74772), we 
adopted a policy that we will use performance on quality and cost 
measures during CY 2015 to calculate the VM that would apply to items 
and services for which payment is made under the PFS during CY 2017. 
Likewise, we propose to use CY 2016 as the performance period for the 
VM adjustments that will apply during CY 2018. Accordingly, we propose 
to add Sec.  414.1215(d) to indicate that the performance period is CY 
2016 for VM adjustments made in the CY 2018 payment adjustment period. 
We seek comment on this proposal.
i. Quality Measures
    In the CY 2015 PFS final rule with comment period (79 FR 67956), we 
aligned our policies for the VM for CY 2017 with the PQRS group 
reporting mechanisms available to groups in CY 2015 and the PQRS 
reporting mechanisms available to individual EPs in CY 2015, such that 
data that groups submit for quality reporting purposes through any of 
the PQRS group reporting mechanisms in CY 2015 and the data that 
individual EPs submit through any of the individual PQRS reporting 
mechanisms in CY 2015 will be used for calculating the quality 
composite under the quality-tiering approach for the VM for CY 2017. 
Moreover, we finalized the use of all of the quality measures that are 
available to be reported under these various PQRS reporting mechanisms 
to calculate a group or solo practitioner's VM in CY 2017, to the 
extent that a group (or individual EPs in the group, in the case of the 
``50 percent option'') or solo practitioner submits data on these 
measures (79 FR 67956). We also noted that, groups with two or more EPs 
can elect to include the patient experience of care measures collected 
through the PQRS CAHPS survey for CY 2015 in their VM for CY 2017. We 
finalized our policy to continue to include the three outcome measures 
in Sec.  414.1230 in the quality measures used for the VM in CY 2017. 
These measures are: (1) a composite of rates of potentially preventable 
hospital admissions for heart failure, chronic obstructive pulmonary 
disease, and diabetes; (2) a composite rate of potentially preventable 
hospital admissions for dehydration, urinary tract infections, and 
bacterial pneumonia; and (3) rates of an all-cause hospital 
readmissions measure (77 FR 69315).
    In Sec.  414.1270(c)(4), we finalized that for groups that are 
assessed under the ``50 percent option'' for the CY 2017 VM, where all 
of the EPs in the group who report as individuals under PQRS do so by 
satisfactorily participating in a PQRS QCDR in CY 2015, and we are 
unable to receive quality performance data for those EPs, then we will 
classify the group's quality composite score as ``average'' under the 
quality-tiering methodology. Because this is the same policy as for the 
CY 2016 payment adjustment period, we also made a conforming revision 
to Sec.  414.1270(b)(4) (79 FR 67956). Moreover, we finalized a policy 
that, for groups that are assessed under the ``50 percent option'' 
where some EPs in the group report data using a QCDR and we are unable 
to obtain the data, but other EPs in the group report data using the 
other PQRS reporting mechanisms for individuals, then we will calculate 
the group's score based on the reported performance data that we obtain 
through those other PQRS reporting mechanisms. We finalized a policy 
that, beginning with the CY 2014 performance period, measures reported 
through a PQRS QCDR that are new to PQRS will not be included in the 
quality composite for the VM until such time as we have historical data 
to calculate benchmarks for them. Once we have historical data from 
measures submitted via QCDRs, the benchmark for quality of care 
measures will be the national mean for the measure's performance rate 
during the year prior

[[Page 41904]]

to the performance period (79 FR 67956). We finalized a policy, 
beginning with the CY 2017 payment adjustment period, to increase the 
case minimum from 20 cases to 200 cases for the all-cause hospital 
readmissions measure as described in Sec.  414.1230(c) to be included 
in the quality composite for the VM. We finalized that we will exclude 
the measure from the VM calculation for a group or solo practitioner if 
the group or solo practitioner has fewer than 200 cases for the measure 
during the relevant performance period, and all remaining measures in 
the domain will be given equal weight. We codified this change in the 
case minimum at Sec.  414.1265.
(1) PQRS Reporting Mechanisms
    It is important to continue to align the VM for CY 2018 with the 
requirements of the PQRS, because quality reporting is a necessary 
component of quality improvement. We also seek to avoid placing an 
undue burden on EPs to report such data. Accordingly, for purposes of 
the VM for CY 2018, we propose to continue to include in the VM all of 
the PQRS GPRO reporting mechanisms available to groups for the PQRS 
reporting periods in CY 2016 and all of the PQRS reporting mechanisms 
available to individual EPs for the PQRS reporting periods in CY 2016. 
These reporting mechanisms are described in Tables 20 and 21 of this 
proposed rule.
(2) PQRS Quality Measures
    We propose to continue to use all of the quality measures that are 
available to be reported under these various PQRS reporting mechanisms 
to calculate a group or solo practitioner's VM in CY 2018 to the extent 
that a group (or individual EPs in the group, in the case of the ``50 
percent option'') or solo practitioner submits data on these measures. 
These PQRS quality measures are described in Tables 22 through 30 of 
this proposed rule.
(3) Benchmarks for eCQMs
    Currently, the VM program utilizes quality of care measure 
benchmarks for a given performance year that are calculated as the 
case-weighted mean of the prior year's performance rates, inclusive of 
all available PQRS reporting mechanisms for that measure (claims, 
registries, Electronic Health Record (EHR), or Web Interface (WI)). We 
finalized this policy in CY 2013 and stated we would consider the 
effects of our policy as we implemented the VM and that we may consider 
changes and refinements in the future (77 FR 69322).
    From experience in utilizing PQRS measures in the VM, we have 
become aware that a given measure may be calculated differently when it 
is collected through an EHR, and are making a proposal to address this 
issue. We refer to quality measures collected through EHRs as 
``eCQMs.'' We note several variances with eCQMs compared to equivalent 
measures reported via a different reporting mechanism. First, the 
inclusion of all-payer data for the eCQMs differentiates them 
sufficiently from their equivalent measures reported via the other PQRS 
reporting mechanisms, which utilize Medicare FFS data. The inclusion of 
all-payer data may increase the cohort size and incorporate a pool of 
beneficiaries with different characteristics than those captured with 
Medicare FFS data. As our goal is to focus on how groups of EPs or 
individual EPs' performance differs from the benchmark on a measure-by-
measure basis, we recognize the need to utilize separate eCQM 
benchmarks that allow us to compare eCQM measure performance rates to a 
benchmark that better reflects the measures' specifications. Second, 
eCQMs follow a different annual update cycle than do other versions of 
measures, and consequently, they are not always consistent with the 
current version of a measure as it is reported via claims, registries, 
or Web Interface. For example, during a given performance period, an 
eCQM's specifications might require data collection on a different age 
range than the specifications of the same measure reported via other 
reporting mechanisms. This means that the eCQM version of a measure may 
differ from the specifications of the all-mechanism benchmark, to which 
it is currently compared. Because of these differences, we propose to 
change our benchmark policy to indicate that eCQMs, as identified by 
their CMS eMeasure IDs, which are distinct from the CMS/PQRS measure 
numbers for other reporting mechanisms, will be recognized as distinct 
measures under the VM. As such, we would exclude eCQM measures from the 
overall benchmark for a given measure and create separate eCQM 
benchmarks, based on the CMS eMeasure ID. We propose to make this 
change beginning with the CY 2016 performance period, for which the 
eCQM benchmarks would be calculated based on CY 2015 performance data.
    We seek comment on this proposal.
(4) CAHPS Reporting
    In our efforts to maintain alignment with the PQRS quality 
reporting requirements, we note that the criteria for administration of 
the CAHPS for PQRS survey for the CY 2016 performance period will 
contain 6 months of data as proposed in Section III.I.5.a of this 
proposed rule. We believe that the CAHPS for PQRS data administered 
during this 6-month period would be sufficiently reliable so that we 
could meaningfully include it in a group's quality composite score 
under the Value Modifier, should they elect to have CAHPS for PQRS 
included in their VM calculation. In order for us to use the data to 
calculate the score, we would require data for each summary survey 
measure on at least 20 beneficiaries which is the reliability standard 
for the value-based payment modifier (77 FR 69322-69323). We note that 
we took a similar approach in the CY 2014 PFS Final Rule (78 FR 74772) 
with regard to the 6-month reporting period for individual eligible 
professionals reporting via qualified registries under PQRS for the CY 
2014 PQRS incentive and CY 2016 payment adjustment. Additionally, in 
the CY 2015 PFS Final Rule (79 FR 67956), we noted that groups with two 
or more EPs could elect to include the patient experience of care 
measures collected through the PQRS CAHPS survey for CY 2015 in their 
VM for CY 2017. We propose to continue this policy for the CY 2016 
performance period for the CY 2018 VM.
(5) Quality Measures for the Shared Savings Program
    In the CY 2015 PFS final rule with comment period (79 FR 67957), we 
finalized a policy to use the ACO GPRO Web Interface measures and the 
Shared Savings Program ACO all-cause readmission measure to calculate a 
quality composite score for groups and solo practitioners who 
participate in an ACO under the Shared Savings Program. Also, we 
finalized a policy to apply the benchmark for quality measures for the 
VM as described under Sec.  414.1250 to determine the standardized 
score for quality measures for groups and solo practitioners 
participating in ACOs under the Shared Savings Program.
    We believe patient surveys are important tools for assessing 
beneficiary experience of care and outcomes. Accordingly, we are 
proposing that starting with the CY 2018 payment adjustment period, the 
ACO CAHPS survey will be required as an additional component of the VM 
quality composite for TINs participating in the Shared Savings Program. 
CAHPS surveys for Shared Savings Program ACOs have been collected since 
2013, for the 2012 reporting period. In the 2014 reporting period, we 
provided two versions of the CAHPS for ACOs survey to assess patient 
experience ACO-8 and ACO-12, with Shared Savings Program ACOs

[[Page 41905]]

having the option to use either survey. We note that under the VM CAHPS 
for PQRS is optional for groups that report it and these groups must 
elect to have their CAHPS performance used in their VM quality 
composite calculations. As both PQRS and Shared Savings Program ACOs 
report on CAHPS for their Medicare FFS populations, there is an overlap 
between the CAHPS survey data collected for both programs and we have 
calculated 2014 performance period prior year benchmarks on 11 of the 
12 ACO CAHPS summary survey measures for the VM. We believe that by the 
CY 2016 performance period, we will have sufficient data and experience 
with calculating these survey measures in the VM, to require the ACO 
CAHPS measures in conjunction with the GPRO WI measures and the all-
cause readmission measure in the calculation of a quality composite 
score for groups and solo practitioners participating in an ACO under 
Shared Savings Program. We propose to include the CAHPS for ACOs survey 
in the quality composite of the VM for TINs participating in ACOs in 
the Shared Savings Program, beginning with the CY 2016 performance 
period and the CY 2018 payment adjustment period. We propose that 
whichever version of the CAHPS for ACOs survey the ACO chooses to 
administer will be included in the TIN's quality composite for the VM. 
We propose to make corresponding changes to Sec.  414.1210(b)(2)(i)(B). 
We seek comment on this proposal.
j. Expansion of the Informal Inquiry Process To Allow Corrections for 
the Value-Based Payment Modifier
    Section 1848(p)(10) of the Act provides that there shall be no 
administrative or judicial review under section 1869 of the Act, 
section 1878 of the Act, or otherwise of the following:
     The establishment of the VM.
     The evaluation of the quality of care composite, including 
the establishment of appropriate measures of the quality of care.
     The evaluation of the cost composite, including the 
establishment of appropriate measures of costs.
     The dates of implementation of the VM.
     The specification of the initial performance period and 
any other performance period.
     The application of the VM.
     The determination of costs.
    These statutory requirements regarding limitations of review are 
reflected in Sec.  414.1280. We previously indicated in the CY 2013 PFS 
final rule with comment period (77 FR 69326) that we believed an 
informal review mechanism is appropriate for groups of physicians to 
review and to identify any possible errors prior to application of the 
VM, and we established an informal inquiry process at Sec.  414.1285. 
We stated that we intend to disseminate reports containing CY 2013 data 
in Fall 2014 to groups of physicians subject to the VM in 2015 and that 
we will make a help desk available to address questions related to the 
reports, and we have since followed through on those actions.
    In the CY 2015 final rule with comment period (79 FR 67960), for 
the CY 2015 payment adjustment period, we finalized: (1) A February 28, 
2015, deadline for a group to request correction of a perceived error 
made by CMS in the determination of its VM; and (2) finalized a policy 
to classify a TIN as ``average quality'' in the event we determined 
that we have made an error in the calculation of the quality composite. 
Beginning with the CY 2016 payment adjustment period, (1) we finalized 
a deadline of 60 days that would start after the release of the QRURs 
for the applicable performance period for a group or solo practitioner 
to request a correction of a perceived error related to the VM 
calculation, and (2) we stated we would take steps to establish a 
process for accepting requests from providers to correct certain errors 
made by CMS or a third-party vendor (for example, PQRS-qualified 
registry). Our intent was to design this process as a means to 
recompute a TIN's quality composite and/or cost composite in the event 
we determine that we initially made an erroneous calculation. We noted 
that if the operational infrastructure was not available to allow this 
recomputation, we would continue the approach for the CY 2015 payment 
adjustment period to classify a TIN as ``average quality'' in the event 
we determine that we have made an error in the calculation of the 
quality composite. We finalized that we would recalculate the cost 
composite in the event that an error was made in the cost composite 
calculation. We noted that we would provide additional operational 
details as necessary in subregulatory guidance.
    Moreover, for both the CY 2015 payment adjustment period and future 
adjustment periods, we finalized a policy to adjust a TIN's quality-
tier if we make a correction to a TIN's quality and/or cost composites 
because of this correction process.
    We further noted that there is no administrative or judicial review 
of the determinations resulting from this expanded informal inquiry 
process under section 1848(p)(10) of the Act. In the CY 2015 final rule 
for the CY 2016 payment adjustment period we noted that if the 
operational infrastructure is not available to allow the recomputation 
of quality measure data we would continue the approach of the initial 
corrections process to classify a TIN as ``average quality'' in the 
event we determine CMS or a third-party vendor made an error in the 
calculation of the quality composite. We propose to continue this 
policy for the CY 2017 payment adjustment and future adjustment periods 
or until such a time that the operational infrastructure is in place to 
allow the recomputation of data. We seek comment on this proposal.
    Our overall approach to the VM is based on participation in the 
PQRS. Beginning with the CY 2016 payment adjustment period for the VM, 
groups of physicians (or individual EPs in the group, in the case of 
the 50 percent option) must meet the criteria to avoid the CY 2016 PQRS 
payment adjustment, to be classified as Category 1 for the VM and avoid 
an automatic downward adjustment under the VM. The payment adjustment 
for the VM is applied at the TIN level whereas the PQRS payment 
adjustment is applied at the TIN/NPI level. We believe that we need a 
policy to address the circumstance in which a group is initially 
determined not to have met the criteria to avoid the PQRS payment 
adjustment and subsequently, through the informal review process, at 
least 50 percent of its EPs are determined to have met the criteria to 
avoid the PQRS payment adjustment as individuals. We note that the 
informal review submission period will occur during the 60 days 
following release of the QRURs for the 2016 VM and subsequent years. We 
believe that this will allow us sufficient time to process the majority 
of the requests before finalizing the adjustment factor. We propose to 
reclassify a TIN as Category 1 when PQRS determines on informal review 
that at least 50 percent of the TIN's EPs meet the criteria for 
satisfactory reporting of data on PQRS quality measures as individuals 
for the relevant CY PQRS payment adjustment, or in lieu of satisfactory 
reporting, satisfactorily participate in a PQRS QCDR for the relevant 
CY PQRS payment adjustment. Moreover, we note that if the group was 
initially classified as Category 2, then we do not expect to have data 
for calculating their quality composite, in which case they'd be 
classified as ``average quality'', however, if the data is available in 
a timely manner, then we would recalculate the quality composite. We 
seek comments on this proposal.

[[Page 41906]]

k. Minimum Episode Count for the Medicare Spending Per Beneficiary 
(MSPB) Measure
    In the CY 2014 PFS final rule with comment period (78 FR 74780), we 
finalized inclusion of the MSPB measure as proposed in the cost 
composite beginning with the CY 2016 VM, with a CY 2014 performance 
period. We finalized a minimum of 20 MSPB episodes for inclusion of the 
MSPB measure in a TIN's cost composite. We stated that the 
nonspecialty-adjusted version of the measure using 2011 data had high 
reliability with a 20 episode minimum (79 FR 74779).
    The reliability results presented in the CY 2014 PFS final rule 
with comment period (79 FR 74779), which supported the 20 episode case 
minimum, were based on the non-specialty-adjusted measure instead of 
the specialty-adjusted measure. We refined the methodology to account 
for the change in measure specifications and the results showed that 
the specialty-adjusted measure was more reliable at higher episode case 
minimums. Using a more appropriate methodology for calculating 
reliability, we have found that the specialty-adjusted measure does not 
have moderate or high reliability with a 20 episode minimum for many 
groups. Table 36 shows the reliability of the measure for different 
group sizes as the case minimum increases.

                                    Table 36--Specialty-Adjusted MSPB Amount, Percent Above 0.4 Reliability Threshold
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                             All solo
    Specialty-adjusted MSPB amount      practitioners and         Solo         Groups with  2-9   Groups with  10-   Groups with  25-  Groups with  100+
                                              groups         practitioners           EPs               24 EPs             99 EPs              EPs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Groups and Solo Practitioners with 20+ Episodes.........................................................................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent above 0.4.....................              40.1%              18.1%              41.7%              60.9%              66.5%              89.7%
Number of groups......................             29,190             10,639             10,505              3,664              3,229              1,153
--------------------------------------------------------------------------------------------------------------------------------------------------------
Groups and Solo Practitioners with 50+ Episodes.........................................................................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent above 0.4.....................              80.2%              60.8%              79.0%              90.3%              91.6%              97.0%
Number of groups......................             15,881              3,406              6,194              2,699              2,499              1,083
--------------------------------------------------------------------------------------------------------------------------------------------------------
Groups and Solo Practitioners with 60+ Episodes.........................................................................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent above 0.4.....................              86.8%              71.9%              84.6%              93.8%              94.7%              98.3%
Number of groups......................             13,614              2,416              5,279              2,506              2,352              1,061
--------------------------------------------------------------------------------------------------------------------------------------------------------
Groups and Solo Practitioners with 75+ Episodes.........................................................................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent above 0.4.....................              92.9%              82.4%              91.1%              96.6%              97.3%              98.8%
Number of groups......................             11,213              1,567              4,182              2,256              2,173              1,035
--------------------------------------------------------------------------------------------------------------------------------------------------------
Groups and Solo Practitioners with 100+ Episodes........................................................................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent above 0.4.....................              97.6%              93.8%              96.3%              98.6%              99.2%              99.5%
Number of groups......................              8,543                785              2,873              1,924              1,957              1,004
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Given that the measure has moderate reliability (above 0.4) for 
only 40.1 percent of all groups and solo practitioners and is as low as 
18.1 percent for solo practitioners with an episode minimum of 20, we 
propose to increase the episode minimum to 100 episodes beginning with 
the CY 2017 payment adjustment period and CY 2015 performance period. 
Although this reduces the number of groups and solo practitioners for 
whom we would be able to include an MSPB calculation in the cost 
composite (from 29,190 to 8,543 based on 2013 data), we do not believe 
we should use the measure in calculating the cost composite if it is 
not reliable at the 20 episode minimum. We note that this change in 
policy could create a situation in which a group that would have 
performed well on this measure would no longer have this measure 
included in its cost composite, which could negatively impact their 
cost composite, and ultimately their VM adjustment. However, we believe 
that it would not be appropriate to include this measure in the cost 
composite even for those groups that performed well. Rather, we believe 
that it is more important to ensure that only reliable measures are 
included in the VM, and we want to avoid a situation in which groups or 
solo practitioners who may have performed poorly on the measure using a 
20 episode minimum may receive a downward adjustment to payments under 
the VM as a result of a measure that was not reliable. We propose to 
add Sec.  414.1265(a)(2) to reflect a case minimum of 100 episodes for 
the MSPB measure. We are seeking comment on this proposal.
    We also considered increasing the episode minimum to 75 instead of 
100. This would allow us to include the MSPB measure in the cost 
composite for a larger number of groups but we believe that the 
reliability for solo practitioners with a minimum of 100 episodes was 
preferable to the reliability when using a 75 episode minimum. We 
welcome comment on this alternative we considered, as well as other 
potential minimum case thresholds for this measure.
    We also considered revising the case minimum for the MSPB measure 
beginning with the CY 2016 payment adjustment period and CY 2014 
performance period, but did not propose this policy, because this PFS 
rule will be finalized after the 2014 QRURs with the 2016 VM payment 
adjustment information are released. We note that, using an episode 
minimum of 20 for the 2016 VM, the MSPB measure has moderate 
reliability for majority of the groups that will be subject to the VM 
in 2016 (60.9 percent of groups with 10-24 EPs, 66.5 percent of groups 
with 25-99 EPs and 89.7 percent of groups with 100 or more EPs).
l. Inclusion of Maryland Hospital Stays in Definition of Index 
Admissions
    In the CY 2014 PFS final rule with comment period (78 FR 74780), we 
finalized inclusion of the MSPB

[[Page 41907]]

measure as proposed in the cost composite beginning with the CY 2016 
VM, with a CY 2014 performance period. We indicated in the 2014 
proposed rule with comment period (78 FR 43494) that we would use the 
MSPB measure as specified for the Hospital Inpatient Quality Reporting 
(IQR) and Hospital Value Based Purchasing (VBP) Program with the 
exception of changes to the attribution methodology. The MSPB measure 
used for the Hospital IQR and Hospital VBP Programs does not include 
hospitalizations at Maryland hospitals as an index admission that would 
trigger an episode because Maryland hospitals are not paid under the 
Inpatient Prospective Payment System (IPPS) and do not participate in 
the Hospital VBP Program. The result is that groups and solo 
practitioners in Maryland would not have the MSPB measure included in 
their cost composite under the Value Modifier. We propose that, 
beginning with the 2018 VM, we change the definition of index admission 
used for the MSPB used in the VM program to include inpatient 
hospitalizations at Maryland hospitals. This change would allow CMS to 
include this measure in the calculation of the cost composite for 
groups and solo practitioners in Maryland, consistent with what is done 
for providers in others states. Under this proposal, we would continue 
to standardized all Medicare claims as described in the ``CMS Price 
Standardization'' document, which can be found in the ``Measure 
Methodology'' section at http://qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier3&cid=1228772053996. The standardization methodology is currently used in the 
calculation of the MSPB measure and is continually being reviewed and 
updated to account payment policy changes and updates; any 
methodological changes made across years are documented in the Appendix 
of the ``CMS Price Standardization'' document. We are seeking comment 
on our proposal to, beginning with the 2018 VM, include 
hospitalizations at Maryland hospitals as an index admission for the 
MSPB measure for the purposes of the VM program.
m. Average Quality and Average Cost Designations in Certain 
Circumstances
    In the CY 2015 PFS final rule with comment period (79 FR 67934), we 
clarified a policy that was finalized at Sec.  414.1270, that beginning 
with the CY 2016 payment adjustment period, a group or solo 
practitioner subject to the VM would receive a cost composite score 
that is classified as average under the quality-tiering methodology if 
the group or solo practitioner does not have at least one cost measure 
with at least 20 cases. We observed that groups that do not provide 
primary care services are not attributed beneficiaries or are 
attributed fewer than 20 beneficiaries, and thus, we are unable to 
calculate reliable cost measures for those groups of physicians (77 FR 
69323). We stated in the CY 2014 PFS final rule with comment period (78 
FR 74780) that we believe this policy is reasonable because we would 
have insufficient information on which to classify the groups' costs as 
``high'' or ``low'' under the quality-tiering methodology. Moreover, we 
believed that to the extent a group's quality composite is classified 
as high or low, the group's VM should reflect that classification. As 
discussed in section III.M.4.k. of this proposed rule, beginning with 
the CY 2017 payment adjustment period, we are proposing to increase the 
minimum number of episodes for inclusion of the MSPB measure in the 
cost composite to 100 episodes. Therefore, we propose to revise Sec.  
414.1265(b) to indicate that a group or solo practitioner subject to 
the VM would receive a cost composite score that is classified as 
average under the quality-tiering methodology if the group or solo 
practitioner does not have at least one cost measure that meets the 
minimum number of cases required for the measure to be included in the 
calculation of the cost composite, as required in Sec.  414.1265. To 
improve the organization of the regulation text, we also propose to 
move the provisions at Sec.  414.1270(b)(5) and (c)(5) to Sec.  
414.1265(b)(3).
    The quality composite score calculated for each group and solo 
practitioner subject to the VM is based on the PQRS measures reported 
by the group or solo practitioner and three claims-based outcome 
measures, as described in Sec.  414.1225 and Sec.  414.1230, 
respectively. A quality measure must have 20 or more cases in order to 
be included in the calculation of the quality composite; however, 
beginning with the CY 2017 payment adjustment period, the all-cause 
hospital readmissions measure must have 200 or more cases in order to 
be included. Section 414.1265(a) describes the minimum number of cases 
required for the quality and cost measures to be included in the 
calculation of the quality and cost composites, respectively. We 
believe it is important to have a policy to determine the designation 
of the quality composite when a quality measure cannot be calculated 
reliably that is similar to the one established for the cost composite. 
Therefore, we propose that beginning in the CY 2016 payment adjustment 
period, a group or solo practitioner subject to the VM would receive a 
quality composite score that is classified as average under the 
quality-tiering methodology if the group or solo practitioner does not 
have at least one quality measure that meets the minimum number of 
cases required for the measure to be included in the calculation of the 
quality composite, as required at Sec.  414.1265. Consequently, to the 
extent a group or solo practitioner's cost composite is classified as 
high, average, or low, the group or solo practitioner's VM would 
reflect that classification. We propose to incorporate this proposal at 
Sec.  414.1265(b)(2).
    Current Sec.  414.1265(b) states that in a performance period, if a 
reliable quality of care composite or cost composite cannot be 
calculated, payments will not be adjusted under the VM. In light of our 
proposals discussed in this section of the proposed rule, we do not 
believe this policy is necessary beginning with the CY 2016 payment 
adjustment period. As proposed above, the cost composite for a group or 
solo practitioner would be classified as average if there is not at 
least one cost measure that can be calculated reliably. Furthermore, we 
are proposing that the quality composite for a group or solo 
practitioner would be classified as average if there is not at least 
one quality measure that can be calculated reliably. Therefore, we 
propose to specify in Sec.  414.1265(b)(1) that this policy was 
applicable only for the CY 2015 payment adjustment period.
n. Technical Changes to the ``Benchmarks for Cost Measures'' Section of 
Regulation Text
    In the CY 2014 PFS final rule with comment period (78 FR 74781 to 
74784), we finalized a policy to use the specialty adjustment method to 
create the standardized score for each group's cost measure beginning 
with the CY 2016 VM that refines the peer group methodology to account 
for specialty mix. We also amended Sec.  414.1255 to include this 
policy in the cost composite methodology. We propose to move Sec.  
414.1255(b) and (c) (describing specialty adjustment of cost measures 
and benchmarks for cost measures) to Sec.  414.1235(c)(4) and (5) (Cost 
measure adjustments) and revise the regulation text to align with the 
specialty adjustment methodology finalized in the CY 2014 PFS final 
rule with comment period. This is a technical change to the

[[Page 41908]]

regulation text only and will not impact how the cost measures will be 
specialty-adjusted beginning with the CY 2016 VM.
    For the CY 2015 VM, the peer group for calculating the benchmarks 
for cost measures was all groups of physician to which beneficiaries 
are attributed and that are subject to the VM (for example, for CY 
2015, the cost measures of groups with 100 or more EPs was compared to 
the cost measures of other groups of 100 or more EPs). About the 
specialty adjustment method, we stated in the CY 2014 PFS final rule 
(78 FR 74783) that this methodology creates one national benchmark for 
each cost measure against which all groups (regardless of size) would 
be assessed in creating the group's standardized score. We did not 
codify this policy in the regulation text in the CY 2014 PFS final rule 
with comment period. We also note that the benchmark for a cost measure 
includes the performance data for groups and solo practitioners that 
meet the minimum number of cases for that measure as described under 
Sec.  414.1265(a). We believe this policy ensures that only the data 
for measures that are considered statistically reliable are included in 
the benchmarks, in addition to being included in the calculation of the 
cost composite. Therefore, we propose to codify at Sec.  414.1255(b) 
that beginning with the CY 2016 payment adjustment period, the 
benchmark for each cost measure is the national mean of the performance 
rates calculated for all groups and solo practitioners that meet the 
minimum number cases for that measure under Sec.  414.1265(a). We note 
that we are not proposing any revisions to the specialty adjustment 
method finalized in the CY 2014 PFS final rule with comment period (78 
FR 74781 through 74784).
o. Discussion of Stratification of Cost Measure Benchmarks by 
Beneficiary Risk Score
    In response to our previously-finalized policies, stakeholders have 
suggested that the CMS-hierarchical condition categories (HCC) Risk 
Adjustment methodology used in the total per capita cost measures for 
the VM does not accurately capture the additional costs associated with 
treating the sickest beneficiaries. Some of these commenters stated 
that groups that work exclusively in post-acute and long-term care 
settings would be unable to perform well on cost measures under the 
current methodology. Another commenter stated that beneficiaries who 
receive care at home typically have high HCC scores and higher costs. 
We appreciate the concerns raised by commenters and agree that it is 
important to make adjustments for differences in beneficiary 
characteristics that impact health and cost outcomes and are outside of 
the control of the provider. We continue to believe that our current 
methodology of using HCC scores that include adjustments for Medicare 
and Medicaid eligibility status in addition to diagnoses, and replacing 
the highest 1 percent of costs with the cost of the 99th percentile for 
the highest cost beneficiaries, help address these concerns. To address 
concerns regarding specialties that might routinely treat more complex 
and consequently more costly beneficiaries, we finalized in the CY 2013 
PFS final rule with comment period that we would apply a specialty 
adjustment to all cost measures used in the VM (78 FR 74776). This 
enables groups' costs to be compared to similarly-comprised groups, 
based on specialty.
    We note that high costs within the post-acute and long-term care 
settings present a unique opportunity for these providers to improve 
performance on cost and quality measures. Although we continue to 
encourage providers to report quality measures for patients in these 
settings and to use the information contained in their QRUR to improve 
and achieve high levels of performance, we stated in the CY 2015 PFS 
final rule with comment period (79 FR 67932) that we would continue to 
monitor these groups and solo practitioners' performance under the VM 
and continue to explore potential risk adjustment refinements. One 
option we are considering would be to stratify the cost measure 
benchmarks so that groups and solo practitioners are compared to other 
groups and individual practitioners treating beneficiaries with similar 
risk profiles. In this way, within a given grouping (for example, a 
quartile or decile), there remains an opportunity to gain efficiencies 
in care and lower costs, while beneficiary severity of illness and 
practice characteristics may be more fully recognized at a smaller, and 
likely less-heterogeneous, attributed beneficiary level. We are not 
making any proposals on this matter at this time. We are seeking 
feedback on this potential approach as well as other approaches..
5. Physician Feedback Program
a. CY 2014 Quality and Resource Use Reports (QRURs) Based on CY 2014 
Data and Disseminated in CY 2015
    In Fall 2015, we plan to expand the Physician Feedback Program by 
making QRURs, containing data on cost and quality performance during 
calendar year 2014, available to all solo practitioner EPs and groups 
of EPs of all sizes, as identified by TIN, including nonphysician EP 
solo practitioners and groups comprised of nonphysician EPs. We also 
plan to make the 2014 QRURs available to Shared Savings Program ACO 
participant TINs and groups that include one or more EPs who 
participated in a Pioneer ACO or the CPC Initiative. The reports will 
contain valuable information about a TIN's actual performance during CY 
2014 on the quality and cost measures that will be used to calculate 
the CY 2016 VM. For physicians in groups of 10 or more, the 2014 QRURs 
will provide information on how a group's quality and cost performance 
will affect their Medicare payments in 2016 through the application of 
the VM based on performance in 2014.
    The report will provide data on a group's or solo practitioner's 
performance on quality measures they report under the PQRS, as well as 
the three claims-based outcome measures calculated for the VM and 
described at Sec.  414.1230. The 2014 QRUR will accommodate new PQRS 
reporting options, including QCDRs and CAHPS for PQRS. In addition, the 
reports will present data assessing a group practice's or solo 
practitioner's performance on cost measures and information about the 
services and procedures that contributed most to costs. The cost 
measures in the 2014 QRUR are payment-standardized and risk-adjusted 
and are also specialty-adjusted to reflect the mix of physician 
specialties in a TIN. For the 2014 QRURs, we will provide more detailed 
per capita cost of service breakdowns for all six cost measures. The 
reports also will contain additional supplementary information on the 
individual PQRS measures for EPs reporting PQRS measures as 
individuals; enhanced drill down tables; and a dashboard with key 
performance measures.
    In response to stakeholder feedback to provide more timely and 
actionable information on outcomes and cost measures, we provided for 
the first time a mid-year report, the 2014 Mid-Year QRUR (MYQRUR) in 
Spring 2015. The 2014 MYQRUR was provided to physician solo 
practitioners and groups of physicians nationwide who billed for 
Medicare-covered services under a single TIN over the period of July 1, 
2013 through June 30, 2014. We disseminated Mid-Year QRURs in the 
spring of each year to provide interim information about performance 
only on those cost and quality outcomes measures that we calculate 
directly from Medicare administrative claims, based

[[Page 41909]]

on the most recent 12 months of data that are available. The MYQRURs 
are for informational purposes and do not estimate performance for the 
calculation of the VM. Beginning in Spring 2016, we intend to expand 
the distribution of MYQRURs to nonphysician EPs, solo practitioners, 
and groups composed of nonphysician EPs.
    We will continue to refine the QRURs based on stakeholder feedback, 
and we invite comment on which aspects of the QRURs reports have been 
most useful and how we can improve access to and actionability of 
performance reports.
b. Episode Costs and the Supplemental QRURs
    Section 1848(n)(9)(A) of the Act requires CMS to develop an episode 
grouper and include episode-based costs in the QRURs. An episode of 
care consists of medical and/or procedural services that address a 
specific medical condition or procedure that are delivered to a patient 
within a defined time period and are captured by claims data. An 
episode grouper organizes administrative claims data into episodes.
    In Summer 2014, we distributed the Supplemental QRUR: Episodes of 
Care based on 2012 data to groups with 100 or more EPs. The 2012 
Supplemental QRUR provided information on 20 episode subtypes and 6 
clinical episode-based measures. In Fall 2015, we expect to provide the 
2014 Supplemental QRURs to all groups and solo practitioners nationwide 
who billed for Medicare-covered services under a single TIN in 2014 and 
for whom we are able to calculate at least one episode measure. The 
supplemental QRURs are provided in addition to the Annual and Mid-Year 
QRURs. They provide information on performance on episode-based cost 
measures that are not included in the VM, in order to help groups and 
solo practitioners understand the cost of care they provide to 
beneficiaries and work toward the provision of more efficient care. The 
2014 Supplemental QRURs will likely include the 6 episode-based 
measures included in the 2012 Supplemental QRURS in addition to other 
episode-based payment measures. We will continue to seek stakeholder 
input as we develop the episode framework.
    Lastly, we would to direct readers to the Physician Compare 
proposals in this rule (section III.H.), which propose the addition of 
a green check mark to the profile page of the Physician Compare Web 
site for providers receiving an upward adjustment under the VM starting 
in CY 2018. CY 2018 is the first year the VM applies to not only all 
physicians, but also all nonphysician EPs as well. More information is 
available about Physician Compare on the CMS Web site at http://www.medicare.gov/physiciancompare/search.html.

N. Physician Self-Referral Updates

1. Background
a. Statutory and Regulatory History
    Section 1877 of the Act, also known as the physician self-referral 
law: (1) Prohibits a physician from making referrals for certain 
designated health services (DHS) payable by Medicare to an entity with 
which he or she (or an immediate family member) has a financial 
relationship (ownership or compensation), unless an exception applies; 
and (2) prohibits the entity from filing claims with Medicare (or 
billing another individual, entity, or third party payer) for those 
referred services. The statute establishes a number of specific 
exceptions, and grants the Secretary the authority to create regulatory 
exceptions for financial relationships that pose no risk of program or 
patient abuse. Section 13624 of the Omnibus Budget Reconciliation Act 
of 1993 (Pub. L. 103-66) (OBRA 1993), entitled ``Application of 
Medicare Rules Limiting Certain Physician Referrals,'' added a new 
paragraph (s) to section 1903 of the Act, to extend aspects of the 
physician self-referral prohibitions to Medicaid. For additional 
information about section 1903(s) of the Act, see 66 FR 857 through 
858.
    Several more recent statutory changes have also affected the 
physician self-referral law. Section 6001 of the Affordable Care Act 
amended section 1877 of the Act to impose additional requirements for 
physician-owned hospitals to qualify for the rural provider and 
hospital ownership exceptions. Section 6409 of the Affordable Care Act 
required the Secretary, in cooperation with the Inspector General of 
the Department of Health and Human Services, to establish a Medicare 
self-referral disclosure protocol (SRDP) that sets forth a process to 
enable providers of services and suppliers to self-disclose actual or 
potential violations of the physician self-referral law.
    This rulemaking follows a history of rulemakings related to the 
physician self-referral law. The following discussion provides a 
chronology of our more significant and comprehensive rulemakings; it is 
not an exhaustive list of all rulemakings related to the physician 
self-referral law. After the passage of section 1877 of the Act, we 
proposed rulemakings in 1992 (related only to referrals for clinical 
laboratory services) (57 FR 8588) (the 1992 proposed rule) and 1998 
(addressing referrals for all DHS) (63 FR 1659) (the 1998 proposed 
rule). We finalized the proposals from the 1992 proposed rule in 1995 
(60 FR 41914) (the 1995 final rule), and issued final rules following 
the 1998 proposed rule in three stages. The first final rulemaking 
(Phase I) was published in the Federal Register on January 4, 2001 (66 
FR 856) as a final rule with comment period. The second final 
rulemaking (Phase II) was published in the Federal Register on March 
26, 2004 (69 FR 16054) as an interim final rule with comment period. 
Due to a printing error, a portion of the Phase II preamble was omitted 
from the March 26, 2004 Federal Register publication. That portion of 
the preamble, which addressed reporting requirements and sanctions, was 
published on April 6, 2004 (69 FR 17933). The third final rulemaking 
(Phase III) was published in the Federal Register on September 5, 2007 
(72 FR 51012) as a final rule.
    In addition to Phase I, Phase II, and Phase III, we issued final 
regulations on August 19, 2008 in the ``Changes to the Hospital 
Inpatient Prospective Payment Systems and Fiscal Year 2009 Rates'' 
final rule with comment period (72 FR 48434) (the FY 2009 IPPS final 
rule). That rulemaking made various revisions to the physician self-
referral regulations, including: (1) Revisions to the ``stand in the 
shoes'' provisions; (2) establishment of provisions regarding the 
period of disallowance and temporary noncompliance with signature 
requirements; and (3) expansion of the definition of ``entity.''
    After passage of the Affordable Care Act, we issued final 
regulations on November 29, 2010 in the CY 2011 PFS final rule with 
comment period (75 FR 73170) that codified a disclosure requirement 
established by the Affordable Care Act for the in-office ancillary 
services exception. We also issued final regulations on November 24, 
2010 in the CY 2011 OPPS final rule with comment period (75 FR 71800), 
on November 30, 2011 in the CY 2012 OPPS final rule with comment period 
(76 FR 74122), and on November 10, 2014 in the CY 2015 OPPS final rule 
with comment period (79 FR 66770) that established or revised certain 
regulatory provisions concerning physician-owned hospitals in order to 
codify and interpret the Affordable Care Act's revisions to section 
1877 of the Act.
b. Purpose of This Proposed Rule
    This rule would update the physician self-referral regulations to 
accommodate

[[Page 41910]]

delivery and payment system reform, to reduce burden, and to facilitate 
compliance. We have learned from stakeholder inquiries, review of 
relevant literature, and self-disclosures submitted to the SRDP that 
additional clarification of certain provisions of the physician self-
referral law would be helpful. In addition to clarifying the 
regulations, we are also interested in expanding access to needed 
health care services. In keeping with these goals, the proposed rule 
expands the regulations to establish two new exceptions and clarifies 
certain regulatory terminology and requirements.
2. Recruitment and Retention (Sec.  411.357(e) and Sec.  411.357(t))
    In this proposed rule, we are proposing to establish new policies 
and revise certain existing policies regarding recruitment assistance 
and retention payments. Specifically, we are proposing a new exception 
for assistance to physicians to employ nonphysician practitioners. In 
addition, we are proposing to clarify for federally qualified health 
centers (FQHCs) and rural health clinics (RHCs) how to determine the 
geographic areas that they serve for purposes of the exception at Sec.  
411.357(e) and to change the language at Sec.  411.357(e)(1)(iii) to 
ensure the consistency we intend for the ``volume or value'' standard 
found throughout the statute and our regulations. We are also proposing 
to lengthen the required record retention period at Sec.  
411.357(e)(4)(iv) from 5 years to 6 years to ensure consistency with 
the proposed exception at Sec.  411.357(x) and other CMS record 
retention policies. For the exception for retention payments to 
physicians in underserved areas, we are proposing to clarify how 
parties should calculate the maximum amount for permissible retention 
payments. We describe these proposals in detail below.
a. Assistance To Employ a Nonphysician Practitioner
(1) Background
    Section 1877(e)(5) of the Act sets forth an exception for 
remuneration provided by a hospital to a physician to induce the 
physician to relocate to the geographic area served by the hospital in 
order to be a member of the hospital's medical staff, subject to 
certain requirements. This exception is codified at Sec.  411.357(e). 
The regulatory exception permits recruitment payments by FQHCs and RHCs 
on the same basis as those permitted by hospitals, but like the 
statute, limits the applicability of the exception to the recruitment 
of physicians. In Phase III, we responded to requests by commenters 
that we expand Sec.  411.357(e) to cover the recruitment of 
nonphysician practitioners into a hospital's service area, including 
into an existing group practice (72 FR 51049). We declined to establish 
a new exception at that time. Further, we indicated that 
``[r]ecruitment payments made by a hospital directly to a nonphysician 
practitioner would not implicate the physician self-referral law, 
unless the nonphysician practitioner serves as a conduit for physician 
referrals or is an immediate family member of a referring physician. 
Payments made by a hospital to subsidize a physician practice's costs 
of recruiting and employing nonphysician practitioners would create a 
compensation arrangement between the hospital and the physician 
practice for which no exception would apply'' (72 FR 51049).
    Significant changes in our health care delivery and payment 
systems, as well as alarming trends in the primary care workforce 
shortage projections, have occurred since the publication of Phase III. 
A primary care workforce shortage has been a concern for years. (See 
Advisory Committee on Training in Primary Care Medicine and Dentistry, 
``Coming Home: the Patient-Centered Medical-Dental Home in Primary Care 
Training,'' 7th annual report to the Secretary of the U.S. Department 
of Health and Human Services and to Congress, December 2008, http://www.hrsa.gov/advisorycommittees/bhpradvisory/actpcmd/Reports/seventhreport.pdf.) The Affordable Care Act expanded access to health 
care coverage to those previously uninsured. As a result, the need for 
primary care providers (including nonphysician practitioners) has 
increased, particularly in remote and underserved areas. (See Ewing, 
Joshua, et al., ``Meeting the Primary Care Needs of Rural America: 
Examining the Role of Non-Physician Providers,'' National Conference of 
State Legislatures, The Rural Health Connection, April 2013, http://www.ncsl.org/documents/health/RuralBrief313.pdf.) The projected rise in 
the demand for primary care is due also to a growing and aging 
population, according to the Health Resources and Services 
Administration (HRSA). (See HHS, HRSA, National Center for Health 
Workforce Analysis, ``Projecting the Supply and Demand for Primary Care 
Practitioners Through 2020,'' November 2013, http://bhpr.hrsa.gov/healthworkforce/supplydemand/usworkforce/primarycare/.) HRSA found that 
``the demand for primary care physicians will grow more rapidly than 
physician supply, resulting in a projected shortage of more than 20,000 
full-time equivalent physicians.'' (Id.) Similarly, a study in the 
Annals of Family Medicine journal projected the country will need 
52,000 more primary care physicians by 2025. (Peterson, Stephen M., et 
al, ``Projecting US Primary Care Physician Workforce Needs: 2010-
2025,'' 29 10(6) Ann. Of Fam. Med. 503 (2012).) Nonphysician 
practitioners, the fastest growing segment of the primary care 
workforce (Schwartz, Mark D., ``Health Care Reform and the Primary Care 
Workforce Bottleneck,'' 27(4) J. Gen. Intern. Med. 469, 470 (2011)), 
may help to mitigate this shortage. Finally, new and evolving care 
delivery models, which feature an increased role for nonphysician 
practitioners (often as care coordination facilitators or in team-based 
care) have been shown to improve patient outcomes while reducing costs, 
both of which are important Department goals as we move further toward 
quality- and value-based purchasing of health care services in the 
Medicare program and the health care system as a whole.
(2) New Exception
    In light of the changes in the health care delivery and payment 
systems since we last considered the issue of nonphysician practitioner 
recruitment assistance to physicians, using the authority granted to 
the Secretary in section 1877(b)(4) of the Act, we are proposing a 
limited exception for hospitals, FQHCs, and RHCs that wish to provide 
remuneration to a physician to assist with the employment of a 
nonphysician practitioner. We believe that this exception is timely, 
will promote beneficiary access to care, and will remove barriers that 
could frustrate certain goals of the Affordable Care Act. When 
structured with the safeguards described below, we do not believe that 
arrangements for assistance to physicians to employ nonphysician 
practitioners pose a risk of program or patient abuse.
    We propose to establish a new exception at Sec.  411.357(x) to 
permit remuneration from a hospital, FQHC, or RHC to a physician to 
assist the physician in employing a nonphysician practitioner in the 
geographic area served by the hospital, FQHC, or RHC providing the 
remuneration. Because the physician self-referral law applies to 
financial relationships between physicians and entities furnishing DHS, 
the proposed exception is not structured to apply to remuneration from 
a hospital, FQHC, or RHC to a group practice or other type of physician

[[Page 41911]]

practice (both of which qualify as a ``physician organization,'' as 
defined at Sec.  411.351) . However, under our regulations at Sec.  
411.354(c), remuneration from an entity furnishing DHS to a physician 
organization would be deemed to be a direct compensation arrangement 
between each physician who stands in the shoes of the physician 
organization and the entity furnishing DHS. A ``deemed'' direct 
compensation arrangement must satisfy the requirements of an applicable 
exception if the physician makes referrals to the DHS entity and the 
DHS entity bills the Medicare program for DHS furnished as a result of 
the physician's referrals. The proposed exception would be available to 
protect a direct compensation arrangement between a hospital, FQHC, or 
RHC providing remuneration to an individual physician, as well as 
``deemed'' direct compensation arrangements between a hospital, FQHC, 
or RHC and the physicians standing in the shoes of the physician 
organization to which the hospital, FQHC, or RHC provided the 
remuneration. Parties would also need to apply the rules regarding 
indirect compensation arrangements at Sec.  411.354(c) to any chain of 
financial relationships that runs between the entity furnishing DHS and 
any physician who does not stand in the shoes of the physician 
organization in order to determine whether an indirect compensation 
arrangement exists. If an indirect compensation arrangement exists as a 
result of remuneration provided by the entity furnishing DHS, it must 
satisfy the requirements of the exception at Sec.  411.357(p) for 
indirect compensation arrangements.
    The proposed exception would apply only where the nonphysician 
practitioner is a bona fide employee of the physician receiving the 
remuneration from the hospital (or of the physician's practice) and the 
purpose of the employment is to provide primary care services to 
patients of the physician practice. We believe that employing a 
nonphysician practitioner (rather than merely contracting on an 
independent basis with a nonphysician practitioner) indicates a 
commitment by the physician to increase the availability of patient 
care services to his or her patients on an ongoing basis and, as such, 
is an important safeguard against program and patient abuse. However, 
we are soliciting comments regarding whether we should also permit 
remuneration to physicians to assist in attracting nonphysician 
practitioners to their medical practices in an independent contractor 
capacity, and, if so, what requirements we should include for such 
arrangements (for example, a requirement that the arrangement between 
the physician and the nonphysician practitioner have a minimum term, 
such as 1 year).
    Because our goal in proposing the exception at Sec.  411.357(x) is 
to promote the expansion of access to primary care services--which we 
consider to include general family practice, general internal medicine, 
pediatrics, geriatrics, and obstetrics and gynecology patient care 
services--we are proposing to define ``nonphysician practitioner,'' for 
purposes of this exception, to include only physician assistants, nurse 
practitioners, clinical nurse specialists, and certified nurse 
midwives. We believe that these are the types of nonphysician 
practitioners that furnish ``primary care services.'' We note that the 
exception would not protect arrangements for assistance to a physician 
to employ a certified registered nurse anesthetist. We solicit comments 
regarding whether there is a compelling need to expand the scope of the 
proposed exception to additional types of nonphysician practitioners 
who furnish primary care services.
    We are also proposing at Sec.  411.357(x)(1)(vi) a requirement that 
the nonphysician practitioner provide only primary care services to 
patients of the physician's practice. As noted, we consider general 
family practice, general internal medicine, pediatrics, geriatrics, and 
obstetrics and gynecology patient care services to be ``primary care 
services.'' Thus, the exception would not protect arrangements for 
assistance to a physician to employ a nonphysician practitioner who 
furnishes specialty care services, such as cardiology or surgical 
services, to the physician practice's patients. We solicit comments 
regarding whether we should consider other, more, or fewer types of 
services to be ``primary care services'' for purposes of proposed Sec.  
411.357(x), whether there is a compelling need to expand the scope of 
the proposed exception to nonphysician practitioners who provide 
services that are not considered ``primary care services'' and, if so, 
safeguards that could be included in a final exception to ensure no 
risk of program or patient abuse. We are proposing two alternatives for 
establishing the minimum amount of primary care services furnished to 
patients of the physician's practice by the nonphysician practitioner: 
(1) At least 90 percent of the patient care services furnished by the 
nonphysician practitioner must be primary care services; or (2) 
substantially all of the patient care services furnished by the 
nonphysician practitioner must be primary care services. We would 
define ``substantially all'' patient care services consistent with our 
regulations; that is, at least 75 percent of the nonphysician 
practitioner's services to patients of the physician's practice must be 
primary care services. (See Sec.  411.352(d) and Sec.  411.356(c)(1).) 
We are soliciting comments regarding which of these alternatives is 
most appropriate and the nature of the documentation necessary to 
measure the nonphysician practitioner's services.
    We do not intend to permit remuneration to physicians through 
ongoing or permanent subsidies of their nonphysician practitioner 
employment and other practice costs. Therefore, we are proposing a cap 
on the amount of remuneration from the hospital to the physician and a 
requirement that the hospital may not provide assistance for a period 
longer than the first 2 consecutive years of the nonphysician 
practitioner's employment by the physician. Under proposed Sec.  
411.357(x)(1)(iii), the amount of remuneration from the hospital, FQHC, 
or RHC would be capped at the lower of: (1) 50 percent of the actual 
salary, signing bonus, and benefits paid by the physician to the 
nonphysician practitioner; or (2) an amount calculated by subtracting 
the receipts attributable to services furnished by the nonphysician 
practitioner from the actual salary, signing bonus, and benefits paid 
to the nonphysician practitioner by the physician. We propose to 
interpret ``benefits'' to include only health insurance, paid leave, 
and other routine non-cash benefits offered to similarly situated 
employees of the physician's practice. We believe that requiring a 
physician who receives assistance to employ a nonphysician practitioner 
to contribute to the costs of the nonphysician practitioner's salary 
and benefits would limit any windfall to the physician that could 
influence the physician's decision whether to refer patients to the 
hospital, FQHC, or RHC providing the assistance. Limiting the 
remuneration from the hospital, FQHC, or RHC to the ``actual'' amount 
paid to the nonphysician practitioner should ensure that the 
nonphysician practitioner is the true beneficiary of the arrangement 
between the physician the hospital, FQHC, or RHC providing the subsidy. 
We recognize that there may be income tax implications for the 
physician receiving the remuneration from the hospital, FQHC, or RHC. 
Because the proposed exception would protect only

[[Page 41912]]

remuneration to reimburse a physician for amounts actually paid to the 
nonphysician practitioner, the hospital, FQHC, or RHC providing the 
remuneration could not increase it to account for any tax implications 
to the physician. We seek comments regarding the cap on the amount of 
remuneration in the proposed exception, including whether the offset of 
receipts attributable to services furnished by the nonphysician 
practitioner should include all receipts for all services furnished by 
the nonphysician practitioner, regardless of payor and regardless of 
whether the services were primary care services. We also seek comments 
regarding whether we should structure the exception with additional or 
different safeguards to ensure that the remuneration from the hospital, 
FQHC, or RHC directly benefits the nonphysician practitioner and 
whether it is necessary to address the issue of the tax implications 
that could result from the use of the exception to provide remuneration 
to a physician to assist in the employment a nonphysician practitioner.
    The proposed exception is intended to permit subsidies necessary to 
expand access to primary care services; however, we do not believe that 
hospitals, FQHCs, and RHCs should bear the full costs of employing 
nonphysician practitioners who work in private physician practices. The 
2-year limit on the assistance is intended to prevent ongoing payment 
to the physician that could serve as a reward for past referrals or an 
inducement to continue making referrals to the hospital, FQHC, or RHC. 
We solicit comments specifically addressing the time limitations set 
forth in our proposal.
    The proposed exception at Sec.  411.357(x) closely tracks the 
structure and requirements of the exception for physician recruitment 
at Sec.  411.357(e). Similar to the exception at Sec.  411.357(e), the 
proposed exception for assistance to employ nonphysician practitioners 
would include requirements that reference hospitals, but would apply in 
the same manner to FQHCs and RHCs that wish to provide assistance to 
physicians to employ nonphysician practitioners.
    We are proposing requirements to safeguard against program or 
patient abuse similar to the requirements found in most of our 
exceptions in Sec.  411.357. Specifically, we propose that an 
arrangement covered by the exception must be set out in writing and 
signed by the hospital providing the remuneration, the physician 
receiving the remuneration, and the nonphysician practitioner. In 
addition, the arrangement may not be conditioned on the physician's or 
the nonphysician practitioner's referral of patients to the hospital 
providing the remuneration. Further, the proposed exception would 
require that the remuneration from the hospital is not determined 
(directly or indirectly) in a manner that takes into account the volume 
or value of any actual or anticipated referrals by the physician or the 
nonphysician practitioner (or any other physician or nonphysician 
practitioner in the physician's practice) or other business generated 
between the parties. We note that the definition of ``referral'' at 
Sec.  411.351 relates to the request, ordering of, or certifying or 
recertifying the need for DHS by a physician. For this reason, for 
purposes of the requirements of the new exception, we have proposed at 
Sec.  411.357(x)(3) to define the term ``referral'' as it relates to 
nonphysician practitioners as a request by a nonphysician practitioner 
that includes the provision of any DHS for which payment may be made 
under Medicare, the establishment of any plan of care by a nonphysician 
practitioner that includes the provision of such DHS, or the certifying 
or recertifying of the need for such DHS, but not including any DHS 
personally performed or provided by the nonphysician practitioner. The 
definition of ``referral'' at proposed Sec.  411.357(x)(3) is modeled 
closely on the definition of ``referral'' at Sec.  411.351. We are also 
proposing that the arrangement may not violate the federal anti-
kickback statute or any federal or state law or regulation governing 
billing or claims submission. Finally, we are proposing that records of 
the actual amount of remuneration provided to the physician (and to the 
nonphysician practitioner) be maintained for a period of at least 6 
years and be made available to the Secretary upon request. We believe 
that a 6-year record retention requirement is appropriate. The 6-year 
period is in line with the requirements of other laws and regulations 
that protect against program or patient abuse as well as other CMS 
record retention requirements. We seek comment regarding whether these 
``general'' safeguards are sufficient to protect against program or 
patient abuse resulting from arrangements to assist with nonphysician 
practitioner employment, or if additional safeguards are necessary.
    We are also proposing requirements for the employment arrangement 
between the physician receiving remuneration and the nonphysician 
practitioner that the remuneration assists the physician to employ. 
Specifically, we are proposing to require that the nonphysician 
practitioner be a bona fide employee of the physician or the 
physician's practice. In addition, we are proposing that the aggregate 
salary, signing bonus, and benefits paid by the physician to the 
nonphysician practitioner must be consistent with fair market value. We 
recognize that employment arrangements may change over time, for 
example, moving from full-time status to part-time status or changing a 
compensation methodology from hourly payments to a pre-determined flat, 
monthly salary. Because of the fair market value requirement and 
because we are proposing a limit on the amount that the hospital may 
provide to the physician, we do not believe that it is necessary to 
require that the nonphysician practitioner's salary, signing bonus, and 
benefits be set in advance. In addition, we are proposing a requirement 
that the physician may not impose practice restrictions on the 
nonphysician practitioner that unreasonably restrict the nonphysician 
practitioner's ability to provide patient care services in the 
geographic area served by the hospital, FQHC, or RHC, and we intend to 
interpret this provision in the same way that we interpret the 
requirement at Sec.  411.357(e)(4)(vi) with respect to physician 
recruitment arrangements.
    In addition, we are proposing to include requirements to prevent 
gaming by ``rotating'' or ``cycling'' nonphysician practitioners 
through multiple physician practices located in the geographic area 
served by the hospital, FQHC, or RHC, an abuse that would effectively 
shift the long-term costs of employing nonphysician practitioners to 
the hospital, FQHC, or RHC. We are also concerned that parties may 
misuse the exception to shift to a hospital, FQHC, or RHC the costs of 
a nonphysician practitioner who is currently employed by a physician 
but provides patient care services in a medical office of the physician 
that is located outside of the geographic area served by the hospital, 
FQHC, or RHC. To address these concerns, we are proposing that the 
hospital, FQHC, or RHC may not provide assistance to a physician to 
employ a nonphysician practitioner if: (1) the nonphysician 
practitioner has practiced in the geographic area served by the 
hospital, FQHC, or RHC within the 3 years prior to becoming employed by 
the physician; or (2) the nonphysician practitioner was employed or 
otherwise engaged by a physician with a medical office in the 
geographic area served by the hospital,

[[Page 41913]]

FQHC, or RHC within the 3 years prior to becoming employed by the 
physician, even if the nonphysician practitioner did not provide 
patient care services in that office. We believe that 3 years is a 
reasonable limit to protect the program and prevent abuse, but we 
solicit comments regarding the appropriateness of this timeframe. For 
consistency and to ease administrative burden, we propose to define 
``geographic area served by the hospital'' to have the same meaning 
assigned to this term in the exception at Sec.  411.357(e) for 
physician recruitment, and to define the term ``geographic area 
served'' by a FQHC or RHC to have the same meaning assigned to this 
term in proposed Sec.  411.357(e)(6)(ii) described in this section 
II.N.2.b of this proposed rule.
    Finally, we are soliciting comments regarding whether additional 
safeguards are necessary to protect against program or patient abuse 
that might result from arrangements that would be covered by proposed 
Sec.  411.357(x). We are particularly interested in comments addressing 
whether we should limit the number of times a hospital, FQHC, or RHC 
may assist the same physician with the employment of nonphysician 
practitioners and, if so, during what time period that limitation 
should apply. For example, should we limit the use of the exception to 
no more than once every 3 years with respect to a particular physician 
or no more than three times in the aggregate (regardless of time 
period) with respect to a particular physician? Could this type of 
limitation potentially undermine the goal of increased access to 
primary care in the event the nonphysician practitioner(s) employed by 
the physician receiving the assistance from the hospital, FQHC, or RHC 
left such employment after only a short period of time or moved from 
the geographic area served by the hospital, FQHC, or RHC? We are also 
interested in comments addressing whether the exception should include 
a requirement that there be a documented, objective need for additional 
primary care services in the geographic area served by the hospital, 
FQHC, or RHC. We also solicit comments specifically from FQHCs and RHCs 
regarding whether this exception would be useful to such entities and 
any barriers to its use that they perceive.
b. Geographic Area Served by Federally Qualified Health Centers and 
Rural Health Clinics
    Section 1877(e)(5) of the Act sets forth an exception for 
remuneration provided by a hospital to an individual physician to 
induce the physician to relocate his or her medical practice to the 
geographic area served by the hospital in order to become a member of 
the hospital's medical staff. This exception was codified in our 
regulations at Sec.  411.357(e) in the 1995 final rule. In Phase II, 
using our authority in section 1877(b)(4) of the Act, we expanded the 
exception to permit FQHCs to make recruitment payments to physicians on 
the same basis as hospitals (69 FR 16094 through 16095). Also in Phase 
II, we revised the exception to define the geographic area served by 
the hospital providing the recruitment remuneration as the lowest 
number of contiguous postal zip codes from which the hospital draws at 
least 75 percent of its inpatients (69 FR 16094 through 16095). In 
Phase III, we made numerous amendments to the exception for physician 
recruitment, including permitting RHCs to utilize the exception in the 
same manner as hospitals and FQHCs (72 FR 51049). We also responded to 
commenters objecting to the Phase II definition of ``geographic area 
served by the hospital'' on the grounds that it ``hurts rural 
hospitals, and that it is very difficult for [FQHCs] to satisfy'' by 
revising the exception to permit a hospital located in a rural area to 
determine the geographic area served by the hospital using an 
alternative test that encompasses the lowest number of contiguous (or 
in some cases, noncontiguous) zip codes from which the hospital draws 
at least 90 percent of its inpatients (72 FR 51049 through 51050).
    We intended for these definitions to apply to the recruitment of 
physicians by FQHCs and RHCs in the same manner as they apply to 
hospitals. However, the definitions of geographic area served by a 
hospital and rural hospital at Sec.  411.357(e)(2)(i) and Sec.  
411.357(e)(2)(iii), respectively, are contingent on the volume of the 
hospital's inpatients. By definition, FQHCs and RHCs provide access to 
primary care services in rural areas or underserved areas and only 
treat patients as outpatients or ambulatory patients (CMS Pub. 100-02, 
Chap. 13, Sec. 10.1 and 10.2 (Rev. 201, Dec. 12, 2014)). Thus, although 
the regulatory exception for physician recruitment is available to 
FQHCs and RHCs, it provides no guidance as to the geographic area into 
which such an entity may recruit a physician, a concept critical for 
compliance with the exception's requirements. Therefore, we are 
proposing to revise Sec.  411.357(e)(6) to add a new definition of the 
geographic area served by a FQHC or RHC. The purpose of this revision 
is to ensure that the definition of the geographic area served by FQHCs 
and RHCs appropriately captures the areas where their patients actually 
reside and to provide certainty to FQHCs and RHCs that their physician 
recruitment arrangements satisfy the requirements of the exception at 
Sec.  411.357(e).
    We are proposing two alternative approaches for this policy, which 
aligns closely with the special optional rule for rural hospitals in 
Sec.  411.357(e)(2)(iii) in recognition that rural hospitals, FQHCs, 
and RHCs often serve patients who are dispersed in wider geographic 
areas and may need to recruit physicians into more remote areas in 
order to achieve their goals of providing needed services to the 
communities that they serve. The first proposed approach would closely 
mirror our current definition of a rural hospital's geographic service 
area. It would indicate that the geographic area served by a FQHC or 
RHC is the area composed of the lowest number of contiguous zip codes 
from which the FQHC or RHC draws at least 90 percent of its patients, 
as determined on an encounter basis. If the FQHC or RHC draws fewer 
than 90 percent of its patients from all of the contiguous zip codes 
from which it draws patients, the geographic area served by the FQHC or 
RHC may include noncontiguous zip codes, beginning with the 
noncontiguous zip code in which the highest percentage of its patients 
reside, and continuing to add noncontiguous zip codes in decreasing 
order of percentage of patients. The geographic area served by the FQHC 
or RHC may include one or more zip codes from which it draws no 
patients, provided that such zip codes are entirely surrounded by zip 
codes in the geographic area from which it draws at least 90 percent of 
its patients.
    In the alternative, we propose to define the geographic area served 
by a FQHC or RHC as the area composed of the lowest number of 
contiguous or noncontiguous zip codes from which the FQHC or RHC draws 
at least 90 percent of its patients, as determined on an encounter 
basis. This would be determined by beginning with the zip code in which 
the highest percentage of the FQHC's or RHC's patients reside, and 
continuing to add zip codes in decreasing order of percentage of 
patients. Although this approach would potentially result in larger 
geographic service areas than in the first approach, we see no 
potential for program or patient abuse in selecting noncontiguous zip 
codes to identify 90 percent of the patient base as long as there are 
patients in those areas. We seek comments on each of these 
alternatives, including whether patient

[[Page 41914]]

encounters is the appropriate measure for determining the geographic 
area served by a FQHC or RHC. Finally, we are soliciting comments 
specifically from FQHCs and RHCs regarding whether the exception at 
Sec.  411.357(e) for physician recruitment is useful to such entities 
and any barriers to its use that they perceive.
c. Conforming Terminology: ``Takes into Account''
    Under section 1877(e)(5) of the Act, the amount of remuneration 
cannot be determined in a manner that takes into account (directly or 
indirectly) the volume or value of the recruited physician's referrals. 
Several other exceptions for compensation arrangements in section 
1877(e) of the Act also contain provisions pertaining to the volume or 
value of a physician's referrals. In each case, the statutory language 
consistently states that compensation cannot be determined in a manner 
that ``takes into account'' the volume or value of a physician's 
referrals. (See sections 1877(e)(1)(A)(iv), (e)(1)(B)(iv), 
(e)(2)(B)(ii), (e)(3)(A)(v), (e)(3)(B)(i), (e)(5)(B), (e)(6)(A), and 
(e)(7)(A)(v).)
    In Phase I, we developed a uniform interpretation of the volume or 
value standard that applies to all provisions under section 1877 of the 
Act and 42 CFR part 411, subpart J (66 FR 877). In Phase III, we 
revised the terminology at Sec.  411.354(c)(2)(iii) pertaining to the 
volume or value of referrals in indirect compensation arrangements (72 
FR 51027). The original language at Sec.  411.354(c)(2)(iii) provided 
that an indirect compensation arrangement exists if the DHS entity has 
knowledge that a physician's aggregate compensation varies with, or 
otherwise reflects the volume or value of referrals. Phase III replaced 
the phrase ``otherwise reflects'' with ``takes into account.'' We 
explained that the phrases ``takes into account'' and ``otherwise 
reflects'' were not intended to have separate and different meanings, 
and that we were revising Sec.  411.354(c)(2)(iii) for the sake of 
consistency (72 FR 51027). We made similar conforming changes to the 
regulations at Sec.  411.354(c)(2)(ii), Sec.  411.354 (c)(2)(iii), and 
Sec.  411.354 (d)(1).
    Despite the consistent use of the phrase ``takes into account'' in 
section 1877(e) of the Act and our uniform interpretation of the volume 
or value standard, not all the regulatory exceptions for compensation 
arrangements in Sec.  411.357 use the phrase ``takes into account'' to 
describe the volume or value standard. In particular, the regulatory 
exception for the recruitment of physicians at Sec.  411.357(e) has two 
provisions relating to the volume or value standard, and the provisions 
use different terms. Current Sec.  411.357(e)(1)(iii) excepts payments 
to a recruited physician if the hospital does not determine the amount 
of compensation (directly or indirectly) ``based on'' the volume or 
value of referrals. Where the recruited physician joins a physician 
practice, Sec.  411.357(e)(4)(v) provides that the amount of 
remuneration may not be determined in a manner that ``takes into 
account'' (directly or indirectly) the volume or value of any actual or 
anticipated referrals by the recruited physician or the physician 
practice (or any physician affiliated with the physician practice) 
receiving the direct payments from the hospital. Like the physician 
recruitment exception, the following exceptions do not use the phrase 
``takes into account'' in reference to the volume or value standard: 
the exception for medical staff incidental benefits at Sec.  
411.357(m); the exception for obstetrical malpractice insurance 
subsidies at Sec.  411.357(r); and the exception for professional 
courtesy at Sec.  411.357(s). The exception for obstetrical malpractice 
insurance premiums at Sec.  411.357(r) provides that the amount of 
payment cannot be ``based on'' the volume or value of actual or 
anticipated referrals. The exceptions at Sec.  411.357(m)(1) and Sec.  
411.357(s)(1) require that medical staff incidental benefits and 
professional courtesies, respectively, are offered to physicians 
``without regard to'' the volume or value of referrals.
    We are concerned that the use of different phrases pertaining to 
the volume or value of referrals (``takes into account,'' ``based on,'' 
and ``without regard to'') may cause some to conclude incorrectly that 
there are different volume or value standards in the compensation 
exceptions. We interpret the phrase ``takes into account'' throughout 
section 1877(e) of the Act as requiring that compensation not be 
determined in a manner that takes into account the volume or value of a 
physician's referrals. Nothing in the regulatory history of the 
exceptions for physician recruitment, medical staff incidental 
benefits, obstetrical malpractice insurance premiums, or professional 
courtesy arrangements suggests that the phrases ``based on'' and 
``without regard to'' were intended to have a different meaning than 
``takes into account.'' Rather, in Phase I we stated that we were 
adopting a uniform interpretation of the volume or value standard (66 
FR 877), and in Phase III we revised our regulations to replace the 
phrases ``reflects'' and ``otherwise reflects'' with the phrase ``takes 
into account.'' Likewise, we do not believe that the ``takes into 
account'' standard for recruiting a physician who joins a physician 
practice (Sec.  411.357(e)(4)) differs in meaning from the current 
``based on'' standard that otherwise applies to recruited physicians 
(Sec.  411.357(e)(1)(iii)). In sum, we believe that the there is no 
substantive difference between the phrases ``takes into account,'' 
``based on,'' and ``without regard to,'' and that the terms have 
previously been used interchangeably in the compensation exceptions.
    To clarify the regulations, we propose to modify Sec.  
411.357(e)(1)(iii) to conform to the exact language in section 
1877(e)(5)(B) of the Act. Specifically, we propose to amend Sec.  
411.357(e) to require that the compensation provided to a recruited 
physician may not take into account (directly or indirectly) the volume 
or value of the recruited physician's referrals to the hospital, FQHC, 
or RHC providing the recruitment remuneration. We also propose to amend 
Sec.  411.357(r) to require that the amount of payment under the 
arrangement not may take into account the volume or value of any actual 
or anticipated referrals. Lastly, we propose to revise the language of 
Sec.  411.357(m) and Sec.  411.357(s) to provide that the offer of 
medical staff incidental benefits or professional courtesy, 
respectively, may not take into account the volume or value of a 
physician's referrals. Taken together, these revisions would make the 
use of the phrase ``takes into account'' consistent throughout the 
compensation exceptions in Sec.  411.357. The consistent terminology 
would reflect our longstanding policy that the volume or value standard 
in the various compensation exceptions should be interpreted uniformly.
d. Retention Payments in Underserved Areas
    Our regulation at Sec.  411.357(t) permits certain retention 
payments made to a physician with a practice located in an underserved 
area. This exception was first established in Phase II, and covered 
only retention payments made to a physician who has a bona fide firm, 
written recruitment offer that would require the physician to move his 
or her medical practice at least 25 miles and outside of the geographic 
area served by the hospital or FQHC making the retention payment (69 FR 
16142). In Phase III, we modified the exception to permit a hospital, 
RHC, or FQHC to retain a physician who does not have a bona fide 
written offer of recruitment or

[[Page 41915]]

employment if the physician certifies in writing that he or she has a 
bona fide opportunity for future employment that meets the requirements 
at Sec.  411.357(t)(2) (72 FR 51066).
    In Phase III, we explained that a retention payment based on a 
physician certification may ``not exceed the lower of the following: 
(1) An amount equal to 25 percent of the physician's current annual 
income (averaged over the previous 24 months) using a reasonable and 
consistent methodology that is calculated uniformly; or (2) the 
reasonable costs the hospital would otherwise have to expend to recruit 
a new physician to the geographic area served by the hospital in order 
to join the medical staff of the hospital to replace the retained 
physician'' (72 FR 51066). We intended the regulations to mirror the 
preamble language precisely. However, the regulations at Sec.  
411.357(t)(2)(iv) state that such retention payments may not exceed the 
lower of: (1) an amount equal to 25 percent of the physician's current 
income (measured over no more than a 24-month period), using a 
reasonable and consistent methodology that is calculated uniformly; or 
(2) the reasonable costs the hospital would otherwise have to expend to 
recruit a new physician. Thus, the current regulation text appears to 
permit entities to make retention payments that consider only part of 
the prior 24-month period instead of the entire period as we intended.
    The policy stated in the Phase III preamble is correct and remains 
our policy at this time. Therefore, in order to avoid confusion due to 
potentially conflicting regulation text, we propose to modify our 
regulations at Sec.  411.357(t)(2)(iv)(A) to reflect the regulatory 
intent we articulated in Phase III.
3. Reducing Burden and Improving Clarity Regarding the Writing, Term, 
and Holdover Provisions in Certain Exceptions and Other Regulations
    The SRDP enables providers and suppliers to disclose actual or 
potential violations of the physician self-referral law to CMS and 
authorizes the Secretary to reduce the amount potentially due and owing 
for disclosed violations. Since the SRDP was established, we have 
received numerous submissions to the SRDP disclosing actual or 
potential violations relating to the writing requirements of various 
compensation exceptions (for example, failure to set an arrangement out 
in writing, failure to obtain the signatures of the parties in a timely 
fashion, or failure to renew an arrangement that expired on its own 
terms after at least 1 year). This proposed rule would clarify the 
writing requirements of various compensation exceptions by making the 
terminology in the compensation exceptions more consistent and by 
providing policy guidance on the writing and 1-year minimum term 
requirement in many exceptions. In addition, to reduce the regulatory 
burden, we propose to except certain holdover arrangements, provided 
certain safeguards are met.
a. Writing Requirements in Certain Compensation Exceptions and Other 
Regulatory Provisions
    The exceptions for the rental of office space and the rental of 
equipment (section 1877(e)(1) of the Act; Sec.  411.357(a) and Sec.  
411.357(b)) require that a lease be set out in writing. Several other 
compensation exceptions have similar writing requirements: the 
exception at Sec.  411.357(d) for personal service arrangements; the 
exception at Sec.  411.357(e) for physician recruitment; the exception 
at Sec.  411.357(h) for certain group practice arrangements with a 
hospital; the exception at Sec.  411.357(l) for fair market value 
compensation; the exception at Sec.  411.357(p) for indirect 
compensation arrangements; the exception at Sec.  411.357(r) for 
obstetrical malpractice insurance subsidies; the exception at Sec.  
411.357(t) for retention payments in underserved areas; the exception 
at Sec.  411.357(v) for electronic prescribing items and services; and 
the exception at Sec.  411.357(w) for electronic health records items 
and services. Through our experience administering the SRDP, we have 
learned that there is uncertainty in the provider community regarding 
the writing requirement of the leasing and other compensation 
exceptions. In particular, we have been asked whether an arrangement 
must be reduced to a single ``formal'' written contract (that is, a 
single document that includes all material aspects of the arrangement) 
in order to satisfy the writing requirement of the applicable 
exception.
    The original exception for the rental of office space required ``a 
written agreement, signed by the parties, for the rental or lease of 
the space . . ..'' (Omnibus Budget Reconciliation Act of 1989, Pub. L. 
101-386 section 6204(e)(1)). In OBRA 1993, the Congress clarified the 
exception for the rental of office space (H. Rept. 103-213 at 812). 
Section 13562(e)(1) of OBRA 1993 (codified at section 1877(e)(1) of the 
Act) provides exceptions for the rental of office space and equipment 
if ``the lease is set out in writing . . ..'' OBRA 1993 also excepted 
personal service arrangements if ``the arrangement is set out in 
writing . . ..'' (OBRA 1993 Sec.  13562(e)(3), codified at section 
1877(e)(3) of the Act). The current regulatory exceptions for the 
rental of office space and the rental of equipment require at Sec.  
411.357(a)(1) and Sec.  411.357 (b)(1), respectively, that an 
``agreement'' be set out in writing. In contrast, the regulatory 
exception for personal service arrangements requires at Sec.  
411.357(d)(1)(i) that the ``arrangement'' be set out in writing.
    Despite the different terminology in the statutory and regulatory 
exceptions, we believe that the writing requirement for the leasing 
exceptions and the personal service arrangements exception is the same. 
Specifically, we interpret the term ``lease'' in sections 1877(e)(1)(A) 
and (B) of the Act to refer to the lease arrangement. Notably, in the 
statutory scheme of section 1877 of the Act, the exceptions for the 
rental of office space, the rental of equipment, and personal service 
arrangements are classified as ``Exceptions Relating to Other 
Compensation Arrangements.'' The lease arrangement is the underlying 
financial relationship between the parties (that is, payments for the 
use of office space or equipment for a period of time). To satisfy the 
writing requirement, the facts and circumstances of the lease 
arrangement must be sufficiently documented to permit the government to 
verify compliance with the applicable exception. (See Phase II (69 FR 
16110) for a similar discussion regarding arrangements among components 
of an academic medical center.)
    In most instances, a single written document memorializing the key 
facts of an arrangement provides the surest and most straightforward 
means of establishing compliance with the applicable exception. 
However, there is no requirement under the physician self-referral law 
that an arrangement be documented in a single formal contract. 
Depending on the facts and circumstances of the arrangement and the 
available documentation, a collection of documents, including 
contemporaneous documents evidencing the course of conduct between the 
parties, may satisfy the writing requirement of the leasing exceptions 
and other exceptions that require that an arrangement be set out in 
writing.
    Through the SRDP, we have learned that some stakeholders interpret 
the term ``agreement,'' as it is used in Sec.  411.357(a)(1) and Sec.  
411.357 (b)(1), to mean that a single written contract is necessary to 
satisfy the writing requirement of the applicable exception. To clarify 
the exceptions for the rental

[[Page 41916]]

of office space and the rental of equipment, we propose to substitute 
the term ``lease arrangement'' for the term ``agreement'' in Sec.  
411.357(a)(1) and Sec.  411.357(b)(1). We believe that this revision 
underscores the fact that the writing requirement at Sec.  
411.357(a)(1) and Sec.  411.357(b)(1) for the rental of office space 
and the rental of equipment, respectively, is identical to the writing 
requirement at Sec.  411.357(d)(1)(i) for personal service 
arrangements. Broadly speaking, we believe that there is no substantive 
difference among the writing requirements of the various compensation 
exceptions that require a writing. To emphasize the uniformity of the 
writing requirement in the compensation exceptions, we propose to 
remove the term ``agreement'' from the exception for physician 
recruitment at Sec.  411.357(e)(4)(i), the exception for fair market 
value compensation at Sec.  411.357(l)(1), the special rule on 
compensation that is set in advance at Sec.  411.354(d)(1), and the 
special rule on physician referrals to a particular provider, 
practitioner, or supplier at Sec.  411.354(d)(4)(i). To be clear, the 
revised rules would still require a writing. For instance, to satisfy 
the revised rule at Sec.  411.354(d)(1) on compensation that is set in 
advance, the rate of compensation must be documented in writing before 
the services are performed. By removing the term ``agreement,'' we are 
simply clarifying that the rules do not require a particular kind of 
writing, for example, a formal contract.
    In light of our proposal to clarify the writing requirement at 
Sec.  411.354(d)(1), Sec.  411.354(d)(4)(i), Sec.  411.357(a)(1), Sec.  
411.357(b)(1), Sec.  411.357(e)(4)(i), and Sec.  411.357(1)(1) by 
removing the term ``agreement,'' we propose to make conforming changes 
where possible to other provisions in the compensation exceptions and 
the special rules on compensation. Specifically, we propose to replace 
the term ``agreement'' with the term ``lease arrangement'' in Sec.  
411.357(a)(2), Sec.  411.357(a)(4), Sec.  411.357(a)(5), Sec.  
411.357(a)(6), Sec.  411.357(b)(3), Sec.  411.357(b)(4), and Sec.  
411.357(b)(5). We propose to replace the term ``agreement'' with the 
term ``arrangement'' in Sec.  411.357(c)(3) (exception for bona fide 
employment relationships) and Sec.  411.357(f)(2) (exception for 
isolated transactions). Likewise, we propose to remove the phrase ``set 
forth in an agreement'' from the introductory language to the exception 
for fair market value compensation at Sec.  411.357(l). Finally, we are 
also concerned that the words ``contract'' and ``contracted for,'' like 
the word ``agreement,'' may suggest that a formal contract or other 
specific kind of writing is required to satisfy the applicable 
exception. To address this issue, we propose to revise Sec.  
411.354(d)(4) by replacing the word ``contract'' as it relates to 
personal service arrangements with the word ``arrangement,'' and we 
propose similar changes to Sec.  411.357(e)(1)(iv) and Sec.  
411.357(r)(2)(v), both of which refer back to Sec.  411.354(d)(4). We 
propose to replace the phrase ``contracted for'' at Sec.  
411.357(d)(1)(iii) with the phrase ``covered by the arrangement.'' In 
the exception at Sec.  411.357(p)(2) for indirect compensation 
arrangements, we propose to replace the phrase ``written contract'' 
with the word ``writing.''
    Certain compensation exceptions use the phrase ``written 
agreement'': the exception at Sec.  411.357(h) for certain group 
practice arrangements with a hospital; the exception at Sec.  
411.357(v) for electronic prescribing items and services; and the 
exception at Sec.  411.357(w) for electronic health records items and 
services. Although these exceptions use the term ``written agreement,'' 
we are not proposing any revisions. The exception at Sec.  411.357(h) 
is rarely used, because it only protects arrangements that began 
before, and continued without interruption since, December 19, 1989. 
The exceptions at Sec.  411.357(v) and Sec.  411.357(w) are aligned 
with the federal anti-kickback statute safe harbors at Sec.  
1001.952(x) and Sec.  1001.952 (y) that protect the provision of these 
items and services. To avoid creating apparent inconsistencies between 
the physician self-referral law exceptions and the corresponding anti-
kickback statute safe harbors, we are not modifying Sec.  411.357(v) or 
Sec.  411.357(w). However, we believe that the principles elucidated 
above regarding the writing requirements of the other compensation 
exceptions to the physician self-referral law also apply to Sec.  
411.357(v) and Sec.  411.357(w).
b. Term Requirements in Certain Compensation Arrangements Exceptions
    The exceptions at Sec.  411.357(a), Sec.  411.357(b), and Sec.  
411.357(d) for the rental of office space, the rental of equipment, and 
personal service arrangements, respectively, require that the 
compensation arrangement between an entity furnishing DHS and a 
referring physician has a term of at least 1 year. Parties submitting 
self-disclosures to the SRDP have asked whether the term of the 
arrangement must be in writing to satisfy the requirements of the 
relevant exceptions. We propose to revise Sec.  411.357(a)(2), Sec.  
411.357(b)(3), and Sec.  411.357(d)(1)(iv) to clarify the documentation 
requirements related to the term of lease arrangements for the rental 
of office space, lease arrangements for the rental of equipment, and 
personal service arrangements.
    The statutory exceptions for the rental of office space and the 
rental of equipment in sections 1877(e)(1)(A)(iii) and (B)(iii) of the 
Act require that the lease provides for a term of rental or lease for 
at least 1 year. The statutory exception for personal service 
arrangements in section 1877(e)(3)(A)(iv) of the Act requires that the 
term of the arrangement is at least 1 year. Although our regulations at 
Sec.  411.357(d)(1)(iv) (the exception for personal service 
arrangements) use language similar to the statutory exception for 
personal service arrangements, our current regulations at Sec.  
411.357(a)(2) and Sec.  411.357(b)(3) (the exceptions for the rental of 
office space and equipment, respectively) use the term ``agreement'' in 
addressing the minimum term requirement. As explained elsewhere in this 
proposed rule, we interpret ``lease'' in section 1877(e)(1) of the Act 
to refer to the lease arrangement between the parties, and we also 
believe that the writing requirement of sections 1877(e)(1)(A) and (B) 
of the Act is identical to the requirement in section 1877(e)(3) of the 
Act.
    We believe that some stakeholders have interpreted the term 
``agreement'' in Sec.  411.357(a)(2) and Sec.  411.357(b)(3) to mean 
that a formal written contract or other document with an explicit 
provision identifying the term of the arrangement is necessary to 
satisfy the 1-year term requirement of the exceptions. As we noted in 
the 1998 proposed rule, the 1-year term requirement is satisfied ``as 
long as the arrangement clearly establishes a business relationship 
that will last for at least 1 year'' (63 FR 1713). An arrangement that 
lasts as a matter of fact for at least 1 year satisfies this 
requirement. Parties must have contemporaneous writings establishing 
that the arrangement lasted for at least 1 year, or be able to 
demonstrate that the arrangement was terminated during the first year 
and that the parties did not enter into a new arrangement for the same 
space, equipment, or services during the first year, as required by 
Sec.  411.357(a)(2), Sec.  411.357(b)(3), and Sec.  411.357(d)(1)(iv), 
as applicable. Depending on the facts and circumstances of the 
arrangement and the available documentation, we believe that, as is the 
case with the writing requirement in these and other

[[Page 41917]]

exceptions, a collection of documents, including contemporaneous 
documents evidencing the course of conduct between the parties, can 
establish that the arrangement in fact lasted for the required period 
of time. A formal contract or other document with an explicit ``term'' 
provision is generally not necessary to satisfy this element of the 
exception. To clarify that a written contract with a formalized 
``term'' provision is not necessary to satisfy the regulations at Sec.  
411.357(a)(2) and Sec.  411.357(b)(3), we propose to remove the word 
``agreement'' and to revise the first sentence of these provisions to 
mirror the 1-year term requirement in the personal service arrangements 
exception at Sec.  411.357(d)(1)(iv).
c. Holdover Arrangements
    The exceptions at Sec.  411.357(a), Sec.  411.357(b), and Sec.  
411.357(d) currently permit a ``holdover'' arrangement for up to 6 
months if an arrangement of at least 1 year expires, the arrangement 
satisfies the requirements of the exception when it expires, and the 
arrangement continues on the same terms and conditions after its stated 
expiration. We propose to amend the holdover provisions at Sec.  
411.357(a)(7), Sec.  411.357(b)(6), and Sec.  411.357(d)(1)(vii) to 
permit indefinite holdovers, provided that certain additional 
safeguards are met. In the alternative, we propose to extend the 
holdover to a definite period that is greater than 6 months (for 
example, 1 year, 2 years, or 3 years), provided that additional 
safeguards are met. Finally, we propose to revise the exception for 
fair market value compensation at Sec.  411.357(l)(2) to permit 
renewals of arrangements of any length of time, including arrangements 
for 1 year or greater.
    The holdover provisions in Sec.  411.357(a), Sec.  411.357(b), and 
Sec.  411.357(d) developed over the course of our rulemaking in 
response to inquiries regarding the expiration, termination, and 
renewal of arrangements. In the 1998 proposed rule, we stated that 
month-to-month arrangements after an arrangement of at least 1 year 
expired would not satisfy the 1-year requirement in the applicable 
exceptions (63 FR 1713). We explained that the purpose of the 1-year 
requirement is to except ``stable arrangements that cannot be 
renegotiated frequently to reflect the current volume or value of a 
physician's referrals.'' Because we were concerned that month-to-month 
arrangements could be frequently renegotiated, we required parties to 
renew arrangements (after the original arrangement of at least 1 year 
expired) in at least 1-year increments.
    In Phase II, we addressed criticism of our statements in the 1998 
proposed rule regarding month-to-month arrangements following the 
expiration of an arrangement that lasted at least 1 year, as required 
under the exceptions at Sec.  411.357(a), Sec.  411.357(b), and Sec.  
411.357(d) (69 FR 16085 through 16086). One commenter suggested that 
there was little additional risk of program or patient abuse if a 
holdover rental continued on the same terms as the original lease 
arrangement. We agreed that there was little risk if a month-to-month 
holdover continued on the same terms and conditions as the original 
lease arrangement, but stated that our position related only to time-
limited holdovers (that is, no more than 6 months) (69 FR 10685 through 
10686). Thus, in Phase II we established the 6-month holdover 
provisions at Sec.  411.357(a)(7) and Sec.  411.357(b)(6) for lease 
arrangements. In Phase III, we declined to except an indefinite 
holdover for rental arrangements where a lessor is taking steps to 
remove a lessee, stating that 6 months is sufficient in the 
circumstances described by the commenter, which related to the lessee's 
refusal to vacate office space upon the expiration of a lease 
arrangement (72 FR 51045). Phase III also established at Sec.  
411.357(d)(vii) a 6-month holdover for personal service arrangements.
    Through our administration of the SRDP, we have reviewed numerous 
rental and personal service arrangements that failed to satisfy the 
requirements of an applicable exception solely because the arrangement 
expired by its terms and the parties continued the arrangement on the 
same (compliant) terms and conditions after the 6-month holdover period 
ended. In our experience, an arrangement that continues beyond the 6-
month period does not pose a risk of program or patient abuse, provided 
that the arrangement continues to satisfy the specific requirements of 
the applicable exception, including the requirements related to fair 
market value, compensation that does not take into account the volume 
or value of referrals or other business generated between the parties, 
and reasonableness of the arrangement. We have reconsidered our 
previous position and are proposing to eliminate the time limitations 
on holdovers with safeguards to address two potential sources of 
program or patient abuse: frequent renegotiation of short term 
arrangements based on a physician's referrals, and compensation or 
rental changes that become inconsistent with fair market value over 
time.
    To prevent frequent renegotiation of short term arrangements, the 
holdover must continue on the same terms and conditions as the original 
arrangement. If the parties change the original terms and conditions of 
the arrangement during the holdover, we would consider this a new 
arrangement. The new arrangement would be subject to the 1-year term 
requirement at Sec.  411.357(a)(2), Sec.  411.357(b)(3), or Sec.  
411.357(d)(1)(iv) (or it must satisfy the requirements of the exception 
for fair market value compensation at Sec.  411.357(l), if applicable). 
Specifically, the new arrangement must have a term of at least 1 year, 
and if the parties terminate the new arrangement with or without cause 
before the end of that year, they cannot enter into another arrangement 
for the same or similar space, equipment, or services until the 
expiration of the year. We believe that these safeguards, which are 
already incorporated into the current exceptions, prevent frequent 
renegotiations of short-term arrangements.
    To ensure that compensation is consistent with or does not exceed 
fair market value, as applicable, the proposed holdover provisions 
require that the holdover arrangement satisfy all the elements of the 
applicable exception when the arrangement expires and on an ongoing 
basis during the holdover. Thus, if office space rental payments are 
fair market value when the lease arrangement expires, but the rental 
amount falls below fair market value at some point during the holdover, 
the lease arrangement would fail to satisfy the requirements of the 
applicable exception at Sec.  411.357(a) as soon as the fair market 
value requirement is no longer satisfied, and DHS referrals by the 
physicians to the entity that is party to the arrangement would no 
longer be permissible. In addition, the entity could not bill the 
Medicare program for DHS furnished as a result of a referral made by 
the physician after the rental charges were no longer consistent with 
fair market value. The requirement that the arrangement is set out in 
writing continues to apply during the holdover. To satisfy this 
requirement, the parties must have documentary evidence that the 
arrangement in fact continued on the same terms and conditions. 
Depending on the facts and circumstances of the arrangement and the 
available documentation, the expired written agreement and a collection 
of documents, including contemporaneous documents evidencing the course 
of conduct

[[Page 41918]]

between the parties may satisfy the writing requirement for the 
holdover.
    As noted above, we propose to revise the holdover provisions at 
Sec.  411.357(a)(7), Sec.  411.357(b)(6), and Sec.  411.357(d)(1)(vii) 
to permit indefinite holdovers under certain conditions. Specifically, 
the arrangement must comply with the applicable exception when it 
expires by its own terms; the holdover must be on the same terms and 
conditions as the immediately preceding arrangement; and the holdover 
must continue to satisfy the requirements of the applicable exception. 
In the alternative, we propose to extend the holdover for a definite 
period (for example, a 1-, 2-, or 3-year holdover period) or for a 
period of time equivalent to the term of the immediately preceding 
arrangement (for example, a 2-year lease would be considered renewed 
for a new 2-year period). We believe that, if the holdover is extended 
for a definite period beyond 6 months, the safeguards outlined above 
for indefinite holdovers are necessary to prevent program or patient 
abuse. We are seeking comments on what additional safeguards, if any, 
are necessary to ensure that holdovers lasting longer than 6 months do 
not pose a risk of program or patient abuse.
    In addition to our proposals to extend the holdover provisions at 
Sec.  411.357(a)(7), Sec.  411.357(b)(6), and Sec.  411.357(d)(1)(vii), 
we propose to amend the exception at Sec.  411.357(l) for fair market 
value compensation arrangements. Section 411.357(l)(2) currently allows 
arrangements for less than 1 year to be renewed any number of times, 
provided that the terms of the arrangement and the compensation for the 
same items or services do not change. We propose to amend Sec.  
411.357(l)(2) to permit arrangements of any timeframe, including 
arrangements for more than 1 year, to be renewed any number of times. 
We believe that the proposal does not pose a risk of patient or program 
abuse, because the arrangement must be renewed on the same terms and 
conditions, and the renewed arrangement must satisfy all the 
requirements of the exception at the time the physician makes a 
referral for DHS and the entity bills Medicare for the DHS. We seek 
comments as to whether the proposed revision of Sec.  411.357(l)(2) 
would be necessary if we revise Sec.  411.357(d)(1)(vii) to permit 
indefinite holdovers.
4. Definitions
    In this proposed rule, we are proposing to revise several 
definitions in our regulations to improve clarity and ensure proper 
application of our policies. We describe below our specific proposals.
a. Remuneration (Sec.  411.351)
    A compensation arrangement between a physician (or an immediate 
family member of such physician) and a DHS entity implicates the 
referral and billing prohibitions of the physician self-referral law. 
Section 1877(h)(1)(A) of the Act defines the term ``compensation 
arrangement'' as any arrangement involving any ``remuneration'' between 
a physician (or an immediate family member of such physician) and an 
entity. However, section 1877(h)(1)(C) of the Act identifies certain 
types of remuneration which, if provided, would not create a 
compensation arrangement subject to the referral and billing 
prohibitions of the physician self-referral law. Under section 
1877(h)(1)(C)(ii) of the Act, the provision of the following items, 
devices, or supplies does not create a compensation arrangement between 
the parties: Items, devices, or supplies that are ``used solely'' to 
collect, transport, process, or store specimens for the entity 
providing the items, devices, or supplies, or to order or communicate 
the results of tests or procedures for such entity. Furthermore, under 
our regulations at Sec.  411.351, the provision of such items, devices, 
or supplies is not considered to be remuneration.
    We are concerned that the phrase ``used solely'' may misleadingly 
suggest that the provision of an item, device, or supply that can be 
used for two or more of the six purposes listed in section 
1877(h)(C)(ii) of the Act constitutes remuneration between the parties 
giving rise to a compensation arrangement. In contrast, in the 1998 
proposed rule, we interpreted the phrase ``solely'' to mean that the 
items must be used solely for the ``purposes listed in the statute'' 
(63 FR 1693). Importantly, the word ``purposes'' is used in the plural, 
and we did not state that an item must be used for only one purpose 
listed in the statute. We continue to believe that the phrase ``used 
solely'' means that an item, device, or supply cannot be used for any 
purpose other than the six purposes listed in the statute. Thus, if an 
item is used for two or more purposes listed in the statute, and it is 
not used for any other purpose (that is, any purpose not listed in the 
statute), then provision of the item does not constitute remuneration 
between the parties. We propose to revise the definition of 
``remuneration'' at Sec.  411.351 to make it clear that the item must 
be used solely for one or more of the six purposes listed in the 
statute.
    Although we are not proposing regulatory revisions at this time, we 
are also concerned about potential confusion, especially for hospitals 
located in states included in the United States Court of Appeals for 
the Third Circuit, regarding whether remuneration is conferred by a 
hospital to a physician when both facility and professional services 
are provided to patients in a hospital-based department. Following 
commentary by the Third Circuit Court of Appeals in its decision in 
United States ex rel. Kosenske v. Carlisle HMA, 554 F.3d 88 (3d Cir. 
2009), we received an advisory opinion request and several self-
disclosures submitted to the SRDP asking whether certain so-called 
``split bill'' arrangements between physicians and DHS entities involve 
remuneration between the parties that gives rise to a compensation 
arrangement for purposes of the physician self-referral law. We are 
taking the opportunity afforded by this rulemaking to address this 
issue.
    In Kosenske, the Third Circuit Court of Appeals held that a 
physician's use of a hospital's resources (for example, examination 
rooms, nursing personnel, and supplies) when treating hospital patients 
constitutes remuneration under the physician self-referral law, even 
when the hospital bills the appropriate payor for the resources and 
services it provides (including the examination room and other facility 
services, nursing and other personnel, and supplies) and the physician 
bills the payor for his or her professional fees only. We do not 
believe that such an arrangement involves remuneration between the 
parties, because the physician and the DHS entity do not provide items, 
services, or other benefits to one another. Rather, the physician 
provides services to the patient and bills the payor for his or her 
services, and the DHS entity provides its resources and services to the 
patient and bills the payor for the resources and services. There is no 
remuneration between the parties for purposes of section 1877 of the 
Act.
    In contrast, if a physician or a DHS entity bills a non-Medicare 
payor (that is, a commercial payor or self-pay patient) globally for 
both the physician's services and the hospital's resources and 
services, a benefit is conferred on the party receiving payment. 
Specifically, the party that bills globally receives payment for items 
or services provided by the other party. Such a global billing 
arrangement involves remuneration between the parties that implicates 
the physician self-referral law.

[[Page 41919]]

b. Compensation Arrangements -``Stand in the Shoes'' (Sec.  411.354(c))
    Phase III included provisions under which all physicians would be 
treated as ``standing in the shoes'' of their physician organizations 
for purposes of applying the rules regarding direct and indirect 
compensation arrangements at Sec.  411.354(c) (72 FR 51026 through 
51030). (Since Phase II, we have considered a referring physician and 
the professional corporation of which he or she is the sole owner to be 
the same for purposes of the physician self-referral regulations (69 FR 
16131).) The FY 2009 IPPS final rule amended Sec.  411.354(c) to: (1) 
Treat a physician with an ownership or investment interest in a 
physician organization as standing in the shoes of that physician 
organization; and (2) permit parties to treat a physician who does not 
have an ownership or investment interest in a physician organization as 
standing in the shoes of that physician organization. An exception to 
the mandatory treatment of physicians with ownership or investment 
interests as standing in the shoes of their physician organizations was 
made for physicians with ``titular'' ownership or investment interests 
only (73 FR 48691 through 48700). A ``physician organization'' is 
defined at Sec.  411.351 as a physician, a physician practice, or a 
group practice that complies with the requirements of Sec.  411.352. 
Therefore, as of October 1, 2008, for purposes of determining whether a 
direct or indirect compensation arrangement exists between a physician 
and an entity to which the physician makes referrals for the furnishing 
of DHS, if the physician has an ownership or investment interest in the 
physician organization that is not merely titular, the physician stands 
in the shoes of the physician organization. The physician is considered 
to have the same compensation arrangements (with the same parties and 
on the same terms) as the physician organization in whose shoes he or 
she stands.
    In Phase III, we established the rule at Sec.  411.354(c)(3)(i), 
which provides that a physician who stands in the shoes of his or her 
physician organization is deemed to have the same compensation 
arrangements (with the same parties and on the same terms) as the 
physician organization. The regulation also states that, when applying 
the exceptions in Sec.  411.355 and Sec.  411.357 to arrangements in 
which a physician stands in the shoes of his or her physician 
organization, the relevant referrals and other business generated 
``between the parties'' are referrals and other business generated 
between the entity furnishing DHS and the physician organization 
(including all members, employees, and independent contractor 
physicians). Our intent for this provision was to make clear that, 
under the Phase III ``stand in the shoes'' policy (which considered all 
physicians in a physician organization to stand in the shoes of the 
physician organization), each physician in the physician organization 
was considered a ``party'' to an arrangement between the physician 
organization and a DHS entity.
    Following the FY 2009 IPPS final rule changes limiting the ``stand 
in the shoes'' rules only to physicians with ownership or investment 
interests in their physician organizations (other than those with 
merely a titular ownership or investment interests) and physicians who 
voluntarily stand in the shoes of their physician organizations, 
stakeholders inquired whether the change in the ``stand in the shoes'' 
policy meant that, when applying the exceptions in Sec.  411.355 and 
Sec.  411.357, for purposes of determining whether compensation takes 
into account the volume or value of referrals or other business 
generated between the ``parties,'' the only ``parties'' to consider are 
the physicians with ownership or investment interests in their 
physician organizations. This was not our intent in revising the 
``stand in the shoes'' rules in the FY 2009 IPPS final rule.
    To address the issue raised by the stakeholders, we are proposing 
to revise Sec.  411.354(c)(3)(i) so that it is consistent with our work 
in the FY 2009 IPPS final rule. Our intent there was, and currently 
remains, that only physicians who stand in the shoes of their physician 
organization are considered parties to an arrangement for purposes of 
the signature requirements of the exceptions. For such purposes, we do 
not consider employees and independent contractors to be parties to a 
physician organization's arrangements unless they voluntarily stand in 
the shoes of the physician organization as permitted under Sec.  
411.354(c)(1)(iii) or Sec.  411.354(c)(2)(iv)(B). Guidance regarding 
physicians who stand in the shoes of their physician organizations may 
be found on our Web site at http://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/FAQs.html. Specifically, consistent with 
our response in Frequently Asked Question #12318, for purposes of 
satisfying the requirements of an exception to the physician self-
referral prohibition, we consider a physician who is standing in the 
shoes of his or physician organization to have satisfied the signature 
requirement of an applicable exception when the authorized signatory of 
the physician organization has signed the writing evidencing the 
arrangement.
    For purposes other than satisfying the signature requirements of 
the exceptions, we remain concerned about the referrals of all 
physicians who are part of a physician organization that has a 
compensation arrangement with a DHS entity when we analyze whether the 
compensation between the DHS entity and the physician organization 
takes into account the volume or value of referrals or other business 
generated between the parties. If we did not consider the referrals of 
all the physicians in the physician organization, and instead only 
considered the referrals of those physicians who stand in the shoes of 
the physician organization, DHS entities would be permitted to 
establish compensation methodologies that take into account the volume 
or value referrals or other business generated by non-owner physicians 
in a physician organization when entering into a compensation 
arrangement with the physician organization. Therefore, our proposal 
would amend Sec.  411.354(c)(3)(i) to clarify that, for all purposes 
other than the signature requirements, all physicians in a physician 
organization are considered parties to the compensation arrangement 
between the physician organization and the DHS entity.
c. Locum Tenens Physician (Sec.  411.351)
    The term ``locum tenens physician'' was first defined for purposes 
of the physician self-referral law in Phase I (66 FR 954). This 
definition is important because a locum tenens physician is considered 
a member of a group practice, and therefore the definition is relevant 
to whether a physician practice complies with the group practice 
requirements at Sec.  411.352. In the Phase I preamble, we likened a 
locum tenens physician to one who is ``standing in the shoes'' of a 
regular physician, subject to certain requirements in CMS manual 
guidance (66 FR 900). Our regulations at Sec.  411.351 have 
continuously defined a locum tenens physician as a physician who 
substitutes (that is, ``stands in the shoes'') in exigent circumstances 
for a physician, first within the definition of ``member of a group'' 
(66 FR 954) and later as a stand-alone defined term applicable to both 
group practices and other physicians (69 FR 16129). We note that the 
Phase I definition referenced the ``regular physician'' (66 FR 954).
    As described in this section, in subsequent rulemaking, we 
established certain rules regarding when a physician ``stands in the 
shoes'' of his

[[Page 41920]]

or her physician organization. The ``stand in the shoes'' rules affect 
whether an arrangement may be analyzed as a direct or indirect 
compensation arrangement (See 72 FR 51027 through 51030, and 73 FR 
48693 through 48700). The ``stand in the shoes'' provisions are 
specific to compensation arrangements and described in our regulations 
at Sec.  411.354(c).
    We propose to revise the definition of locum tenens physician to 
remove the reference to ``stand in the shoes.'' We believe that the 
definition of a locum tenens physician is clear without the phrase 
``stands in the shoes.'' We also believe that it is clear that the 
``stand in the shoes'' provisions specific to compensation arrangements 
are separate and distinct from the definition of a locum tenens 
physician. However, to eliminate unnecessary verbiage and to avoid any 
potential ambiguity, we propose to revise the definition of locum 
tenens physician at Sec.  411.351 by removing the phrase ``stands in 
the shoes.''
5. Exception for Ownership of Publicly Traded Securities
    Section 1877(c)(1) of the Act sets forth an exception for ownership 
in certain publicly traded securities and mutual funds. To qualify for 
the exception, securities must be:
     Investment securities (including shares or bonds, 
debentures, notes, or other debt instruments) which may be purchased on 
terms generally available to the public;
     Securities that are: (1) Listed on the New York Stock 
Exchange (NYSE), the American Stock Exchange, or any regional exchange 
in which quotations are published on a daily basis; (2) foreign 
securities listed on a recognized foreign, national, or regional 
exchange in which quotations are published on a daily basis; or (3) 
traded under the automated interdealer quotation system operated by the 
National Association of Securities Dealers (NASD); and
     In a corporation that had stockholder equity exceeding $75 
million at the end of the corporation's most recent fiscal year or on 
average during the previous 3 fiscal years.
    This exception is codified in our regulations at Sec.  411.356(a), 
which closely mirrors section 1877(c) of the Act. Although we are aware 
of no public comment regarding publicly traded securities which are 
traded under an automated interdealer quotation system operated by the 
NASD, it has come to our attention that the NASD no longer exists and 
that it is no longer possible to purchase a publicly traded security 
traded under the automated interdealer quotation system it formerly 
operated. In response, we investigated whether we could modernize the 
exception for ownership of publicly traded securities by including 
currently existing systems that are equivalent to the NASD's now-
obsolete automated interdealer quotation system.
    In 1972, NASD launched a computerized stock trading system called 
the National Association of Securities Dealers Automated Quotation 
Systems (NASDAQ) stock market. In 2000, NASDAQ became an independent 
entity. In 2007, the United States Securities and Exchange Commission 
approved the formation of a new self-regulatory organization, the 
Financial Industry Regulatory Authority (FINRA), to be a successor to 
the NASD. The NASD and the member regulation, enforcement, and 
arbitration functions of the NYSE consolidated to form FINRA. Until 
November 2014, FINRA operated a quotation medium for over-the-counter 
(OTC) securities, including those not listed on NASDAQ or a national 
stock exchange. We are unable to locate a definition of ``automated 
interdealer quotation system'' and believe this is an antiquated term 
for which there is no modern day equivalent. However, we believe that 
electronic stock markets such as NASDAQ and FINRA's OTC market are 
outgrowths and modern day equivalents to an automated interdealer 
quotation system.
    We propose to use our authority in section 1877(b)(4) of the Act to 
revise the regulations at Sec.  411.356(a)(1) to include securities 
listed for trading on an electronic stock market or OTC quotation 
system in which quotations are published on a daily basis and trades 
are standardized and publicly transparent. Trades made through a 
physical exchange (such as the NYSE or the American Stock Exchange) are 
standardized and publicly transparent. To protect against risk of 
program or patient abuse, we believe that trades on the electronic 
stock markets and OTC quotation systems that are eligible for this 
exception must also be standardized and publicly transparent. 
Accordingly, we are not proposing to include any electronic stock 
markets or OTC quotation systems that trade unlisted stocks or that 
involve decentralized dealer networks. We also believe it is 
appropriate to limit the proposed exception to those electronic stock 
markets or OTC quotation systems that publish quotations on a daily 
basis, as physical exchanges must publish on that basis. We seek 
comment regarding whether fewer, different, or additional restrictions 
on electronic stock markets or OTC quotation systems are necessary to 
effectuate the Congress' intent and to protect against patient or 
program abuse.
6. New Exception for Timeshare Arrangements
a. Statutory and Regulatory Background
    Section 1877(e)(1)(A) of the Act sets forth an exception for the 
rental of office space. Under this exception, lease arrangements must 
satisfy six specific criteria, one of which is that the office space 
rented or leased is used exclusively by the lessee when being used by 
the lessee (and is not shared with or used by the lessor or any other 
person or entity related to the lessor). The exception also permits 
payments by the lessee for the use of space consisting of common areas 
(which do not afford exclusive use to the lessee) if the payments do 
not exceed the lessee's pro rata share of expenses for the space based 
upon the ratio of the space used exclusively by the lessee to the total 
amount of space (other than common areas) occupied by all persons using 
the common areas. The 1995 final rule (60 FR 41959) incorporated the 
provisions of section 1877(e)(1)(A) of the Act into our regulations at 
Sec.  411.357(a).
    Section 1877(e)(8) of the Act sets forth an exception for: (1) 
Payments made by a physician to a laboratory in exchange for the 
provision of clinical laboratory services; and (2) payments made by a 
physician to an entity as compensation for items or services other than 
clinical laboratory services if the items or services are furnished at 
fair market value (the ``payments by a physician exception''). The 1995 
final rule (60 FR 41929) incorporated the provisions of section 
1877(e)(8) of the Act into our regulations at Sec.  411.357(i). In the 
1998 proposed rule (63 FR 1703), we proposed to interpret ``other items 
or services'' to mean any kind of items or services that a physician 
might purchase, but not including clinical laboratory services or those 
specifically excepted under another provision in Sec. Sec.  411.355 
through 411.357. In that proposal, we stated that we did not believe 
that the Congress meant for the payments by a physician exception to 
cover a rental arrangement as a service that a physician might 
purchase, because it had already included in the statute specific 
exceptions, with specific standards for such arrangements, in section 
1877(e)(1) of the Act. In Phase II (69 FR 16099), we responded to 
commenters that disagreed with our position that the exception for 
payments by a physician is not available for

[[Page 41921]]

arrangements involving items and services addressed by another 
exception, stating that our position is consistent with the overall 
statutory scheme and purpose and is necessary to prevent the exception 
from negating the statute (69 FR 16099). We made no changes to the 
exception in Phase II to accommodate the commenters' concerns.
    In the 1998 proposed rule (63 FR 1699), we proposed an exception 
for compensation arrangements that are based upon fair market value and 
meet certain other criteria. We finalized the exception at Sec.  
411.357(l) in Phase I, noting that, although it only covered services 
provided by a physician (or an immediate family member of a physician) 
to an entity furnishing DHS, it was available for some arrangements 
that are covered by other exceptions (66 FR 917 through 919). Although 
commenters requested that we expand the exception to cover the 
transfer, lease or license of real property, intangible property, 
property rights, or a covenant not to compete (69 FR 16111), we made no 
substantive changes to the exception for fair market value compensation 
in Phase II. In Phase III, we expanded the exception at Sec.  
411.357(l) for fair market value compensation to include arrangements 
involving compensation from a physician to an entity furnishing DHS. We 
reiterated that the exception for fair market value compensation does 
not protect office space lease arrangements; rather, arrangements for 
the rental of office space must satisfy the requirements of the 
exception at Sec.  411.357(a) (72 FR 51059 through 51060).
    In Phase III, a commenter suggested that ``timeshare'' leasing 
arrangements would be addressed more appropriately in the exception for 
fair market value compensation at Sec.  411.357(l) or the exception for 
payments by a physician at Sec.  411.357(i), instead of the exception 
for the rental of office space at Sec.  411.357(a) (72 FR 51044). The 
commenter described a timeshare lease arrangement under which a 
physician or group practice pays the lessor for the right to use office 
space exclusively on a turnkey basis, including support personnel, 
waiting area, furnishings, and equipment, during a schedule of time 
intervals for a fair market value rate per interval of time or in the 
aggregate, and urged us to clarify that such timeshare arrangements may 
qualify under Sec.  411.357(i) or Sec.  411.357 (l), the exceptions for 
payments by a physician and fair market value compensation, 
respectively. We note that the commenter specifically described 
arrangements where the lessee had exclusive, but only periodic, use of 
the premises, equipment, and personnel. In response, we declined to 
permit space leases to be eligible for the fair market value exception 
at Sec.  411.357(l), and stated that we were not persuaded that Sec.  
411.357(i) should protect space leases (72 FR 51044 through 51045).
b. Timeshare Arrangements
    Through our administration of the SRDP, as well as stakeholder 
inquiries, we have been made aware of arrangements for the use of a 
licensor's premises, equipment, personnel, items, supplies or services 
by physicians who, for various legitimate reasons, do not require or 
are not interested in a traditional office space lease arrangement. For 
example, in a rural or underserved area, there may be a need in the 
community for certain specialty services but that need is not great 
enough to support the full-time services of a physician specialist. 
Under timeshare arrangements, a hospital or local physician practice 
may ask a specialist from a neighboring community to provide the 
services in space owned by the hospital or practice on a limited or as-
needed basis. Most often, under such an arrangement, the specialist 
does not establish an additional medical practice office by renting 
office space and equipment, hiring personnel, and purchasing services 
and supplies necessary for the operation of a medical practice. Rather, 
it is common for a hospital or local physician practice to make 
available to the visiting independent physician on a ``timeshare'' 
basis the space, equipment and services necessary to treat patients. 
Under the timeshare arrangement, the hospital or physician practice may 
provide the physician with a medical office suite that is fully 
furnished and operational. The physician does not need to make any 
improvements to the space or to bring any medical or office supplies in 
order to begin seeing patients. Timeshare arrangements also may be 
attractive to a relocating physician whose prior medical practice 
office lease has not expired or to a new physician establishing his or 
her medical practice.
    It is our understanding that a license to use the property of 
another person differs from a lease in that ownership and control of 
the property remains with the licensor. That is, a lease transfers 
dominion and control of the property from the lessor to the lessee, but 
a license is a mere privilege to act on another's property and does not 
confer a possessory interest in the property. We recognize that 
timeshare arrangements may differ from traditional lease and service 
arrangements. Often, a timeshare arrangement does not transfer dominion 
and control over the premises, equipment, personnel, items, supplies, 
and services of the licensor to the licensee, but rather confers a 
privilege (or license) to use (during specified periods of time) the 
premises, equipment, personnel, items, supplies, and services that are 
the subject of the license.
c. New Exception
    Because timeshare arrangements generally include the use of office 
space, under our current regulations, an arrangement as it relates to 
office space must be analyzed under the exception for the rental of 
office space. However, where a timeshare arrangement is structured as a 
license to use the office space (and other property and personnel) of 
the licensor, it cannot satisfy the requirements of that exception 
because a license generally does not provide for exclusive use of the 
premises. Moreover, the arrangement may have a term of less than 1 
year, which would not satisfy the term requirement at Sec.  
411.357(a)(2). The exceptions for payments by a physician and fair 
market value compensation arrangements, which do not have exclusive use 
or 1-year term requirements, are unavailable under our current 
regulations because of the inclusion of office space in the bundle of 
items and services in a typical timeshare arrangement.
    We believe that timeshare arrangements that include the use of 
office space can be structured in a way that does not pose a risk of 
program or patient abuse. To address such arrangements, which we 
believe are often necessary to ensure adequate access to needed 
specialty care (especially in rural and underserved areas), we are 
using our authority at section 1877(b)(4) of the Act to propose a new 
exception at Sec.  411.357(y) that would protect timeshare arrangements 
that meet certain criteria, including that: (1) The arrangement is set 
out in writing, signed by the parties, and specifies the premises, 
equipment, personnel, items, supplies and services covered by the 
arrangement; (2) the arrangement is between a hospital or physician 
organization (licensor) and a physician (licensee) for the use of the 
licensor's premises, equipment, personnel, items, supplies, or 
services; (3) the licensed premises, equipment, personnel, items, 
supplies, and services are used predominantly to furnish evaluation and 
management services to

[[Page 41922]]

patients of the licensee; (4) the equipment covered by the arrangement, 
if any: (i) Is located in the office suite where the physician performs 
evaluation and management services, (ii) is used only to furnish DHS 
that is incidental to the physician's evaluation and management 
services and furnished at the time of such evaluation and management 
services, and (iii) is not advanced imaging equipment, radiation 
therapy equipment, or clinical or pathology laboratory equipment (other 
than equipment used to perform CLIA-waived laboratory tests); (5) the 
arrangement is not conditioned on the licensee's referral of patients 
to the licensor; (6) the compensation over the term of the arrangement 
is set in advance, consistent with fair market value, and not 
determined in a manner that takes into account (directly or indirectly) 
the volume or value of referrals or other business generated between 
the parties; (7) the arrangement would be commercially reasonable even 
if no referrals were made between the parties; and (8) the arrangement 
does not violate the anti-kickback statute (section 1128B(b) of the 
Act) or any federal or state law or regulation governing billing or 
claims submission.
    The proposed exception at Sec.  411.357(y) would apply only to 
timeshare arrangements where the licensor is a hospital or physician 
organization; it would not protect arrangements where the licensor is 
another type of DHS entity. We believe that timeshare arrangements 
offered by independent diagnostic testing facilities and clinical 
laboratories, in particular, pose a heightened risk of program or 
patient abuse as they may serve to lock in referral streams from the 
physician licensee as a result of the physician's proximity to the DHS 
furnished by such entities. We do not believe that it is necessary to 
protect arrangements with these types of entities in order to achieve 
the goals of beneficiary access to care and improved outcomes. 
Similarly, we see no reason to protect timeshare arrangements in which 
the hospital or other entity furnishing DHS is the licensee and the 
referring physician is the licensor. We seek comment regarding whether 
the scope of the exception is sufficiently broad to improve beneficiary 
access to care (especially in rural or underserved areas), whether 
there is a compelling need to allow DHS entities other than hospitals 
and physician organizations to enter into timeshare arrangements with 
referring physicians, and whether the exception should apply if the 
licensor is a physician who is a source of DHS referrals to the 
licensee. We solicit comment on whether the exception should be limited 
to arrangements in rural and underserved areas.
    We propose to protect only those timeshare arrangements under which 
the physician uses the licensed premises, equipment, personnel, items, 
supplies, and services predominantly for the evaluation and management 
of patients. The proposed exception at Sec.  411.357(y) would not 
protect the license of office space used by the physician solely or 
primarily to furnish DHS to patients. We seek comment regarding whether 
``predominant use'' is an appropriate measure of the use of the 
licensed premises and, if so, how we might define this standard, or 
whether we should include a different measure, such as one that would 
require that ``substantially all of the services furnished to patients 
on the licensed premises are not DHS.'' We also propose to limit the 
type and location of the equipment that may be licensed to only that 
which is used to furnish DHS that is incidental to the patient's 
evaluation and management visit and furnished contemporaneously with 
that visit. We note that this requirement does not affect the manner in 
which the DHS is billed (for example, ``incident to'' a physician's 
service or directly by a nonphysician practitioner). We believe that 
DHS that is ``incidental to'' the patient's evaluation and management 
includes a limited universe of diagnostic tests and other procedures, 
such as x-rays, rapid strep tests, and urine dipstick tests to diagnose 
pregnancy, that assist the physician in his or her diagnosis and 
treatment of the patient. For this reason, we propose to exclude from 
the protection of the exception the license of advanced imaging 
equipment, radiation therapy equipment, and clinical and pathology 
laboratory equipment (other than that which is used to furnish CLIA-
waived laboratory tests). Finally, we propose to require that the 
equipment be located on the licensed premises; that is, in the office 
suite. For example, it is reasonable for an orthopedic surgeon to x-ray 
a patient to assist in the diagnosis and treatment of the patient's 
potential orthopedic injury or condition. Under the proposed exception, 
a hospital may license to the orthopedic surgeon the use of medical 
office space, an in-suite x-ray machine, an x-ray technician, and 
office and medical supplies, provided that all of the other 
requirements of the exception are satisfied. We seek comment on these 
requirements and limitations. Specifically we are interested in 
comments regarding whether the equipment location requirement should be 
expanded to include equipment located in the same building (as defined 
at Sec.  411.351) as the licensed office suite or an off-site location, 
and whether we should prohibit the license of equipment in the absence 
of a corresponding license of office space.
    We also propose to prohibit certain per unit-of-service and 
percentage compensation methodologies for determining the license fees 
under timeshare arrangements. Under the new exception, parties would be 
able to determine license fees on an hourly, daily, or other time-based 
basis, but would not be permitted to use a compensation methodology 
based on, for example, the number of patients seen. Parties also would 
not be permitted to use a compensation methodology based on the amount 
of revenue raised, earned, billed, collected, or otherwise attributable 
to the services provided by the licensee while using the licensor's 
premises, equipment, personnel, items, supplies or services. We are 
soliciting comments on whether these limitations on compensation 
methodologies for license fees are necessary and whether a timeshare 
arrangement for the use of a licensor's premises, equipment, personnel, 
items, supplies or services would pose a risk of program or patient 
abuse in the absence of this prohibition on per-click and percentage 
compensation methodologies for the license fees paid by the licensee to 
the licensor.
    We note that the exception for the rental of office space would 
continue to be the only exception that would apply to traditional 
office space lease arrangements where dominion and control of the 
premises is transferred to the lessee for a specified period of time 
for the lessee's exclusive use of the leased premises. The proposed new 
exception would also not be available to protect part-time exclusive 
use office space lease arrangements. We solicit comments on the 
proposed new exception for timeshare arrangements and any additional 
criteria that may be necessary to safeguard against program or patient 
abuse.
7. Temporary Noncompliance With Signature Requirements (Sec.  
411.353(g))
    Several compensation arrangement exceptions to the physician self-
referral law require that an arrangement be signed by the parties. Our 
current regulations at Sec.  411.353(g) include a special rule for 
arrangements involving temporary noncompliance with signature 
requirements. The regulation permits an entity to submit a claim or

[[Page 41923]]

bill and receive payment for DHS if an arrangement temporarily does not 
satisfy the applicable exception's signature requirement but otherwise 
fully complies with the exception. Under the current rule, if the 
failure to comply with the signature requirement is inadvertent, the 
parties must obtain the required signature(s) within 90 days. If the 
failure to comply is not inadvertent, the parties must obtain the 
required signature(s) within 30 days.
    In the FY 2009 IPPS final rule, we stated that we would evaluate 
our experience with the regulation at Sec.  411.353(g) and propose more 
or less restrictive modifications at a later date (73 FR 48707). We are 
now proposing to modify the current regulation to allow parties 90 days 
to obtain the required signatures, regardless of whether or not the 
failure to obtain the signature(s) was inadvertent. We recognize that 
it is not uncommon for parties who are aware of a missing signature to 
take up to 90 days to obtain all required signatures. We are also 
proposing to revise Sec.  411.353(g) to include reference to the new 
regulatory exceptions for payments to a physician to employ a 
nonphysician practitioner and timeshare arrangements that we are 
proposing at new Sec.  411.357(x) and Sec.  411.357(y), respectively, 
to ensure that all compensation exceptions with signature requirements 
are treated uniformly. We do not believe that allowing parties 90 days 
to obtain signatures while the arrangement otherwise complies with the 
physician self-referral law poses a risk of program or patient abuse.
    The proposed regulation maintains the safeguards of the current 
rule. Specifically, the proposed regulation applies narrowly to the 
signature requirement only. To make use of the proposed revised 
provisions at Sec.  411.353(g), an arrangement would have to satisfy 
all other requirements of an applicable exception, including the 
requirement that the arrangement be set out in writing. In addition, an 
entity may make use of the proposed regulation only once every 3 years 
with respect to the same referring physician. Given these safeguards, 
we believe that the proposed revision poses no risk of program or 
patient abuse.
8. Physician-Owned Hospitals
    Section 6001(a) of the Affordable Care Act amended the rural 
provider and hospital ownership or investment interest exceptions to 
the physician self-referral law to impose additional restrictions on 
physician ownership and investment in hospitals. For purposes of these 
exceptions, the new legislation defined a ``physician owner or 
investor'' as a physician, or immediate family member of a physician, 
who has a direct or indirect ownership or investment interest in a 
hospital. We refer to hospitals with direct or indirect physician 
owners or investors as ``physician-owned hospitals.''
    Section 6001(a)(3) of the Affordable Care Act established new 
section 1877(i) of the Act, which imposes additional requirements for 
physician-owned hospitals to qualify for the rural provider or hospital 
ownership exceptions. In part, section 1877(i) of the Act requires a 
physician-owned hospital to disclose the fact that the hospital is 
partially owned or invested in by physicians on any public Web site for 
the hospital and in any public advertising for the hospital; provides 
that a physician-owned hospital must have had a provider agreement in 
effect as of December 31, 2010; and provides that the percentage of the 
total value of the ownership or investment interests held in a 
hospital, or in an entity whose assets include the hospital, by 
physician owners or investors in the aggregate cannot exceed such 
percentage as of March 23, 2010.
    In the CY 2011 OPPS/ASC final rule with comment period (75 FR 
72240), we addressed many of the additional requirements that were 
established by the Affordable Care Act for a physician-owned hospital 
to avail itself of the rural provider or hospital ownership exceptions. 
In that final rule with comment period, among other things, we 
finalized regulations at Sec.  411.362(b)(3)(ii)(C) that required a 
physician-owned hospital to disclose on any public Web site for the 
hospital and in any public advertising that the hospital is owned or 
invested in by physicians. We also finalized regulations at Sec.  
411.362(b)(1) that required a physician-owned hospital to have had a 
provider agreement in effect on December 31, 2010, and at Sec.  
411.362(b)(4)(i) to provide that the percentage of the total value of 
the ownership or investment interests held in a hospital (or in an 
entity whose assets include the hospital) by physician owners or 
investors in the aggregate cannot exceed such percentage as of March 
23, 2010. We also revised the rural provider and hospital ownership 
exceptions at Sec.  411.356(c)(1) and Sec.  411.356(c)(3), 
respectively, to provide that a physician-owned hospital must meet the 
requirements in new Sec.  411.362 not later than September 23, 2011, in 
order to avail itself of the applicable exception.
a. Preventing Conflicts of Interest: Public Web Site and Public 
Advertising Disclosure Requirement (Sec.  411.362(b)(3)(ii)(C))
    Following publication of the CY 2011 OPPS/ASC final rule with 
comment period (75 FR 72240), we received numerous inquiries about many 
of the additional requirements that were established by the Affordable 
Care Act for the rural provider and hospital ownership exceptions, 
including the requirement that a physician-owned hospital must disclose 
on any public Web site for the hospital and in any public advertising 
that the hospital is owned or invested in by physicians. Specifically, 
industry stakeholders requested additional guidance to clarify the 
terms ``public Web site for the hospital'' and ``public advertising for 
the hospital,'' the range of statements that constitute a sufficient 
disclosure, and the period of noncompliance for a failure to disclose. 
We also received disclosures through the SRDP where the disclosing 
parties reasonably assessed that, based on existing CMS guidance, they 
could not certify compliance with this disclosure requirement and, 
therefore, the conduct constituted a violation of the law.
    Given the inquiries and disclosures that we received, we have 
carefully considered both the disclosure requirement's purpose and our 
existing regulations addressing the requirement. We believe that, in 
establishing this requirement, the Congress decided that the public 
should be on notice if a hospital is physician-owned because that fact 
may inform an individual's medical decision-making. We do not interpret 
the public Web site and advertising disclosure requirements to be 
prescriptive requirements for the inclusion of specific wording in an 
undefined range of communication. Accordingly, we are proposing to 
provide physician-owned hospitals more certainty regarding the forms of 
communication that require a disclosure statement and the types of 
language that would constitute a sufficient statement of physician 
ownership or investment. We believe that our proposals would 
appropriately balance the industry's need for greater clarity with the 
public's need to be apprised of such information. Finally, we note 
that, in the event that a physician-owned hospital discovers that it 
failed to satisfy the public Web site or public advertising disclosure 
requirements, the SRDP is the appropriate means for reporting such 
overpayments. For more information, see the Special Instructions for 
Submissions to the CMS Voluntary Self-

[[Page 41924]]

Referral Disclosure Protocol for Physician-Owned Hospitals and Rural 
Providers that Failed to Disclose Physician Ownership on any Public Web 
site and in any Public Advertisement, available on our Web site at 
http://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/Self_Referral_Disclosure_Protocol.html.
    For the public Web site disclosure requirement, we are proposing to 
amend existing Sec.  411.362(b)(3)(ii)(C) to list examples of the types 
of Web sites that do not constitute a ``public Web site for the 
hospital.'' We are proposing to revise Sec.  411.362(b)(3)(ii)(C) to 
specify that a ``public Web site for the hospital'' does not include 
certain types of Web sites, even though limited information about the 
hospital may be found on such Web sites. For example, we do not 
consider social media Web sites to be ``public Web sites for the 
hospital,'' and the proposed regulation would clarify this. We do not 
believe that a hospital's communications (such as maintaining an 
individual page on a Web site, posting a video, or posting messages) 
via a social media Web site should be construed as a Web site that is 
``for the hospital,'' given that the Web site is operated and 
maintained by a social networking service and that a multitude of users 
typically can become members of such a service. Further, we note that 
social media communications, which are used primarily for the 
development of social and professional contacts and for sharing 
information between interested parties, differ in scope from the 
provision of information typically found on a hospital's main Web site, 
such as the hospital's history, leadership and governance structure, 
mission, and a list of staff physicians. We also propose to specify at 
Sec.  411.362(b)(3)(ii)(C) that a ``public Web site for the hospital'' 
does not include electronic patient payment portals, electronic patient 
care portals, or electronic health information exchanges, as these are 
not available to the general public. These portals are for the 
convenience of only those patients who have already been treated at the 
hospital and to whom the hospital's physician ownership likely would 
have already been disclosed. Our proposed examples of Web sites that do 
not constitute a ``public Web site for the hospital'' is not 
exhaustive. We recognize the difficulty in identifying every type of 
Web site that either currently exists or may emerge as technology 
develops that would not require a disclosure statement. We seek public 
comment on whether our proposed examples are appropriate given the 
statutory language and whether we should include different or 
additional examples of Web sites in the list. We also seek public 
comment on whether, in the alternative, we should provide an inclusive 
definition of what would be considered a ``public Web site for the 
hospital'' and, if so, we solicit recommendations for such a 
definition. Finally, we note that, even if a Web site does not 
constitute a public Web site for the hospital under our proposal, the 
online content may, depending on the facts and circumstances, 
constitute public advertising for the hospital that would require a 
disclosure statement.
    For the public advertising disclosure requirement, we are proposing 
to define ``public advertising for the hospital'' at Sec.  411.362(a). 
We note that our existing regulations at Sec.  411.362(b)(3)(ii)(C) 
reference ``public advertising'' without explicitly specifying ``for 
the hospital,'' which is different from the statutory language of 
section 1877(i)(1)(C)(iv) of the Act. We are proposing to include that 
phrase in the definition and in the disclosure requirement to conform 
our regulations to the statutory language. To determine how best to 
clarify what we consider to be ``public advertising for the hospital,'' 
we consulted numerous sources for definitions of ``advertise'' and 
``advertising.'' After considering the results of our research, we are 
proposing to define ``public advertising for the hospital,'' for 
purposes of the physician self-referral law, as any public 
communication paid for by the hospital that is primarily intended to 
persuade individuals to seek care at the hospital. We are proposing 
that the definition of ``public advertising for the hospital'' does not 
include, by way of example, communication made for the primary purpose 
of recruiting hospital staff (or other similar human resources 
activities), public service announcements issued by the hospital, and 
community outreach issued by the hospital. We believe that, as a 
general matter, communications related to recruitment are for the 
primary purpose of fulfilling a hospital's basic need for staff and 
that communications issued via public service announcements and 
community outreach are for the primary purpose of providing the general 
public healthcare-related information. Therefore, we are proposing to 
specify in our regulations that these types of communications would be 
excluded from our proposed definition of ``public advertising for the 
hospital.'' We note that these types of communications do not represent 
an exhaustive list of what we do not consider ``public advertising for 
the hospital.'' We seek public comment on our proposed definition of 
``public advertising for the hospital'' as well as our proposed list of 
examples that do not constitute ``public advertising for the 
hospital.''
    We note that a determination as to whether a certain communication 
constitutes public advertising for the hospital depends on the specific 
facts and circumstances of the communication. In the CY 2011 OPPS/ASC 
final rule with comment period, commenters asserted that a hospital 
should not be required to include disclosures in certain advertising, 
such as the kind found on billboards, or the kind aired via radio and 
television and that the requirement should be confined to print media 
such as newspapers, magazines, and other internally produced print 
material for public use (75 FR 72248). In response to the commenters, 
we stated that we have no flexibility to exclude certain types of 
advertising media, as the statute was very straightforward in its 
statement that the disclosure appear in ``any public advertising'' for 
the hospital. In this proposed rule, we are clarifying that the facts 
and circumstances of the communication, rather than the medium by which 
the message is communicated, determine whether a communication 
constitutes ``public advertising for the hospital.''
    We also are proposing to clarify the types of statements that 
constitute a sufficient statement of physician ownership or investment. 
Specifically, we propose to amend Sec.  411.362(b)(3)(ii)(C) to specify 
that any language that would put a reasonable person on notice that the 
hospital may be physician-owned is deemed a sufficient statement of 
physician ownership or investment. A statement such as ``this hospital 
is owned or invested in by physicians'' or ``this hospital is partially 
owned or invested in by physicians'' would certainly meet this 
standard. However, statements that the hospital is ``founded by 
physicians,'' ``managed by physicians,'' ``operated by physicians,'' or 
``part of a health network that includes physician-owned hospitals'' 
would also meet this standard. We also believe that a hospital's name, 
by itself, could constitute language that meets this standard. For 
example, we believe that ``Doctors Hospital at Main Street, USA'' would 
put a reasonable person on notice that the hospital may be physician-
owned. We seek public comment on our proposed revision to the public 
Web site and advertising disclosure requirements and on our proposed 
examples of language that would satisfy that standard. We also invite 
suggestions

[[Page 41925]]

regarding alternative standards for deeming language sufficient for 
these requirements.
    For the location and legibility of disclosure statements, we 
continue to believe, as stated in the CY 2011 OPPS/ASC final rule with 
comment period, that the disclosure should be located in a conspicuous 
place on the Web site and on a page that is commonly visited by current 
or potential patients, such as the home page or ``about us'' section 
(75 FR 72248). Further, we believe that the disclosure should be 
displayed in a clear and readable manner and in a size that is 
generally consistent with other text on the Web site. We do not propose 
here to prescribe a specific location or font size for disclosure 
statements on either a public Web site or public advertising; rather, 
physician-owned hospitals have flexibility in determining exactly where 
and how to include the disclosure statements, provided that the 
disclosure would put a reasonable person on notice that the hospital 
may be physician-owned.
    For those physician-owned hospitals that have identified non-
compliance with the public Web site disclosure requirement, we are 
taking this opportunity to clarify that the period of noncompliance is 
the period during which the physician-owned hospital failed to satisfy 
the requirement. We note that September 23, 2011 is the date by which a 
physician-owned hospital had to be in compliance with the public Web 
site and advertising disclosure requirements (75 FR 72241), and, 
therefore, would be the earliest possible beginning date for 
noncompliance. For those physician-owned hospitals that have identified 
noncompliance with the public advertising disclosure requirement, we 
are clarifying that the period of noncompliance is the duration of the 
applicable advertisement's predetermined initial circulation, unless 
the hospital amends the advertisement to satisfy the requirement at an 
earlier date. For example, if a hospital pays for an advertisement to 
be included in one issue of a monthly magazine and the hospital fails 
to include the disclosure in the advertisement, the period of 
noncompliance likely would be the applicable month of circulation, even 
if the magazine continued to be available in the archives of the 
publisher, in waiting rooms of physician offices, or other public 
places. We seek public comment on additional guidance that may be 
necessary regarding the periods of noncompliance for both disclosure 
requirements.
b. Determining the Bona Fide Investment Level (Sec.  411.362(b)(4)(i))
    As stated above, section 6001(a)(3) of the Affordable Care Act 
established new requirements for physician-owned hospitals to avail 
themselves of either the rural provider or hospital ownership 
exceptions to the physician self-referral law, including the 
requirement that the percentage of the total value of the ownership or 
investment interests held in a hospital, or in an entity whose assets 
include the hospital, by physician owners or investors in the aggregate 
cannot exceed such percentage as of March 23, 2010. In this proposed 
rule, we refer to the percentage of ownership or investment interests 
held by physicians in a hospital as the ``bona fide investment level'' 
and such percentage that was set as of March 23, 2010, as the 
``baseline bona fide investment level.''
    In the CY 2011 OPPS/ASC final rule with comment period (75 FR 
72251), we codified the bona fide investment requirement at Sec.  
411.362(b)(4)(i). In that final rule we responded to commenters that 
asserted that the bona fide investment level should be calculated 
without regard to any ownership or investment interests held by 
physicians who do not make any referrals to the hospital, including 
physicians who are no longer practicing medicine (75 FR 72250). We 
stated that the ownership or investment interests of non-referring 
physicians need not be considered when calculating the baseline 
physician ownership level. In our response, we noted that section 
1877(i)(5) of the Act defines ``physician owner or investor'' for 
purposes of that subsection to include any physician with a direct or 
indirect ownership or investment interest in the hospital and that, 
under our definition of ``indirect ownership or investment interest'' 
at Sec.  411.354(b)(5), only ``referring physicians'' can have an 
indirect ownership or investment interest in a DHS entity. Although we 
did not explicitly address direct ownership or investment interests in 
our response, we note that only referring physicians can have a direct 
financial relationship under our existing regulations at Sec.  
411.354(a)(2)(i).
    Following publication of the CY 2011 OPPS/ASC final rule with 
comment period, we received inquiries from industry stakeholders 
regarding our statement that the baseline bona fide investment level 
need not be calculated as including the ownership or investment 
interests of non-referring physicians. First, the stakeholders asserted 
that the statutory definition of physician owner or investor is broad 
and that if the Congress had intended to limit the definition to only 
referring physicians, the Congress would have included such qualifying 
language, as it did in a separate requirement established by the 
Affordable Care Act for physician-owned hospitals in section 
1877(i)(C)(ii) of the Act. Second, the stakeholders asserted that 
including only referring physicians in the definition of physician 
owner or investor for purposes of establishing the baseline bona fide 
investment level frustrates the purpose of an explicit deadline set 
forth in the statute. The stakeholders noted that in the Affordable 
Care Act, the Congress required physician-owned hospitals that seek to 
avail themselves of the rural provider or hospital ownership exceptions 
to have had physician ownership or investment as of March 23, 2010, but 
allowed them until December 31, 2010 to obtain a provider agreement. 
The stakeholders asserted that our position makes the March 23, 2010 
deadline meaningless because a pre-operational physician-owned hospital 
that did not have a provider agreement until December 31, 2010 likely 
would not have had physician owners or investors referring to the 
hospital as of the March 23 date. The stakeholders stated that our 
position regarding non-referring physicians in the CY 2011 OPPS/ASC 
final rule with comment period, in effect, precluded pre-operational 
hospitals from satisfying the requirement for physician ownership as of 
March 23, 2010, thus preventing the hospitals from availing themselves 
of the hospital ownership or rural provider exceptions.
    Given the inquiries that we received after publication of the CY 
2011 OPPS/ASC final rule with comment period, we have reconsidered our 
position that our regulations at Sec.  411.354 necessarily limit the 
definition of physician owner or investor for purposes of establishing 
the baseline bona fide investment level (and any bona fide investment 
level thereafter). As we stated in the CY 2011 OPPS/ASC final rule with 
comment period, we recognize that the statutory definition of physician 
owner or investor is broad (75 FR 72250). Further, we understand the 
concern expressed by the stakeholders that our position may frustrate 
an explicit statutory deadline for certain physician-owned hospitals. 
We believe that the statutory revisions to the rural provider and 
hospital ownership exceptions must be read harmoniously and not in a 
way that makes any provision meaningless. Accordingly, we are proposing 
to revise our policy articulated in the CY 2011

[[Page 41926]]

OPPS/ASC final rule with comment period to require that the baseline 
bona fide investment level and the bona fide investment level include 
direct and indirect ownership and investment interests held by a 
physician if he or she satisfies the definition of ``physician'' in 
section 1861(r) of the Act and in Sec.  411.351, regardless of whether 
the physician refers patients to the hospital (and therefore, 
irrespective of whether he or she is a ``referring physician'' for 
purposes of our regulatory definition of ownership or investment 
interest at Sec.  411.354). Further, under our proposal, the direct or 
indirect ownership interests held by an individual who no longer 
practices medicine, as described in the comment summary above, would be 
counted if he or she satisfies the definition of ``physician'' in 
section 1861(r) of the Act and in Sec.  411.351. We seek public comment 
regarding non-referring physicians and the bona fide investment level, 
including whether our proposal might alleviate the burden that some 
physician-owned hospitals reported when trying to determine whether a 
particular physician was a referring or non-referring physician for 
purposes of establishing their baseline bona fide investment levels and 
the bona fide investment levels generally.
    In order to support our proposal and implement the requirements of 
the statute, we are proposing to amend our existing regulations to 
specify that, for purposes of Sec.  411.362 (including for purposes of 
determining the baseline bona fide investment level and the bona fide 
investment level thereafter), the ownership or investment interests 
held by both referring and non-referring physicians are included. We 
propose to effectuate this change by establishing a definition of 
ownership or investment interest solely for purposes of Sec.  411.362 
that would apply to all types of owners or investors, regardless of 
their status as referring or non-referring physicians. Specifically, we 
propose to define ``ownership or investment interest'' at Sec.  
411.362(a) as a direct or indirect ownership or investment interest in 
a hospital. Under the proposed revision, a direct ownership or 
investment interest in a hospital exists if the ownership or investment 
interest in the hospital is held without any intervening persons or 
entities between the hospital and the owner or investor, and an 
indirect ownership or investment interest in a hospital exists if: (1) 
Between the owner or investor and the hospital there exists an unbroken 
chain of any number (but no fewer than one) of persons or entities 
having ownership or investment interests; and (2) the hospital has 
actual knowledge of, or acts in reckless disregard or deliberate 
ignorance of, the fact that the owner or investor has some ownership or 
investment interest (through any number of intermediary ownership or 
investment interests) in the hospital. We are also proposing that an 
indirect ownership or investment interest in a hospital exists even 
though the hospital does not know, or acts in reckless disregard or 
deliberate ignorance of, the precise composition of the unbroken chain 
or the specific terms of the ownership or investment interests that 
form the links in the chain. As used in Sec.  411.362, the term 
``physician'' would continue to have the meaning set forth in Sec.  
411.351; that is, an individual who meets the definition of 
``physician'' set forth in section 1861(r) of the Act.
    We believe that our proposed revision would make the prohibition 
set forth at Sec.  411.362(b)(4)(i) consistent with the statutory 
definition of ``physician owner or investor'' in a hospital without 
unsettling long-standing definitions in our regulations. We seek public 
comment on our proposed revision to Sec.  411.362, including whether 
such revision would adequately address the concerns expressed by the 
stakeholders after publication of the CY 2011 OPPS/ASC final rule with 
comment period.
    We seek public comment on an alternate proposal that we believe 
also supports our policy and, thereby, effectuates the statute's 
purpose. Specifically, we seek public comment on whether, in the 
alternative, we should revise our regulations in an even more 
comprehensive manner and remove the references to a ``referring 
physician'' throughout existing Sec.  411.354. We invite public comment 
on whether it would be helpful to retain the references to a 
``referring physician'' for those specific provisions where the concept 
of a physician's referrals to a DHS entity is essential to the 
provision, such as our definition of an indirect compensation 
arrangement at Sec.  411.354(c)(2)(ii).
    Finally, we recognize that some physician-owned hospitals may have 
relied on the position that was articulated in the CY 2011 OPPS/ASC 
final rule with comment period concerning non-referring physicians and 
the baseline bona fide investment level. If we finalize one or more of 
the proposals described in this section of the proposed rule, these 
hospitals may have revised bona fide investment levels that exceed the 
baseline bona fide investment levels calculated under our current 
guidance. Therefore, we propose to delay the effective date of the new 
regulation until such time as physician-owned hospitals would have 
sufficient time to come into compliance with the new policy. For 
example, we could delay the effective date for 1 year from the date of 
publication in the Federal Register of the rulemaking in which we 
finalize the new regulation or on a specific date, such as January 1, 
2017. We solicit comment on how long we should delay the effective 
date. We also seek comment on the impact of our proposed regulatory 
revisions on physician-owned hospitals and on the measures or actions 
physician-owned hospitals would need to undertake to come into 
compliance with our proposed revisions.
9. Solicitation of Comments: Perceived Need for Regulatory Revisions or 
Policy Clarification Regarding Permissible Physician Compensation
a. Background
    In the 1998 proposed rule, we discussed the impetus for the 
physician self-referral law (63 FR 1662), noting that both the anti-
kickback statute and section 1877 address Congress' concern that health 
care decision making can be unduly influenced by a profit motive. When 
physicians have a financial incentive to refer, this incentive can 
affect utilization, patient choice, and competition. Physicians can 
overutilize by ordering items and services for patients that, absent a 
profit motive, they would not have ordered. A patient's choice can be 
affected when physicians steer patients to less convenient, lower 
quality, or more expensive providers of health care, just because the 
physicians are sharing profits with, or receiving remuneration from, 
the providers. And lastly, where referrals are controlled by those 
sharing profits or receiving remuneration, the medical marketplace 
suffers since new competitors can no longer win business with superior 
quality, service, or price.
    The referral and billing prohibitions of the statute (and the 
corresponding prohibitions in Sec.  411.353) are intended to address 
these concerns, which remain valid today. (See section P.1. of this 
proposed rule for a detailed description of the prohibitions.) As 
explained elsewhere in this proposed rule, the prohibitions are 
absolute unless the financial relationship between the physician and 
entity to which he or she refers DHS satisfies the requirements of an 
applicable exception. The Congress provided for certain exceptions in 
sections 1877(b), (c), (d) and (e) of the Act, and granted the 
Secretary authority to establish additional exceptions for financial 
relationships that do not pose a risk of program or patient abuse. The 
Secretary has used the authority in

[[Page 41927]]

section 1877(b)(4) of the Act to establish numerous exceptions and has 
interpreted statutory and regulatory provisions in numerous 
rulemakings.
    Many of the exceptions in section 1877(e) of the Act (``Exceptions 
Relating to Other Compensation Arrangements'') include a requirement 
that the compensation paid under the arrangement is not determined in a 
manner that takes into account the volume or value of referrals by the 
physician who is a party to the arrangement, and some exceptions also 
include a requirement that the compensation is not determined in a 
manner that takes into account other business generated between the 
parties. We refer to these as the ``volume or value'' and ``other 
business generated'' standards.
    In the 1998 proposed rule, we discussed the volume or value 
standard as it pertains to the criteria that a group of physicians must 
meet to qualify as a ``group practice'' (63 FR 1690). We also stated 
that we would apply this interpretation of the volume or value standard 
throughout our regulations (63 FR 1699). In the discussion of group 
practices, we stated that ``[w]e believe that the `volume or value' 
standard precludes a group practice from paying physician members for 
each referral they personally make or based on the volume or value of 
the referred services'' (63 FR 1690). We went on to state that ``[t]he 
most straightforward way for a group to demonstrate that it is meeting 
the requirements [for group practices] would be for the group to avoid 
a link between physician compensation and the volume or value of any 
referrals, regardless of whether the referrals involve Medicare or 
Medicaid patients'' (63 FR 1690). However, because our definition of 
``referral'' at Sec.  411.351 includes only referrals for DHS, ``a 
group that wants to compensate its members on the basis of non-Medicare 
and non-Medicaid referrals would be required to separately account for 
revenues and distributions related to referrals for [DHS] for Medicare 
and Medicaid patients'' (63 FR 1690). As noted in this section of the 
proposed rule, outside the group practice context, these principles 
apply generally to compensation from a DHS entity to a physician.
    We also addressed the ``other business generated'' standard in the 
1998 proposed rule, stating that we believe that the ``Congress may not 
have wished to except arrangements that include additional compensation 
for other business dealings'' and that ``[i]f a party's compensation 
contains payment for other business generated between the parties, we 
would expect the parties to separately determine if this extra payment 
falls within one of the exceptions'' (63 FR 1700).
    In Phase I, we finalized our policy regarding the volume or value 
and other business generated standards, responding to comments on our 
proposals in the 1998 proposed rule. Most importantly, we revised the 
scope of the volume or value standard to permit time-based or unit of 
service-based compensation formulae (66 FR 876). We also stated that 
the phrase ``does not take into account other business generated 
between the parties'' means that ``the fixed, fair market value payment 
cannot take into account, or vary with, referrals of Medicare or 
Medicaid DHS or any other business generated by the referring 
physician, including other Federal and private pay business'' (66 FR 
877), noting that the phrase ``generated between the parties'' means 
``business generated by the referring physician'' for purposes of the 
physician self-referral law (66 FR 876). In Phase II, we clarified that 
personally performed services are not considered ``other business 
generated'' by the referring physician (69 FR 16068). ``Simply stated, 
section 1877 of the Act establishes a straightforward test that 
compensation should be at fair market value for the work or service 
performed or the equipment or [office] space leased--not inflated to 
compensate for the physician's ability to generate other revenue'' (66 
FR 877). This remains our position, and we continue to apply this 
interpretation of the volume or value and other business generated 
standards uniformly to all provisions under section 1877 of the Act and 
part 411, subpart J, where the language appears. (See 66 FR 877.)
    Also in Phase I, we established special rules on compensation at 
Sec.  411.354(d) that deem compensation not to take into account the 
volume or value of referrals or other business generated between the 
parties if certain conditions are met (66 FR 876-77). These rules state 
that compensation will be deemed not to take into account the volume or 
value of referrals if the compensation is fair market value for 
services or items actually provided and does not vary during the course 
of the compensation arrangement in any manner that takes into account 
referrals of DHS. Compensation will be deemed not to take into account 
other business generated between the parties to a compensation 
arrangement if the compensation is fair market value and does not vary 
during the term of the compensation arrangement in any manner that 
takes into account referrals or other business generated by the 
referring physician, including private pay health care business. Both 
special rules apply to time-based or per-unit of service-based (per-
click) compensation formulae. However, as we noted in Phase II, the 
special rules on compensation are intended to be safe harbors and there 
may be some situations not described in Sec.  411.354(d) where an 
arrangement does not take into account the volume or value of referrals 
(69 FR 16070).
b. Changes in Health Care Delivery and Payment Systems Since the 
Enactment of the Physician Self-Referral Law
    Since the enactment of section 1877 of the Act in 1989, significant 
changes in the delivery of health care services and the payment for 
such services have occurred, both within the Medicare and Medicaid 
programs and for non-federal payors and patients. For over a decade, we 
have engaged in efforts to align payment under the Medicare program 
with the quality of the care provided to our beneficiaries. Laws such 
as the Medicare Prescription Drug, Improvement, and Modernization Act 
of 2003 (MMA), the Deficit Reduction Act of 2005 (DRA), and the 
Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) 
have guided our efforts to move toward health care delivery and payment 
reform. More recently, the Affordable Care Act required significant 
changes to the Medicare program's payment systems and provides the 
Secretary with broad authority to test models to implement these 
reforms. We highlight a few of the Affordable Care Act's notable 
provisions in this section of this proposed rule.
    Section 1886(o) of the Act, as added by section 3001(a)(1) of the 
Affordable Care Act, requires the Secretary to establish a hospital 
value-based purchasing (VBP) program (the Hospital VBP Program) under 
which value-based incentive payments are made in a fiscal year to 
hospitals that meet performance standards established for a performance 
period for such fiscal year. Section 1886(o)(1)(B) of the Act states 
that the Hospital VBP Program applies to payments for hospital 
discharges occurring on or after October 1, 2012. In accordance with 
section 1886(o)(6)(A) of the Act, we are required to make value-based 
incentive payments under the Hospital VBP Program to hospitals that 
meet or exceed performance standards for a performance period for a 
fiscal year. As further required by section 1886(o)(6)(C)(ii)(I) of the 
Act, we base each hospital's value-based payment percentage on the 
hospital's Total

[[Page 41928]]

Performance Score (TPS) for a specified performance period. (See 79 FR 
49853, 50048.) A TPS score is awarded to hospitals during a VBP period 
(established as a fiscal year) and is derived from four domains: 
Clinical Process of Care, Patient Experience of Care, Outcome, and 
Efficiency. For more detailed information about each TPS domain, see 
our regulations at Sec.  412.165(b); for more information regarding how 
TPS scores are calculated, see http://www.medicare.gov/hospitalcompare/data/total-performance-scores.html. As noted, participation in the 
Hospital VBP is mandatory.
    Section 3021 of the Affordable Care Act, codified at section 1115A 
of the Act, established the Center for Medicare and Medicaid Innovation 
(CMMI) within CMS. The purpose of CMMI is to test innovative payment 
and service delivery models to reduce the cost of care provided to 
patients in the Medicare and Medicaid programs while preserving or 
enhancing the quality of care furnished to Medicare and Medicaid 
patients. Using its authority in section 1115A of the Act, CMMI has 
begun testing numerous health care delivery and payment models, 
including the Pioneer Accountable Care Organization (ACO) model, four 
models of the Bundled Payment for Care Improvements Initiative (BPCI), 
the Nursing Home Value-based Purchasing Demonstration, and the 
Community-based Care Transitions Program. Participation in these models 
is voluntary. For more information about CMMI's innovation models, see 
http://innovation.cms.gov/initiatives/index.html#views=models.
    Section 3022 of the Affordable Care Act established the Medicare 
Shared Savings Program (MSSP). The Congress created the MSSP to 
facilitate coordination and cooperation among providers to improve the 
quality of care for Medicare fee-for-service (FFS) beneficiaries and 
reduce unnecessary costs. Physicians, hospitals, and other eligible 
providers and suppliers may participate in the MSSP by creating or 
participating in an ACO. The MSSP will reward ACOs that lower their 
growth in health care costs while meeting performance standards on 
quality of care. Participation in the MSSP is voluntary. For more 
information about the MSSP, see http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/index.html.
    Outside of the programs established or authorized under the laws 
noted above, we are moving away from Medicare payments to providers and 
suppliers that do not incorporate the value of the care provided. The 
Secretary recently set a goal of tying 30 percent of traditional, fee-
for-service Medicare payments to quality or value through alternative 
payment models, such as ACOs or bundled payment arrangements, by the 
end of 2016, and 50 percent of payments to these models by the end of 
2018. The Secretary also set a goal of tying 85 percent of all 
traditional Medicare payments to quality or value by 2016, and 90 
percent of payments to quality or value by 2018, through programs such 
as the Hospital VBP Program and the Hospital Readmissions Reduction 
Program. (See press release titled ``Better, Smarter, Healthier: In 
historic announcement, HHS sets clear goals and timeline for shifting 
Medicare reimbursements from volume to value,'' U.S. Department of 
Health & Human Services (Jan. 26, 2015), http://www.hhs.gov/news/press/2015pres/01/20150126a.html.)
    Value-based payment models and similar programs are receiving 
attention in the commercial payor sector as well. Some of the largest 
private carriers have made significant efforts to transition from fee-
for-service models to global payment systems. For example, in 2009, 
Blue Cross and Blue Shield of Massachusetts (BC/BS Massachusetts) 
launched the Alternative Quality Contract (AQC), replacing a fee-for-
service model with a modified global payment model for payments to 
hospitals and physicians. The AQC model merges a per-patient global 
budget with performance incentives based on national measures linked to 
health outcomes, quality, and patient satisfaction. The AQC model now 
includes approximately 85 percent of the hospitals and physicians in 
the BC/BS Massachusetts HMO network. (See Alternative Quality Contract, 
Blue Cross Blue Shield of Massachusetts https://www.bluecrossma.com/visitor/about-us/affordability-quality/aqc.html.) The AQC program 
initiated by BC/BS Massachusetts has met with initial success as shown 
in a 4-year study published in the New England Journal of Medicine in 
2014. (See Song, Zuri, et al., Changes in Health Care Spending and 
Quality 4 Years into Global Payment, N. Engl. J. Med 371; 18, Oct. 30, 
2014, http://www.nejm.org/doi/full/10.1056/NEJMsa1404026#t=article.) 
Specifically, the study found that spending grew an average of $62.21 
per enrollee per quarter less in the AQC model contingent than in a 
control group. Similarly, in 2011, Blue Cross Blue Shield of Minnesota 
began a 3-year partnership with large health care providers within 
Minnesota to improve quality and lower costs through an Aligned 
Incentive Contracting Model. Under that model, increases to the fee-
for-service components of payments decrease over time and are replaced 
by growing performance incentives tied to measurable improvements in 
quality outcomes and to managing total cost of care. (See Blue Plans 
Improving Healthcare Quality and Affordability through Innovative 
Partnerships with Clinicians, BlueCross BlueShield Association, Feb. 
13, 2014, http://www.bcbs.com/healthcare-news/press-center/BP-and-Quality-and-Plan-Innovations.pdf.)
c. Financial Relationships in Alternative Delivery and Payment Systems
    The physician self-referral law, by design, separates entities 
furnishing DHS from the physicians who refer Medicare patients to them. 
Evolving health care delivery and payment models, within both the 
Medicare and Medicaid programs and programs sponsored by non-federal 
payors, are premised on the close integration of a variety of different 
health care providers in order to achieve the goals of improving the 
experience of care, improving the health of populations, and reducing 
per capita costs of health care, often referred to as the ``three-part 
aim.'' Entities furnishing DHS face the predicament of trying to 
achieve clinical and financial integration with other health care 
providers, including physicians, while simultaneously having to satisfy 
the requirements of an exception to the physician self-referral law's 
prohibitions if they wish to compensate physicians to help them meet 
the triple aim and avoid financial penalties that may be imposed on 
low-value health care providers. Because all inpatient and outpatient 
services are considered DHS, hospitals must consider each and every 
service referred by a physician in their attempts to ensure that 
compensation paid to a physician does not take into account the volume 
or value of his or her referrals to the hospital. According to 
stakeholders, structuring incentive compensation and other payments can 
be particularly challenging for hospitals, even where the payments are 
to hospital-employed physicians.
    Stakeholders have expressed concern that, outside of the MSSP or 
certain CMMI-sponsored care delivery and payment models--for which we 
have issued waivers of the prohibitions of the physician self-referral 
law--the physician self-referral law prohibits financial relationships 
necessary to achieve the clinical and financial

[[Page 41929]]

integration required for successful health care delivery and payment 
reform. These concerns apply equally to the participation of physicians 
and entities furnishing health care services in models sponsored and 
paid for solely by non-federal payors, where care is provided solely to 
non-federal program patients, because the financial arrangements 
between the parties that result from participation in these models must 
satisfy the requirements of an applicable exception to the physician 
self-referral law in order to avoid the law's referral and billing 
prohibitions on DHS referred for and furnished to Medicare 
beneficiaries. We also have received numerous stakeholder inquiries, 
unrelated to participation in alternative health care delivery or 
payment models, regarding whether certain compensation methodologies 
would be viewed as taking into account the volume or value of a 
physician's referrals or other business generated between the physician 
and the entity furnishing DHS that provides the compensation. Many of 
these inquiries relate to performance-based or incentive compensation. 
We have not issued any formal guidance to date, either through a 
binding advisory opinion or rulemaking.
    The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) 
(Pub. L. 114-10), enacted April 16, 2015, includes certain Medicare 
program integrity and fraud and abuse provisions. Notably, MACRA 
requires the Secretary to undertake two studies relating to the 
promotion of alternative payment models and to provide the Congress 
with a gainsharing study and report.
    Section 101(e)(7) of MACRA requires the Secretary, in consultation 
with the Office of Inspector General (OIG), to study and report to the 
Congress on fraud related to alternative payment models under the 
Medicare program (the APM Report). The Secretary must study the 
applicability of the federal fraud prevention laws to items and 
services furnished under title XVIII of the Act for which payment is 
made under an alternative payment model, identify aspects of 
alternative payment models that are vulnerable to fraudulent activity, 
and examine the implications of waivers to the fraud prevention laws to 
support alternative payment models. The Secretary must include in the 
APM Report the results of her study and recommendations for actions to 
reduce the vulnerabilities of Medicare alternative payment models, 
including possible changes in federal fraud prevention laws to reduce 
such vulnerabilities. This report must be issued no later than 2 years 
after the enactment of MACRA.
    Section 512(b) of MACRA requires the Secretary, in consultation 
with OIG, to submit to the Congress a report with options for amending 
existing fraud and abuse laws and regulations through exceptions, safe 
harbors or other narrowly tailored provisions, to permit gainsharing 
arrangements that would otherwise be subject civil money penalties in 
paragraphs (1) and (2) of section 1128A(b) of the Act and similar 
arrangements between physicians and hospitals that improve care while 
reducing waste and increasing efficiency (the Gainsharing Report). The 
Gainsharing Report must address whether the recommended changes should 
apply to ownership interests, compensation arrangements, or other 
relationships. The Gainsharing Report must also describe how the 
recommendations address accountability, transparency, and quality, 
including how best to limit inducements to stint on care, discharge 
patients prematurely, or otherwise reduce or limit medically necessary 
care. Further, the Secretary's Gainsharing Report must consider whether 
a portion of any savings generated by such arrangements should accrue 
to the Medicare program. This report must be issued no later than 12 
months after the enactment of MACRA.
d. Solicitation of Comments
    To inform the APM Report and Gainsharing Report required under 
sections 101(e)(7) and 512(b) of MACRA, respectively, as well as to aid 
us in determining whether additional rulemaking or guidance is 
desirable or necessary, we are soliciting comments regarding the impact 
of the physician self-referral law on health care delivery and payment 
reform. We are interested in comments regarding perceived barriers to 
achieving clinical and financial integration posed by the physician 
self-referral law generally and, in particular, the ``volume or value'' 
and ``other business generated'' standards set out in our regulations. 
We are also interested in learning whether stakeholders see a need for 
guidance on the application of our regulations as they relate to 
physician compensation that is unrelated to participation in 
alternative payment models. On this subject, we specifically solicit 
comments regarding the ``volume or value'' and ``other business 
generated'' standards, but welcome comments regarding any of our rules 
for determining physician compensation. To encourage robust commentary 
from stakeholders, we pose the following topics and questions for 
discussion:
     Does the physician self-referral law generally and, in 
particular, the ``volume or value'' and ``other business generated'' 
standards set out in our regulations, pose barriers to or limitations 
on achieving clinical and financial integration? If so, are the 
barriers or limitations more pronounced for hospitals than for other 
providers or suppliers because all Medicare revenue is from DHS (and, 
thus, any compensation might be considered to take into account the 
volume or value of referrals or other business generated by the 
physician to whom it is paid)?
     Which exceptions to the physician self-referral law apply 
to financial relationships created or necessitated by alternative 
payment models? Are they adequate to protect such financial 
relationships?
     Is there a need for new exceptions to the physician self-
referral law to support alternative payment models? If so, what types 
of financial relationships should be excepted? What conditions should 
we place on such financial relationships to protect against program or 
patient abuse? Should a new exception be structured to protect 
services, rather than a specific type of financial relationship, when 
established conditions are met (similar to the in-office ancillary 
services exception at Sec.  411.355(b), which protects referrals for 
certain services performed by physician practices that meet the 
requirements of Sec.  411.352)? Would legislative action be necessary 
to establish exceptions to support alternative payment models?
     Which aspects of alternative payment models are 
particularly vulnerable to fraudulent activity?
     Is there need for new exceptions to the physician self-
referral law to support shared savings or ``gainsharing'' arrangements? 
If so, what types of financial relationships should be excepted? What 
conditions should we place on such financial relationships to address 
accountability, transparency, and quality, including how best to limit 
inducements to stint on care, discharge patients prematurely, or 
otherwise reduce or limit medically necessary care? Would legislative 
action be necessary to establish exceptions to support shared savings 
or ``gainsharing'' arrangements?
     Should certain entities, such as those considered to 
provide high-value care to our beneficiaries, be permitted to 
compensate physicians in ways that other entities may not? For example, 
should we permit hospitals that meet established quality and value 
metrics under the Hospital VBP to pay bonus

[[Page 41930]]

compensation from DHS revenues to physicians who help the hospital meet 
those metrics? If so, what conditions should we impose to protect 
against program and patient abuse? How should we define ``high-value 
care'' or ``high-value entity''? Are there standards other than the 
value of the care provided to patients that would be appropriate as 
threshold standards for permitting a hospital or other entity 
furnishing DHS to compensate physicians in ways that other entities may 
not?
     Could existing exceptions, such as the exception at Sec.  
411.357(n) for risk-sharing arrangements, be expanded to protect 
certain physician compensation, for example, compensation paid to a 
physician who participates in an alternative care delivery and payment 
model sponsored by a non-federal payor? If so, what conditions should 
we impose to protect against program and patient abuse from the 
compensation arrangements resulting from participation in such models?
     Have litigation and judicial rulings on issues such as 
compensation methodologies, fair market value, or commercial 
reasonableness) generated a need for additional guidance from CMS on 
the interpretation of the physician self-referral law or the 
application of its exceptions? We are particularly interested in the 
need for guidance in the context of delivery system reform.
     Is there a need for revision to or clarification of the 
rules regarding indirect compensation arrangements or the exception at 
Sec.  411.357(p) for indirect compensation arrangements?
     Given the changing incentives for health care providers 
under delivery system reform, should we deem certain compensation not 
to take into account the volume or value of referrals or other business 
generated by a physician? If so, what criteria should we impose for 
this deemed status to ensure that compensation paid to a physician is 
sufficiently attenuated from the volume or value of his referrals to or 
other business generated for the entity paying the compensation? Should 
we apply such a deeming provision only to certain types of entities 
furnishing DHS, such as hospitals that provide high value care to our 
beneficiaries?
10. Technical Corrections
    We have become aware that some of the manual citations listed in 
our regulations are no longer correct. We therefore propose to update 
regulations at Sec.  411.351, definitions of ``entity'', ```incident 
to' services or services `incident to''', ``parenteral and enteral 
nutrients, equipment, and supplies'', and ``physician in the group 
practice'', with the correct citations. We also propose to modernize 
the regulatory text by changing ``Web site'' to ``Web site'' in Sec.  
411.351, definition of ``list of CPT/HCPCS Codes'', Sec.  
411.357(k)(2), Sec.  411.357(m)(2) through (m)(3), Sec.  411.357(m)(5), 
Sec.  411.362(c)(2)(iv) through (c)(2)(iv)(v), Sec.  411.362(c)(5), and 
Sec.  411.384(b). Lastly, we are removing the hyphen from ``publicly-
traded'' in Sec.  411.356(a) and Sec.  411.361(d), and we are 
correcting a minor typographical error in Sec.  411.357(p)(1)(ii)(A).

O. Private Contracting/Opt-Out

1. Background
    Effective January 1, 1998, section 1802(b) of the Act permits 
certain physicians and practitioners to opt out of Medicare if certain 
conditions are met, and to furnish through private contracts services 
that would otherwise be covered by Medicare. For those physicians and 
practitioners who opt out of Medicare in accordance with section 
1802(b) of the Act, the mandatory claims submission and limiting charge 
rules of section 1848(g) of the Act do not apply. As a result, if the 
conditions necessary for an effective opt-out are met, physicians and 
practitioners are permitted to privately contract with Medicare 
beneficiaries and to charge them without regard to Medicare's limiting 
charge rules.
a. Provisions of the Proposed Regulation
    The private contracting/opt out law at section 1802(b) of the Act 
was recently amended by section 106(a) of the Medicare Access and CHIP 
Reauthorization Act of 2015 (MACRA) (Public Law 114-10). Prior to the 
MACRA amendments, the law specified that physicians and practitioners 
may opt out for a 2 year period. Individuals that wished to renew their 
opt-out at the end of a 2 year opt-out period were required to file new 
affidavits with their Medicare Administrative contractors (MAC). 
Section 106(a) of MACRA amends section 1802(b)(3) of the Act to require 
that opt-out affidavits filed on or after June 16, 2015, automatically 
renew every 2 years. Therefore, physicians and practitioners that file 
opt-out affidavits on or after June 16, 2015 will no longer be required 
to file renewal affidavits in order to continue their opt-out status. 
The amendments further provide that physicians and practitioners who 
have filed opt-out affidavits on or after June 16, 2015, and who do not 
want their opt-out status to automatically renew at the end of a 2 year 
opt-out period may cancel the automatic extension by notifying us at 
least 30 days prior to the start of the next 2 year opt-out period.
    We propose to revise the regulations governing the requirements and 
procedures for private contracts at 42 CFR part 405, subpart D so that 
they conform with these statutory changes. Specifically, we propose to 
revise the following:
     The definition of ``Opt-out period'' at Sec.  405.400 so 
that opt-out affidavits automatically renew unless the physician or 
practitioner properly cancels opt-out.
     Sections 405.405(b), 405.410(c)(1) and (2), 405.415(h), 
(m), and (o), 405.425, 405.435(a)(4), 405.435(b)(8), 405.435(d), and 
405.445(b)(2) so those sections conform with the revised definition of 
``Opt-out period''.
     Section 405.445(a) so that proper cancellation of opt-out 
requires a physician or practitioner to submit written notice, not 
later than 30 days before the end of the current 2-year opt-out period, 
that the physician or practitioner does not want to extend the 
application of the opt-out affidavit for a subsequent 2-year period.
     Section 405.450(a) so that failure to properly cancel opt-
out is included as an initial determination for purposes of Sec.  
498.3(b).
    To update the terminology in our regulations, we also propose to 
amend sections 405.410(d), 405.435(d), and 405.445(b)(2) so that the 
term ``carrier'' is replaced with ``Medicare Administrative 
contractor''.

IV. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995 (PRA), we are required to 
publish a 60-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval.
    To fairly evaluate whether an information collection should be 
approved by OMB, PRA section 3506(c)(2)(A) requires that we solicit 
comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our burden estimates.
     The quality, utility, and clarity of the information to be 
collected.
     Our effort to minimize the information collection burden 
on the affected public, including the use of automated collection 
techniques.
    We are soliciting public comment on each of the section 
3506(c)(2)(A)-required issues for the following information collection 
requirements.

[[Page 41931]]

A. Wage Estimates

    To derive average costs, we used data from the U.S. Bureau of Labor 
Statistics' May 2014 National Occupational Employment and Wage 
Estimates for all salary estimates (www.bls.gov/oes/current/oes_nat.htm). In this regard, Table 37 presents the mean hourly wage, 
the cost of fringe benefits, and the adjusted hourly wage.

                                        Table 37--Estimated Hourly Wages
----------------------------------------------------------------------------------------------------------------
                                                                                      Fringe         Adjusted
                Occupation title                    Occupation      Mean hourly    benefit  ($/    hourly  wage
                                                       code        wage  ($/hr)         hr)           ($/hr)
----------------------------------------------------------------------------------------------------------------
Billing and Posting Clerks......................         43-3021           17.10          * 9.58           26.68
Business Operations Specialists.................         13-1000           33.69           33.69           67.38
Computer Systems Analysts.......................         15-1121           41.98           41.98           83.96
Medical and Health Services Managers............         11-9111           49.84           49.84           99.68
Medical Secretaries.............................         43-6013           16.12           16.12           32.24
Physicians and Surgeons.........................         29-1060           93.71           93.71          187.48
----------------------------------------------------------------------------------------------------------------
* For fringe benefits, we are using the December 2014 Employer Costs for Employee Compensation (http://www.bls.gov/news.release/archives/ecec_03112015.pdf).

    Except where noted, we are adjusting our employee hourly wage 
estimates by a factor of 100 percent. This is necessarily a rough 
adjustment, both because fringe benefits and overhead costs vary 
significantly from employer to employer, and because methods of 
estimating these costs vary widely from study to study. Nonetheless, 
there is no practical alternative and we believe that doubling the 
hourly wage to estimate total cost is a reasonably accurate estimation 
method.

B. Proposed Information Collection Requirements (ICRs)

1. ICRs Regarding 42 CFR Part 405, Subpart D
    Section 106(a) of MACRA indicates that valid opt-out affidavits 
filed on or after June 16, 2015, automatically renew every 2 years. 
Previously, physicians and practitioners wanting to renew their opt-out 
were required to file new valid affidavits with their Medicare 
Administrative Contractors (MAC).
    To be consistent with section 106(a), we propose to revise 42 CFR 
part 405, subpart D governing the submission of opt-out affidavits. We 
estimate that 150 physicians/practitioners will submit new affidavits 
at 2 hr per submission or 300 hr (total). Previously, we estimated that 
600 physicians/practitioners would submit renewal affidavits at 2 hr 
per submission or 1,200 hr (total). In this regard, the burden will 
decrease by -900 hr (300 hr - 1,200 hr) when physicians and 
practitioners no longer need to submit renewal affidavits starting on 
June 16, 2017. We also estimate that a Medical Secretary will perform 
this duty at $32.24/hr for a savings of -$29,016 (-900 hr x $32.24/hr).
    Under Sec.  405.445(a), physicians and practitioners that file 
valid opt-out affidavits on or after June 16, 2015 and do not want to 
extend their opt-out status at the end of a 2 year opt-out period may 
cancel by notifying us at least 30 days prior to the start of the next 
2 year opt-out period. The burden associated with this new requirement 
is the time to draft, sign and submit the writing to the MAC. We 
estimate it will take 60 physicians/practitioners approximately 10 
minutes each for a total of 10 burden hours. We also estimate that a 
Medical Secretary will perform this duty at $32.24/hr for a cost of 
$322.40 (10 hr x $32.24/hr).
    The requirements and burden will be submitted to OMB under control 
number 0938-0730 (CMS-R-234).
2. ICRs Regarding the Payment for RHC and FQHC Services (Sec.  
405.2462) and What Constitutes a Visit (Sec.  405.2463)
    In Sec. Sec.  405.2462(d) and 405.2463(c)(4), we propose that 
clinics that were provider-based to an IHS hospital on or before April 
7, 2000, and are now tribally-operated clinics contracted or compacted 
under the ISDEAA, may seek to become certified as grandfathered tribal 
FQHCs. To become certified, an eligible tribe or tribal organization 
must submit an enrollment application (CMS-855A, OMB control number 
0938-0685) and all required accompanied documentation, including an 
attestation of compliance with the Medicare FQHC Conditions for 
Coverage at part 491, to the Jurisdiction H Medicare Administrative 
Contractor (A/B MAC).
    We estimate that between 3 and 5 grandfathered tribal clinics that 
were provider-based to an IHS hospital on or before April 7, 2000, and 
are now tribally-operated clinics contracted or compacted under the 
ISDEAA, would seek to become certified as grandfathered tribal FQHCs. 
Since we estimate fewer than 10 respondents, the information collection 
requirements are exempt (5 CFR 1320.3(c)) from the requirements of the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).
3. ICRs Regarding the Payment for RHC and FQHC Services (Sec.  
405.2462)
    In Sec.  405.2462(g)(3), we propose that RHCs must report 
Healthcare Common Procedure Coding System (HCPCS) and other codes as 
required in reporting services furnished to a Medicare beneficiary 
during a RHC visit effective for dates of service on or after January 
1, 2016.
    The ongoing burden associated with the requirements under Sec.  
405.2462(g)(3) is the time and effort it would take each of the 
approximately 4,000 Medicare certified RHCs to report the services 
furnished to a Medicare beneficiary during a RHC visit using HCPCS and 
other codes as required. We believe that most RHCs are already familiar 
with the use of HCPCS coding since RHCs typically record HCPCS coding 
through their billing software or electronic health record systems and 
they could be subject to HCPCS reporting in accordance with the 
National Uniform Billing Committee and Accredited Standards Committee 
X12 standards. In our estimates below, we do not disregard any RHCs 
that may already be reporting HCPCS coding but we do take into the 
account the range of time it will take for inexperienced RHCs compared 
to experienced RHCs. We recognize some RHCs may need to make minor 
updates in their systems, but more so, RHC billing staff will need 
education in HCPCS coding associated with Medicare payable RHC visits. 
Due to the scope of services payable as a RHC visit, we do not 
anticipate RHCs will face a significant burden in training and 
education of billing staff. We plan to

[[Page 41932]]

provide educational information on how RHCs are to report HCPCS and 
other codes as required and clarify other appropriate RHC billing 
procedures through sub-regulatory guidance.
    We estimate that it will take 2 to 5 additional minutes to report 
HCPCS codes on RHC claims to Medicare and, for most RHCs, we believe 
that billing staff will require closer to 2 min when the RHCs become 
more experienced with including HCPCS coding on Medicare claims. As 
noted previously, for some RHCs, this requirement may not require any 
additional coding time since they already could be capturing HCPCS 
coding in their billing or electronic health record systems. Whereas, 
other RHCs may need up to 5 additional minutes to include HCPCS coding 
on Medicare claims. In this regard, we estimate a median of 3.5 
additional minutes in the following calculations:

(8,964,208 Medicare claims in 2013 x 3.5 min)/60 min = 522,912.13 hr 
(aggregate)
522,912.13 hr/4,000 RHCs = 130.73 hr (per RHC)
522,912.13 hr x $26.68/hr = $13,951,295.63 additional cost 
(aggregate)
$13,951,295.63/4,000 RHCs = $3,487.82 per RHC

    In deriving these figures, we analyzed claims data and RHC 
certification data maintained by CMS. We also used wage data from the 
Bureau of Labor Statistics (see Table 37).
    The burden for the aforementioned requirements will be submitted to 
OMB for approval under control number 0938-New (CMS-10568).
4. ICRs Regarding Exceptions to the Referral Prohibition Related to 
Compensation Arrangements (Sec.  411.357)
    Section 411.357 would be revised to establish two new exceptions: 
An exception to permit remuneration to independent physicians to assist 
in employing nonphysician practitioners in the geographic service area 
of the hospital, FQHC, or RHC providing the remuneration; and an 
exception to permit timeshare arrangements for the use of premises, 
equipment, personnel, items, supplies or services. Arrangements covered 
by these new exceptions must be in writing. We have also proposed 
clarifications to the writing requirements for compensation 
arrangements in Sec.  411.357(a), (b), (d), (e), (l), (p), and (r). The 
burden associated with these requirements would be the time and effort 
necessary to prepare written documents and obtain signatures of the 
parties.
    While these requirements are subject to the PRA, we believe the 
associated burden is exempt from the PRA in accordance with 5 CFR 
1320.3(b)(2). We believe that the time, effort, and financial resources 
necessary to comply with the aforementioned requirements would be 
incurred by persons during the normal course of their activities and, 
therefore, should be considered a usual and customary business 
practice.
5. ICRs Regarding [the] Physician Quality Reporting System (PQRS) 
(Sec.  414.90 and Section K of This Preamble)
    With respect to the PQRS, the burden associated with the 
requirements of this voluntary reporting initiative is the time and 
effort associated with individual eligible professionals and group 
practices identifying applicable quality measures for which they can 
report the necessary information, selecting a reporting option, and 
reporting the information on their selected measures or measures group 
to CMS using their selected reporting option. We assume that most 
eligible professionals participating in the PQRS will attempt to meet 
the criteria for satisfactory reporting for the 2018 PQRS payment 
adjustment.
    For individual eligible professionals, the burden associated with 
the requirements of this reporting initiative is the time and effort 
associated with eligible professionals identifying applicable quality 
measures for which they can report the necessary information, 
collecting the necessary information, and reporting the information 
needed to report the eligible professional's measures. We believe it is 
difficult to accurately quantify the burden because eligible 
professionals may have different processes for integrating the PQRS 
into their practice's work flows. Moreover, the time needed for an 
eligible professional to review the quality measures and other 
information, select measures applicable to his or her patients and the 
services he or she furnishes to them, and incorporate the use of 
quality data codes into the office work flows is expected to vary along 
with the number of measures that are potentially applicable to a given 
professional's practice. Since eligible professionals are generally 
required to report on at least nine measures covering at least three 
National Quality Strategy domains criteria for satisfactory reporting 
(or, in lieu of satisfactory reporting, satisfactory participation in a 
QCDR) for the 2018 PQRS payment adjustment, we will assume that each 
eligible professional reports on an average of nine measures for this 
burden analysis.
    For eligible professionals who are participating in PQRS, we 
estimate that it will take 5 hr for an eligible professional's billing 
clerk to review the PQRS Measures List, review the various reporting 
options, select the most appropriate reporting option, identify the 
applicable measures or measures groups for which they can report the 
necessary information, review the measure specifications for the 
selected measures or measures groups, and incorporate reporting of the 
selected measures or measures groups into the office work flows. The 
measures list contains the measure title and brief summary information 
for the eligible professional to review. Assuming the eligible 
professional has received no training from his/her specialty society, 
we estimate it will take an eligible professional's billing clerk up to 
2 hr to review this list, review the reporting options, and select a 
reporting option and measures on which to report. If an eligible 
professional has received training, then we believe this would take 
less time. CMS believes that 3 hours is sufficient time for an eligible 
professional to review the measure specifications of nine measures or 
one measures group they select to report for purposes of participating 
in PQRS and to develop a mechanism for incorporating reporting of the 
selected measures or measures groups into the office work flows. 
Therefore, we believe that the start-up cost for an eligible 
professional to report PQRS quality measures data is 5 hr x $26.68/hr = 
$133.40.
    We continue to expect the ongoing cost associated with PQRS 
participation to decline based on an eligible professional's 
familiarity with and understanding of the PQRS, experience with 
participating in the PQRS, and increased efforts by CMS and 
stakeholders to disseminate useful educational resources and best 
practices.
    We believe the burden associated with actually reporting the 
quality measures will vary depending on the reporting mechanism 
selected by the eligible professional. As such, we break down the 
burden estimates by eligible professionals and group practices 
participating in the GPRO according to the reporting mechanism used.
    The proposed requirements and burden estimates will be submitted to 
OMB under control number 0938-1059 (CMS-10276).
a. Burden Estimate for PQRS Reporting by Individual Eligible 
Professionals and Group Practices: Claims-Based Reporting Mechanism
    Under the claims-based reporting option, eligible professionals 
must

[[Page 41933]]

gather the required information, select the appropriate quality data 
codes (QDCs), and include the appropriate QDCs on the claims they 
submit for payment. The PQRS collects QDCs as additional (optional) 
line items on the CMS-1500 claim form or the electronic equivalent 
HIPAA transaction 837-P, approved under OMB control number 0938-0999. 
This rule does not propose any changes to these forms. Beginning in 
2014, CMS made changes on how Critical access hospitals (CAHs) were 
billed under Medicare which made it possible for eligible professionals 
in CAH method II payment to participate in PQRS.
    Based on our experience with the Physician Voluntary Reporting 
Program (PVRP), we continue to estimate that the time needed to perform 
all the steps necessary to report each measure (that is, reporting the 
relevant quality data code(s) for nine measures) would range from 15 
sec (0.25 min) to over 12 min for complicated cases and/or measures, 
with the median time being 1.75 min. To report nine measures, we 
estimate that it would take approximately 2.25 min (0.25 min x 9) to 
108 min (12 min x 9) to perform all the steps necessary to report nine 
measures.
    At an adjusted labor rate of $83.96/hr for a computer systems 
analyst, the per measure cost would range from $0.35 [($83.96/hr/60) x 
0.25 min] to $16.79 [($83.96/hr/60) x 12 min], with a median cost of 
$2.45 [($83.96/hr/60) x 1.75 min]. To report nine measures we estimate 
that the cost would range from $3.15 ($0.35 x 9) to $151.11 ($16.79 x 
9), with a median cost of $22.05 ($2.45 x 9).
    The total estimated annual burden will vary along with the volume 
of claims on which quality data is reported. In previous years, when we 
required reporting on 80 percent of eligible cases for claims-based 
reporting we found that, on average, the median number of reporting 
instances for each of the PQRS measures was nine. Since we reduced the 
required reporting rate by over one-third to 50 percent, we assume that 
an eligible professional or eligible professional in a group practice 
will need to report each selected measure for six reporting instances. 
The actual number of cases on which an eligible professional or group 
practice is required to report quality measures data will vary with the 
eligible professional's or group practice's patient population and the 
types of measures on which the eligible professional or group practice 
chooses to report (each measure's specifications includes a required 
reporting frequency). For the 2018 payment adjustment, eligible 
professionals will also report on one cross-cutting measure if they see 
at least one Medicare patient. However, we do not see any additional 
burden impact as they are still reporting on the same number of 
measures.
    Based on these assumptions, we estimate that the per individual 
eligible professional reporting burden would range from 13.5 min (0.25 
min per measure x 9 measures x 6 cases per measure) to 648 min (12 min 
per measure x 9 measures x 6 cases per measure), with a median burden 
of 94.5 min (1.75 min per measure x 9 measures x 6 cases). We also 
estimate that the cost would range from $18.90 [13.5 min ($83.96/hr/
60)] to $906.66 [648 min ($83.96/hr/60)], with a median cost of $132.30 
[94.5 min ($83.96/hr/60)].
    Based on the assumptions discussed above, Table 38 provides an 
estimate of the range of total annual burden associated with eligible 
professionals using the claims-based reporting mechanism.

   Table 38--Summary of Burden Estimates for Eligible Professionals Using the Claims-Based Reporting Mechanism
----------------------------------------------------------------------------------------------------------------
                                                                  Minimum burden   Median burden  Maximum burden
                                                                     estimate        estimate        estimate
----------------------------------------------------------------------------------------------------------------
Estimated # of Participating Eligible Professionals (a).........         350,000         350,000         350,000
Estimated # of Measures Per Eligible Professional Per Year (b)..               9               9               9
Estimated # of Cases Per Measure Per Eligible Professional Per                 6               6               6
 Year (c).......................................................
Total Estimated # of Cases Per Eligible Professional Per Year                 54              54              54
 (d) = (b)*(c)..................................................
Estimated Burden Hours Per Case (e).............................         0.00415         0.02917         0.19992
Estimated Total Burden Hours For Measures Per Eligible                    0.2241         1.57518        10.79568
 Professional Per Year (f) = (d)*(e)............................
Estimated Burden Hours Per Eligible Professional to Prepare for                5               5               5
 PQRS Participation (g).........................................
Estimated Total Annual Burden Hours Per Eligible Professional             5.2241         6.57518        15.79568
 (h) = (f) + (g)................................................
Estimated Total Annual Burden Hours (i) = (a)*(h)...............       1,828,435       2,301,313       5,528,488
Estimated Cost Per Case (j).....................................           $0.35           $2.45          $16.79
Total Estimated Cost of Cases Per Eligible Professional Per Year          $18.90         $132.30         $906.66
 (k) = (d)*(j)..................................................
Estimated Cost Per Eligible Professional to Prepare for PQRS             $133.40         $133.40         $133.40
 Participation (l)..............................................
Estimated Total Annual Cost Per Eligible Professional (m) = (k)          $152.30         $265.70       $1,040.06
 + (l)..........................................................
Estimated Total Annual Burden Cost (n) = (a)*(m)................     $53,305,000     $92,995,000    $364,021,000
----------------------------------------------------------------------------------------------------------------

b. Burden Estimate for PQRS Reporting by Individual Eligible 
Professionals and Group Practices: Qualified Registry-Based and QCDR-
Based Reporting Mechanisms
    For qualified registry-based and QCDR-based reporting, there will 
be no additional time for eligible professionals or group practices to 
report data to a qualified registry as eligible professionals and group 
practices opting for qualified registry-based reporting or use of a 
QCDR will more than likely already be reporting data to the qualified 
registry for other purposes and the qualified registry will merely be 
re-packaging the data for use in the PQRS. Little, if any, additional 
data will need to be reported to the qualified registry or QCDR solely 
for purposes of participation in the PQRS. However, eligible 
professionals and group practices will need to authorize or instruct 
the qualified registry or QCDR to submit quality measures results and 
numerator and denominator data on quality measures to CMS on their 
behalf. We estimate that the time and effort associated with this 
requirement will be approximately 5 min per eligible professional or 
eligible professional within a group practice.
    Based on the assumptions discussed above, Table 39 provides an 
estimate of the total annual burden hours and cost associated with 
eligible professionals using the qualified registry-based or QCDR-based 
reporting mechanism. Please note that, unlike the claims-based 
reporting mechanism that would require an eligible professional to 
report data to CMS on quality measures on multiple

[[Page 41934]]

occasions, an eligible professional would not be required to submit 
this data to CMS, as the qualified registry or QCDR would perform this 
function on the eligible professional's behalf.

    Table 39--Summary of Burden Estimates for Eligible Professionals
  (Participating Individually or as Part of A Group Practice) Using the
      Qualified Registry-Based and QCDR-Based Reporting Mechanisms
------------------------------------------------------------------------
                                                              Burden
                                                             estimate
------------------------------------------------------------------------
Estimated # of Participating Eligible Professionals (a).         212,000
Estimated Burden Hours Per Eligible Professional to                0.083
 Authorize the Qualified registry or QCDR to Report on
 Eligible Professional's Behalf (b).....................
Estimated Burden Hours Per Eligible Professional to                    3
 Report PQRS Data to Qualified registry or QCDR (c).....
Estimated Burden Hours Per Eligible Professional to                    5
 Prepare for PQRS Participation (d).....................
Estimated Total Annual Burden Hours Per Eligible                   8.083
 Professional (e) = (b) + (c) + (d).....................
Estimated Total Annual Burden Hours (f) = (a)*(e).......       1,713,596
Estimated Cost Per Eligible Professional to Authorize              $6.97
 Qualified registry or QCDR to Report on Eligible
 Professional's Behalf (g)..............................
Estimated Cost Per Eligible Professional to Report PQRS          $251.88
 Data to Qualified registry or QCDR (h).................
Estimated Cost Per Eligible Professional to Prepare for          $133.40
 PQRS Participation (i).................................
Estimated Total Annual Cost Per Eligible Professional            $392.25
 (j) = (g) + (h) + (i)..................................
Estimated Total Annual Burden Cost (k) = (a)*(j)........     $83,157,000
------------------------------------------------------------------------

c. Burden Estimate for PQRS Reporting by Individual Eligible 
Professionals and Group Practices: EHR-Based Reporting Mechanism
    For EHR-based reporting, which includes EHR reporting via a direct 
EHR product and an EHR data submission vendor's product, the eligible 
professional or group practice must review the quality measures on 
which we will be accepting PQRS data extracted from EHRs, select the 
appropriate quality measures, extract the necessary clinical data from 
his or her EHR, and submit the necessary data to the CMS-designated 
clinical data warehouse.
    Under this reporting mechanism the individual eligible professional 
or group practice may either submit the quality measures data directly 
to CMS from their EHR or utilize an EHR data submission vendor to 
submit the data to CMS on the eligible professional's or group 
practice's behalf. To submit data to CMS directly from their EHR, the 
eligible professional or eligible professional in a group practice must 
have access to a CMS-specified identity management system, such as 
IACS, which we believe takes less than 1 hour to obtain. Once an 
eligible professional or eligible professional in a group practice has 
an account, he or she will need to extract the necessary clinical data 
from his or her EHR, and submit the necessary data to the CMS-
designated clinical data warehouse.
    With respect to submitting the actual data file for the respective 
reporting period, we believe that this will take an eligible 
professional or group practice no more than 2 hr, depending on the 
number of patients on which the eligible professional or group practice 
is submitting. We also believe that once the EHR is programmed by the 
vendor to allow data submission to CMS, the burden to the eligible 
professional or group practice associated with submission of data on 
quality measures should be minimal as all of the information required 
to report the measure should already reside in the eligible 
professional's or group practice's EHR.
    In this rule, we are proposing that group practices with 25 or more 
eligible professionals must report on CAHPS for PQRS (OMB control 
number 0938-1222, CMS-10450). Therefore, a group practice of 25 or more 
eligible professionals would be required to report six or more measures 
covering two domains of their choosing. At this point, we do not 
believe the requirement to report CAHPS for PQRS adds or reduces the 
burden on group practices, as we consider reporting the CAHPS for PQRS 
survey as reporting three measures covering one domain.
    Based on the assumptions discussed above, Table 40 provides an 
estimate of the total annual burden hours and cost associated with EHR-
based reporting for individual eligible professionals or group 
practices. Please note that, unlike the claims-based reporting 
mechanism that would require an eligible professional to report data to 
CMS on quality measures on multiple occasions, an eligible professional 
would not be required to submit this data to CMS, as the EHR product 
would perform this function on the eligible professional's behalf.

    Table 40--Summary of Burden Estimates for Eligible Professionals
  (Participating Individually or as Part of A Group Practice) Using the
                      EHR-Based Reporting Mechanism
------------------------------------------------------------------------
                                                              Burden
                                                             estimate
------------------------------------------------------------------------
Estimated # of Participating Eligible Professionals (a).          50,000
Estimated Burden Hours Per Eligible Professional to                    1
 Obtain IACS Account (b)................................
Estimated Burden Hours Per Eligible Professional to                    1
 Submit Test Data File to CMS (c).......................
Estimated Burden Hours Per Eligible Professional to                    2
 Submit PQRS Data File to CMS (d).......................
Estimated Burden Hours Per Eligible Professional to                    5
 Prepare for PQRS Participation (e).....................
Estimated Total Annual Burden Hours Per Eligible                       9
 Professional (f) = (b) + (c) + (d) + (e)...............
Estimated Total Annual Burden Hours (g) = (a)*(f).......         450,000
Estimated Cost Per Eligible Professional to Obtain IACS           $83.96
 Account (h)............................................
Estimated Cost Per Eligible Professional to Submit PQRS          $251.88
 Data File to CMS (includes 1hr for submitting test
 file, which is optional) (i)...........................
Estimated Cost Per Eligible Professional to Prepare for          $133.40
 PQRS Participation (j).................................
Estimated Total Annual Burden Cost Per Eligible                  $469.24
 Professional (k) = (h) + (i) + (j).....................
Estimated Total Annual Burden Cost (m) = (a)*(k)........     $23,462,000
------------------------------------------------------------------------

d. Burden Estimate for PQRS Reporting by Group Practices Using the GPRO 
Web Interface
    With respect to the process for group practices to be treated as 
satisfactorily submitting quality measures data under the PQRS, group 
practices interested in participating in the PQRS through the group 
practice reporting option (GPRO) must complete a self-nomination 
process similar to the self-nomination process required of qualified 
registries. However, since a group practice using the GPRO web 
interface would not need to determine which measures to report under 
PQRS, we believe that the self-nomination process is handled by a group 
practice's administrative staff

[[Page 41935]]

(billing and posting clerk). Therefore, we estimate that the self-
nomination process for the group practices for the PQRS involves 
approximately 2 hr per group practice to review the PQRS GPRO and make 
the decision to participate as a group rather than individually and an 
additional 2 hr per group practice to draft the letter of intent for 
self-nomination, gather the requested TIN and NPI information, and 
provide this requested information. It is estimated that each self-
nominated entity will also spend 2 hr undergoing the vetting process 
with CMS officials. We assume that the group practice staff involved in 
the self-nomination process has an adjusted labor rate of $26.68/hr. 
Therefore, assuming the time associated with the group practice self-
nomination process is 6 hr per group practice, at a cost of $160.08 
($26.68/hr x 6 hr per group practice).
    The burden associated with the group practice reporting 
requirements under the GPRO is the time and effort associated with the 
group practice submitting the quality measures data. For physician 
group practices, this would be the time associated with the physician 
group completing the web interface. We estimate that the time and 
effort associated with using the GPRO web interface is comparable to 
the time and effort associated to using the PAT. As stated above, the 
information collection components of the PAT have been reviewed by OMB 
and are approved under OMB control number 0938-0941 (CMS-10136) for use 
in the PGP, MCMP, and EHR demonstrations. As the GPRO was only recently 
implemented in 2010, it is difficult to determine the time and effort 
associated with the group practice submitting the quality measures 
data. As such, we will use the same burden estimate for group practices 
participating in the GPRO as we use for group practices participating 
in the PGP, MCMP, and EHR demonstrations. Since these changes will not 
have any impact on the information collection requirements associated 
with the PAT and we will be using the same data submission process used 
in the PGP demonstration, we estimate that the burden associated with a 
group practice completing data for PQRS under the web interface will be 
the same as for the group practice to complete the PAT for the PGP 
demonstration. In other words, we estimate that, on average, it will 
take each group practice 79 hr to submit quality measures data via the 
GPRO web interface at a cost of $83.96/hr. Therefore, the annual cost 
is estimated at $6,632.84 per group practice.
    Based on the assumptions discussed above, Table 41 provides an 
estimate of the total annual burden hours and cost associated with the 
group practice reporting of quality measures.

Table 41--Summary of Burden Estimates for Group Practices Using the GPRO
                    Web Interface Reporting Mechanism
------------------------------------------------------------------------
                                                              Burden
                                                             estimate
------------------------------------------------------------------------
Estimated # of Eligible Group Practices in 2013/2014 (a)             500
Estimated # of Burden Hours Per Group Practice to Self-                6
 Nominate to Participate in PQRS Under the Group
 Practice Reporting Option (b)..........................
Estimated # of Burden Hours Per Group Practice to Report              79
 (c)....................................................
Estimated Total Annual Burden Hours Per Group Practice                85
 (d) = (b) + (c)........................................
Estimated Total Annual Burden Hours (e) = (a)*(d).......          42,500
Estimated Cost Per Group Practice to Self-Nominate to            $160.08
 Participate in PQRS Under the Group Practice Reporting
 Option (at a labor rate of $26.68/hr) (f)..............
Estimated Cost Per Group Practice to Report (g).........       $6,632.84
Estimated Total Annual Cost Per Group Practice (h) = (f)       $6,792.92
 + (g)..................................................
Estimated Total Annual Burden Cost (i) = (a)*(h)........      $3,396,460
------------------------------------------------------------------------

    Please note that, beginning in 2013, we are requiring group 
practices that use the GPRO web interface reporting mechanism to 
administer a CAHPS survey. Please note that the burden estimates of 
implementing this survey is provided in a separate PRA package 
submission.
e. Total Estimated Burden of This Information Collection Requirement 
for 2013 and 2014
    It is difficult to accurately estimate the total annual burden 
hours and costs associated with the submission of the quality measures 
data for the PQRS. For example, there are a number of reporting 
mechanisms available that eligible professionals can choose to use to 
report the PQRS measures. It may be more burdensome for some practices 
to use some reporting mechanisms to report the PQRS measures and/or 
electronic prescribing measure than others. This will vary with each 
practice. We have no way of determining which reporting mechanism an 
individual eligible professional will use in a given year, especially 
since EHR reporting and group practice reporting were new options for 
the 2010 PQRS and the QCDR option is new for the 2014 PQRS. Therefore, 
Table 42 provides a range of estimates for individual eligible 
professionals or group practices using the claims, qualified registry, 
or EHR-based reporting mechanisms. The lower range of the estimate 
assumes that eligible professionals will only participate in PQRS to 
avoid the PQRS payment adjustments that begin in 2015. The upper range 
assumes that eligible professionals participate in PQRS for purposes of 
earning an incentive as well as avoiding the PQRS payment adjustments. 
This upper range represents the sum of the estimated maximum hours and 
cost per eligible professional from Tables 37, 38, and 40. We are 
updating our previously approved estimates for the upper range of the 
estimates provided in Table 42.

 Table 42--Summary of Burden Estimates for Eligible Professionals and/or
   Group Practices Using the Claims, Qualified Registry, and EHR-Based
                          Reporting Mechanisms
------------------------------------------------------------------------
                                          Minimum burden  Maximum burden
                                             estimate        estimate
------------------------------------------------------------------------
Estimated Annual Burden Hours for Claims-      1,828,435       5,528,488
 based Reporting (for individual
 eligible professionals only)...........
Estimated Annual Burden for Qualified          1,713,596       1,713,596
 Registry-based or QCDR-based Reporting.
Estimated Annual Burden Hours for EHR-           450,000         450,000
 based Reporting........................
Estimated Total Annual Burden Hours for        3,992,031       7,692,084
 Eligible Professionals or Eligible
 Professionals in a Group Practice......
Estimated Cost for Claims-based              $53,305,000    $364,021,000
 Reporting (for individual eligible
 professionals only)....................
Estimated Cost for Qualified Registry-       $83,157,000     $83,157,000
 based Reporting........................
Estimated Cost for EHR-based Reporting..     $23,462,000     $23,462,000

[[Page 41936]]

 
Estimated Total Annual Cost for Eligible    $159,924,000    $470,640,000
 Professionals or Eligible Professionals
 in a Group Practice....................
------------------------------------------------------------------------

    For purposes of estimating the reporting burden for group 
practices, Table 43 provides a summary of an estimate for group 
practices to participate in PQRS under the group practice reporting 
option using the GPRO web interface during 2015 (that is, Table 41).

Table 43--Summary of Burden Estimates for Group Practices Using the GPRO
                    Web Interface Reporting Mechanism
------------------------------------------------------------------------
                                                               Maximum
                                                                burden
                                                               estimate
------------------------------------------------------------------------
Estimated # of Participating Group Practices...............          500
Estimated # of Burden Hours Per Group Practice to Self-                6
 Nominate to Participate in PQRS and the Electronic
 Prescribing Incentive Program Under the Group Practice
 Reporting Option..........................................
Estimated # of Burden Hours Per Group Practice to Report              79
 Quality Measures..........................................
Estimated Total Annual Burden Hours Per Group Practice.....           85
Estimated Total Annual Burden Hours for Group Practices....       42,500
Estimated Cost Per Group Practice to Self-Nominate to            $160.08
 Participate in PQRS for the Group Practice Reporting
 Option....................................................
Estimated Cost Per Group Practice to Report Quality            $6,632.84
 Measures..................................................
Estimated Total Annual Cost Per Group Practice.............    $6,792.12
Annual Burden Cost for Group Practices.....................   $3,396,460
------------------------------------------------------------------------

6. ICRs Regarding Appropriate Use Criteria for Advanced Diagnostic 
Imaging Services (Sec.  414.94)
    Consistent with section 1834(q) of the statute (as amended by 
section 218(b) of the PAMA), CMS is proposing specific requirements for 
the development of appropriate use criteria (AUC) that can be specified 
under Sec.  414.94 as part of the Medicare program. Provider-led 
organizations that use processes meeting certain requirements and want 
to be recognized as qualified provider-led entities for the purpose of 
this section may apply to CMS.
    Applications must be submitted electronically and demonstrate how 
the organization's processes meet the requirements specified in Sec.  
414.94(c)(1) which include: A systematic literature review of the 
clinical topic and relevant imaging studies; AUC development led by at 
least one multidisciplinary team with autonomous governance; a process 
for identifying team members' conflicts of interest; publication of 
individual appropriate use criterion on each organizations Web site; 
identification of key decision points for individual criterion as 
evidence-based or consensus-based and strength of evidence grading per 
a formal, published, and widely recognized methodology; a transparent 
process for the timely and continual updating of each criterion; and a 
process for developing, modifying or endorsing AUC publicly posted on 
the entity's Web site.
    To be identified as a qualified provider-led entity by CMS, 
organizations must demonstrate adherence to the requirements in their 
application and use the application process identified in Sec.  
414.94(c)(2) which includes: Only entities meeting the definition of 
provider-led entity are eligible to submit applications documenting 
adherence to each AUC development requirement; applications may be 
accepted annually by January 1; all approved provider-led entities will 
be posted to our Web site by June 30; and all qualified provider-led 
entities must re-apply every 6 years and applications must be submitted 
by January 1 during the 5th year of approval.
    The one-time burden associated with the requirements under Sec.  
414.94(c)(2) is the time and effort it would take each of the 30 
organizations that have expressed interests in developing AUC to 
compile, review and submit documentation demonstrating adherence to the 
proposed AUC development requirements. We anticipate 30 respondents 
based on the number of national professional medical specialty 
societies and other organizations that have expressed interest in 
participating in this program as well as other entities we have not 
heard from but would expect to participate.
    We estimate it will take 20 hr at $67.38/hr for a business 
operations specialist to compile, prepare and submit the required 
information, 5 hr at $99.68/hr for a medical and health services 
manager to review and approve the submission, and 5 hr at $187.48/hr 
for a physician to review and approve the submission materials. In this 
regard, we estimate 30 hr per submission at a cost of $2,783.40 per 
organization. In aggregate, we estimate 900 hr (30 hr x 30 submissions) 
at $83,502 ($2,783.40 x 30 submissions).
    After the anticipated initial 30 respondents, we expect less than 
10 applicants to apply to become qualified provider-led entities 
annually. Since we estimate fewer than ten respondents, the information 
collection requirements are exempt (5 CFR 1320.3(c)) from the 
requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et 
seq).
    Qualified provider-led entities must re-apply every 6 years. 
Therefore in years 7-10, we expect that the initial 30 entities will 
re-apply. The ongoing burden for re-applying is expected to be half the 
burden of the initial application process. The provider-led entity will 
be able to make modifications to their original application which 
should result in a burden of 10 hr at $67.38/hr for a business 
operations specialist to compile, prepare and submit the required 
information, 2.5 hr at $99.68/hr for a medical and health services 
manager to review and approve the submission, and 2.5 hr at $187.48/hr 
for a physician to review and approve the submission materials. 
Annually, we estimate 15 hr per submission at a cost of $1,391.70 per 
organization. In aggregate, we estimate 450 hr (15 hr x 30 submissions) 
at $41,751 ($1,391.70 x 30 submissions).
    The proposed requirements and burden will be submitted to OMB under 
control number 0938-New (CMS-10570).

[[Page 41937]]

7. ICRs Regarding the Comprehensive Primary Care (CPC) Initiative and 
the Medicare EHR Incentive Program (Section L of This Preamble)
    Section L outlines an aligned reporting option between the 
Comprehensive Primary Care (CPC) initiative and the Medicare EHR 
Incentive Program whereby a practice site participating in CPC can 
report at least nine clinical quality measures as defined by the model 
that are across three domains and receive credit for reporting to the 
model as well as receive credit for the clinical quality measure 
reporting requirement of the Medicare EHR Incentive Program. While the 
reporting of quality measures is an information collection, the 
requirement is exempt from the PRA in accordance with section 
1115A(d)(3) of the Social Security Act.
8. ICRs Regarding the Medicare Shared Savings Program (Section M of 
This Preamble)
    While the proposed measures discussed in section M of this preamble 
is a collection of information, section 3022 of the Affordable Care Act 
exempts any collection of information associated with the Medicare 
Shared Savings Program from the requirements of the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501 et seq.). Consequently, we are not setting 
out any burden for OMB approval.

C. Summary of Proposed Annual Burden Estimates

                                           Table 44--Proposed Annual Recordkeeping and Reporting Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                               Total
 Section(s) in title 42 of the     OMB No. (CMS ID      Respondents        Responses        Burden per         annual      Labor rate for     Total cost
              CFR                       No.)                                (total)          response       burden (hr)   reporting ($/hr)       ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Part 405, subpart D............  0938-0730 (CMS-R-   -450.............            -450  2 hr..............         -900  67.38.............      -60,642
                                  234).
405.445(a).....................  0938-0730 (CMS-R-   60...............              60  10 min............           10  67.38.............          674
                                  234).
405.2462(g)(3).................  0938-New (CMS-      4,000............       8,964,208  3.5 min...........   522,912.13  26.68.............   13,951,296
                                  10568).
414.90 and section K of this     0938-1059 (CMS-     350,000 (claims-       54 (9 x 6)  5.2 hr (5 hr + 12     5,528,488  varies (see Table   364,021,000
 preamble.                        10276).             based reporting).                  min).                            1).
                                                     212,000                   212,000  8.083 hr..........    1,713,596  varies (see Table    83,157,000
                                                      (qualified                                                          2).
                                                      registry-based
                                                      and QCDR-based
                                                      reporting).
                                                     50,000 (EHR-based          50,000  9.................      450,000  varies (see Table    23,462,000
                                                      reporting).                                                         3).
                                                     500 (GPRO web                 500  85................       42,500  varies (see Table     3,396,460
                                                      interface).                                                         4).
414.94(c)(1) and (2)...........  0938-New (CMS-      30...............              30  5 hr..............          150  187.48............       28,113
                                  10570).
                                                                                        5 hr..............          150  99.68.............       14,952
                                                                                        20 hr.............          600  67.38.............       40,332
                                                                       ---------------------------------------------------------------------------------
    Total......................  ..................  .................  ..............  ..................    8,257,506  ..................  488,011,185
--------------------------------------------------------------------------------------------------------------------------------------------------------

D. Submission of PRA-Related Comments

    We have submitted a copy of this proposed rule to OMB for its 
review of the rule's information collection and recordkeeping 
requirements. These requirements are not effective until they have been 
approved by the OMB.
    To obtain copies of the supporting statement and any related forms 
for the proposed collections discussed above, please visit CMS' Web 
site at www.cms.hhs.gov/[email protected]">www.cms.hhs.gov/[email protected], or call the Reports 
Clearance Office at 410-786-1326.
    We invite public comments on these potential information collection 
requirements. If you wish to comment, please submit your comments 
electronically as specified in the ADDRESSES section of this proposed 
rule and identify the rule (CMS-1631-P).
    PRA-related comments must be received on/by September 8, 2015.

V. Response to Comments

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

VI. Regulatory Impact Analysis

A. Statement of Need

    This proposed rule is necessary to make payment and policy changes 
under the Medicare PFS and to make required statutory changes under the 
Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and the 
Achieving a Better Life Experience Act of 2014 (ABLE). This proposed 
rule is also necessary to make changes to Part B payment policy and 
other Part B related policies.

B. Overall Impact

    We have examined the impact of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(February 2, 2013), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, 
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 
1999) and the Congressional Review Act (5 U.S.C. 804(2)).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits

[[Page 41938]]

(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). A regulatory impact 
analysis (RIA) must be prepared for major rules with economically 
significant effects ($100 million or more in any 1 year). We estimate, 
as discussed below in this section, that the PFS provisions included in 
this proposed rule will redistribute more than $100 million in 1 year. 
Therefore, we estimate that this rulemaking is ``economically 
significant'' as measured by the $100 million threshold, and hence also 
a major rule under the Congressional Review Act. Accordingly, we have 
prepared a RIA that, to the best of our ability, presents the costs and 
benefits of the rulemaking. The RFA requires agencies to analyze 
options for regulatory relief of small entities. For purposes of the 
RFA, small entities include small businesses, nonprofit organizations, 
and small governmental jurisdictions. Most hospitals, practitioners and 
most other providers and suppliers are small entities, either by 
nonprofit status or by having annual revenues that qualify for small 
business status under the Small Business Administration standards. (For 
details see the SBA's Web site at http://www.sba.gov/content/table-small-business-size-standards (refer to the 620000 series)). 
Individuals and States are not included in the definition of a small 
entity.
    The RFA requires that we analyze regulatory options for small 
businesses and other entities. We prepare a regulatory flexibility 
analysis unless we certify that a rule would not have a significant 
economic impact on a substantial number of small entities. The analysis 
must include a justification concerning the reason action is being 
taken, the kinds and number of small entities the rule affects, and an 
explanation of any meaningful options that achieve the objectives with 
less significant adverse economic impact on the small entities.
    Approximately 95 percent of practitioners, other providers and 
suppliers are considered to be small entities, based upon the SBA 
standards. There are over 1 million physicians, other practitioners, 
and medical suppliers that receive Medicare payment under the PFS. 
Because many of the affected entities are small entities, the analysis 
and discussion provided in this section as well as elsewhere in this 
proposed rule is intended to comply with the RFA requirements.
    In addition, section 1102(b) of the Act requires us to prepare an 
RIA if a rule may have a significant impact on the operations of a 
substantial number of small rural hospitals. This analysis must conform 
to the provisions of section 603 of the RFA. For purposes of section 
1102(b) of the Act, we define a small rural hospital as a hospital that 
is located outside of a Metropolitan Statistical Area for Medicare 
payment regulations and has fewer than 100 beds. We are not preparing 
an analysis for section 1102(b) of the Act because we have determined, 
and the Secretary certifies, that this proposed rule would not have a 
significant impact on the operations of a substantial number of small 
rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits on State, 
local, or tribal governments or on the private sector before issuing 
any rule whose mandates require spending in any 1 year of $100 million 
in 1995 dollars, updated annually for inflation. In 2015, that 
threshold is approximately $144 million. This proposed rule would 
impose no mandates on state, local, or tribal governments or on the 
private sector.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on state 
and local governments, preempts state law, or otherwise has Federalism 
implications. Since this regulation does not impose any costs on state 
or local governments, the requirements of Executive Order 13132 are not 
applicable.
    We have prepared the following analysis, which together with the 
information provided in the rest of this preamble, meets all assessment 
requirements. The analysis explains the rationale for and purposes of 
this proposed rule; details the costs and benefits of the rule; 
analyzes alternatives; and presents the measures we would use to 
minimize the burden on small entities. As indicated elsewhere in this 
proposed rule, we are proposing to implement a variety of changes to 
our regulations, payments, or payment policies to ensure that our 
payment systems reflect changes in medical practice and the relative 
value of services, and to implement statutory provisions. We provide 
information for each of the policy changes in the relevant sections of 
this proposed rule. We are unaware of any relevant federal rules that 
duplicate, overlap, or conflict with this proposed rule. The relevant 
sections of this proposed rule contain a description of significant 
alternatives if applicable.

C. Changes in Relative Value Unit (RVU) Impacts

1. Resource-Based Work, PE, and MP RVUs
    Section 1848(c)(2)(B)(ii)(II) of the Act requires that increases or 
decreases in RVUs may not cause the amount of expenditures for the year 
to differ by more than $20 million from what expenditures would have 
been in the absence of these changes. If this threshold is exceeded, we 
make adjustments to preserve budget neutrality.
    Our estimates of changes in Medicare revenues for PFS services 
compare payment rates for CY 2015 with proposed payment rates for CY 
2016 using CY 2014 Medicare utilization. The payment impacts in this 
proposed rule reflect averages by specialty based on Medicare 
utilization. The payment impact for an individual physician could vary 
from the average and would depend on the mix of services the 
practitioner furnishes. The average percentage change in total revenues 
would be less than the impact displayed here because practitioners and 
other entities generally furnish services to both Medicare and non-
Medicare patients. In addition, practitioners and other entities may 
receive substantial Medicare revenues for services under other Medicare 
payment systems. For instance, independent laboratories receive 
approximately 83 percent of their Medicare revenues from clinical 
laboratory services that are paid under the Clinical Lab Fee Schedule.
    The annual update to the PFS conversion factor (CF) was previously 
calculated based on a statutory formula; for details about this 
formula, we refer readers to the CY 2015 PFS final rule with comment 
period (79 FR 67741 through 67742). The Medicare Access and CHIP 
Reauthorization Act (MACRA) of 2015 established the update factor for 
calendar years 2015 through 2025. To calculate the conversion factor 
for the update year, we multiply the product of the current year 
conversion factor and the update factor by the budget neutrality 
adjustment. We estimate the CY 2016 PFS conversion factor to be 
$36.1096, which reflects a budget neutrality adjustment of 0.9999 and 
the 0.5 percent update factor specified under MACRA. We estimate the CY 
2016 anesthesia conversion factor to be $22.6296, which reflects the 
0.9999 budget neutrality adjustment, a 0.99602 anesthesia fee schedule 
adjustment practice expense and malpractice adjustment, and the 0.5 
percent update specified under the MACRA. We note that Section 220(d) 
of the PAMA added

[[Page 41939]]

a new paragraph at section 1848(c)(2)(O) of the Act to establish an 
annual target for reductions in PFS expenditures resulting from 
adjustments to relative values of misvalued codes. Under section 
1848(c)(2)(O)(ii) of the Act, if the net reduction in expenditures for 
the year is equal to or greater than the target for the year, reduced 
expenditures attributable to such adjustments shall be redistributed in 
a budget-neutral manner within the PFS in accordance with the existing 
budget neutrality requirement under section 1848(c)(2)(B)(ii)(II) of 
the Act.
    As we discuss in section II.F.4 of this proposed rule, because CY 
2016 represents a transition year in our new process of proposing 
values for new, revised and misvalued codes in the proposed rule, 
rather than establishing them as interim final in the final rule with 
comment period, we will not be able to calculate a realistic estimate 
of the target amount at the time the proposed rule is published. 
Therefore, we did not incorporate the impact of the target into the 
calculation of the proposed conversion factor. However, we did estimate 
the net reduction in expenditures as a result of proposed adjustments 
to the relative value established for misvalued codes in this proposed 
rule, not including interim final changes that will be established in 
the CY 2016 PFS final rule. The net reduction is approximately 0.25 
percent of the estimated amount of expenditures under the fee schedule 
for CY 2016.
    Table 45 shows the payment impact on PFS services of the proposals 
contained in this proposed rule. To the extent that there are year-to-
year changes in the volume and mix of services provided by 
practitioners, the actual impact on total Medicare revenues will be 
different from those shown in Table 45 (CY 2016 PFS Proposed Rule 
Estimated Impact on Total Allowed Charges by Specialty). The following 
is an explanation of the information represented in Table 45.
     Column A (Specialty): Identifies the specialty for which 
data is shown.
     Column B (Allowed Charges): The aggregate estimated PFS 
allowed charges for the specialty based on CY 2014 utilization and CY 
2015 rates. That is, allowed charges are the PFS amounts for covered 
services and include coinsurance and deductibles (which are the 
financial responsibility of the beneficiary). These amounts have been 
summed across all services furnished by physicians, practitioners, and 
suppliers within a specialty to arrive at the total allowed charges for 
the specialty.
     Column C (Impact of Work RVU Changes): This column shows 
the estimated CY 2016 impact on total allowed charges of the proposed 
changes in the work RVUs, including the impact of changes due to 
potentially misvalued codes.
     Column D (Impact of PE RVU Changes): This column shows the 
estimated CY 2016 impact on total allowed charges of the proposed 
changes in the PE RVUs.
     Column E (Impact of RVU Changes): This column shows the 
estimated CY 2016 impact on total allowed charges of the proposed 
changes in the MP RVUs, which are primarily driven by the required 
five-year review and update of MP RVUs.
     Column F (Combined Impact): This column shows the 
estimated CY 2016 combined impact on total allowed charges of all the 
proposed changes in the previous columns. Column F may not equal the 
sum of columns C, D, and E due to rounding.

          Table 45--CY 2016 PFS Proposed Rule Estimated Impact on Total Allowed Charges by Specialty *
----------------------------------------------------------------------------------------------------------------
                                      Allowed     Impact of work   Impact of PE    Impact of MP      Combined
            Specialty              charges (mil)   RVU changes %   RVU changes %   RVU changes %    Impact ** %
(A)                                          (B)             (C)             (D)             (E)             (F)
----------------------------------------------------------------------------------------------------------------
TOTAL...........................         $88,408               0               0               0               0
ALLERGY/IMMUNOLOGY..............             220               0               1               0               1
ANESTHESIOLOGY..................           1,959               0               2              -2               0
AUDIOLOGIST.....................              60               0              -1               1              -0
CARDIAC SURGERY.................             340               0               0               0               0
CARDIOLOGY......................           6,462               0               0               0               0
CHIROPRACTOR....................             781               0               0               0               0
CLINICAL PSYCHOLOGIST...........             713               0               0               0               0
CLINICAL SOCIAL WORKER..........             552               0               0               0               0
COLON AND RECTAL SURGERY........             160              -1               0              -1              -1
CRITICAL CARE...................             293               0               0               0               0
DERMATOLOGY.....................           3,207               0               0               0               1
DIAGNOSTIC TESTING FACILITY.....             719               0               1               0               1
EMERGENCY MEDICINE..............           3,099               0               0               0               0
ENDOCRINOLOGY...................             452               0               0               0               0
FAMILY PRACTICE.................           6,043               0               0               0               0
GASTROENTEROLOGY................           1,829              -2              -1              -1              -5
GENERAL PRACTICE................             471               0               0               0               0
GENERAL SURGERY.................           2,186               0               0               0               0
GERIATRICS......................             213               0               0               0               0
HAND SURGERY....................             169               0               1               0               1
HEMATOLOGY/ONCOLOGY.............           1,781               0               0               0               0
INDEPENDENT LABORATORY..........             823               1               8               0               9
INFECTIOUS DISEASE..............             655               0               0               0               0
INTERNAL MEDICINE...............          10,964               0               0               0               0
INTERVENTIONAL PAIN MGMT........             715               0               1               0               1
INTERVENTIONAL RADIOLOGY........             296               0               1               0               1
MULTISPECIALTY CLINIC/OTHER PHYS              95               0               0               0               0
NEPHROLOGY......................           2,187               0               0               0               0
NEUROLOGY.......................           1,512               0               0               0               0
NEUROSURGERY....................             770               0               0              -1              -1
NUCLEAR MEDICINE................              46               0               0               0               0

[[Page 41940]]

 
NURSE ANES/ANES ASST............           1,181               0               2              -2               0
NURSE PRACTITIONER..............           2,528               0               0               0               0
OBSTETRICS/GYNECOLOGY...........             664               0               0               0               0
OPHTHALMOLOGY...................           5,490               0               0               0               0
OPTOMETRY.......................           1,167               0               0               0               0
ORAL/MAXILLOFACIAL SURGERY......              45               0               0               0               0
ORTHOPEDIC SURGERY..............           3,653               0               0               0               0
OTHER...........................              25               0               0               0               0
OTOLARNGOLOGY...................           1,195               0              -1               0               0
PATHOLOGY.......................           1,316               4               4               0               8
PEDIATRICS......................              59               0               0               0               0
PHYSICAL MEDICINE...............           1,027               0               0               0               0
PHYSICAL/OCCUPATIONAL THERAPY...           3,077               0               0               0               0
PHYSICIAN ASSISTANT.............           1,716               0               0               0               0
PLASTIC SURGERY.................             371               0               0               0               1
PODIATRY........................           1,978               0               0               0               0
PORTABLE X-RAY SUPPLIER.........             103               0               0               0               0
PSYCHIATRY......................           1,300               0               0               0               0
PULMONARY DISEASE...............           1,769               0               0               0               0
RADIATION ONCOLOGY..............           1,769               0              -3               0              -3
RADIATION THERAPY CENTERS.......              52               0              -9               0              -9
RADIOLOGY.......................           4,472               0               0               0               0
RHEUMATOLOGY....................             534               0               0               0               0
THORACIC SURGERY................             346               0               0               0               0
UROLOGY.........................           1,789               0               0               0               0
----------------------------------------------------------------------------------------------------------------
** Column F may not equal the sum of columns C, D, and E due to rounding.

2. CY 2016 PFS Impact Discussion
a. Changes in RVUs
    The most widespread specialty impacts of the RVU changes are 
generally related to two major factors. The first factor, as discussed 
in section II. of this proposed rule, is the number of changes to RVUs 
for specific services resulting from the Misvalued Code Initiative, 
including the establishment of RVUs for new and revised codes. Several 
specialties, including radiation therapy centers, radiation oncology, 
and gastroenterology, will experience significant decreases to payments 
to services that they frequently furnish as a result of widespread 
revisions to the structure and the inputs used to develop RVUs for the 
codes that describe particular services. Other specialties, including 
pathology and independent laboratories, will experience significant 
increases to payments for similar reasons.
    The second factor relates to a technical improvement that refines 
the MP RVU methodology, which we are proposing to make as part of our 
annual update of malpractice RVUs. This technical improvement will 
result in small negative impacts to the portion of PFS payments 
attributable to malpractice for gastroenterology, colon and rectal 
surgery, and neurosurgery.
b. Combined Impact
    Column F of Table 45 displays the estimated CY 2016 combined impact 
on total allowed charges by specialty of all the proposed RVU changes. 
Table 46 (Impact of Proposed Rule on CY 2016 Payment for Selected 
Procedures) shows the estimated impact on total payments for selected 
high volume procedures of all of the proposed changes. We selected 
these procedures for sake of illustration from among the most commonly 
furnished by a broad spectrum of specialties. The change in both 
facility rates and the nonfacility rates are shown. For an explanation 
of facility and nonfacility PE, we refer readers to Addendum A found on 
the CMS Web site at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/.

                  Table 46--Impact of Proposed Rule on CY 2016 Payment for Selected Procedures
----------------------------------------------------------------------------------------------------------------
                                                            Facility                       Non Facility
                                               -----------------------------------------------------------------
   CPT/HCPCS 1       MOD      Short descriptor   CY 2015    CY 2016               CY 2015    CY 2016
                                                   \2\        \3\      % Change     \2\        \3\      % Change
----------------------------------------------------------------------------------------------------------------
11721...........  .........  Debride nail 6 or     $25.15     $25.64          2     $45.28     $46.22          2
                              more.
17000...........  .........  Destruct premalg       53.90      54.88          2      67.20      68.24          2
                              lesion.
27130...........  .........  Total hip           1,407.87   1,411.02          0         NA         NA         NA
                              arthroplasty.
27244...........  .........  Treat thigh         1,277.80   1,285.37          1         NA         NA         NA
                              fracture.
27447...........  .........  Total knee          1,407.52   1,411.38          0         NA         NA         NA
                              arthroplasty.
33533...........  .........  Cabg arterial       1,952.63   1,963.08          1         NA         NA         NA
                              single.
35301...........  .........  Rechanneling of     1,203.41   1,204.14          0         NA         NA         NA
                              artery.

[[Page 41941]]

 
43239...........  .........  Egd biopsy single/    154.15     152.72         -1     412.52     409.80         -1
                              multiple.
66821...........  .........  After cataract        316.21     318.10          1     334.90     336.87          1
                              laser surgery.
66984...........  .........  Cataract surg w/      650.40     646.65         -1         NA         NA         NA
                              iol 1 stage.
67210...........  .........  Treatment of          508.82     513.07          1     526.79     531.12          1
                              retinal lesion.
71010...........  .........  Chest x-ray 1             NA         NA         NA      22.64      22.75          0
                              view frontal.
71010...........         26  Chest x-ray 1           9.34       9.39          1       9.34       9.39          1
                              view frontal.
77056...........  .........  Mammogram both            NA         NA         NA     116.42     117.35          1
                              breasts.
77056...........         26  Mammogram both         44.56      44.78          0      44.56      44.78          0
                              breasts.
77057...........  .........  Mammogram                 NA         NA         NA      83.01      83.40          0
                              screening.
77057...........         26  Mammogram              35.93      36.11          0      35.93      36.11          0
                              screening.
77427...........  .........  Radiation tx          187.57     196.42          5     187.57     196.42          5
                              management x5.
88305...........         26  Tissue exam by         39.17      39.72          1      39.17      39.72          1
                              pathologist.
90935...........  .........  Hemodialysis one       73.66      74.01          0         NA         NA         NA
                              evaluation.
92012...........  .........  Eye exam               53.18      53.79          1      86.24      86.65          0
                              establish
                              patient.
92014...........  .........  Eye exam&tx estab      80.85      81.24          0     124.69     125.65          1
                              pt 1/>vst.
93000...........  .........  Electrocardiogram         NA         NA         NA      17.25      16.97         -2
                              complete.
93010...........  .........  Electrocardiogram       8.62       8.67          1       8.62       8.67          1
                              report.
93015...........  .........  Cardiovascular            NA         NA         NA      77.26      76.54         -1
                              stress test.
93307...........         26  Tte w/o doppler        45.99      46.22          0      45.99      46.22          0
                              complete.
93458...........         26  L hrt artery/         323.76     324.96          0     323.76     324.96          0
                              ventricle angio.
98941...........  .........  Chiropract manj 3-     35.21      35.03         -1      41.32      41.53          0
                              4 regions.
99203...........  .........  Office/outpatient      77.98      78.35          0     109.60     110.12          0
                              visit new.
99213...........  .........  Office/outpatient      51.38      51.99          1      73.30      74.01          1
                              visit est.
99214...........  .........  Office/outpatient      79.41      79.43          0     108.88     109.04          0
                              visit est.
99222...........  .........  Initial hospital      139.06     139.01          0         NA         NA         NA
                              care.
99223...........  .........  Initial hospital      205.90     205.80          0         NA         NA         NA
                              care.
99231...........  .........  Subsequent             39.53      40.08          1         NA         NA         NA
                              hospital care.
99232...........  .........  Subsequent             73.30      73.65          0         NA         NA         NA
                              hospital care.
99233...........  .........  Subsequent            105.64     105.79          0         NA         NA         NA
                              hospital care.
99236...........  .........  Observ/hosp same      220.99     220.97          0         NA         NA         NA
                              date.
99239...........  .........  Hospital              108.88     109.04          0         NA         NA         NA
                              discharge day.
99283...........  .........  Emergency dept         62.88      63.18          0         NA         NA         NA
                              visit.
99284...........  .........  Emergency dept        119.66     119.87          0         NA         NA         NA
                              visit.
99291...........  .........  Critical care         227.46     227.83          0     279.20     279.82          0
                              first hour.
99292...........  .........  Critical care         113.55     114.10          0     124.33     125.29          1
                              addl 30 min.
99348...........  .........  Home visit est            NA         NA         NA      84.80      85.57          1
                              patient.
99350...........  .........  Home visit est            NA         NA         NA     178.95     180.17          1
                              patient.
G0008...........  .........  Immunization              NA         NA         NA      25.51      25.64          0
                              admin.
----------------------------------------------------------------------------------------------------------------
\1\ CPT codes and descriptions are copyright 2015 American Medical Association. All Rights Reserved. Applicable
  FARS/DFARS apply.
\2\ Payments based on the 2015 conversion factor of 35.9335.
\3\ Payments based on the estimated 2016 conversion factor of $36.1096.

D. Effect of Proposed Changes in Telehealth List

    As discussed in section II.E. of this proposed rule, we are 
proposing to add several new codes to the list of Medicare telehealth 
services. Although we expect these changes to increase access to care 
in rural areas, based on recent utilization of similar services already 
on the telehealth list, we estimate no significant impact on PFS 
expenditures from the proposed additions.

E. Other Provisions of the Proposed Regulation

1. Ambulance Fee Schedule
    As discussed in section III.A.2 of this proposed rule, section 203 
of the Medicare Access and CHIP Reauthorization Act of 2015 amended 
section 1834(l)(12)(A) and (l)(13)(A) of the Act to extend the payment 
add-ons set forth in those subsections through December 31, 2017. These 
statutory ambulance extender provisions are self-implementing. As a 
result, there are no policy proposals associated with these provisions 
or associated impact in this rule. We are proposing only to correct the 
dates in the Code of Federal Regulations (CFR) at Sec.  
414.610(c)(1)(ii) and Sec.  414.610(c)(5)(ii) to conform the 
regulations to these self-implementing statutory provisions.
    For CY 2016 and subsequent CYs, we are proposing to continue 
implementation of the revised OMB delineations and the most recent 
modifications of the RUCA codes for purposes of payment under the 
ambulance fee schedule, as originally finalized and implemented in the 
CY 2015 PFS final rule with comment period as corrected (79 FR 67744 
through 67750; 79 FR 78716 through 78719). The proposed continued use 
of the revised OMB delineations and the updated RUCA codes for CY 2016 
and subsequent CYs would mean the continued recognition of urban and 
rural boundaries based on the population migration that occurred over a 
10-year period, between 2000 and 2010. For the RUCA codes, we would 
continue to designate any census tracts falling at or above RUCA level 
4.0 as rural areas. In addition, none of the super rural areas would 
lose their status based on our continued implementation of the revised 
OMB delineations and updated RUCA codes. As discussed in section 
III.A.3. of this proposed rule, the implementation of the revised OMB 
delineations and updated RUCA codes for CY 2016 and subsequent CYs 
would continue to affect whether certain areas are designated as urban 
or rural, and whether or not transports would be

[[Page 41942]]

eligible for rural adjustments under the ambulance fee schedule statute 
and regulations. Descriptions of our proposals and accompanying 
rationale are set forth in more detail in section III.A.3. of this 
proposed rule. We estimate that our proposal to continue implementation 
of the revised OMB delineations and updated RUCA codes for CY 2016 and 
subsequent CYs would result in a minimal fiscal impact on the Medicare 
program as compared to CY 2015. We also estimate that our continued 
implementation of these geographic delineations would result in a 
minimal fiscal impact on ambulance providers and suppliers as compared 
to CY 2015, because we would be continuing implementation of the same 
revised OMB delineations and updated RUCA codes that were in effect in 
CY 2015. We note that there may be minimal impacts due to changes in 
ZIP codes based on updates by the USPS that we receive every two 
months.
    As previously discussed in this section, most providers and 
suppliers, including ambulance companies, are small entities, either by 
their nonprofit status or by having annual revenues that qualify for 
small business status under the Small Business Administration 
standards. Although, we do not believe that the proposed continued 
implementation of the revised OMB delineations and updated RUCA codes 
would have a significant economic impact on ambulance providers and 
suppliers as compared to CY 2015, we have included an analysis in 
section III.A.3. of this proposed rule describing certain impacts 
associated with implementation of these geographic delineations and 
have invited public comments on any alternative methods for 
implementing the revised OMB delineations and the updated RUCA codes. 
As further discussed in section III.A.3. of this proposed rule, Table 
16 sets forth an analysis of the number of ZIP codes that changed urban 
and rural status in each U.S. state and territory after CY 2014 due to 
our implementation of the revised OMB delineations and updated RUCA 
codes, using an updated April 2015 USPS ZIP code file, the revised OMB 
delineations, and the updated RUCA codes (including the RUCA ZIP code 
approximation file discussed in that section).
    In addition, we are proposing to revise Sec.  410.41(b) to require 
that all Medicare-covered ambulance transports must be staffed by at 
least two people who meet both the requirements of applicable state and 
local laws where the services are being furnished and the current 
Medicare requirements under Sec.  410.41(b). In addition, we are 
proposing to revise the definition of Basic Life Support (BLS) in Sec.  
414.605 to include the proposed revised staffing requirements discussed 
in this section for Sec.  410.41(b). Since we expect ambulance 
providers and suppliers are already in compliance with their state and 
local laws, we expect that this proposal would have a minimal impact on 
ambulance providers and suppliers. Similarly, we do not expect any 
significant impact on the Medicare program.
    Furthermore, we are proposing to revise Sec.  410.41(b) and the 
definition of BLS in Sec.  414.605 to clarify that, for BLS vehicles, 
at least one of the staff members must be certified at a minimum as an 
EMT-Basic, which we believe would more clearly state our current 
policy. Also, for the reasons discussed in section III.A.4. of this 
proposed rule, we are proposing to delete the last sentence of our 
definition of BLS in Sec.  414.605. Because these proposals do not 
change our current policies, we expect that they would have a minimal 
impact on ambulance providers and suppliers and do not expect any 
significant impact on the Medicare program.
2. Chronic Care Management (CCM) Services for Rural Health Clinics 
(RHCs) and Federally Qualified Health Centers (FQHCs)
    As discussed in section III.B of this proposed rule, we are 
proposing to establish payment, beginning on January 1, 2016, for RHCs 
and FQHCs who furnish a minimum of 20 minutes of qualifying CCM 
services during a calendar month to patients with multiple (two or 
more) chronic conditions that are expected to last at least 12 months 
or until the death of the patient, and that place the patient at 
significant risk of death, acute exacerbation/decompensation, or 
functional decline. We also are proposing that payment for CCM be based 
on the PFS national average non-facility payment rate when CPT code 
99490 is billed alone or with other payable services on a RHC or FQHC 
claim.
    In the CY 2015 PFS final rule (79 FR 67715 through 67730), we 
estimated that 65 percent of Medicare beneficiaries in fee-for-service 
practices had 2 or more chronic conditions, and that 30 percent of 
those beneficiaries would choose to receive CCM services. We also 
estimated that for those patients, there would be an average of 6 CCM 
billable payments per year.
    We do not have the data to determine the percentage of Medicare 
beneficiaries in RHCs or FQHCs with 2 or more chronic conditions, but 
we have no reason to believe that the percentage would be different for 
patients in a RHC or FQHC. We also assume that the rate of acceptance, 
and the number of billable visits per year, would be the same for RHCs 
and FQHCs as it is for practitioners in non-RHC and FQHC settings that 
are billing under the PFS.
    Based on these assumptions, we estimate that the 5-year cost impact 
of CCM payment in RHCs and FQHCs would be $ 850 million, of which $210 
million is the premium offset and $640 million is the Part B payment. 
We estimate that the 10-year cost impact of CCM payment in RHCs and 
FQHCs would be $1.970 billion, of which $480 million is the premium 
offset and $1.490 billion is the Part B payment.
    These estimates were derived by first multiplying the number of 
Medicare beneficiaries in RHCs and FQHCs per year by 0.65 percent, (the 
estimated percentage of Medicare beneficiaries with 2 or more chronic 
conditions). This number was then multiplied by 0.30 (the estimated 
percentage of Medicare beneficiaries with 2 or more chronic conditions 
that will choose to receive CCM services). This number was then 
multiplied by $42.91 (the national average payment rate per beneficiary 
per calendar month). Finally, this number was multiplied by 6 (the 
estimated number of CCM payments per beneficiary receiving CCM 
services). Table 47 provides the yearly estimates (figures are in 
millions):

                                                               Table 47--Yearly Estimates
                                                                      [In millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   5 Year      10 Year
                                        2016     2017     2018     2019     2020     2021     2022     2023     2024     2025   impact 2016- impact 2016-
                                                                                                                                    2020         2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY Cash Impact--Part B:
    Benefits........................      $90     $170     $190     $200     $200     $210     $220     $220     $230     $230         $850       $1,970

[[Page 41943]]

 
    Premium Offset..................      -20      -40      -50      -50      -50      -50      -50      -50      -50      -60         -210         -480
                                     -------------------------------------------------------------------------------------------------------------------
        Total Part B................       70      130      140      150      150      160      170      170      170      180          640        1,490
--------------------------------------------------------------------------------------------------------------------------------------------------------

3. Healthcare Common Procedure Coding System (HCPCS) Coding for Rural 
Health Clinics (RHCs)
    As discussed in section III.C. of this proposed rule, we are 
proposing to require HCPCS coding for all services furnished by RHCs to 
Medicare beneficiaries effective for dates of service on or after 
January 1, 2016. There will be no cost impact on the Medicare program 
since this proposal does not change the payment methodology for RHC 
services. This proposal would necessitate some RHCs to make changes to 
their billing practices; however, we estimate no significant cost 
impact on RHCs.
4. Payment to Grandfathered Tribal FQHCs That Were Provider-Based 
Clinics on or Before April 7, 2000
    As discussed in section III.D. of this proposed rule, we are 
proposing that clinics that were provider-based to an IHS hospital on 
or before April 7, 2000, and are now tribally-operated clinics 
contracted or compacted under the ISDEAA, may seek to become certified 
as grandfathered tribal FQHCs. We also propose that these grandfathered 
tribal FQHCs retain their Medicare outpatient per visit payment rate, 
as set annually by the IHS, rather than the FQHC PPS per visit base 
rate of $158.85. Since we are not proposing any changes to their 
payment rate, there will be no cost impact as a result of this 
proposal.
5. Part B Drugs--Payment for Biosimilar Biological Products Under 
Section 1847A
    In section III.E. of this rule we discussed the payment of 
biosimilar biological products under section 1847A of the Act and 
proposed to clarify existing regulation text. The updated regulation 
text states that the payment amount for a biosimilar biological product 
is based on the average sales prices (ASP) of all NDCs assigned to the 
biosimilar biological products included within the same billing and 
payment code.
    We anticipate that biosimilar biological products will have lower 
ASPs than the corresponding reference products, and we expect the 
Medicare Program will realize savings from the utilization of 
biosimilar biological products. However, at the time of writing this 
proposed rule, we have not yet received ASP data for any biosimilar 
biological products that have been approved under the FDA's biosimilar 
approval pathway. Further, it is not clear how many biosimilar products 
will be approved, when approval and marketing of various products will 
occur, what the market penetration of biosimilars in Medicare will be, 
and what the cost differences between the biosimilars as well as the 
price differences between the biosimilars and the reference products 
will be. Therefore, using available data, we are not able to quantify 
with certainty the potential savings to Medicare part B. Similarly, we 
are not able to quantify the impact, if any, on physician offices that 
administer biosimilar biological products.
6. Appropriate Use Criteria for Advanced Diagnostic Imaging Services
    We are proposing and requesting public comment on Appropriate Use 
Criteria development process requirements as well as an application 
process that organizations must comply with to become qualified 
provider-led entities. These proposals would not impact CY 2016 
physician payments under the PFS.
7. Oncology Care Model and Overlap With Care Management Services Under 
PFS
    The participation requirements and financial incentives of the 
Oncology Care Model (OCM) are outlined in the model's Request for 
Applications (http://innovation.cms.gov/initiatives/Oncology-Care/) and 
in the model's announcement in the Federal Register on February 17, 
2015 (80 FR 8323). The proposals for OCM set forth in the CY 2016 MPFS 
proposed rule articulate restrictions in OCM providers' ability to bill 
the model's Per-Beneficiary-Per-Month (PBPM) fee and for other MPFS 
care coordination services in the same month for the same beneficiary, 
given that the enhanced services required of each overlap in scope. 
Since the proposed policies are designed to limit the likelihood that 
Medicare double pays for similar services, these proposals are not 
expected to have a fiscal impact on the Medicare program.
8. Physician Compare
    We do not estimate any impact as a result of the proposals for the 
Physician Compare Web site.
9. Physician Quality Reporting System
a. Burden Estimate for PQRS Reporting by Individual Eligible 
Professionals: Reporting in General
    According to the 2013 Reporting Experience, ``more than 1.25 
million eligible professionals were eligible to participate in the 2013 
PQRS, Medicare Shared Savings Program, and Pioneer ACO Model.'' \10\ In 
this burden estimate, we assume that 1.25 million eligible 
professionals, the same number of eligible professionals eligible to 
participate in the PQRS in 2013, will be eligible to participate in the 
PQRS. Since all eligible professionals are subject to the 2018 PQRS 
payment adjustment, we estimate that ALL 1.25 million eligible 
professionals will participate in the PQRS in 2016 for purposes of 
meeting the criteria for satisfactory reporting (or, in lieu of 
satisfactory reporting, satisfactory participation in a QCDR) for the 
2018 PQRS payment adjustment.
---------------------------------------------------------------------------

    \10 \ Centers for Medicare and Medicaid Services, 2012 Reporting 
Experience Including Trends (2007-2013): Physician Quality Reporting 
System and Electronic Prescribing (eRx) Incentive Program, March 14, 
2014, at xiii.
---------------------------------------------------------------------------

    Historically, the PQRS has never experienced 100 percent 
participation in reporting for the PQRS. In the 2013 PQRS and eRx 
Reporting Experience Report more than 1.25 million professionals were 
eligible to participate in the 2013 PQRS (including group practices 
reporting under the GPRO, Medicare Shared Savings Program, and Pioneer 
ACO Model). Therefore, we believe that although 1.25 million eligible 
professionals will be subject to the 2018 PQRS payment adjustment, not 
all eligible participants will actually report quality measures data 
for purposes of the 2018 PQRS payment adjustment. In this burden 
estimate, we will only provide burden estimates for the eligible 
professionals and group

[[Page 41944]]

practices who attempt to submit quality measures data for purposes of 
the 2018 PQRS payment adjustment.
    In 2013, 641,654 eligible professionals (51 percent) eligible 
professionals (including those who belonged to group practices that 
reported under the GPRO and eligible professionals within an ACO that 
participated in the PQRS via the GPRO) participated in the PQRS, 
Medicare Shared Savings Program, or Pioneer ACO Model.\11\ We expect to 
see a steady increase in participation in reporting for the PQRS in 
2016 than 2013. Eligible professionals have become more familiar with 
the PQRS payment adjustments since eligible professionals are currently 
experiencing the implementation of the first PQRS payment adjustment--
the 2015 PQRS payment adjustment. Therefore, we estimate that we will 
see a 70 percent participation rate in 2016. Therefore, we estimate 
that 70 percent of eligible professionals (or approximately 875,000 
eligible professionals) will report quality measures data for purposes 
of the 2018 PQRS payment adjustment.
---------------------------------------------------------------------------

    \11\ Id. at XV.
---------------------------------------------------------------------------

    With respect to the PQRS, the burden associated with the 
requirements of this voluntary reporting initiative is the time and 
effort associated with individual eligible professionals and group 
practices identifying applicable quality measures for which they can 
report the necessary information, selecting a reporting option, and 
reporting the information on their selected measures or measures group 
to CMS using their selected reporting option. We assume that most 
eligible professionals participating in the PQRS will attempt to meet 
both the criteria for satisfactory reporting for the 2018 PQRS payment 
adjustment.
    We believe the labor associated with eligible professionals and 
group practices reporting quality measures data in the PQRS is 
primarily handled by an eligible professional's or group practice's 
billing clerk or computer analyst trained to report quality measures 
data. Therefore, we will consider the hourly wage of a billing clerk 
and computer analyst in our estimates. For purposes of this burden 
estimate, we will assume that a billing clerk will handle the 
administrative duties associated with participating in the PQRS.
    For individual eligible professionals, the burden associated with 
the requirements of this reporting initiative is the time and effort 
associated with eligible professionals identifying applicable quality 
measures for which they can report the necessary information, 
collecting the necessary information, and reporting the information 
needed to report the eligible professional's measures. We believe it is 
difficult to accurately quantify the burden because eligible 
professionals may have different processes for integrating the PQRS 
into their practice's work flows. Moreover, the time needed for an 
eligible professional to review the quality measures and other 
information, select measures applicable to his or her patients and the 
services he or she furnishes to them, and incorporate the use of 
quality data codes into the office work flows is expected to vary along 
with the number of measures that are potentially applicable to a given 
professional's practice. Since eligible professionals are generally 
required to report on at least 9 measures covering at least 3 National 
Quality Strategy domains criteria for satisfactory reporting (or, in 
lieu of satisfactory reporting, satisfactory participation in a QCDR) 
for the 2018 PQRS payment adjustment, we will assume that each eligible 
professional reports on an average of 9 measures for this burden 
analysis.
    For eligible professionals who are participating in PQRS, we will 
assign 5 total hours as the amount of time needed for an eligible 
professional's billing clerk to review the PQRS Measures List, review 
the various reporting options, select the most appropriate reporting 
option, identify the applicable measures or measures groups for which 
they can report the necessary information, review the measure 
specifications for the selected measures or measures groups, and 
incorporate reporting of the selected measures or measures groups into 
the office work flows. The measures list contains the measure title and 
brief summary information for the eligible professional to review. 
Assuming the eligible professional has received no training from his/
her specialty society, we estimate it will take an eligible 
professional's billing clerk up to 2 hours to review this list, review 
the reporting options, and select a reporting option and measures on 
which to report. If an eligible professional has received training, 
then we believe this would take less time. CMS believes 3 hours is 
plenty of time for an eligible professional to review the measure 
specifications of 9 measures or 1 measures group they select to report 
for purposes of participating in PQRS and to develop a mechanism for 
incorporating reporting of the selected measures or measures groups 
into the office work flows. Therefore, we believe that the start-up 
cost for an eligible professional to report PQRS quality measures data 
is 5 hr x $26.68/hr = $127.25.
    We continue to expect the ongoing costs associated with PQRS 
participation to decline based on an eligible professional's 
familiarity with and understanding of the PQRS, experience with 
participating in the PQRS, and increased efforts by CMS and 
stakeholders to disseminate useful educational resources and best 
practices.
    We believe the burden associated with actually reporting the 
quality measures will vary depending on the reporting mechanism 
selected by the eligible professional. As such, we break down the 
burden estimates by eligible professionals and group practices 
participating in the GPRO according to the reporting mechanism used.
b. Burden Estimate for PQRS Reporting by Individual Eligible 
Professionals: Claims-Based Reporting Mechanism
    According to the 2011 PQRS and eRx Experience Report, 229,282 of 
the 320,422 eligible professionals (or 72 percent) of eligible 
professionals used the claims-based reporting mechanism. According to 
the 2012 Reporting Experience, 248,206 eligible professionals 
participated in the PQRS using the claims-based reporting mechanism in 
2012.\12\ According to the 2013 PQRS and eRx Experience Report, 641,654 
eligible professionals participated as individuals or group practices 
through one of the PQRS reporting mechanism, a 47 percent increase from 
those that participated in 2012 (435,931). Through the individual 
claims-based reporting mechanism, 331,668 of those eligible 
professionals (or 52 percent) reported using this mechanism. Increased 
claims based reporting to 350,000 (approximately 5 percent increase 
over 2013). Though claims reporting was declining, we did see an 
increase in 2013 once the payment adjustment was applied to all 
participants, so we assume a slight increase in 2016.
---------------------------------------------------------------------------

    \12\ Id. at xvi. See Figure 4.
---------------------------------------------------------------------------

    According to the historical data cited above, although the claims-
based reporting mechanism is still the most widely-used reporting 
mechanism, we are seeing a decline in the use of the claims-based 
reporting mechanism in the PQRS. There was a slight increase in 2013, 
which may be reflected by the use of administrative claims-based 
reporting mechanism by individual eligible professionals and group 
practices only

[[Page 41945]]

for the 2015 PQRS payment adjustment (in CY2013).
    Although these eligible professionals continue to participate in 
the PQRS, these eligible professionals have started to shift towards 
the use of other reporting mechanisms--mainly the GPRO web interface 
(whether used by a PQRS GPRO or an ACO participating in the PQRS via 
the Medicare Shared Savings Program), registry, or the EHR-based 
reporting mechanisms. For purposes of this burden estimate, based on 
PQRS participation using the claims-based reporting mechanism in 2012 
and 2013, we will assume that approximately 350,000 eligible 
professionals will participate in the PQRS using the claims-based 
reporting mechanism.
    For the claims-based reporting option, eligible professionals must 
gather the required information, select the appropriate quality data 
codes (QDCs), and include the appropriate QDCs on the claims they 
submit for payment.
    We estimate the cost for an eligible professional to review the 
list of quality measures or measures groups, identify the applicable 
measures or measures groups for which they can report the necessary 
information, incorporate reporting of the selected measures into the 
office work flows, and select a PQRS reporting option to be 
approximately $419.80 per eligible professional ($83.96 per hour x 5 
hours).
    Based on our experience with the Physician Voluntary Reporting 
Program (PVRP), we continue to estimate that the time needed to perform 
all the steps necessary to report each measure (that is, reporting the 
relevant quality data code(s) for 9 measures measure) would range from 
15 seconds (0.25 minutes) to over 12 minutes for complicated cases and/
or measures, with the median time being 1.75 minutes. To report 9 
measures, we estimate that it would take approximately 2.25 minutes to 
108 minutes to perform all the steps necessary to report 9 measures.
    Per measure, at an average labor cost of $83.96/hour per practice, 
the cost associated with this burden will range from $0.17 in labor to 
about $8.40 in labor time for more complicated cases and/or measures, 
with the cost for the median practice being $1.20. To report 9 
measures, using an average labor cost of $42/hour, we estimated that 
the time cost of reporting for an eligible professional via claims 
would range from $3.15 (2.25 minutes or 0.0375 hours x $83.96/hour) to 
$151.13 (108 minutes or 1.8 hours x $83.96/hour) per reported case.
    The total estimated annual burden for this requirement will also 
vary along with the volume of claims on which quality data is reported. 
In previous years, when we required reporting on 80 percent of eligible 
cases for claims-based reporting, we found that on average, the median 
number of reporting instances for each of the PQRS measures was 9. 
Since we reduced the required reporting rate by over one-third to 50 
percent, then for purposes of this burden analysis we will assume that 
an eligible professional or eligible professional in a group practice 
will need to report each selected measure for 6 reporting instances. 
The actual number of cases on which an eligible professional or group 
practice is required to report quality measures data will vary, 
however, with the eligible professional's or group practice's patient 
population and the types of measures on which the eligible professional 
or group practice chooses to report (each measure's specifications 
includes a required reporting frequency). For the 2018 payment 
adjustment, EPs will also report on 1 cross-cutting measure if they see 
at least 1 Medicare patient. However, we do not see any additional 
burden impact as they are still reporting on the same number of 
measures.
c. Burden Estimate for PQRS Reporting by Individual Eligible 
Professionals and Group Practices: Qualified Registry-Based and 
Qualified Clinical Data Registry (QCDR)-Based Reporting Mechanisms
    In 2011, approximately 50,215 (or 16 percent) of the 320,422 
eligible professionals participating in PQRS used the qualified 
registry-based reporting mechanism. In 2012, 36,473 eligible 
professionals reported individual measures via the registry-based 
reporting mechanism, and 10,478 eligible professionals reporting 
measures groups via the registry-based reporting mechanism in 2012.\13\ 
According to the 2013 Reporting Experience, approximately 67,896 
eligible professionals participated in the PQRS using the registry-
based reporting mechanism (51,473 for individual measures and 16,423 
for measures groups). Please note that we currently have no data on 
participation in the PQRS via a Qualified Clinical Data Registry 
(QCDR), as 2014 is the first year in which an eligible professional may 
participate in the PQRS via a QCDR.
---------------------------------------------------------------------------

    \13\ Id. at xvi. See Figure 4.
---------------------------------------------------------------------------

    We believe that the rest of the eligible professionals not 
participating in other PQRS reporting mechanisms will use either the 
registry or QCDR reporting mechanisms for the following reasons:
     The PQRS measures set is moving away from use of claims-
based measures and moving towards the use of registry-based measures
     We believe the number of QCDR vendors will increase as the 
QCDR reporting mechanism evolves.
    Therefore, based on these assumptions, we expect to see a 
significant jump from 47,000 eligible professionals to approximately 
212,000 eligible professionals using either the registry-based 
reporting mechanism or QCDR in 2016. We believe the majority of these 
eligible professionals will participate in the PQRS using a QCDR, as we 
presume QCDRs will be larger entities with more members.
    For qualified registry-based and QCDR-based reporting, there will 
be no additional time burden for eligible professionals or group 
practices to report data to a qualified registry as eligible 
professionals and group practices opting for qualified registry-based 
reporting or use of a QCDR will more than likely already be reporting 
data to the qualified registry for other purposes and the qualified 
registry will merely be repackaging the data for use in the PQRS. 
Little, if any, additional data will need to be reported to the 
qualified registry or QCDR solely for purposes of participation in the 
PQRS. However, eligible professionals and group practices will need to 
authorize or instruct the qualified registry or QCDR to submit quality 
measures results and numerator and denominator data on quality measures 
to CMS on their behalf. We estimate that the time and effort associated 
with this will be approximately 5 minutes per eligible professional or 
eligible professional within a group practice.
    Please note that, unlike the claims-based reporting mechanism that 
would require an eligible professional to report data to CMS on quality 
measures on multiple occasions, an eligible professional would not be 
required to submit this data to CMS, as the qualified registry or QCDR 
would perform this function on the eligible professional's behalf.
    For CY 2014, 90 qualified registries and 50 QCDRs were qualified to 
report quality measures data to CMS for purposes of the PQRS.\14\ 
Therefore, a total of 140 entities are currently classified as 
qualified registries and/or QCDRs under the PQRS. Although we believe 
the number of qualified registries will remain the same in 2015,

[[Page 41946]]

we believe we will see a slight increase in the number of entities that 
become a QCDR in 2015. We estimate that an additional 10 entities 
(bringing the total number of QCDRs to 60 in 2015) will become QCDRs in 
2015. We attribute this slight increase to entities that wish to become 
QCDRs but, for some reason (lack of information regarding the QCDR 
option, rejected during the qualification process, the inability to get 
its self-nomination info provided in time, etc.), were not selected to 
be QCDRs in 2014. Therefore, we estimate that a total of 150 entities 
will become qualified registries and/or QCDRs under the PQRS in 2015.
---------------------------------------------------------------------------

    \14\ The full list of qualified registries for 2014 is available 
at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/2014QualifiedRegistryVendors.pdf.
---------------------------------------------------------------------------

    Qualified registries or QCDRs interested in submitting quality 
measures results and numerator and denominator data on quality measures 
to CMS on their participants' behalf will need to complete a self-
nomination in order to be considered qualified to submit on behalf of 
eligible professionals or group practices unless the qualified registry 
or clinical data qualified registry was qualified to submit on behalf 
of eligible professionals or group practices for prior program years 
and did so successfully. We estimate that the self-nomination process 
for qualifying additional qualified registries or qualified clinical 
data registries to submit on behalf of eligible professionals or group 
practices for the PQRS will involve approximately 1 hour per qualified 
registry or qualified clinical data registry to draft the letter of 
intent for self-nomination.
    In addition to completing a self-nomination statement, qualified 
registries and QCDRs will need to perform various other functions, such 
as develop a measures flow and meet with CMS officials when additional 
information is needed. In addition, QCDRs must perform other functions, 
such as benchmarking and calculating their measure results. We note, 
however, that many of these capabilities may already be performed by 
QCDRs for purposes other than to submit data to CMS for the PQRS. The 
time it takes to perform these functions may vary depending on the 
sophistication of the entity, but we estimate that a qualified registry 
or QCDR will spend an additional 9 hours performing various other 
functions related to being a PQRS qualified entity.
    We estimate that the staff involved in the qualified registry or 
QCDR self-nomination process will have an average labor cost of $83.96/
hour. Therefore, assuming the total burden hours per qualified registry 
or QCDR associated with the self-nomination process is 10 hours, we 
estimate that the total cost to a qualified registry or QCDR associated 
with the self-nomination process will be approximately $839.60 ($83.96 
per hour x 10 hours per qualified registry).
    The burden associated with the qualified registry-based and QCDR 
reporting requirements of the PQRS will be the time and effort 
associated with the qualified registry calculating quality measures 
results from the data submitted to the qualified registry or QCDR by 
its participants and submitting the quality measures results and 
numerator and denominator data on quality measures to CMS on behalf of 
their participants. We expect that the time needed for a qualified 
registry or QCDR to review the quality measures and other information, 
calculate the measures results, and submit the measures results and 
numerator and denominator data on the quality measures on their 
participants' behalf will vary along with the number of eligible 
professionals reporting data to the qualified registry or QCDR and the 
number of applicable measures. However, we believe that qualified 
registries and QCDRs already perform many of these activities for their 
participants. Therefore, there may not necessarily be a burden on a 
particular qualified registry or QCDR associated with calculating the 
measure results and submitting the measures results and numerator and 
denominator data on the quality measures to CMS on behalf of their 
participants. Whether there is any additional burden to the qualified 
registry or QCDR as a result of the qualified registry's or QCDR's 
participation in the PQRS will depend on the number of measures that 
the qualified registry or QCDR intends to report to CMS and how similar 
the qualified registry's measures are to CMS's PQRS measures.
    In this proposed rule, we are proposing that group practices of 25 
or more eligible professionals must report on CAHPS for PQRS. 
Therefore, a group practice of 25 or more eligible professionals would 
be required to report on the CAHPS for PQRS, 6 or more measures 
covering 2 domains of their choosing. At this point, we do not believe 
the requirement to report CAHPS for PQRS adds or reduces the burden to 
the group practices, as we consider reporting the CAHPS for PQRS survey 
as reporting 3 measures covering 1 domain.
d. Burden Estimate for PQRS Reporting by Individual Eligible 
Professionals and Group Practices: EHR-Based Reporting Mechanism
    According to the 2011 PQRS and eRx Experience Report, 560 (or less 
than 1 percent) of the 320,422 eligible professionals participating in 
PQRS used the EHR-based reporting mechanism. In 2012 there was a sharp 
increase in reporting via the EHR-based reporting mechanism. 
Specifically, according to the 2012 Reporting Experience, 19,817 
eligible professionals submitted quality data for the PQRS through a 
qualified EHR.\15\ According to the 2013 PQRS and eRx Experience 
Report, 23,194 (3.6 percent) eligible professionals participating in 
PQRS used the EHR-based reporting mechanism.
---------------------------------------------------------------------------

    \15\ Id. at XV.
---------------------------------------------------------------------------

    As can be seen in the 2013 Experience Report, the number of 
eligible professionals and group practices using the EHR-based 
reporting mechanism are steadily increasing as eligible professionals 
become more familiar with EHR products and more eligible professionals 
participate in programs encouraging use of an EHR, such as the EHR 
Incentive Program. In particular, we believe eligible professionals 
will transition from using the claims-based to the EHR-based reporting 
mechanisms. To account for this anticipated increase, we continue to 
estimate that approximately 50,000 eligible professionals, whether 
participating as an individual or part of a group practice under the 
GPRO, would use the EHR-based reporting mechanism in CY 2016.
    For EHR-based reporting, which includes EHR reporting via a direct 
EHR product and an EHR data submission vendor's product, the eligible 
professional or group practice must review the quality measures on 
which we will be accepting PQRS data extracted from EHRs, select the 
appropriate quality measures, extract the necessary clinical data from 
his or her EHR, and submit the necessary data to the CMS-designated 
clinical data warehouse.
    For EHR-based reporting for the PQRS, the individual eligible 
professional or group practice may either submit the quality measures 
data directly to CMS from their EHR or utilize an EHR data submission 
vendor to submit the data to CMS on the eligible professional's or 
group practice's behalf. To submit data to CMS directly from their EHR, 
the eligible professional or eligible professional in a group practice 
must have access to a

[[Page 41947]]

CMS-specified identity management system, such as IACS, which we 
believe takes less than 1 hour to obtain. Once an eligible professional 
or eligible professional in a group practice has an account for this 
CMS-specified identity management system, he or she will need to 
extract the necessary clinical data from his or her EHR, and submit the 
necessary data to the CMS-designated clinical data warehouse. With 
respect to submitting the actual data file for the respective reporting 
period, we believe that this will take an eligible professional or 
group practice no more than 2 hours, depending on the number of 
patients on which the eligible professional or group practice is 
submitting. We believe that once the EHR is programmed by the vendor to 
allow data submission to CMS, the burden to the eligible professional 
or group practice associated with submission of data on quality 
measures should be minimal as all of the information required to report 
the measure should already reside in the eligible professional's or 
group practice's EHR.
    In this proposed rule, we are proposing that group practices of 25 
or more eligible professionals must report on CAHPS for PQRS. 
Therefore, a group practice of 25 or more eligible professionals would 
be required to report on the CAHPS for PQRS, 6 or more measures 
covering 2 domains of their choosing. At this point, we do not believe 
the requirement to report CAHPS for PQRS adds or reduces the burden to 
the group practices, as we consider reporting the CAHPS for PQRS survey 
as reporting 3 measures covering 1 domain.
    Please note that, unlike the claims-based reporting mechanism that 
would require an eligible professional to report data to CMS on quality 
measures on multiple occasions, an eligible professional would not be 
required to submit this data to CMS, as the EHR product would perform 
this function on the eligible professional's behalf.
e. Burden Estimate for PQRS Reporting by Group Practices Using the GPRO 
Web Interface
    As noted in the 2011 Experience Report, approximately 200 group 
practices participated in the GPRO in 2011. According to the 2012 
Reporting Experience, 66 practices participated in the PQRS GPRO.\16\ 
In addition, 144 ACOs participated in the PQRS GPRO through either the 
Medicare Shared Savings Program (112 ACOs) or Pioneer ACO Model (32 
practices).\17\ These group practices encompass 134,510 eligible 
professionals (or approximately 140,000 eligible professionals).\18\ 
According to the 2013 PQRS and eRx Experience Report, 677 group 
practices self-nominated to participate via the PQRS GPRO (compared to 
68 total that self-nominated in 2012), 550 moved on to become PQRS 
group practices, another 220 practices were approved by CMS to 
participate as Medicare MSSP ACOs, and 23 were eligible under the 
Pioneer ACO model. The number of eligible professionals (from the 2013 
Experience Report) participating in one of these reporting methods 
include: 131,690 in PQRS group practices, 21,678 in Pioneer ACO, and 
85,059 in MSSP ACO. Group practices participating in PQRS GPRO are 
increasing each year, from roughly 200 group practices in 2011 and 
2012, to 860 eligible practices in 2013 (including all GPRO, Pioneer 
ACO, and MSSP ACO. However, not all group practices use the Web 
Interface to report. We will assume, based on these numbers that 500 
group practices (accounting for approximately 228,000 eligible 
professional) will continue to participate in the PQRS using the GPRO 
Web Interface in 2016.
---------------------------------------------------------------------------

    \16\ Id. at xv.
    \17\ Id. at xvi.
    \18\ Id. at 18.
---------------------------------------------------------------------------

    With respect to the process for group practices to be treated as 
satisfactorily submitting quality measures data under the PQRS, group 
practices interested in participating in the PQRS through the group 
practice reporting option (GPRO) must complete a self-nomination 
process similar to the self-nomination process required of qualified 
registries. However, since a group practice using the GPRO web 
interface would not need to determine which measures to report under 
PQRS, we believe that the self-nomination process is handled by a group 
practice's administrative staff. Therefore, we estimate that the self-
nomination process for the group practices for the PQRS involves 
approximately 2 hours per group practice to review the PQRS GPRO and 
make the decision to participate as a group rather than individually 
and an additional 2 hours per group practice to draft the letter of 
intent for self-nomination, gather the requested TIN and NPI 
information, and provide this requested information. It is estimated 
that each self-nominated entity will also spend 2 hours undergoing the 
vetting process with CMS officials. We assume that the group practice 
staff involved in the group practice self-nomination process has an 
average practice labor cost of $26.68 per hour. Therefore, assuming the 
total burden hours per group practice associated with the group 
practice self-nomination process is 6 hours, we estimate the total cost 
to a group practice associated with the group practice self-nomination 
process to be approximately $160.08 ($26.68 per hour x 6 hours per 
group practice).
    The burden associated with the group practice reporting 
requirements under the GPRO is the time and effort associated with the 
group practice submitting the quality measures data. For physician 
group practices, this would be the time associated with the physician 
group completing the web interface. We estimate that the time and 
effort associated with using the GPRO web interface will be comparable 
to the time and effort associated to using the PAT. As stated above, 
the information collection components of the PAT have been reviewed by 
OMB and was approved under OMB control number 0938-0941--Form 10136, 
with an expiration date of December 31, 2011 for use in the PGP, MCMP, 
and EHR demonstrations. As the GPRO was only recently implemented in 
2010, it is difficult to determine the time and effort associated with 
the group practice submitting the quality measures data. As such, we 
will use the same burden estimate for group practices participating in 
the GPRO as we use for group practices participating in the PGP, MCMP, 
and EHR demonstrations. Since these changes will not have any impact on 
the information collection requirements associated with the PAT and we 
will be using the same data submission process used in the PGP 
demonstration, we estimate that the burden associated with a group 
practice completing data for PQRS under the web interface will be the 
same as for the group practice to complete the PAT for the PGP 
demonstration. In other words, we estimate that, on average, it will 
take each group practice 79 hours to submit quality measures data via 
the GPRO web interface at a cost of $83.96 per hour. Therefore, the 
total estimated annual cost per group practice is estimated to be 
approximately $6,632.84.
10. EHR Incentive Program
    The changes to the EHR Incentive Program in section III.L of this 
proposed rule would not impact the current burden estimate for the EHR 
Incentive Program.
11. Comprehensive Primary Care (CPC) Initiative and Meaningful Use 
Aligned Reporting
    The establishment of an aligned reporting option between CPC and 
the Medicare EHR Incentive Program does

[[Page 41948]]

not impact the CY 2016 payments under PFS.
12. Potential Expansion of the Comprehensive Primary Care (CPC) 
Initiative
    The solicitation of public input regarding potential CPC expansion 
does not impact CY2016 payments under the PFS, because no actual 
expansion is being proposed at this time.
13. Medicare Shared Saving Program
    The requirements for participating in the Medicare Shared Saving 
Program and the impacts of these requirements were established in the 
final rule implementing the Medicare Shared Savings Program that 
appeared in the Federal Register on November 2, 2011 (76 FR 67802). In 
this rule, we are proposing a change to the quality measure set. We are 
also proposing to establish rules for maintaining a measure as pay for 
reporting, or reverting a pay for performance measure to pay for 
reporting if a measure owner determines the measure no longer meets 
best clinical practices due to clinical guidelines updates or clinical 
evidence suggests that continued application of the measure may result 
in harm to patients. In addition, we are proposing to update the 
assignment methodology to include claims submitted by electing teaching 
amendment hospitals. Since the proposed policies are not expected to 
increase the quality reporting burden for ACOs participating in the 
Shared Savings Program and their ACO participants or change the 
financial calculations, there is no impact for these proposals.
14. Value-Based Payment Modifier and the Physician Feedback Program
    Section 1848(p) of the Act requires that we establish a value-based 
payment modifier (VM) and apply it to specific physicians and groups of 
physicians the Secretary determines appropriate starting January 1, 
2015 and to all physicians and groups of physicians by January 1, 2017. 
Section 1848(p)(4)(C) of the Act requires the VM to be budget neutral. 
Budget-neutrality means that, in aggregate, the increased payments to 
high performing physicians and groups of physicians equal the reduced 
payments to low performing physicians and groups of physicians. Unless 
specified, the proposed changes to the VM in section III.N of this 
proposed rule would not impact CY 2016 physician payments under the 
PFS. We finalized the VM policies that would impact the CY 2016 
physician payments under the PFS in the CY 2013 PFS final rule with 
comment period (77 FR 69306 through 69326) and the CY 2014 PFS final 
rule with comment period (78 FR 74764 through 74787).
    In the CY 2013 PFS final rule with comment period, we finalized 
policies to phase-in the VM by applying it starting January 1, 2015 to 
payments under the Medicare PFS for physicians in groups of 100 or more 
eligible professionals (EPs). We identify a group of physicians as a 
single taxpayer identification number (TIN). We apply the VM to the 
items and services billed by physicians under the TIN, not to other EPs 
that also may bill under the TIN. We established CY 2014 as the 
performance period for the VM that will be applied to payments during 
CY 2016 (77 FR 69314). We also finalized that we will not apply the VM 
in CYs 2015 and 2016 to any group of physicians that is participating 
in the Medicare Shared Savings Program, the Pioneer ACO Model, or the 
Comprehensive Primary Care Initiative, or other similar Innovation 
Center or CMS initiatives (77 FR 69313).
    In the CY 2014 PFS final rule with comment period (78 FR 74765-
74770), we finalized a policy to apply the VM in CY 2016 to physicians 
in groups with 10 or more EPs. We also adopted a policy to categorize 
groups of physicians subject to the VM in CY 2016 based on a group's 
participation in the PQRS. Specifically, we categorize groups of 
physicians eligible for the CY 2016 VM into two categories. Category 1 
includes groups of physicians that (a) meet the criteria for 
satisfactory reporting of data on PQRS quality measures through the 
GPRO for the CY 2016 PQRS payment adjustment or (b) do not register to 
participate in the PQRS as a group practice in CY 2014 and that have at 
least 50 percent of the group's eligible professionals meet the 
criteria for satisfactory reporting of data on PQRS quality measures as 
individuals for the CY 2016 PQRS payment adjustment, or in lieu of 
satisfactory reporting, satisfactorily participate in a PQRS-qualified 
clinical data registry for the CY 2016 PQRS payment adjustment. For a 
group of physicians that is subject to the CY 2016 VM to be included in 
Category 1, the criteria for satisfactory reporting (or the criteria 
for satisfactory participation, if the PQRS-qualified clinical data 
registry reporting mechanism is selected) must be met during the CY 
2014 reporting period for the PQRS CY 2016 payment adjustment. For the 
CY 2016 VM, Category 2 includes those groups of physicians that are 
subject to the CY 2016 VM and do not fall within Category 1. For those 
groups of physicians in Category 2, the VM for CY 2016 is -2.0 percent.
    In addition, for the CY 2016 VM, we adopted that quality-tiering, 
which is the method for evaluating performance on quality and cost 
measures for the VM, is mandatory for groups of physicians with 10 or 
more EPs. In CY 2016, groups of physicians with between 10 and 99 EPs 
would not be subjected to a downward payment adjustment (that is, they 
will either receive an upward or neutral adjustment) determined under 
the quality-tiering methodology, and groups of physicians with 100 or 
more EPs, however, would either receive upward, neutral, or downward 
adjustments under the quality-tiering methodology.
    Under the quality-tiering approach, each group's quality and cost 
composites are classified into high, average, and low categories 
depending upon whether the composites are at least one standard 
deviation above or below the mean and statistically different from the 
mean. We compare the group's quality of care composite classification 
with the cost composite classification to determine the VM adjustment 
for the CY 2016 payment adjustment period according to the amounts in 
Table 48.

                                 Table 48--2016 VM Amounts Under Quality-Tiering
----------------------------------------------------------------------------------------------------------------
                      Cost/quality                          Low quality      Average  quality     High quality
----------------------------------------------------------------------------------------------------------------
Low Cost...............................................              +0.0%            * +1.0x            * +2.0x
Average Cost...........................................              -1.0%              +0.0%            * +1.0x
High Cost..............................................              -2.0%              -1.0%              +0.0%
----------------------------------------------------------------------------------------------------------------
* Groups of physicians eligible for an additional +1.0x if (1) reporting Physician Quality Reporting System
  quality measures and (2) average beneficiary risk score is in the top 25 percent of all beneficiary risk
  scores.


[[Page 41949]]

    To ensure budget neutrality, we first aggregate the downward 
payment adjustments in Table 48 for those groups in Category 1 with the 
-2.0 percent downward payment adjustments for groups of physicians 
subject to the VM that fall within Category 2. Using the aggregate 
downward payment adjustment amount, we then calculate the upward 
payment adjustment factor (x). These calculations will be done after 
the performance period has ended.
    At the time of this proposed rule, we have not completed the 
analysis of the impact of the VM in CY 2016 on physicians in groups 
with 10 or more EPs based on their performance in CY 2014. In the CY 
2016 PFS final rule with comment period, we will present the actual 
number of groups of physicians that will be subject to the VM in CY 
2016.
15. Physician Self-Referral Updates
    The physician self-referral update provisions are discussed in 
section II.P of this proposed rule. Physicians and Designated Health 
Services (DHS) entities have been complying with the requirements set 
forth in the physician self-referral law for many years, specifically 
in regard to clinical laboratory services since 1992 and to referrals 
for all other DHS since 1995. The majority of our proposals would 
reduce burden by clarifying previous guidance. We believe these 
proposals would allow parties to determine with greater certainty 
whether their financial relationships comply with an exception.
    We also proposed new exceptions and a new definition that would 
accommodate legitimate financial arrangements while continuing to 
protect against program and patient abuse:
     In section II.P.2.A of this proposed rule, we proposed a 
limited exception for hospitals, FQHCs, and RHCs that wish to provide 
remuneration to physicians to assist with the employment of a non-
physician practitioner. This new exception would promote access to 
primary care services, a goal of the Secretary and the Affordable Care 
Act.
     In section II.P.2.B of this proposed rule, we described 
our proposal to revise the physician recruitment exception to add a new 
definition of the geographic area served by an FQHC or RHC. This 
proposal would provide certainty to FQHCs and RHCs that their physician 
recruitment arrangements satisfy the requirements of the exception.
     In section II.P.7 of this proposed rule, we proposed a new 
exception that would protect timeshare arrangements that meet certain 
criteria. This proposal would help ensure beneficiary access to care, 
particularly in rural and underserved areas.
    To the extent that the new exceptions and definition permit 
additional legitimate arrangements to comply with the law, this rule 
would reduce the potential costs of restructuring such arrangements, 
and the consequences of noncompliance may be avoided entirely.
     In section II.P.9.B of this proposed rule, we discussed 
our proposal that the physician-owned hospital baseline bona fide 
investment level and the bona fide investment level include direct and 
indirect ownership and investment interests held by a physician 
regardless of whether the physician refers patients to the hospital. We 
recognize that some physician-owned hospitals may have relied on 
earlier guidance that the ownership or investment interests of non-
referring physicians need not be considered when calculating the 
baseline bona fide physician ownership level and that, if one or more 
of our proposals described in section II.P.9.B are finalized, may have 
revised bona fide investment levels that may exceed the baseline bona 
fide investment levels calculated under our current guidance. We seek 
public comment on the impact of our proposed regulatory and policy 
revisions on physician-owned hospitals and on the measures or actions 
physician-owned hospitals would need to undertake to come into 
compliance with our proposed revisions.
16. Opt Out Change
    We propose revising the regulations governing the requirements and 
procedures for private contracts at part 405, subpart D so that they 
conform with the statutory changes made by section 106(a) of the MACRA. 
We anticipate no or minimal impact as a result of these revisions.

F. Alternatives Considered

    This proposed rule contains a range of policies, including some 
provisions related to specific statutory provisions. The preceding 
preamble provides descriptions of the statutory provisions that are 
addressed, identifies those policies when discretion has been 
exercised, presents rationale for our final policies and, where 
relevant, alternatives that were considered.

G. Impact on Beneficiaries

    There are a number of changes in this proposed rule that would have 
an effect on beneficiaries. In general, we believe that many of the 
proposed changes, including those intended to improve accuracy in 
payment through revisions to the inputs used to calculate payments 
under the PFS will have a positive impact and improve the quality and 
value of care provided to Medicare beneficiaries.
    Most of the aforementioned proposed policy changes could result in 
a change in beneficiary liability as relates to coinsurance (which is 
20 percent of the fee schedule amount if applicable for the particular 
provision after the beneficiary has met the deductible). To illustrate 
this point, as shown in Table 46, the CY 2015 national payment amount 
in the nonfacility setting for CPT code 99203 (Office/outpatient visit, 
new) is $109.60, which means that in CY 2015, a beneficiary would be 
responsible for 20 percent of this amount, or $21.92. Based on this 
proposed rule, using the estimated CY 2016 CF, the CY 2016 national 
payment amount in the nonfacility setting for CPT code 99203, as shown 
in Table 46, is $110.13, which means that, in CY 2016, the proposed 
beneficiary coinsurance for this service would be $22.03.

H. Accounting Statement

    As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Table 49 (Accounting 
Statement), we have prepared an accounting statement. This estimate 
includes growth in incurred benefits from CY 2015 to CY 2016 based on 
the FY 2016 President's Budget baseline. Note that subsequent 
legislation changed the updates for 2016 from those shown in the 2016 
President's Budget baseline.

Table 49--Accounting Statement: Classification of Estimated Expenditures
------------------------------------------------------------------------
                Category                            Transfers
------------------------------------------------------------------------
CY 2016 Annualized Monetized Transfers.  Estimated increase in
                                          expenditures of $670 million
                                          for PFS CF update.
From Whom To Whom?.....................  Federal Government to
                                          physicians, other
                                          practitioners and providers
                                          and suppliers who receive
                                          payment under Medicare.

[[Page 41950]]

 
CY 2016 Annualized Monetized Transfers.  Estimated increase in payment
                                          of $473 million.
From Whom To Whom?.....................  Federal Government to eligible
                                          professionals who
                                          satisfactorily participate in
                                          the Physician Quality
                                          Reporting System (PQRS).
------------------------------------------------------------------------


   Table 50--Accounting Statement: Classification of Estimated Costs,
                          Transfer, and Savings
------------------------------------------------------------------------
                Category                             Transfer
------------------------------------------------------------------------
CY 2016 Annualized Monetized Transfers   $100 million.
 of beneficiary cost coinsurance.
From Whom to Whom?.....................  Federal Government to
                                          Beneficiaries.
------------------------------------------------------------------------

I. Conclusion

    The analysis in the previous sections, together with the remainder 
of this preamble, provides an initial Regulatory Flexibility Analysis. 
The previous analysis, together with the preceding portion of this 
preamble, provides a Regulatory Impact Analysis.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

List of Subjects

42 CFR Part 405

    Administrative practice and procedure, Health facilities, Health 
professions, Kidney diseases, Medical devices, Medicare, Reporting and 
recordkeeping requirements, Rural areas, X-rays.

42 CFR Part 410

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

42 CFR Part 411

    Kidney diseases, Medicare, Physician Referral, Reporting and 
recordkeeping requirements.

42 CFR Part 414

    Administrative practice and procedure, Health facilities, Health 
professions, Kidney diseases, Medicare, Reporting and recordkeeping 
requirements.

42 CFR Part 425

    Administrative practice and procedure, Health facilities, Health 
professions, Medicare, and Reporting and recordkeeping requirements.

42 CFR Part 495

    Administrative practice and procedure, Electronic health records, 
Health facilities, Health professions, Health maintenance organizations 
(HMO), Medicaid, Medicare, Penalties, Privacy, Reporting and 
recordkeeping requirements.
    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services proposes to amend 42 CFR chapter IV as set forth 
below:

PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED

0
1. The authority citation for part 405 continues to read as follows:

    Authority:  Secs. 205(a), 1102, 1861, 1862(a), 1869, 1871, 1874, 
1881, and 1886(k) of the Social Security Act (42 U.S.C. 405(a), 
1302, 1395x, 1395y(a), 1395ff, 1395hh, 1395kk, 1395rr and 
1395ww(k)), and sec. 353 of the Public Health Service Act (42 U.S.C. 
263a).

0
2. Section 405.400 is amended by revising the definition of ``Opt-out 
period'' to read as follows:


Sec.  405.400  Definitions

* * * * *
    Opt-out period means, with respect to an affidavit that meets the 
requirements of Sec.  405.420, a 2-year period beginning on the date 
the affidavit is signed, as specified by Sec.  405.410(c)(1) or Sec.  
405.410(c)(2) as applicable, and each successive 2-year period unless 
the physician or practitioner properly cancels opt-out in accordance 
with Sec.  405.445.
* * * * *
0
3. Section 405.405 is amended by revising paragraph (b) to read as 
follows:


Sec.  405.405  General rules.

* * * * *
    (b) A physician or practitioner who enters into at least one 
private contract with a Medicare beneficiary under the conditions of 
this subpart, and who submits one or more affidavits in accordance with 
this subpart, opts out of Medicare for the opt-out period described in 
Sec.  405.400 unless the opt-out is terminated early according to Sec.  
405.445.
* * * * *
0
4. Section 405.410 is amended by revising paragraphs (b), (c)(1), 
(c)(2), and (d) to read as follows:


Sec.  405.410  Conditions for properly opting-out of Medicare.

* * * * *
    (b) The physician or practitioner must submit an affidavit that 
meets the specifications of Sec.  405.420 to each Medicare 
Administrative contractor with which he or she would file claims absent 
the opt-out.
    (c) * * *
    (1) The initial 2-year opt-out period begins the date the affidavit 
meeting the requirements of Sec.  405.420 is signed, provided the 
affidavit is filed within 10 days after he or she signs his or her 
first private contract with a Medicare beneficiary.
    (2) If the physician or practitioner does not timely file the opt-
out affidavit(s) as specified in the previous paragraph, the initial 2-
year opt-out period begins when the last such affidavit is filed. Any 
private contract entered into before the last required affidavit is 
filed becomes effective upon the filing of the last required affidavit, 
and the furnishing of any items or services to a Medicare beneficiary 
under such contract before the last required affidavit is filed is 
subject to standard Medicare rules.
    (d) A participating physician may properly opt-out of Medicare at 
the beginning of any calendar quarter, provided that the affidavit 
described in Sec.  405.420 is submitted to the participating 
physician's Medicare Administrative contractors at least 30 days before 
the beginning of the selected calendar quarter. A private contract 
entered into before the beginning of the selected calendar quarter 
becomes effective at the beginning of the selected calendar quarter, 
and the furnishing of any items or services to a Medicare

[[Page 41951]]

beneficiary under such contract before the beginning of the selected 
calendar quarter is subject to standard Medicare rules.
0
5. Section 405.415 is amended by revising paragraphs (h), (m), and (o) 
to read as follows:


Sec.  405.415  Requirements of the private contract.

* * * * *
    (h) State the expected or known effective date and the expected or 
known expiration date of the current 2-year opt-out period.
* * * * *
    (m) Be retained (original signatures of both parties required) by 
the physician or practitioner for the duration of the current 2-year 
opt-out period.
* * * * *
    (o) Be entered into for each 2-year opt-out period.
0
6. Section 405.425 is amended by revising the introductory text to read 
as follows:


Sec.  405.425  Effects of opting-out of Medicare.

    If a physician or practitioner opts-out of Medicare in accordance 
with this subpart, the following results obtain during the opt-out 
period:
* * * * *
0
7. Section 405.435 is amended by revising paragraphs (a)(4), (b)(8), 
and (d) to read as follows:


Sec.  405.435  Failure to maintain opt-out.

    (a) * * *
    (4) He or she fails to retain a copy of each private contract that 
he or she has entered into for the duration of the current 2-year 
period for which the contracts are applicable or fails to permit CMS to 
inspect them upon request.
    (b) * * *
    (8) The physician or practitioner may not attempt to once more meet 
the criteria for properly opting-out until the current 2-year period 
expires.
* * * * *
    (d) If a physician or practitioner demonstrates that he or she has 
taken good faith efforts to maintain opt-out (including by refunding 
amounts in excess of the charge limits to beneficiaries with whom he or 
she did not sign a private contract) within 45 days of a notice from 
the Medicare Administrative contractor of a violation of paragraph (a) 
of this section, then the requirements of paragraphs (b)(1) through (8) 
of this section are not applicable. In situations where a violation of 
paragraph (a) of this section is not discovered by the Medicare 
Administrative contractor during the current 2-year period when the 
violation actually occurred, then the requirements of paragraphs (b)(1) 
through (8) of this section are applicable from the date that the first 
violation of paragraph (a) of this section occurred until the end of 
the 2-year period during which the violation occurred (unless the 
physician or practitioner takes good faith efforts, within 45 days of 
any notice from the Medicare Administrative contractor that the 
physician or practitioner failed to maintain opt-out, or within 45 days 
of the physician's or practitioner's discovery of the failure to 
maintain opt-out, whichever is earlier, to correct his or her 
violations of paragraph (a) of this section. Good faith efforts 
include, but are not limited to, refunding any amounts collected in 
excess of the charge limits to beneficiaries with whom he or she did 
not sign a private contract.
0
8. Section 405.445 is amended by revising the section heading and 
paragraphs (a) and (b)(2) to read as follows:


Sec.  405.445  Properly cancel opt-out and early termination of opt-
out.

    (a) A physician or practitioner may cancel opt-out by submitting a 
written request (that indicates the physician or practitioner does not 
want to extend the application of his or her affidavit for a subsequent 
2-year period) with each Medicare contractor with which he or she would 
file claims absent completion of opt-out, provided the written requests 
are submitted not later than 30 days before the end of the previous 2-
year period.
    (b) * * *
    (2) Notify all Medicare contractors, with which he or she filed an 
affidavit, of the termination of the opt-out no later than 90 days 
after the effective date of the initial 2-year period.
* * * * *
0
9. Section 405.450 is amended by revising paragraph (a) to read as 
follows:


Sec.  405.450  Appeals.

    (a) A determination by CMS that a physician or practitioner has 
failed to properly opt out, failed to maintain opt-out, failed to 
timely renew opt-out, failed to privately contract, failed to properly 
terminate opt-out, or failed to properly cancel opt-out is an initial 
determination for purposes of Sec.  498.3(b) of this chapter.
* * * * *
0
10. Section 405.2410 is amended by revising paragraph (b)(1) 
introductory text and (b)(1)(i) to read as follows:


Sec.  405.2410  Application of Part B deductible and coinsurance.

* * * * *
    (b) * * *
    (1) For RHCs that are authorized to bill on the basis of the 
reasonable cost system--
    (i) A coinsurance amount that does not exceed 20 percent of the 
RHC's reasonable customary charge for the covered service; and
* * * * *
0
11. Section 405.2415 is amended by revising the section heading to read 
as follows:


Sec.  405.2415  Incident to Services and direct supervision.

* * * * *
0
12. Section Sec.  405.2448 is amended by revising paragraph (a)(2) to 
read as follows:


Sec.  405.2448  Preventive primary services.

    (a) * * *
    (2) Are furnished by a or under the direct supervision of a 
physician, nurse practitioner, physician assistant, certified nurse 
midwife, clinical psychologist or clinical social worker employed by or 
under contract with the FQHC.
* * * * *
0
13. Section Sec.  405.2462 is amended by--
0
a. Revising paragraph (a) introductory text, the heading of paragraph 
(b), and paragraphs (b)(1) and (c) introductory text.
0
b. Amending paragraph (b)(2) by removing the reference ``paragraphs 
(e)(1) and (2)'' and adding in its place the reference ``paragraphs 
(f)(1) and (2)''.
0
c. Redesignating paragraphs (d), (e), and (f) as paragraphs (e), (f), 
and (g), respectively.
0
d. Adding paragraph (d).
0
e.. Revising newly redesignated paragraphs (e)(1)(i) and (ii).
0
f. Adding paragraph (g)(3).
    The revisions and additions read as follows:


Sec.  405.2462  Payment for RHC and FQHC services.

    (a) Payment to provider-based RHCs that are authorized to bill 
under the reasonable cost system. A RHC that is authorized to bill 
under the reasonable cost system is paid in accordance with parts 405 
and 413 of this subchapter, as applicable, if the RHC is--
* * * * *
    (b) Payment to independent RHCs that are authorized to bill under 
the reasonable cost system. (1) RHCs that are authorized to bill under 
the reasonable cost system are paid on the basis of an all-inclusive 
rate for each

[[Page 41952]]

beneficiary visit for covered services. This rate is determined by the 
MAC, in accordance with this subpart and general instructions issued by 
CMS.
* * * * *
    (c) Payment to FQHCs that are authorized to bill under the PPS. A 
FQHC that is authorized to bill under the PPS is paid a single, per 
diem rate based on the prospectively set rate for each beneficiary 
visit for covered services. Except as noted in paragraph (d) of this 
section, this rate is adjusted for the following:
* * * * *
    (d) Payment to grandfathered tribal FQHCs. (1) A ``grandfathered 
tribal FQHC'' is a FQHC that:
    (i) Is operated by a tribe or tribal organization under the Indian 
Self-Determination Education and Assistance Act (ISDEAA);
    (ii) Was provider-based to an IHS hospital on or before April 7, 
2000; and
    (iii) Is not operating as a provider-based department of an IHS 
hospital.
    (2) A grandfathered tribal FQHC is paid at the Medicare outpatient 
per visit rate as set annually by the IHS.
    (3) The payment rate is not adjusted:
    (i) By the FQHC Geographic Adjustment Factor;
    (ii) For new patients, annual wellness visits, or initial 
preventive physical examinations; or
    (iii) Annually by the Medicare Economic Index or a FQHC PPS market 
basket.
    (4) The payment rate is adjusted annually by the IHS under the 
authority of sections 321(a) and 322(b) of the Public Health Service 
Act (42 U.S.C. 248 and 249(b)), Pub. L. 83-568 (42 U.S.C. 2001(a)), and 
the Indian Health Care Improvement Act (25 U.S.C. 1601 et seq.).
    (e) * * *
    (1) * * *
    (i) 80 percent of the lesser of the FQHC's actual charge or the PPS 
encounter rate for FQHCs authorized to bill under the PPS; or
    (ii) 80 percent of the lesser of a grandfathered tribal FQHC's 
actual charge, or the outpatient rate for Medicare as set annually by 
the IHS for tribal FQHCs that are authorized to bill at this rate.
* * * * *
    (g) * * *
    (3) FQHCs, RHCs, whether or not exempt from electronic reporting 
under Sec.  424.32(d)(3) of this subchapter, are required to submit 
HCPCS and other codes as required in reporting services furnished.
0
14. Section 405.2463 is amended by revising paragraph (c)(4) 
introductory text to read as follows:


Sec.  405.2463  What constitutes a visit.

* * * * *
    (c) * * *
    (4) For FQHCs billing under the PPS, and grandfathered tribal FQHCs 
that are authorized to bill as a FQHC at the outpatient per visit rate 
for Medicare as set annually by the Indian Health Service--
* * * * *
0
15. Section 405.2464 is amended by--
0
a. Revising the heading of paragraph (a), paragraphs (a)(1), (a)(2), 
and (a)(5), the heading of paragraph (b), and paragraph (b)(1).
0
b. Adding paragraphs (c) and (d).
    The revisions and additions read as follows:


Sec.  405.2464  Payment rate.

    (a) Payment rate for RHCs that are authorized to bill under the 
reasonable cost system. (1) Except as specified in paragraph (c) of 
this section, a RHC that is authorized to bill under the reasonable 
cost system is paid an all-inclusive rate that is determined by the MAC 
at the beginning of the cost reporting period.
    (2) The rate is determined by dividing the estimated total 
allowable costs by estimated total visits for RHC services.
* * * * *
    (5) The RHC may request the MAC to review the rate to determine 
whether adjustment is required.
    (b) Payment rate for FQHCs billing under the prospective payment 
system. (1) Except as specified in paragraph (c) of this section, a per 
diem rate is calculated by CMS by dividing total FQHC costs by total 
FQHC daily encounters to establish an average per diem cost.
* * * * *
    (c) Payment for chronic care management services. Payment to RHCs 
and FQHCs for qualified chronic care management services is at the 
physician fee schedule national average payment rate.
    (d) Determination of the payment rate for FQHCs that are authorized 
to bill as grandfathered tribal FQHCs. These rates are paid at the 
outpatient per visit rate for Medicare as set annually by the Indian 
Health Service for each beneficiary visit for covered services. There 
are no adjustments to this rate.


Sec.  405.2467  [Amended]

0
16. Section 405.2467 is amended by removing paragraph (b) and 
redesignating paragraphs (c) and (d) as paragraphs (b) and (c), 
respectively.
0
17. Section 405.2469 is amended by revising paragraphs (a) and (b)(2) 
and adding paragraph (b)(3) to read as follows:


Sec.  405.2469  FQHC supplemental payments.

    (a) Eligibility for supplemental payments. FQHCs under contract 
(directly or indirectly) with MA organizations are eligible for 
supplemental payments for FQHC services furnished to enrollees in MA 
plans offered by the MA organization to cover the difference, if any, 
between their payments from the MA plan and what they would receive 
under one of the following:
    (1) The PPS rate if the FQHC is authorized to bill under the PPS; 
or
    (2) The Medicare outpatient per visit rate as set annually by the 
Indian Health Service for grandfathered tribal FQHCs.
    (b) * * *
    (2) Payments received by the FQHC from the MA plan as determined on 
a per visit basis and the FQHC PPS rate as set forth in this subpart, 
less any amount the FQHC may charge as described in section 
1857(e)(3)(B) of the Act; or
    (3) Payments received by the FQHC from the MA plan as determined on 
a per visit basis and the FQHC outpatient rate as set forth in this 
section under paragraph (a)(2) of this section, less any amount the 
FQHC may charge as described in section 1857(e)(3)(B) of the Act.
* * * * *

PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

0
18. The authority citation for part 410 continues to read as follows:

    Authority: Secs. 1102, 1834, 1871, 1881, and 1893 of the Social 
Security Act (42 U.S.C. 1302. 1395m, 1395hh, and 1395ddd.

0
19. Section 410.26 is amended by revising paragraphs (a)(1) and (b)(5) 
to read as follows:


Sec.  410.26  Services and supplies incident to a physician's 
professional services: Conditions.

    (a) * * *
    (1) Auxiliary personnel means any individual who is acting under 
the supervision of a physician (or other practitioner), regardless of 
whether the individual is an employee, leased employee, or independent 
contractor of the physician (or other practitioner) or of the same 
entity that employs or contracts with the physician (or other 
practitioner), has not been excluded from the Medicare program or had 
his or her Medicare enrollment revoked, and meets any applicable 
requirements to provide the services, including licensure, imposed by 
the State in which the services are being furnished.
* * * * *

[[Page 41953]]

    (b) * * *
    (5) Services and supplies must be furnished under the direct 
supervision of the billing physician (or other billing practitioner) 
who is enrolled under Medicare Part B at the time the services are 
furnished. Services and supplies furnished incident to transitional 
care management and chronic care management services can be furnished 
under the general supervision of the physician (or other practitioner) 
when these services or supplies are provided by clinical staff.
* * * * *
0
20. Section 410.41 is amended by revising paragraph (b) to read as 
follows:


Sec.  410.41  Requirements for ambulance suppliers.

* * * * *
    (b) Vehicle staff. A vehicle furnishing ambulance services must be 
staffed by at least two people who meet the requirements of state and 
local laws where the services are being furnished, and at least one of 
the staff members must, for:
    (1) BLS vehicles. (i) Be certified at a minimum as an emergency 
medical technician-basic by the State or local authority where the 
services are furnished; and
    (ii) Be legally authorized to operate all lifesaving and life-
sustaining equipment on board the vehicle;
    (2) ALS vehicles. (i) Meet the requirements of paragraph (b)(1) of 
this section; and
    (ii) Be certified as a paramedic or an emergency medical 
technician, by the State or local authority where the services are 
being furnished, to perform one or more ALS services.
* * * * *
0
21. Section 410.78 is amended by adding paragraph (b)(2)(ix) to read as 
follows:


Sec.  410.78  Telehealth services.

* * * * *
    (b) * * *
    (2) * * *
    (ix) A certified registered nurse anesthetist as described in Sec.  
410.69.
* * * * *
0
22. Section 410.160 is amended by revising paragraph (b)(8) to read as 
follows:


Sec.  410.160  Part B annual deductible.

* * * * *
    (b) * * *
    (8) Beginning January 1, 2011, for a surgical service, and 
beginning January 1, 2015, for an anesthesia service, furnished in 
connection with, as a result of, and in the same clinical encounter as 
a planned colorectal cancer screening test. A surgical or anesthesia 
service furnished in connection with, as a result of, and in the same 
clinical encounter as a colorectal cancer screening test means--a 
surgical or anesthesia service furnished on the same date as a planned 
colorectal cancer screening test as described in Sec.  410.37.
* * * * *

PART 411--EXCLUSIONS FROM MEDICARE AND LIMITATIONS ON MEDICARE 
PAYMENT

0
23. The authority citation for part 414 continues to read as follows:

    Authority:  Secs. 1102, 1860D-1 through 1860D-42, 1871, and 1877 
of the Social Security Act (42 U.S.C. 1302, 1395w-101 through 1395w-
152, 1395hh, and 1395nn).

0
24. Section 411.351 is amended by--
0
a. Amending the definition of ``Entity'' by revising paragraph (3).
0
b. Revising the definitions of `` `Incident to' services or services 
`incident to' '', ``List of CPT/HCPCS Codes'', and ``Locum tenens 
physician''.
0
c. Amending the definition of ``Parenteral and enteral nutrients, 
equipment, and supplies'' by revising paragraphs (1) and (2).
0
d. Revising the definition of ``Physician in the group practice''.
0
e. Amending the definition of ``Remuneration'' by revising paragraph 
(2).
    The revisions read as follows:


Sec.  411.351  Definitions.

* * * * *
    Entity * * *
    (3) For purposes of this subpart, ``entity'' does not include a 
physician's practice when it bills Medicare for the technical component 
or professional component of a diagnostic test for which the anti-
markup provision is applicable in accordance with Sec.  414.50 of this 
chapter and Pub. 100-04, Medicare Claims Processing Manual, Chapter 1, 
Section 30.2.9, as amended or replaced from time to time.
* * * * *
    ``Incident to'' services or services ``incident to'' means those 
services and supplies that meet the requirements of section 
1861(s)(2)(A) of the Act, Sec.  410.26 of this chapter, and Pub. 100-
02, Medicare Benefit Policy Manual, Chapter 15, Sections 60, 60.1, 
60.2, 60.3, and 60.4 as amended or replaced from time to time.
* * * * *
    List of CPT/HCPCS Codes means the list of CPT and HCPCS codes that 
identifies those items and services that are DHS under section 1877 of 
the Act or that may qualify for certain exceptions under section 1877 
of the Act. It is updated annually, as published in the Federal 
Register, and is posted on the CMS Web site at http://www.cms.hhs.gov/PhysicianSelfReferral/11_List_of_Codes.asp#TopOfPage.
    Locum tenens physician (or substitute physician) is a physician who 
substitutes in exigent circumstances for another physician, in 
accordance with section 1842(b)(6)(D) of the Act and Pub. 100-04, 
Medicare Claims Processing Manual, Chapter 1, Section 30.2.11, as 
amended or replaced from time to time.
* * * * *
    Parenteral and enteral nutrients, equipment, and supplies * * *
    (1) Parenteral nutrients, equipment, and supplies, meaning those 
items and supplies needed to provide nutriment to a patient with 
permanent, severe pathology of the alimentary tract that does not allow 
absorption of sufficient nutrients to maintain strength commensurate 
with the patient's general condition, as described in Pub. 100-03, 
Medicare National Coverage Determinations Manual, Chapter 1, Section 
180.2, as amended or replaced from time to time; and
    (2) Enteral nutrients, equipment, and supplies, meaning items and 
supplies needed to provide enteral nutrition to a patient with a 
functioning gastrointestinal tract who, due to pathology to or 
nonfunction of the structures that normally permit food to reach the 
digestive tract, cannot maintain weight and strength commensurate with 
his or her general condition, as described in Pub. 100-03, Medicare 
National Coverage Determinations Manual, Chapter 1, Section 180.2, as 
amended or replaced from time to time.
* * * * *
    Physician in the group practice means a member of the group 
practice, as well as an independent contractor physician during the 
time the independent contractor is furnishing patient care services (as 
defined in this section) for the group practice under a contractual 
arrangement directly with the group practice to provide services to the 
group practice's patients in the group practice's facilities. The 
contract must contain the same restrictions on compensation that apply 
to members of the group practice under Sec.  411.352(g) (or the 
contract must satisfy the requirements of the personal service 
arrangements exception in Sec.  411.357(d)), and the independent 
contractor's arrangement with the group practice must comply with the 
reassignment

[[Page 41954]]

rules in Sec.  424.80(b)(2) of this chapter (see also Pub. 100-04, 
Medicare Claims Processing Manual, Chapter 1, Section 30.2.7, as 
amended or replaced from time to time). Referrals from an independent 
contractor who is a physician in the group practice are subject to the 
prohibition on referrals in Sec.  411.353(a), and the group practice is 
subject to the limitation on billing for those referrals in Sec.  
411.353(b).
* * * * *
    Remuneration * * *
    (2) The furnishing of items, devices, or supplies (not including 
surgical items, devices, or supplies) that are used solely for one or 
more of the following purposes:
    (i) Collecting specimens for the entity furnishing the items, 
devices or supplies;
    (ii) Transporting specimens for the entity furnishing the items, 
devices or supplies;
    (iii) Processing specimens for the entity furnishing the items, 
devices or supplies;
    (iv) Storing specimens for the entity furnishing the items, devices 
or supplies;
    (v) Ordering tests or procedures for the entity furnishing the 
items, devices or supplies; or
    (vi) Communicating the results of tests or procedures for the 
entity furnishing the items, devices or supplies.
* * * * *
0
25. Section 411.353 is amended by revising paragraphs (g)(1)(i) and 
(ii) to read as follows:


Sec.  411.353  Prohibition on certain referrals by physicians and 
limitations on billing.

* * * * *
    (g) * * *
    (1) * * *
    (i) The compensation arrangement between the entity and the 
referring physician fully complies with an applicable exception in 
Sec.  411.355, Sec.  411.356 or Sec.  411.357, except with respect to 
the signature requirement in Sec.  411.357(a)(1), Sec.  411.357(b)(1), 
Sec.  411.357(d)(1)(i), Sec.  411.357(e)(1)(i), Sec.  411.357(e)(4)(i), 
Sec.  411.357(l)(1), Sec.  411.357(p)(2), Sec.  411.357(q) 
(incorporating the requirement contained in Sec.  1001.952(f)(4)), 
Sec.  411.357(r)(2)(ii), Sec.  411.357(t)(1)(ii) or (t)(2)(iii) (both 
incorporating the requirements contained in Sec.  411.357(e)(1)(i)), 
Sec.  411.357(v)(7)(i), Sec.  411.357(w)(7)(i), Sec.  411.357(x)(1)(i), 
or Sec.  411.357(y)(1); and
    (ii) The parties obtain the required signature(s) within 90 
consecutive calendar days immediately following the date on which the 
compensation arrangement became noncompliant (without regard to whether 
any referrals occur or compensation is paid during such 90-day period) 
and the compensation arrangement otherwise complies with all criteria 
of the applicable exception.
* * * * *
0
26. Section 411.354 is amended by revising paragraphs (c)(3)(i), 
(d)(1), (d)(4) introductory text, (d)(4)(i), (d)(4)(iv)(A), and 
(d)(4)(v) to read as follows:


Sec.  411.354  Financial relationship, compensation, and ownership or 
investment interest.

* * * * *
    (c) * * *
    (3)(i) For purposes of paragraphs (c)(1)(ii) and (c)(2)(iv) of this 
section, a physician who ``stands in the shoes'' of his or her 
physician organization is deemed to have the same compensation 
arrangements (with the same parties and on the same terms) as the 
physician organization. When applying the exceptions in Sec.  411.355 
and Sec.  411.357 to arrangements in which a physician stands in the 
shoes of his or her physician organization, the ``parties to the 
arrangements'' are considered to be--
    (A) With respect to a signature requirement, the physician 
organization and any physician who ``stands in the shoes'' of the 
physician organization as required under paragraphs (c)(1)(ii) or 
(c)(2)(iv)(A) of this section; and
    (B) With respect to all other requirements of the exception, 
including the relevant referrals and other business generated between 
the parties, the entity furnishing DHS and the physician organization 
(including all members, employees, and independent contractor 
physicians).
* * * * *
    (d) * * *
    (1) Compensation is considered ``set in advance'' if the aggregate 
compensation, a time-based or per-unit of service-based (whether per-
use or per-service) amount, or a specific formula for calculating the 
compensation is set out in writing before the furnishing of the items 
or services for which the compensation is to be paid. The formula for 
determining the compensation must be set forth in sufficient detail so 
that it can be objectively verified, and the formula may not be changed 
or modified during the course of the arrangement in any manner that 
takes into account the volume or value of referrals or other business 
generated by the referring physician.
* * * * *
    (4) A physician's compensation from a bona fide employer or under a 
managed care contract or other arrangement for personal services may be 
conditioned on the physician's referrals to a particular provider, 
practitioner, or supplier, provided that the compensation arrangement 
meets all of the following conditions. The compensation arrangement:
    (i) Is set in advance for the term of the arrangement.
* * * * *
    (iv) * * *
    (A) The requirement to make referrals to a particular provider, 
practitioner, or supplier is set out in writing and signed by the 
parties.
* * * * *
    (v) The required referrals relate solely to the physician's 
services covered by the scope of the employment, the arrangement for 
personal services, or the contract, and the referral requirement is 
reasonably necessary to effectuate the legitimate business purposes of 
the compensation arrangement. In no event may the physician be required 
to make referrals that relate to services that are not provided by the 
physician under the scope of his or her employment, arrangement for 
personal services, or contract.
0
27. Section 411.356 is amended by revising paragraphs (a) introductory 
text and (a)(1)(i) and (ii), and adding paragraph (a)(1)(iii) to read 
as follows:


Sec.  411.356  Exceptions to the referral prohibition related to 
ownership or investment interests.

* * * * *
    (a) Publicly traded securities. Ownership of investment securities 
(including shares or bonds, debentures, notes, or other debt 
instruments) that at the time the DHS referral was made could be 
purchased on the open market and that meet the requirements of 
paragraphs (a)(1) and (a)(2) of this section.
    (1) * * *
    (i) Listed for trading on the New York Stock Exchange, the American 
Stock Exchange, or any regional exchange in which quotations are 
published on a daily basis, or foreign securities listed on a 
recognized foreign, national, or regional exchange in which quotations 
are published on a daily basis;
    (ii) Traded under an automated interdealer quotation system 
operated by the National Association of Securities Dealers; or
    (iii) Listed for trading on an electronic stock market or over-the-
counter quotation system in which quotations are published on a daily 
basis and

[[Page 41955]]

trades are standardized and publicly transparent.
* * * * *
0
28. Section 411.357 is amended by--
0
A. Revising paragraphs (a) introductory text, (a)(1) through (4), 
(a)(5) introductory text, (a)(6), (a)(7), (b)(1) through (3), (b)(4) 
introductory text, (b)(5), (b)(6), (c)(3), (d)(1)(iii), (d)(1)(iv), 
(d)(1)(vii), (e)(1)(iii), (e)(1)(iv), (e)(4)(i), (e)(4)(iv), (e)(6), 
(f)(2), (k)(2), (l) introductory text, (l)(1), (l)(2), (m)(1), (m)(2), 
(m)(3), (m)(5), (p)(1)(ii)(A), (p)(2), (r)(2)(iv), (r)(2)(v), (s)(1), 
(t)(2)(iv)(A).
0
B. Adding paragraphs (x) and (y).
    The revisions and additions read as follows:


Sec.  411.357  Exceptions to the referral prohibition related to 
compensation arrangements.

* * * * *
    (a) Rental of office space. Payments for the use of office space 
made by a lessee to a lessor if the arrangement meets the following 
requirements:
    (1) The lease arrangement is set out in writing, is signed by the 
parties, and specifies the premises it covers.
    (2) The term of the lease arrangement is at least 1 year. To meet 
this requirement, if the lease arrangement is terminated with or 
without cause, the parties may not enter into a new lease arrangement 
for the same space during the first year of the original lease 
arrangement.
    (3) The space rented or leased does not exceed that which is 
reasonable and necessary for the legitimate business purposes of the 
lease arrangement and is used exclusively by the lessee when being used 
by the lessee (and is not shared with or used by the lessor or any 
person or entity related to the lessor), except that the lessee may 
make payments for the use of space consisting of common areas if the 
payments do not exceed the lessee's pro rata share of expenses for the 
space based upon the ratio of the space used exclusively by the lessee 
to the total amount of space (other than common areas) occupied by all 
persons using the common areas.
    (4) The rental charges over the term of the lease arrangement are 
set in advance and are consistent with fair market value.
    (5) The rental charges over the term of the lease arrangement are 
not determined--
* * * * *
    (6) The lease arrangement would be commercially reasonable even if 
no referrals were made between the lessee and the lessor.
    (7) If the lease arrangement expires after a term of at least 1 
year, a holdover lease arrangement immediately following the expiration 
of the lease arrangement satisfies the requirements of paragraph (a) of 
this section if the following conditions are met:
    (i) The lease arrangement met the conditions of paragraphs (a)(1) 
through (6) of this section when the arrangement expired;
    (ii) The holdover lease arrangement is on the same terms and 
conditions as the immediately preceding arrangement; and
    (iii) The holdover lease arrangement continues to satisfy the 
conditions of paragraphs (a)(1) through (6) of this section.
    (b) * * *
    (1) The lease arrangement is set out in writing, is signed by the 
parties, and specifies the equipment it covers.
    (2) The equipment leased does not exceed that which is reasonable 
and necessary for the legitimate business purposes of the lease 
arrangement and is used exclusively by the lessee when being used by 
the lessee (and is not shared with or used by the lessor or any person 
or entity related to the lessor).
    (3) The term of the lease arrangement is at least 1 year. To meet 
this requirement, if the lease arrangement is terminated with or 
without cause, the parties may not enter into a new lease arrangement 
for the same equipment during the first year of the original lease 
arrangement.
    (4) The rental charges over the term of the lease arrangement are 
set in advance, are consistent with fair market value, and are not 
determined--
* * * * *
    (5) The lease arrangement would be commercially reasonable even if 
no referrals were made between the parties.
    (6) If the lease arrangement expires after a term of at least 1 
year, a holdover lease arrangement immediately following the expiration 
of the lease arrangement satisfies the requirements of paragraph (b) of 
this section if the following conditions are met:
    (i) The lease arrangement met the conditions of paragraphs (b)(1) 
through (5) of this section when the arrangement expired;
    (ii) The holdover lease arrangement is on the same terms and 
conditions as the immediately preceding lease arrangement; and
    (iii) The holdover lease arrangement continues to satisfy the 
conditions of paragraphs (b)(1) through (5) of this section.
    (c) * * *
    (3) The remuneration is provided under an arrangement that would be 
commercially reasonable even if no referrals were made to the employer.
* * * * *
    (d) * * *
    (1) * * *
    (iii) The aggregate services covered by the arrangement do not 
exceed those that are reasonable and necessary for the legitimate 
business purposes of the arrangement(s).
    (iv) The term of each arrangement is for at least 1 year. To meet 
this requirement, if an arrangement is terminated with or without 
cause, the parties may not enter into the same or substantially the 
same arrangement during the first year of the original arrangement.
* * * * *
    (vii) If the arrangement expires after a term of at least 1 year, a 
holdover arrangement immediately following the expiration of the 
arrangement satisfies the requirements of paragraph (d) of this section 
if the following conditions are met:
    (A) The arrangement met the conditions of paragraphs (d)(1)(i) 
through (vi) of this section when the arrangement expired;
    (B) The holdover arrangement is on the same terms and conditions as 
the immediately preceding arrangement; and
    (C) The holdover arrangement continues to satisfy the conditions of 
paragraphs (d)(1)(i) through (vi) of this section.
* * * * *
    (e) * * *
    (1) * * *
    (iii) The amount of remuneration under the arrangement is not 
determined in a manner that takes into account (directly or indirectly) 
the volume or value of any actual or anticipated referrals by the 
physician or other business generated between the parties; and
    (iv) The physician is allowed to establish staff privileges at any 
other hospital(s) and to refer business to any other entities (except 
as referrals may be restricted under an employment or services 
arrangement that complies with Sec.  411.354(d)(4)).
* * * * *
    (4) * * *
    (i) The writing in paragraph (e)(1) of this section is also signed 
by the physician practice.
* * * * *
    (iv) Records of the actual costs and the passed-through amounts are 
maintained for a period of at least 6 years and made available to the 
Secretary upon request.
* * * * *
    (6)(i) This paragraph (e) applies to remuneration provided by a 
federally qualified health center or a rural health

[[Page 41956]]

clinic in the same manner as it applies to remuneration provided by a 
hospital, provided that the arrangement does not violate the anti-
kickback statute (section 1128B(b) of the Act), or any Federal or State 
law or regulation governing billing or claims submission.
    (ii) The ``geographic area served'' by a federally qualified health 
center or a rural health clinic is the area composed of the lowest 
number of contiguous zip codes from which the federally qualified 
health center or rural health clinic draws at least 90 percent of its 
patients, as determined on an encounter basis. If the federally 
qualified health center or rural health clinic draws fewer than 90 
percent of its patients from all of the contiguous zip codes from which 
it draws patients, the ``geographic area served'' by the federally 
qualified health center or rural health clinic may include 
noncontiguous zip codes, beginning with the noncontiguous zip code in 
which the highest percentage of the federally qualified health center's 
or rural health clinic's patients reside, and continuing to add 
noncontiguous zip codes in decreasing order of percentage of patients. 
The geographic area served by the federally qualified health center or 
rural health clinic may include one or more zip codes from which the 
federally qualified health center or rural health clinic draws no 
patients, provided that such zip codes are entirely surrounded by zip 
codes in the geographic area described above from which the federally 
qualified health center or rural health clinic draws at least 90 
percent of its patients.
    (f) * * *
    (2) The remuneration is provided under an arrangement that would be 
commercially reasonable even if the physician made no referrals to the 
entity.
* * * * *
    (k) * * *
    (2) The annual aggregate nonmonetary compensation limit in this 
paragraph (k) is adjusted each calendar year to the nearest whole 
dollar by the increase in the Consumer Price Index--Urban All Items 
(CPI-U) for the 12-month period ending the preceding September 30. CMS 
displays after September 30 each year both the increase in the CPI-U 
for the 12-month period and the new nonmonetary compensation limit on 
the physician self-referral Web site at http://www.cms.hhs.gov/PhysicianSelfReferral/10_CPI-U_Updates.asp.
* * * * *
    (l) Fair market value compensation. Compensation resulting from an 
arrangement between an entity and a physician (or an immediate family 
member) or any group of physicians (regardless of whether the group 
meets the definition of a group practice set forth in Sec.  411.352) 
for the provision of items or services (other than the rental of office 
space) by the physician (or an immediate family member) or group of 
physicians to the entity, or by the entity to the physician (or an 
immediate family member) or a group of physicians, if the arrangement 
meets the following conditions:
    (1) The arrangement is in writing, signed by the parties, and 
covers only identifiable items or services, all of which are specified 
in writing.
    (2) The writing specifies the timeframe for the arrangement, which 
can be for any period of time and contain a termination clause, 
provided that the parties enter into only one arrangement for the same 
items or services during the course of a year. An arrangement may be 
renewed any number of times if the terms of the arrangement and the 
compensation for the same items or services do not change.
* * * * *
    (m) * * *
    (1) The compensation is offered to all members of the medical staff 
practicing in the same specialty (but not necessarily accepted by every 
member to whom it is offered) and is not offered in a manner that takes 
into account the volume or value of referrals or other business 
generated between the parties.
    (2) Except with respect to identification of medical staff on a 
hospital Web site or in hospital advertising, the compensation is 
provided only during periods when the medical staff members are making 
rounds or are engaged in other services or activities that benefit the 
hospital or its patients.
    (3) The compensation is provided by the hospital and used by the 
medical staff members only on the hospital's campus. Compensation, 
including, but not limited to, internet access, pagers, or two-way 
radios, used away from the campus only to access hospital medical 
records or information or to access patients or personnel who are on 
the hospital campus, as well as the identification of the medical staff 
on a hospital Web site or in hospital advertising, meets the ``on 
campus'' requirement of this paragraph (m) of this section.
* * * * *
    (5) The compensation is of low value (that is, less than $25) with 
respect to each occurrence of the benefit (for example, each meal given 
to a physician while he or she is serving patients who are hospitalized 
must be of low value). The $25 limit in this paragraph (m)(5) is 
adjusted each calendar year to the nearest whole dollar by the increase 
in the Consumer Price Index--Urban All Items (CPI-I) for the 12 month 
period ending the preceding September 30. CMS displays after September 
30 each year both the increase in the CPI-I for the 12 month period and 
the new limits on the physician self-referral Web site at http://www.cms.hhs.gov/PhysicianSelfReferral/10_CPI-U_Updates.asp.
* * * * *
    (p) * * *
    (1) * * *
    (ii) * * *
    (A) A percentage of the revenue raised, earned, billed, collected, 
or otherwise attributable to the services performed or business 
generated in the office space or to the services performed on or 
business generated through the use of the equipment; or
* * * * *
    (2) The compensation arrangement described in Sec.  
411.354(c)(2)(ii) is set out in writing, signed by the parties, and 
specifies the services covered by the arrangement, except in the case 
of a bona fide employment relationship between an employer and an 
employee, in which case the arrangement need not be set out in writing, 
but must be for identifiable services and be commercially reasonable 
even if no referrals are made to the employer.
* * * * *
    (r) * * *
    (2) * * *
    (iv) The hospital, federally qualified health center, or rural 
health clinic does not determine the amount of the payment in a manner 
that takes into account (directly or indirectly) the volume or value of 
any actual or anticipated referrals by the physician or any other 
business generated between the parties.
    (v) The physician is allowed to establish staff privileges at any 
hospital(s), federally qualified health center(s), or rural health 
clinic(s) and to refer business to any other entities (except as 
referrals may be restricted under an employment arrangement or services 
arrangement that complies with Sec.  411.354(d)(4)).
* * * * *
    (s) * * *
    (1) The professional courtesy is offered to all physicians on the 
entity's bona fide medical staff or in such entity's local community or 
service area, and the offer does not take into account

[[Page 41957]]

the volume or value of referrals or other business generated between 
the parties;
* * * * *
    (t) * * *
    (2) * * *
    (iv) * * *
    (A) An amount equal to 25 percent of the physician's current annual 
income (averaged over the previous 24 months), using a reasonable and 
consistent methodology that is calculated uniformly; or
* * * * *
    (x) Assistance to employ a nonphysician practitioner. (1) 
Remuneration provided by a hospital to a physician to employ a 
nonphysician practitioner to provide patient care services, if all of 
the following conditions are met:
    (i) The arrangement is set out in writing and signed by the 
hospital, the physician, and the nonphysician practitioner.
    (ii) The arrangement is not conditioned on--
    (A) The physician's referrals to the hospital; or
    (B) The nonphysician practitioner's referrals to the hospital.
    (iii) The remuneration from the hospital--
    (A) Does not exceed the lower of--
    (1) 50 percent of the actual salary, signing bonus, and benefits 
paid by the physician to the nonphysician practitioner during a period 
not to exceed the first 2 consecutive years of employment; or
    (2) An amount calculated by subtracting all receipts attributable 
to services furnished by the nonphysician practitioner from the actual 
salary, signing bonus, and benefits paid to the nonphysician 
practitioner by the physician during a period not to exceed the first 2 
consecutive years of employment; and
    (B) Is not determined in a manner that takes into account (directly 
or indirectly) the volume or value of any actual or anticipated 
referrals by--
    (1) The physician (or any physician in the physician's practice) or 
other business generated between the parties; or
    (2) The nonphysician practitioner (or any nonphysician practitioner 
in the physician's practice) or other business generated between the 
parties.
    (iv) The salary, signing bonus, and benefits paid to the 
nonphysician practitioner by the physician does not exceed fair market 
value for the patient care services furnished by the nonphysician 
practitioner to patients of the physician's practice.
    (v) The nonphysician practitioner has not, within 3 years of 
becoming employed by the physician (or the physician organization in 
whose shoes the physician stands under Sec.  411.354(c) of this 
subpart)--
    (A) Practiced in the geographic area served by the hospital; or
    (B) Been employed or otherwise engaged to provide patient care 
services by a physician or a physician organization that has a medical 
practice site located in the geographic area served by the hospital, 
regardless of whether the nonphysician practitioner furnished services 
at the medical practice site located in the geographic area served by 
the hospital.
    (vi) The nonphysician practitioner--
    (A) Is a bona fide employee of the physician or the physician 
organization in whose shoes the physician stands under Sec.  411.354(c) 
of this subpart; and
    (B) Furnishes only primary care services to patients of the 
physician's practice.
    (vii) The physician does not impose practice restrictions on the 
nonphysician practitioner that unreasonably restrict the nonphysician 
practitioner's ability to provide patient care services in the 
geographic area served by the hospital.
    (viii) The arrangement does not violate the anti-kickback statute 
(section 1128B(b) of the Act), or any Federal or State law or 
regulation governing billing or claims submission.
    (2) Records of the actual amount of remuneration provided under 
paragraph (x)(1) of this section by the hospital to the physician, and 
by the physician to the nonphysician practitioner, must be maintained 
for a period of at least 6 years and made available to the Secretary 
upon request.
    (3) For purposes of this paragraph (x), ``nonphysician 
practitioner'' means a physician assistant as defined in section 
1861(aa)(5) of the Act, a nurse practitioner or clinical nurse 
specialist as defined in section 1861(aa)(5) of the Act, or a certified 
nurse-midwife as defined in section 1861(gg) of the Act.
    (4) For purposes of paragraphs (x)(1)(ii)(B) and (x)(1)(iii)(B)(2) 
of this section, ``referral'' means a request by a nonphysician 
practitioner that includes the provision of any designated health 
service for which payment may be made under Medicare, the establishment 
of any plan of care by a nonphysician practitioner that includes the 
provision of such a designated health service, or the certifying or 
recertifying of the need for such a designated health service, but not 
including any designated health service personally performed or 
provided by the nonphysician practitioner.
    (5) For purposes of paragraph (x)(1) of this section, ``geographic 
area served by the hospital'' has the meaning set forth in paragraph 
(e)(2) of this section.
    (6)(i) This paragraph (x) applies to remuneration provided by a 
federally qualified health center or a rural health clinic in the same 
manner as it applies to remuneration provided by a hospital.
    (ii) The ``geographic area served'' by a federally qualified health 
center or a rural health clinic has the meaning set forth in paragraph 
(e)(6)(ii) of this section.
    (y) Timeshare arrangements. Remuneration provided by a licensee to 
a licensor under an arrangement for the use of the licensor's premises, 
equipment, personnel, items, supplies or services if the following 
conditions are met:
    (1) The arrangement is set out in writing, signed by the parties, 
and specifies the premises, equipment, personnel, items, supplies, and 
services covered by the arrangement.
    (2) The licensor is a hospital or physician organization.
    (3) The licensed premises, equipment, personnel, items, supplies 
and services are used predominantly for the provision of evaluation and 
management services to patients.
    (4) The licensed equipment is--
    (i) Located in the office suite where the evaluation and management 
services are furnished;
    (ii) Not used to furnish designated health services other than 
those incidental to the evaluation and management services furnished by 
the physician at the time of the patient's evaluation and management 
visit; and
    (iii) Not advanced imaging equipment, radiation therapy equipment, 
or clinical or pathology laboratory equipment (other than equipment 
used to perform CLIA-waived laboratory tests).
    (5) The arrangement is not conditioned on the licensee's referral 
of patients to the licensor.
    (6) The compensation over the term of the arrangement is set in 
advance, consistent with fair market value, and not determined--
    (i) In a manner that takes into account (directly or indirectly) 
the volume or value of referrals or other business generated between 
the parties; or
    (ii) Using a formula based on--
    (A) A percentage of the revenue raised, earned, billed, collected, 
or otherwise attributable to the services provided by the licensee 
while using the licensor's premises, equipment, personnel, items, 
supplies or services; or
    (B) Per-unit of service license fees that are not time-based, to 
the extent that

[[Page 41958]]

such fees reflect services provided to patients referred by the 
licensor to the licensee.
    (7) The arrangement would be commercially reasonable even if no 
referrals were made between the parties.
    (8) The arrangement does not violate the anti-kickback statute 
(section 1128B(b) of the Act) or any Federal or State law or regulation 
governing billing or claims submission.
0
29. Section 411.361 is amended by revising paragraph (d) to read as 
follows:


Sec.  411.361  Reporting requirements.

* * * * *
    (d) Reportable financial relationships. For purposes of this 
section, a reportable financial relationship is any ownership or 
investment interest, as defined at Sec.  411.354(b) or any compensation 
arrangement, as defined at Sec.  411.354(c), except for ownership or 
investment interests that satisfy the exceptions set forth in Sec.  
411.356(a) or Sec.  411.356(b) regarding publicly traded securities and 
mutual funds.
* * * * *
0
30. Section 411.362 is amended by--
0
a. Amending paragraph (a) by adding the definitions of ``Ownership or 
investment interest'' and ``Public advertising for the hospital'' in 
alphabetical order.
0
b. Revising paragraphs (b)(3)(ii)(C), (c)(2)(iv), (c)(2)(v), and (c)(5) 
introductory text.
    The additions and revisions read as follows:


Sec.  411.362  Additional requirements concerning physician ownership 
and investment in hospitals.

    (a) * * *
    Ownership or investment interest means for purposes of this section 
a direct or indirect ownership or investment interest in a hospital.
    (1) A direct ownership or investment interest in a hospital exists 
if the ownership or investment interest in the hospital is held without 
any intervening persons or entities between the hospital and the owner 
or investor.
    (2) An indirect ownership or investment interest in a hospital 
exists if--
    (i) Between the owner or investor and the hospital there exists an 
unbroken chain of any number (but no fewer than one) of persons or 
entities having ownership or investment interests; and
    (ii) The hospital has actual knowledge of, or acts in reckless 
disregard or deliberate ignorance of, the fact that the owner or 
investor has some ownership or investment interest (through any number 
of intermediary ownership or investment interests) in the hospital.
    (3) An indirect ownership or investment interest in a hospital 
exists even though the hospital does not know, or acts in reckless 
disregard or deliberate ignorance of, the precise composition of the 
unbroken chain or the specific terms of the ownership or investment 
interests that form the links in the chain.
* * * * *
    Public advertising for the hospital means any public communication 
paid for by the hospital that is primarily intended to persuade 
individuals to seek care at the hospital.
    (b) * * *
    (3) * * *
    (ii) * * *
    (C) Disclose on any public Web site for the hospital and in any 
public advertising for the hospital that the hospital is owned or 
invested in by physicians. Any language that would put a reasonable 
person on notice that the hospital may be physician-owned would be 
deemed a sufficient statement of physician ownership or investment. For 
purposes of this section, a public Web site for the hospital does not 
include, by way of example: Social media Web sites; electronic patient 
payment portals; electronic patient care portals; and electronic health 
information exchanges.
* * * * *
    (c) * * *
    (2) * * *
    (iv) Average bed capacity. Is located in a State in which the 
average bed capacity in the State is less than the national average bed 
capacity during the most recent fiscal year for which HCRIS, as of the 
date that the hospital submits its request, contains data from a 
sufficient number of hospitals to determine a State's average bed 
capacity and the national average bed capacity. CMS will provide on its 
Web site State average bed capacities and the national average bed 
capacity. For purposes of this paragraph, ``sufficient number'' means 
the number of hospitals, as determined by CMS that would ensure that 
the determination under this paragraph would not materially change 
after additional hospital data are reported.
    (v) Average bed occupancy. Has an average bed occupancy rate that 
is greater than the average bed occupancy rate in the State in which 
the hospital is located during the most recent fiscal year for which 
HCRIS, as of the date that the hospital submits its request, contains 
data from a sufficient number of hospitals to determine the requesting 
hospital's average bed occupancy rate and the relevant State's average 
bed occupancy rate. A hospital must use filed hospital cost report data 
to determine its average bed occupancy rate. CMS will provide on its 
Web site State average bed occupancy rates. For purposes of this 
paragraph, ``sufficient number'' means the number of hospitals, as 
determined by CMS that would ensure that the determination under this 
paragraph would not materially change after additional hospital data 
are reported.
* * * * *
    (5) Community input and timing of complete request. Upon submitting 
a request for an exception and until the hospital receives a CMS 
decision, the hospital must disclose on any public Web site for the 
hospital that it is requesting an exception and must also provide 
actual notification that it is requesting an exception, in either 
electronic or hard copy form, directly to hospitals whose data are part 
of the comparisons in paragraphs (c)(2)(ii) and (c)(3)(ii) of this 
section. Individuals and entities in the hospital's community may 
provide input with respect to the hospital's request no later than 30 
days after CMS publishes notice of the hospital's request in the 
Federal Register. Such input must take the form of written comments. 
The written comments must be either mailed or submitted electronically 
to CMS. If CMS receives written comments from the community, the 
hospital has 30 days after CMS notifies the hospital of the written 
comments to submit a rebuttal statement.
* * * * *
0
31. Section 411.384 is amended by revising paragraph (b) to read as 
follows:


Sec.  411.384  Disclosing advisory opinions and supporting information.

* * * * *
    (b) Promptly after CMS issues an advisory opinion and releases it 
to the requestor, CMS makes available a copy of the advisory opinion 
for public inspection during its normal hours of operation and on the 
CMS Web site.
* * * * *

PART 414--PAYMENT FOR PART B MEDICAL AND OTHER HEALTH SERVICES

0
32. The authority citation for part 414 continues to read as follows:

    Authority: Secs. 1102, 1871, and 1881(b)(l) of the Social 
Security Act (42 U.S.C. 1302, 1395hh, and 1395rr(b)(l)).

0
33. Section 414.90 is amended by--
0
a. Adding paragraphs (j)(8) and (j)(9).
0
b. Revising paragraphs (k) introductory text, and (k)(2).

[[Page 41959]]

0
c. Redesignating paragraphs (l)(4) and (l)(5) as (k)(4) and (l)(4), 
respectively.
0
d. Adding new paragraph (k)(5).


Sec.  414.90  Physician Quality Reporting System (PQRS).

* * * * *
    (j) * * *
    (8) Satisfactory reporting criteria for individual eligible 
professionals for the 2018 PQRS payment adjustment. An individual 
eligible professional who wishes to meet the criteria for satisfactory 
reporting for the 2018 PQRS payment adjustment must report information 
on PQRS quality measures identified by CMS in one of the following 
manners:
    (i) Via claims. (A) For the 12-month 2018 PQRS payment adjustment 
reporting period--
    (1)(i) Report at least 9 measures, covering at least 3 of the NQS 
domains AND report each measure for at least 50 percent of the eligible 
professional's Medicare Part B FFS patients seen during the reporting 
period to which the measure applies. Of the measures reported, if the 
eligible professional sees at least 1 Medicare patient in a face-to-
face encounter, the eligible professional will report on at least 1 
measure contained in the proposed cross-cutting measure set. If less 
than 9 measures apply to the eligible professional, the eligible 
professional must report on each measure that is applicable, AND report 
each measure for at least 50 percent of the Medicare Part B FFS 
patients seen during the reporting period to which the measure applies. 
Measures with a 0 percent performance rate would not be counted.
    (ii) [Reserved]
    (2) [Reserved]
    (B) [Reserved]
    (ii) Via qualified registry. (A) For the 12-month 2018 PQRS payment 
adjustment reporting period--
    (1)(i) Report at least 9 measures, covering at least 3 of the NQS 
domains AND report each measure for at least 50 percent of the eligible 
professional's Medicare Part B FFS patients seen during the reporting 
period to which the measure applies. Of the measures reported, if the 
eligible professional sees at least 1 Medicare patient in a face-to-
face encounter, the eligible professional will report on at least 1 
measure contained in the proposed cross-cutting measure set. If less 
than 9 measures apply to the eligible professional, the eligible 
professional must report on each measure that is applicable to the 
eligible professional, AND report each measure for at least 50 percent 
of the Medicare Part B FFS patients seen during the reporting period to 
which the measure applies.
    (ii) Report at least 1 measures group and report each measures 
group for at least 20 patients, a majority of which much be Medicare 
Part B FFS patients.
    (2) Measures with a 0 percent performance rate or measures groups 
containing a measure with a 0 percent performance rate will not be 
counted.
    (B) [Reserved]
    (iii) Via EHR direct product. For the 12-month 2018 PQRS payment 
adjustment reporting period, report 9 measures covering at least 3 of 
the NQS domains. If an eligible professional's direct EHR product or 
EHR data submission vendor product does not contain patient data for at 
least 9 measures covering at least 3 domains, then the eligible 
professional must report all of the measures for which there is 
Medicare patient data. An eligible professional must report on at least 
1 measure for which there is Medicare patient data.
    (iv) Via EHR data submission vendor. For the 12-month 2018 PQRS 
payment adjustment reporting period, report 9 measures covering at 
least 3 of the NQS domains. If an eligible professional's direct EHR 
product or EHR data submission vendor product does not contain patient 
data for at least 9 measures covering at least 3 domains, then the 
eligible professional would be required to report all of the measures 
for which there is Medicare patient data. An eligible professional 
would be required to report on at least 1 measure for which there is 
Medicare patient data.
    (9) Satisfactory reporting criteria for group practices for the 
2018 PQRS payment adjustment. A group practice who wishes to meet the 
criteria for satisfactory reporting for the 2018 PQRS payment 
adjustment must report information on PQRS quality measures identified 
by CMS in one of the following manners:
    (i) Via the GPRO web interface. For the 12-month 2018 PQRS payment 
adjustment reporting period, for a group practice of 25 or more 
eligible professionals, report on all measures included in the web 
interface; AND populate data fields for the first 248 consecutively 
ranked and assigned beneficiaries in the order in which they appear in 
the group's sample for each module or preventive care measure. If the 
pool of eligible assigned beneficiaries is less than 248, then the 
group practice must report on 100 percent of assigned beneficiaries. In 
some instances, the sampling methodology will not be able to assign at 
least 248 patients on which a group practice may report, particularly 
those group practices on the smaller end of the range of 25-99 eligible 
professionals. If the group practice is assigned less than 248 Medicare 
beneficiaries, then the group practice must report on 100 percent of 
its assigned beneficiaries. A group practice must report on at least 1 
measure for which there is Medicare patient data.
    (ii) Via qualified registry. For a group practice of 2 or more 
eligible professionals, for the 12-month 2018 PQRS payment adjustment 
reporting period, report at least 9 measures, covering at least 3 of 
the NQS domains. Of these measures, if a group practice sees at least 1 
Medicare patient in a face-to-face encounter, the group practice would 
report on at least 1 measure in the cross-cutting measure set. If less 
than 9 measures covering at least 3 NQS domains apply to the group 
practice, the group practice would report on each measure that is 
applicable to the group practice, AND report each measure for at least 
50 percent of the group's Medicare Part B FFS patients seen during the 
reporting period to which the measure applies. Measures with a 0 
percent performance rate would not be counted.
    (iii) Via EHR direct product. For a group practice of 2 or more 
eligible professionals, for the 12-month 2018 PQRS payment adjustment 
reporting period, report 9 measures covering at least 3 domains. If the 
group practice's direct EHR product or EHR data submission vendor 
product does not contain patient data for at least 9 measures covering 
at least 3 domains, then the group practice must report all of the 
measures for which there is Medicare patient data. A group practice 
must report on at least 1 measure for which there is Medicare patient 
data.
    (iv) Via EHR data submission vendor. For a group practice of 2 or 
more eligible professionals, for the 12-month 2018 PQRS payment 
adjustment reporting period, report 9 measures covering at least 3 
domains. If the group practice's direct EHR product or EHR data 
submission vendor product does not contain patient data for at least 9 
measures covering at least 3 domains, then the group practice must 
report all of the measures for which there is Medicare patient data. A 
group practice must report on at least 1 measure for which there is 
Medicare patient data.
    (v) Via a certified survey vendor in addition to a qualified 
registry. For a group practice of 25 or more eligible professionals 
that elects to report via a certified survey vendor in addition to a 
qualified registry for the 12-month 2018 PQRS payment adjustment 
reporting period, the group practice must have all

[[Page 41960]]

CAHPS for PQRS survey measures reported on its behalf via a CMS-
certified survey vendor, and report at least 6 additional measures, 
outside of CAHPS for PQRS, covering at least 2 of the NQS domains using 
the qualified registry. If less than 6 measures apply to the group 
practice, the group practice must report on each measure that is 
applicable to the group practice. Of the additional measures that must 
be reported in conjunction with reporting the CAHPS for PQRS survey 
measures, if any eligible professional in the group practice sees at 
least 1 Medicare patient in a face-to-face encounter, the group 
practice must report on at least 1 measure in the cross-cutting measure 
set.
    (vi) Via a certified survey vendor in addition to a direct EHR 
product or EHR data submission vendor. For a group practice of 25 or 
more eligible professionals that elects to report via a certified 
survey vendor in addition to a direct EHR product or EHR data 
submission vendor for the 12-month 2018 PQRS payment adjustment 
reporting period, the group practice must have all CAHPS for PQRS 
survey measures reported on its behalf via a CMS-certified survey 
vendor, and report at least 6 additional measures, outside of CAHPS for 
PQRS, covering at least 2 of the NQS domains using the direct EHR 
product or EHR data submission vendor product. If less than 6 measures 
apply to the group practice, the group practice must report all of the 
measures for which there is patient data. Of the additional 6 measures 
that must be reported in conjunction with reporting the CAHPS for PQRS 
survey measures, a group practice would be required to report on at 
least 1 measure for which there is Medicare patient data.
    (vii) Via a certified survey vendor in addition to the GPRO web 
interface. (A) For a group practice of 25 or more eligible 
professionals, for the 12-month 2018 PQRS payment adjustment reporting 
period, the group practice must have all CAHPS for PQRS survey measures 
reported on its behalf via a CMS-certified survey vendor. In addition, 
the group practice must report on all measures included in the GPRO web 
interface; AND populate data fields for the first 248 consecutively 
ranked and assigned beneficiaries in the order in which they appear in 
the group's sample for each module or preventive care measure. If the 
pool of eligible assigned beneficiaries is less than 248, then the 
group practice must report on 100 percent of assigned beneficiaries. A 
group practice will be required to report on at least 1 measure for 
which there is Medicare patient data.
    (viii) If the CAHPS for PQRS survey is applicable to the practice, 
group practices comprised of 25 or more eligible professionals who 
elect to use the GPRO web interface must administer the CAHPS for PQRS 
survey.
    (k) Satisfactory participation requirements for the payment 
adjustments for individual eligible professionals and group practices. 
In order to satisfy the requirements for the PQRS payment adjustment 
for a particular program year through participation in a qualified 
clinical data registry, an individual eligible professional, as 
identified by a unique TIN/NPI combination, or group practice must meet 
the criteria for satisfactory participation as specified in paragraph 
(k)(3) for such year, by reporting on quality measures identified by a 
qualified clinical data registry during a reporting period specified in 
paragraph (k)(1) of this section, using the reporting mechanism 
specified in paragraph (k)(2) of this section.
* * * * *
    (2) Reporting mechanism. An individual eligible professional or 
group practice who wishes to meet the criteria for satisfactory 
participation in a qualified clinical data registry must use the 
qualified clinical data registry to report information on quality 
measures identified by the qualified clinical data registry.
* * * * *
    (5) Satisfactory participation criteria for individual eligible 
professionals and group practices for the 2018 PQRS payment adjustment. 
An individual eligible professional or group practice who wishes to 
meet the criteria for satisfactory participation in a QCDR for the 2018 
PQRS payment adjustment must report information on quality measures 
identified by the QCDR in the following manner:
    (i) For the 12-month 2018 PQRS payment adjustment reporting period, 
report at least 9 measures available for reporting under a QCDR 
covering at least 3 of the NQS domains, and report each measure for at 
least 50 percent of the eligible professional's patients. Of these 
measures, report on at least 3 outcome measures, or, if 3 outcomes 
measures are not available, report on at least 2 outcome measures and 
at least 1 of the following types of measures--resource use, patient 
experience of care, or efficiency/appropriate use.
    (ii) [Reserved]
* * * * *
0
34. Section 414.94 is added to Subpart B to read as follows:


Sec.  414.94  Appropriate use criteria for advanced diagnostic imaging 
services.

    (a) Basis and scope. This section implements the following 
provisions of the Act:
    (1) Section 1834(q)--Recognizing Appropriate Use Criteria for 
Certain Imaging Services.
    (2) Section 1834(q)(1)--Program Established.
    (3) Section 1834(q)(2)--Establishment of Applicable Appropriate Use 
Criteria.
    (b) Definitions. As used in this section unless otherwise 
indicated--
    Advanced diagnostic imaging service means an imaging service as 
defined in section 1834(e)(1)(B) of the Act.
    Applicable imaging service means an advanced diagnostic imaging 
service (as defined in section 1834(e)(1)(B) of the Act for which the 
Secretary determines--
    (i) One or more applicable appropriate use criteria apply;
    (ii) There are one or more qualified clinical decision support 
mechanisms listed; and
    (iii) One or more of such mechanisms is available free of charge.
    Applicable setting means a physician's office, a hospital 
outpatient department (including an emergency department), an 
ambulatory surgical center, and any other provider-led outpatient 
setting determined appropriate by the Secretary.
    Appropriate use criteria (AUC) means criteria only developed or 
endorsed by national professional medical specialty societies or other 
provider-led entities, to assist ordering professionals and furnishing 
professionals in making the most appropriate treatment decision for a 
specific clinical condition for an individual. To the extent feasible, 
such criteria must be evidence-based. AUC are a collection of 
individual appropriate use criteria. Individual criteria is information 
presented in a manner that links: A specific clinical condition or 
presentation; one or more services; and, an assessment of the 
appropriateness of the service(s).
    Furnishing professional means a physician (as defined in section 
1861(r) of the Act) or a practitioner described in section 
1842(b)(18)(C) of the Act who furnishes an applicable imaging service.
    Ordering professional means a physician (as defined in section 
1861(r) of the Act) or a practitioner described in section 
1842(b)(18)(C) of the Act who orders an applicable imaging service.
    Priority clinical areas means clinical topics, clinical topics and 
imaging modalities, or imaging modalities identified by CMS through 
annual rulemaking and in consultation with stakeholders which may be 
used in the

[[Page 41961]]

determination of outlier ordering professionals.
    Provider-led entity means a national professional medical specialty 
society, or an organization that is comprised primarily of providers 
and is actively engaged in the practice and delivery of healthcare.
    Specified applicable appropriate use criteria means AUC developed, 
modified or endorsed by a qualified provider-led entity.
    (c) Qualified provider-led entities. Provider-led entities (PLEs) 
must follow appropriate, evidence-based processes for the development 
of AUC and demonstrate adherence to the requirements below to be 
qualified by CMS. AUC developed, modified or endorsed by qualified PLEs 
are specified applicable AUC. Qualified PLEs may develop AUC, modify 
AUC developed by another entity, or provide endorsement to AUC 
developed by other entities.
    (1) Requirements for developing, modifying or endorsing AUC. All of 
the following requirements must be met:
    (i) An evidentiary review process that includes:
    (A) A systematic literature review of the clinical topic and 
relevant imaging studies; and
    (B) An assessment of the evidence using a formal, published and 
widely recognized methodology for grading evidence. Consideration of 
relevant published consensus statements by professional medical 
specialty societies must be part of the evidence assessment.
    (ii) At least one multidisciplinary team with autonomous 
governance, decision making and accountability for developing, 
modifying or endorsing AUC. At a minimum the team must be comprised of 
three members including one with expertise in the clinical topic 
related to the criterion and one with expertise in the imaging modality 
related to the criterion.
    (iii) A publicly transparent process for identifying potential 
conflicts of interest of members on the multidisciplinary team. The 
following information is identified and made timely available in 
response to a public request for a period of not less than 5 years, 
coincident with the AUC publication of the related recommendation:
    (A) Direct or indirect financial relationships that exist between 
individuals or the spouse or minor child of individuals who have 
substantively participated in the development of AUC and companies or 
organizations that may financially benefit from the AUC. This may 
include, for example, compensation arrangements such as salary, grant, 
speaking or consulting fees, contract, or collaboration agreements 
between individuals or the spouse or minor child of individuals who 
have substantively participated in the development of AUC and companies 
or organizations that may financially benefit from the AUC.
    (B) Ownership or investment interests between individuals or the 
spouse or minor child of individuals who have substantively 
participated in the development of AUC and companies or organizations 
that may financially benefit from the AUC.
    (iv) Individual criteria must be published on the provider-led 
entity's Web site and include an identifying title, authors, and key 
references used to establish the evidence. If relevant to a CMS 
identified priority clinical area, such a statement must be included.
    (v) Key points in individual criteria must be identified as 
evidence-based or consensus-based, and graded in terms of strength of 
evidence using a formal, published and widely recognized methodology.
    (vi) The provider-led entity must have a transparent process for 
the timely and continual updating of each criterion.
    (vii) The provider-led entity's process for developing, modifying 
or endorsing AUC is publicly posted on the entity's Web site.
    (2) Process to identify qualifying provider-led entities. Provider-
led entities must meet all of the following criteria:
    (i) Provider-led entities must submit an application to CMS that 
documents adherence to each of the AUC development requirements 
outlined in paragraph (c)(1) of this section;
    (ii) Applications will be accepted by CMS only from provider-led 
entities that meet the definition in paragraph (b) of this section;
    (iii) Applications must be received by CMS annually by January 1;
    (iv) All approved provider-led entities from each year of 
submissions will be posted to the CMS Web site by June 30; and
    (v) Qualified provider-led entities are required to re-apply every 
6 years. The application must be submitted by January 1 during the 5th 
year of their approval.
    (d) Identifying priority clinical areas. (1) CMS must identify 
priority clinical areas through annual rulemaking and in consultation 
with stakeholders.
    (2) CMS will consider incidence and prevalence of disease, volume 
variability of utilization, and strength of evidence for imaging 
services. We will also consider applicability of the clinical area to a 
variety of care settings and to the Medicare population.
    (3) The Medicare Evidence Development & Coverage Advisory Committee 
(MEDCAC) may make recommendations to CMS.
    (4) Priority clinical areas will be used by CMS to identify outlier 
ordering professionals (section 1834(q)(5) of the Act).
    (e) Identification of non-evidence based AUC. (1) CMS will accept 
public comment to facilitate identification of individual or groupings 
of AUC that fall within a priority clinical area and are not evidence-
based. CMS may also independently identify AUC of concern.
    (2) The evidentiary basis of the identified AUC may be reviewed by 
the MEDCAC.
0
35. Section 414.605 is amended by revising the definition of ``Basic 
life support (BLS)'' to read as follows:


Sec.  414.605  Definitions.

* * * * *
    Basic life support (BLS) means transportation by ground ambulance 
vehicle and medically necessary supplies and services, plus the 
provision of BLS ambulance services. The ambulance must be staffed by 
at least two people who meet the requirements of state and local laws 
where the services are being furnished. Also, at least one of the staff 
members must be certified, at a minimum, as an emergency medical 
technician-basic (EMT-Basic) by the State or local authority where the 
services are furnished and be legally authorized to operate all 
lifesaving and life-sustaining equipment on board the vehicle. These 
laws may vary from State to State.
* * * * *


Sec.  414.610  [Amended]

0
36. In Sec.  414.610, amend paragraphs (c)(1)(ii) introductory text and 
(c)(5)(ii), by removing the date ``March 31, 2015'' and adding in its 
place the date ``December 31, 2017''.
0
37. Section 414.904 is amended by revising paragraph (j) to read as 
follows:


Sec.  414.904  Average sales price as the basis for payment.

* * * * *
    (j) Biosimilar biological products. Effective January 1, 2016, the 
payment amount for a biosimilar biological drug product (as defined in 
Sec.  414.902) for all NDCs assigned to such product is the sum of the 
average sales price of all NDCs assigned to the biosimilar biological 
products included within the same billing and payment code as 
determined under section 1847A(b)(6) of the Act and 6 percent of the 
amount determined under section 1847A(b)(4)

[[Page 41962]]

of the Act for the reference drug product (as defined in Sec.  
414.902).
0
38. Section 414.1205 is amended by adding the definition of ``Certified 
registered nurse anesthetist (CRNA)'' and ``Physician assistant (PA), 
nurse practitioner (NP), and clinical nurse specialist (CNS)'' in 
alphabetical order to read as follows:


Sec.  414.1205  Definitions.

* * * * *
    Certified registered nurse anesthetist (CRNA) has the same meaning 
given this term under section 1861(bb)(2) of the Act.
* * * * *
    Physician assistant (PA), nurse practitioner (NP), and clinical 
nurse specialist (CNS) have the same meanings given these terms under 
section 1861(aa)(5) of the Act.
* * * * *
0
39. Section 414.1210 is amended by--
0
a. Revising paragraph (a)(4), (b)(2)(i)(B), (b)(2)(i)(C), (b)(2)(i)(D), 
(b)(3)(i), (b)(4) and (c).
0
b. Adding paragraphs (b)(2)(i)(E), (b)(2)(i)(F), (b)(3)(ii) and 
(b)(3)(iii).
    The revisions and additions read as follows:


Sec.  414.1210  Application of the value-based payment modifier.

    (a) * * *
    (4) For the CY 2018 payment adjustment period, to nonphysician 
eligible professionals who are physician assistants, nurse 
practitioners, clinical nurse specialists, and certified registered 
nurse anesthetists in groups with 2 or more eligible professionals and 
to physician assistants, nurse practitioners, clinical nurse 
specialists, and certified registered nurse anesthetists who are solo 
practitioners based on the performance period for the payment 
adjustment period as described at Sec.  414.1215.
    (b) * * *
    (2) * * *
    (i) * * *
    (B) The quality composite score is calculated under Sec.  
414.1260(a) using quality data reported by the ACO for the performance 
period through the ACO GPRO Web interface as required under Sec.  
425.504(a)(1) of this chapter or another mechanism specified by CMS and 
the ACO all-cause readmission measure. Groups and solo practitioners 
that participate in two or more ACOs during the applicable performance 
period receive the quality composite score of the ACO that has the 
highest numerical quality composite score. For the CY 2018 payment 
adjustment period, the CAHPS for ACOs survey also will be included in 
the quality composite score.
    (C) For the CY 2017 payment adjustment period, the value-based 
payment modifier adjustment will be equal to the amount determined 
under Sec.  414.1275 for the payment adjustment period, except that if 
the ACO does not successfully report quality data as described in 
paragraph (b)(2)(i)(B) of this section for the performance period, such 
adjustment will be equal to -4% for groups with 10 or more eligible 
professionals and equal to -2% for groups with two to nine eligible 
professionals and for solo practitioners. If the ACO has an assigned 
beneficiary population during the performance period with an average 
risk score in the top 25 percent of the risk scores of beneficiaries 
nationwide, and a group or solo practitioner that participates in the 
ACO during the performance period is classified as high quality/average 
cost under quality-tiering for the CY 2017 payment adjustment period, 
the group or solo practitioner receives an upward adjustment of +3x 
(rather than +2x) if the group has 10 or more eligible professionals or 
+2x (rather than +1x) if a solo practitioner or the group has two to 
nine eligible professionals.
    (D) For the CY 2018 payment adjustment period, the value-based 
payment modifier adjustment will be equal to the amount determined 
under Sec.  414.1275 for the payment adjustment period, except that if 
the ACO does not successfully report quality data as described in 
paragraph (b)(2)(i)(B) of this section for the performance period, such 
adjustment will be equal to the downward payment adjustment amounts 
described at Sec.  414.1270(d)(1). If the ACO has an assigned 
beneficiary population during the performance period with an average 
risk score in the top 25 percent of the risk scores of beneficiaries 
nationwide, and a group or solo practitioner that participates in the 
ACO during the performance period is classified as high quality/average 
cost under quality-tiering for the CY 2018 payment adjustment period, 
the group or solo practitioner receives an upward adjustment of +3x 
(rather than +2x) if the group has 10 or more eligible professionals, 
+2x (rather than +1x) if a solo practitioner or the group has two to 
nine eligible professionals, or +2.0x (rather than +1.x) if a solo 
practitioner or group consisting of nonphysician eligible 
professionals.
    (E) For the CY 2017 payment adjustment period and each subsequent 
calendar year payment adjustment period, the value-based payment 
modifier for groups and solo practitioners that participate in an ACO 
under the Shared Savings Program during the applicable performance 
period is determined as described under Sec.  414.1210(b)(2), 
regardless of whether any eligible professionals in the group or the 
solo practitioner also participate in an Innovation Center model during 
the performance period.
    (F) The same value-based payment modifier adjustment will be 
applied in the payment adjustment period to all groups based on size as 
specified under Sec.  414.1275 and solo practitioners that participated 
in the ACO during the performance period.
* * * * *
    (3) * * *
    (i) For the CY 2017 payment adjustment period, the value-based 
payment modifier is waived under section 1115A(d)(1) of the Act for 
physicians in groups with 2 or more eligible professionals and for 
physicians who are solo practitioners that participate in the Pioneer 
ACO Model or the Comprehensive Primary Care (CPC) Initiative during the 
performance period for the payment adjustment period as described at 
Sec.  414.1215.
    (ii) For the CY 2018 payment adjustment period, the value-based 
payment modifier is waived under section 1115A(d)(1) of the Act for 
physicians and nonphysician eligible professionals in groups with 2 or 
more eligible professionals and for physicians and nonphysician 
eligible professionals who are solo practitioners that participate in 
the Pioneer ACO Model or the Comprehensive Primary Care (CPC) 
Initiative during the performance period for the payment adjustment 
period as described at Sec.  414.1215.
    (iii) For purposes of the value-based payment modifier, a group or 
solo practitioner is considered to be participating in the Pioneer ACO 
Model or CPC Initiative if at least one eligible professional billing 
under the TIN in the performance period for the payment adjustment 
period as described at Sec.  414.1215 is participating in the Pioneer 
ACO Model or CPC Initiative in the performance period.
    (4) Application of the value-based payment modifier to participants 
in other similar Innovation Center models. (i) For the CY 2017 payment 
adjustment period, the value-based payment modifier is waived under 
section 1115A(d)(1) of the Act for physicians in groups with 2 or more 
eligible professionals and for physicians who are solo practitioners 
that participate in other similar Innovation Center models during the 
performance period for the payment adjustment period as described at 
Sec.  414.1215.
    (ii) For the CY 2018 payment adjustment period, the value-based

[[Page 41963]]

payment modifier is waived under section 1115A(d)(1) of the Act for 
physicians and nonphysician eligible professionals in groups with 2 or 
more eligible professionals and for physicians and nonphysician 
eligible professionals who are solo practitioners that participate in 
other similar Innovation Center models during the performance period 
for the payment adjustment period as described at Sec.  414.1215.
    (iii) For purposes of the value-based payment modifier, a group or 
solo practitioner is considered to be participating in a similar 
Innovation Center model if at least one eligible professional billing 
under the TIN in the performance period for the payment adjustment 
period as described at Sec.  414.1215 is participating in the similar 
model in the performance period.
    (c) Group size and composition determination. (1) The list of 
groups of physicians subject to the value-based payment modifier for 
the CY 2015 payment adjustment period is based on a query of PECOS on 
October 15, 2013. For each subsequent calendar year payment adjustment 
period, the list of groups and solo practitioners subject to the value-
based payment modifier is based on a query of PECOS that occurs within 
10 days of the close of the Physician Quality Reporting System group 
registration process during the applicable performance period described 
at Sec.  414.1215. Groups are removed from the PECOS-generated list if, 
based on a claims analysis, the group did not have the required number 
of eligible professionals, as defined in Sec.  414.1210(a), that 
submitted claims during the performance period for the applicable 
calendar year payment adjustment period. Solo practitioners are removed 
from the PECOS-generated list if, based on a claims analysis, the solo 
practitioner did not submit claims during the performance period for 
the applicable calendar year payment adjustment period.
    (2) Beginning with the CY 2016 payment adjustment period, the size 
of a group during the applicable performance period will be determined 
by the lower number of eligible professionals as indicated by the 
PECOS-generated list or claims analysis.
    (3) For the CY 2018 payment adjustment period, the composition of a 
group during the applicable performance period will be determined based 
on whether the group includes physicians, physician assistants, nurse 
practitioners, clinical nurse specialists, certified registered nurse 
anesthetists, and/or other types of nonphysician eligible professionals 
as indicated by the PECOS-generated list or claims analysis.
0
40. Section 414.1215 is amended by adding paragraph (d) to read as 
follows:


Sec.  414.1215  Performance and payment adjustment periods for the 
value-based payment modifier.

* * * * *
    (d) The performance period is calendar year 2016 for value-based 
payment modifier adjustments made in the calendar year 2018 payment 
adjustment period.
0
41. Section 414.1235 is amended by adding paragraphs (c)(4) and (c)(5) 
to read as follows:


Sec.  414.1235  Cost measures.

* * * * *
    (c) * * *
    (4) Beginning with the CY 2016 payment adjustment period, the cost 
measures of a group and solo practitioner subject to the value-based 
payment modifier are adjusted to account for the group's and solo 
practitioner's specialty mix, by computing the weighted average of the 
national specialty specific expected costs and comparing this to the 
group's actual risk adjusted costs. Each national specialty-specific 
expected cost is weighted by the proportion of Part B payments incurred 
by each specialty within the group.
    (5) The national specialty-specific expected costs referenced in 
paragraph (c)(4) of this section are derived by calculating, for each 
specialty, the weighted average of the risk-adjusted costs computed 
across all groups, where the weight for each group is equal to the 
number of beneficiaries attributed to the group, times the number of 
eligible professionals in the group with the relevant specialty, times 
the proportion of eligible professionals in the group with the relevant 
specialty.
0
42. Section 414.1250 is amended by revising paragraph (a) to read as 
follows:


Sec.  414.1250  Benchmarks for quality of care measures.

    (a) The benchmark for quality of care measures reported through the 
PQRS using the claims, registries, or web interface is the national 
mean for that measure's performance rate (regardless of the reporting 
mechanism) during the year prior to the performance period. In 
calculating the national benchmark, solo practitioners' and groups' (or 
individual eligible professionals' within such groups) performance 
rates are weighted by the number of beneficiaries used to calculate the 
solo practitioners' or groups' (or individual eligible professionals' 
within such groups) performance rate. Beginning with the CY 2016 
performance period, eCQMs reported via EHRs are excluded from the 
overall benchmark for quality of care measures and separate benchmarks 
are used for eCQMs. The eCQM benchmark is the national mean for the 
measure's performance rate during the year prior to the performance 
period. In calculating the national benchmark, solo practitioners' and 
groups' (or individual eligible professionals' within such groups) 
performance rates are weighted by the number of beneficiaries used to 
calculate the solo practitioners' or groups' (or individual eligible 
professionals' within such groups) performance rate.
* * * * *
0
43. Section 414.1255 is amended by revising paragraph (b) and removing 
paragraph (c) to read as follows:


Sec.  414.1255  Benchmarks for cost measures.

* * * * *
    (b) Beginning with the CY 2016 payment adjustment period, the 
benchmark for each cost measure is the national mean of the performance 
rates calculated among all groups and solo practitioners that meet the 
minimum number of cases for that measure under Sec.  414.1265(a). In 
calculating the national benchmark, groups and solo practitioners' 
performance rates are weighted by the number of beneficiaries used to 
calculate the group or solo practitioner's performance rate.
0
44. Section 414.1265 is amended by adding paragraph (a)(2), and 
revising paragraph (b) to read as follows:


Sec.  414.1265  Reliability of measures.

* * * * *
    (a) * * *
    (2) Starting with the CY 2017 payment adjustment period, the 
Medicare Spending Per Beneficiary measure described at Sec.  
414.1235(a)(6) is an exception to this paragraph (a). In a performance 
period, if a group or a solo practitioner has fewer than 100 cases for 
this MSPB measure, that measure is excluded from its domain and the 
remaining measures in the domain are given equal weight.
    (b)(1) For the CY 2015 payment adjustment period, if a reliable 
quality of care composite or cost composite cannot be calculated, 
payments will not be adjusted under the value-based payment modifier.
    (2) Beginning with the CY 2016 payment adjustment period, a group 
and a solo practitioner subject to the value-based payment modifier 
will receive a quality composite score that is classified as 
``average'' under Sec.  414.1275(b)(1) if such group and solo 
practitioner do not have at least one quality measure that

[[Page 41964]]

meets the minimum number of cases under paragraph (a) of this section.
    (3) Beginning with the CY 2016 payment adjustment period, a group 
and a solo practitioner subject to the value-based payment modifier 
will receive a cost composite score that is classified as ``average'' 
under Sec.  414.1275(b)(2) if such group and solo practitioner do not 
have at least one cost measure that meets the minimum number of cases 
under paragraph (a) of this section.
0
45. Section 414.1270 is amended by removing paragraphs (b)(5) and 
(c)(5), and adding paragraph (d) to read as follows:


Sec.  414.1270  Determination and calculation of Value-Based Payment 
Modifier adjustments.

* * * * *
    (d) For the CY 2018 payment adjustment period:
    (1) A downward payment adjustment of -2.0 percent will be applied 
to a group with two to nine eligible professionals and a solo 
practitioner, a downward payment adjustment of -4.0 percent will be 
applied to a group with 10 or more eligible professionals, and a 
downward payment adjustment of -2.0 percent will be applied to a group 
or solo practitioner consisting of nonphysician eligible professionals 
subject to the value-based payment modifier if, during the applicable 
performance period as defined in Sec.  414.1215, the following apply:
    (i) Such group does not meet the criteria as a group to avoid the 
PQRS payment adjustment for CY 2018 as specified by CMS; and
    (ii) Fifty percent of the eligible professionals in such group do 
not meet the criteria as individuals to avoid the PQRS payment 
adjustment for CY 2018 as specified by CMS; or
    (iii) Such solo practitioner does not meet the criteria as an 
individual to avoid the PQRS payment adjustment for CY 2018 as 
specified by CMS.
    (2) For a group composed of 10 or more eligible professionals that 
is not included in paragraph (d)(1) of this section, the value-based 
payment modifier adjustment will be equal to the amount determined 
under Sec.  414.1275(c)(4)(i).
    (3) For a group composed of between two to nine eligible 
professionals and a solo practitioner that are not included in 
paragraph (d)(1) of this section, the value-based payment modifier 
adjustment will be equal to the amount determined under Sec.  
414.1275(c)(4)(ii).
    (4) For a group and a solo practitioner consisting of nonphysician 
eligible professionals that are not included in paragraph (d)(1) of 
this section, the value-based payment modifier adjustment will be equal 
to the amount determined under Sec.  414.1275(c)(4)(iii).
    (5) If at least 50 percent of the eligible professionals in the 
group meet the criteria as individuals to avoid the PQRS payment 
adjustment for CY 2018 as specified by CMS, and all of those eligible 
professionals use a qualified clinical data registry and CMS is unable 
to receive quality performance data for them, the quality composite 
score for such group will be classified as ``average'' under Sec.  
414.1275(b)(1).
0
46. Section 414.1275 is amended by adding paragraphs (c)(4) and (d)(3) 
to read as follows:


Sec.  414.1275  Value-based payment modifier quality-tiering scoring 
methodology.

    (c) * * *
    (4) The following value-based payment modifier percentages apply to 
the CY 2018 payment adjustment period:
    (i) For physicians, physician assistants, nurse practitioners, 
clinical nurse specialists, and certified registered nurse anesthetists 
in groups with 10 or more eligible professionals:

     CY 2018 Value-Based Payment Modifier Amounts for the Quality-Tiering Approach for Physicians, Physician
   Assistants, Nurse Practitioners, Clinical Nurse Specialists, and Certified Registered Nurse Anesthetists in
                                  Groups With 10 or More Eligible Professionals
----------------------------------------------------------------------------------------------------------------
                                                                                      Average
                          Cost/quality                              Low quality       quality      High quality
----------------------------------------------------------------------------------------------------------------
Low Cost........................................................           +0.0%         +2.0x *         +4.0x *
Average Cost....................................................           -2.0%           +0.0%         +2.0x *
High Cost.......................................................           -4.0%           -2.0%           +0.0%
----------------------------------------------------------------------------------------------------------------
* Groups eligible for an additional +1.0x if reporting Physician Quality Reporting System quality measures and
  average beneficiary risk score is in the top 25 percent of all beneficiary risk scores, where `x' represents
  the upward payment adjustment factor.

    (ii) For physicians, physician assistants, nurse practitioners, 
clinical nurse specialists, and certified registered nurse anesthetists 
in groups with two to nine eligible professionals and physician solo 
practitioners:

     CY 2018 Value-Based Payment Modifier Amounts for the Quality-Tiering Approach for Physicians, Physician
   Assistants, Nurse Practitioners, Clinical Nurse Specialists, and Certified Registered Nurse Anesthetists in
                 Groups With Two to Nine Eligible Professionals and Physician Solo Practitioners
----------------------------------------------------------------------------------------------------------------
                                                                                      Average
                          Cost/quality                              Low quality       quality      High quality
----------------------------------------------------------------------------------------------------------------
Low Cost........................................................           +0.0%         +1.0x *         +2.0x *
Average Cost....................................................           -1.0%           +0.0%         +1.0x *
High Cost.......................................................           -2.0%           -1.0%           +0.0%
----------------------------------------------------------------------------------------------------------------
* Groups and solo practitioners eligible for an additional +1.0x if reporting Physician Quality Reporting System
  quality measures and average beneficiary risk score is in the top 25 percent of all beneficiary risk scores,
  where `x' represents the upward payment adjustment factor.

    (iii) For physician assistants, nurse practitioners, clinical nurse 
specialists, and certified registered nurse anesthetists in groups that 
consist of nonphysician eligible professionals, and solo practitioners 
who are physician assistants, nurse practitioners, clinical nurse 
specialists, and certified registered nurse anesthetists:

[[Page 41965]]



  CY 2018 Value-Based Payment Modifier Amounts for the Quality-Tiering Approach for Physician Assistants, Nurse
 Practitioners, Clinical Nurse Specialists, and Certified Registered Nurse Anesthetists in Groups Consisting of
 Nonphysician Eligible Professionals, and Solo Practitioners Who Are Physician Assistants, Nurse Practitioners,
                     Clinical Nurse Specialists, and Certified Registered Nurse Anesthetists
----------------------------------------------------------------------------------------------------------------
                                                                                      Average
                          Cost/quality                              Low quality       quality      High quality
----------------------------------------------------------------------------------------------------------------
Low Cost........................................................           +0.0%         +1.0x *         +2.0x *
Average Cost....................................................           +0.0%           +0.0%         +1.0x *
High Cost.......................................................           +0.0%           +0.0%           +0.0%
----------------------------------------------------------------------------------------------------------------
* Groups and solo practitioners eligible for an additional +1.0x if reporting Physician Quality Reporting System
  quality measures and average beneficiary risk score is in the top 25 percent of all beneficiary risk scores,
  where `x' represents the upward payment adjustment factor.

    (d) * * *
    (3) Groups and solo practitioners subject to the value-based 
payment modifier that have an attributed beneficiary population with an 
average risk score in the top 25 percent of the risk scores of 
beneficiaries nationwide and for the CY 2018 payment adjustment period 
are subject to the quality-tiering approach, receive a greater upward 
payment adjustment as follows:
    (i) Classified as high quality/low cost receive an upward 
adjustment of +5x (rather than +4x) if the group has 10 or more 
eligible professionals, +3x (rather than +2x) if a solo practitioner or 
the group has two to nine eligible professionals, or +3x (rather than 
+2x) if a solo practitioner or group consisting of nonphysician 
eligible professionals; and
    (ii) Classified as either high quality/average cost or average 
quality/low cost receive an upward adjustment of +3x (rather than +2x) 
if the group has 10 or more eligible professionals, +2x (rather than 
+1x) if a solo practitioner or the group has two to nine eligible 
professionals, or +2x (rather than +1x) if a solo practitioner or group 
consisting of nonphysician eligible professionals.

PART 425--MEDICARE SHARED SAVINGS PROGRAM

0
47. The authority citation for part 425 continues to read as follows:

    Authority: Secs. 1102, 1106, 1871, and 1899 of the Social 
Security Act (42 U.S.C. 1302 and 1395hh).

0
48. Section 425.20, as amended on June 9, 2015 (80 FR 32833) and 
effective on August 10, 2015, is further amended in the definition of 
``Primary care services'' by--
0
a. Revising paragraph (2) introductory text.
0
b. Adding paragraph (2)(v).
0
c. Adding paragraph (4).
    The revision and additions read as follows:


Sec.  425.20  Definitions.

* * * * *
    Primary care services * * *
    (2) For performance year 2016 as follows:
* * * * *
    (v) G0463 for services furnished in ETA hospitals.
* * * * *
    (4) For performance years 2017 and subsequent years as follows:
    (i) 99201 through 99215.
    (ii) 99304-99318 (excluding claims including the POS 31 modifier) 
and 99319-99340
    (iii) 99341 through 99350.
    (iv) 99495, 99496 and 99490.
    (v) G0402 (the code for the Welcome to Medicare visit).
    (vi) G0438 and G0439 (codes for the annual wellness visits).
    (vii) Revenue center codes 0521, 0522, 0524, 0525 submitted by 
FQHCs (for services furnished prior to January 1, 2011), or by RHCs.
    (viii) G0463 for services furnished in ETA hospitals.
0
49. Section 425.102 is amended by--
0
a. Adding paragraph (a)(8).
0
b. In paragraph (b), removing the phrase ``eligible participate'' and 
adding in its place the phrase ``eligible to participate''.
    The addition reads as follows:


Sec.  425.102  Eligible providers and suppliers.

    (a) * * *
    (8) Teaching hospitals that have elected under Sec.  415.160 of 
this chapter to receive payment on a reasonable cost basis for the 
direct medical and surgical services of their physicians.
* * * * *
0
50. Section 425.402, as amended on June 9, 2015 (80 FR 32841) and 
effective on August 10, 2015, is further amended by adding paragraph 
(d) to read as follows:


Sec.  425.402  Basic assignment methodology.

* * * * *
    (d) When considering services furnished by ACO professionals in 
teaching hospitals that have elected under Sec.  415.160 of this 
subchapter to receive payment on a reasonable cost basis for the direct 
medical and surgical services of their physicians in the assignment 
methodology under paragraph (b) of this section, CMS uses an estimated 
amount based on the amounts payable under the physician fee schedule 
for similar services in the geographic location of the teaching 
hospital as a proxy for the amount of the allowed charges for the 
service.
0
51. Section 425.502 is amended by adding paragraph (a)(5) to read as 
follows:


Sec.  425.502  Calculating the ACO quality performance score.

    (a) * * *
    (5) CMS reserves the right to redesignate a measure as pay for 
reporting when the measure owner determines the measure no longer 
aligns with clinical practice or causes patient harm.
* * * * *


Sec.  425.504  [Amended]

0
52. In Sec.  425.504--
0
a. Amend paragraph (a)(1) by removing the phrase ``their ACO provider/
suppliers who are eligible professionals'' and adding in its place the 
phrase ``eligible professionals who bill under the TIN of an ACO 
participant''.
0
b. Amend paragraphs (b)(1) and (c)(1) by removing the phrase ``their 
ACO providers/suppliers who are eligible professionals'' and adding in 
its place the phrase ``eligible professionals who bill under the TIN of 
an ACO participant''.
0
c. Amend paragraphs (a)(2)(ii), (b)(2)(ii), (b)(3) and (c)(3), by 
removing the phrase ``its ACO providers/suppliers who are eligible 
professionals'' and adding in its place the phrase ``eligible 
professionals who bill under the TIN of an ACO participant''.
0
d. Amend paragraphs (a)(2)(i), (b)(2)(i), and (c)(2) by removing the 
phrase ``ACO providers/suppliers that are eligible professionals'' and 
adding in

[[Page 41966]]

its place the phrase ``eligible professionals who bill under the TIN of 
an ACO participant''.
0
e. Amend paragraphs (a)(3), (a)(4), and (b)(4), by removing the phrase 
``ACO providers/suppliers who are eligible professionals'' and adding 
in its place the phrase ``eligible professionals who bill under the TIN 
of an ACO participant''.
0
f. Amend paragraph (b)(3) by removing the phrase ``each ACO supplier/
provider who is an eligible professional'' and adding in its place the 
phrase ``each eligible professional who bills under the TIN of an ACO 
participant''.
0
g. Amend paragraph (c)(3) by removing the phrase ``each ACO provider/
supplier who is an eligible professional'' and adding in its place the 
phrase ``each eligible professional who bills under the TIN of an ACO 
participant''.

PART 495--STANDARDS FOR THE ELECTRONIC HEALTH RECORD TECHNOLOGY 
INCENTIVE PROGRAM

0
53. The authority citation for part 495 continues to read as follows:

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

0
54. In Sec.  495.4 the definition of ``Certified electronic health 
record technology (CEHRT)'', as proposed to be revised on March 30, 
2015 (80 FR 16795), is proposed to be further amended by revising 
paragraphs (1)(ii)(C)(2) and (2)(iii)(B) to read as follows:


Sec.  495.4  Definitions.

* * * * *
    Certified electronic health record technology (CEHRT) * * *
    (1) * * *
    (ii) * * *
    (C) * * *
    (2) Clinical quality measure certification criteria that support 
the calculation and reporting of clinical quality measures at 45 CFR 
170.314(c)(2) and (c)(3); or 45 CFR 170.315(c)(2), (c)(3)(i) and 
(c)(3)(ii); and can be electronically accepted by CMS if the provider 
is submitting electronically.
* * * * *
    (2) * * *
    (iii) * * *
    (B) Clinical quality measure certification criteria that support 
the calculation and reporting of clinical quality measures under the 
2015 Edition certification criteria 45 CFR 170.315(c)(2), (c)(3)(i) and 
(c)(3)(ii), and can be electronically accepted by CMS.
* * * * *

    Dated: June 24, 2015.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
    Dated: June 30, 2015.
Sylvia M. Burwell,
Secretary, Department of Health and Human Services.
[FR Doc. 2015-16875 Filed 7-8-15; 4:15 pm]
 BILLING CODE 4120-01-P