[Federal Register Volume 81, Number 220 (Tuesday, November 15, 2016)]
[Rules and Regulations]
[Pages 80170-80562]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-26668]



[[Page 80169]]

Vol. 81

Tuesday,

No. 220

November 15, 2016

Part II





 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, et al.





Medicare Program; Revisions to Payment Policies Under the Physician Fee 
Schedule and Other Revisions to Part B for CY 2017; Medicare Advantage 
Bid Pricing Data Release; Medicare Advantage and Part D Medical Loss 
Ratio Data Release; Medicare Advantage Provider Network Requirements; 
Expansion of Medicare Diabetes Prevention Program Model; Medicare 
Shared Savings Program Requirements; Final Rule

  Federal Register / Vol. 81 , No. 220 / Tuesday, November 15, 2016 / 
Rules and Regulations  

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 405, 410, 411, 414, 417, 422, 423, 424, 425, and 460

[CMS-1654-F]
RIN 0938-AS81


Medicare Program; Revisions to Payment Policies Under the 
Physician Fee Schedule and Other Revisions to Part B for CY 2017; 
Medicare Advantage Bid Pricing Data Release; Medicare Advantage and 
Part D Medical Loss Ratio Data Release; Medicare Advantage Provider 
Network Requirements; Expansion of Medicare Diabetes Prevention Program 
Model; Medicare Shared Savings Program Requirements

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

ACTION: Final rule.

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SUMMARY: This major final rule addresses changes to the physician fee 
schedule and other Medicare Part B payment policies, such as changes to 
the Value Modifier, 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. This final rule also includes 
changes related to the Medicare Shared Savings Program, requirements 
for Medicare Advantage Provider Networks, and provides for the release 
of certain pricing data from Medicare Advantage bids and of data from 
medical loss ratio reports submitted by Medicare health and drug plans. 
In addition, this final rule expands the Medicare Diabetes Prevention 
Program model.

DATES: These regulations are effective on January 1, 2017.

FOR FURTHER INFORMATION CONTACT: 
    Jessica Bruton, (410) 786-5991, for issues related to 
identification of potentially misvalued services and any physician 
payment issues not identified below.
    Gail Addis, (410) 786-4522, for issues related to diabetes self-
management training.
    Jaime Hermansen, (410) 786-2064, for issues related to moderate 
sedation coding and anesthesia services.
    Roberta Epps, (410) 786-4503, for issues related to PAMA section 
218(a) policy and the transition from traditional x-ray imaging to 
digital radiography.
    Ann Marshall, (410) 786-3059, for primary care issues related to 
chronic care management (CCM), burden reduction, telehealth services 
and evaluation and management services.
    Emily Yoder, (410) 786-1804, for issues related to resource 
intensive services, telehealth services and other primary care issues.
    Lindsey Baldwin, (410) 786-1694, for primary care issues related to 
behavioral health integration services.
    Geri Mondowney, (410) 786-4584, and Donta Henson, (410) 786-1947, 
for issues related to geographic practice cost indices.
    Michael Soracoe, (410) 786-6312, for issues related to the target 
and phase-in provisions, the practice expense methodology, impacts, 
conversion factor, and the valuation of pathology and surgical 
procedures.
    Pamela West, (410) 786-2302, for issues related to therapy.
    Patrick Sartini, (410) 786-9252, for issues related to malpractice 
RVUs, radiation treatment, mammography and other imaging services.
    Kathy Bryant, (410) 786-3448, for issues related to collecting data 
on resources used in furnishing global services.
    Donta Henson, (410) 786-1947, for issues related to ophthalmology 
services.
    Corinne Axelrod, (410) 786-5620, for issues related to rural health 
clinics or federally qualified health centers.
    Simone Dennis, (410) 786-8409, for issues related to FQHC-specific 
market basket.
    JoAnna Baldwin, (410) 786-7205, or Sarah Fulton, (410) 786-2749, 
for issues related to appropriate use criteria for advanced diagnostic 
imaging services.
    Robin Usi, (410) 786-0364, for issues related to open payments.
    Sean O'Grady, (410) 786-2259, or Julie Uebersax, (410) 786-9284, 
for issues related to release of pricing data from Medicare Advantage 
bids and release of medical loss ratio data submitted by Medicare 
Advantage organizations and Part D sponsors.
    Sara Vitolo, (410) 786-5714, for issues related to prohibition on 
billing qualified Medicare beneficiary individuals for Medicare cost-
sharing.
    Michelle Peterman, (410) 786-2591, for issues related to 
Accountable Care Organization (ACO) participants who report PQRS 
quality measures separately.
    Katie Mucklow, (410) 786-0537 or John Spiegel, (410) 786-1909, for 
issues related to Provider Enrollment Medicare Advantage Program.
    Jen Zhu, (410) 786-3725, Carlye Burd, (410) 786-1972, or Nina 
Brown, (410) 786-6103, for issues related to Medicare Diabetes 
Prevention Program model expansion.
    Rabia Khan or Terri Postma, (410) 786-8084 or [email protected], for 
issues related to the Medicare Shared Savings Program.
    Kimberly Spalding Bush, (410) 786-3232, or Fiona Larbi, (410) 786-
7224, for issues related to Value-based Payment Modifier and Physician 
Feedback Program.
    Lisa Ohrin Wilson, (410) 786-8852, or Gabriel Scott, (410) 786-
3928, for issues related to physician self-referral updates.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Executive Summary and Background
    A. Executive Summary
    B. Background
II. Provisions of the Final Rule for PFS
    A. Determination of Practice Expense Relative Value Units (PE 
RVUs)
    B. Determination of Malpractice Relative Value Units (MRVUs)
    C. Medicare Telehealth Services
    D. Potentially Misvalued Services Under the Physician Fee 
Schedule
    1. Background
    2. Progress in Identifying and Reviewing Potentially Misvalued 
Codes
    3. Validating RVUs of Potentially Misvalued Codes
    4. CY 2017 Identification and Review of Potentially Misvalued 
Services
    5. Valuing Services That Include Moderate Sedation as an 
Inherent Part of Furnishing the Procedure
    6. Collecting Data on Resources Used in Furnishing Global 
Services
    E. Improving Payment Accuracy for Primary Care, Care Management 
Services, and Patient-Centered Services
    F. Improving Payment Accuracy for Services: Diabetes Self-
Management Training (DSMT)
    G. Target for Relative Value Adjustments for Misvalued Services
    H. Phase-In of Significant RVU Reductions
    I. Geographic Practice Cost Indices (GPCIs)
    J. Payment Incentive for the Transition From Traditional X-Ray 
Imaging to Digital Radiography and Other Imaging Services
    K. Procedures Subject to the Multiple Procedure Payment 
Reduction (MPPR) and the OPPS Cap
    L. Valuation of Specific Codes
    M. Therapy Caps
III. Other Provisions of the Final Rule for PFS
    A. Chronic Care Management (CCM) and Transitional Care 
Management (TCM) Supervision Requirements in Rural Health Clinics 
(RHCs) and Federally Qualified Health Centers (FQHCs)
    B. FQHC-Specific Market Basket
    C. Appropriate Use Criteria for Advanced Diagnostic Imaging 
Services
    D. Reports of Payments or Other Transfers of Value to Covered 
Recipients: Summary of Public Comments
    E. Release of Part C Medicare Advantage Bid Pricing Data and 
Part C and Part D Medical Loss Ratio (MLR) Data

[[Page 80171]]

    F. Prohibition on Billing Qualified Medicare Beneficiary 
Individuals for Medicare Cost-Sharing
    G. Recoupment or Offset of Payments to Providers Sharing the 
Same Taxpayer Identification Number
    H. Accountable Care Organization (ACO) Participants Who Report 
Physician Quality Reporting System (PQRS) Quality Measures 
Separately
    I. Medicare Advantage Provider Enrollment
    J. Expansion of the Diabetes Prevention Program (DPP) Model
    K. Medicare Shared Savings Program
    L. Value-Based Payment Modifier and Physician Feedback Program
    M. Physician Self-Referral Updates
    N. Designated Health Services
IV. Collection of Information Requirements
V. Regulatory Impact Analysis
    Regulations Text

Acronyms

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

A1c Hemoglobin A1c
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)
AWV Annual wellness visit
BBA Balanced Budget Act of 1997 (Pub. L. 105-33)
BBRA [Medicare, Medicaid and State Child Health Insurance Program] 
Balanced Budget Refinement Act of 1999 (Pub. L. 106-113)
BLS Bureau of Labor Statistics
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
CoA Certificate of Accreditation
CoC Certificate of Compliance
CoR Certificate of Registration
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 2015 American Medical 
Association. All rights reserved.)
CQM Clinical quality measure
CSW Clinical social worker
CT Computed tomography
CW Certificate of Waiver
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
ED Emergency Department
EHR Electronic health record
E/M Evaluation and management
EMT Emergency Medical Technician
EP Eligible professional
eRx Electronic prescribing
ESRD End-stage renal disease
FAR Federal Acquisition Regulations
FDA Food and Drug Administration
FFS Fee-for-service
FQHC Federally qualified health center
FR Federal Register
FSHCAA Federally Supported Health Centers Assistance Act
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
IPPE Initial preventive physical exam
IPPS Inpatient Prospective Payment System
IQR Inpatient Quality Reporting
ISO Insurance service office
IT Information technology
IWPUT Intensity of work per unit of time
LCD Local coverage determination
MA Medicare Advantage
MAC Medicare Administrative Contractor
MACRA Medicare Access and CHIP Reauthorization Act of 2015 (Pub. L. 
114-10)
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
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)
PAMPA Patient Access and Medicare Protection Act (Pub. L. 114-115)
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
PPM Provider-Performed Microscopy
PQRS Physician Quality Reporting System
PPIS Physician Practice Expense Information Survey
PPS Prospective Payment System
PT Physical therapy
PT Proficiency Testing
PT/INR Prothrombin Time/International Normalized Ratio
PY Performance year
QA Quality Assessment
QC Quality Control
QCDR Qualified clinical data registry
QRUR Quality and Resources Use Report
RBRVS Resource-based relative value scale
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
TCM Transitional Care Management
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 final 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,

[[Page 80172]]

``PFS Federal Regulations Notices'' for a chronological list of PFS 
Federal Register and other related documents. For the CY 2017 PFS Final 
Rule, refer to item CMS-1654-F. 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 Jessica 
Bruton at (410) 786-5991.

CPT (Current Procedural Terminology) Copyright Notice

    Throughout this final 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 final rule revises payment polices under the Medicare 
Physician Fee Schedule (PFS) and makes other policy changes related to 
Medicare Part B payment. These changes will be applicable to services 
furnished in CY 2017. In addition, this final rule includes the 
following provisions: Payment policy changes for Rural Health Clinics 
(RHCs) and Federally Qualified Health Centers (FQHCs); expansion of the 
Medicare Diabetes Prevention Program model; policy changes related to 
the Medicare Shared Savings Program; and release of pricing data 
submitted to CMS by Medicare Advantage (MA) organizations; and medical 
loss ratio reports submitted by MA plans and Part D plans. These 
additional policies are addressed in section III. of this final rule.
2. Summary of the Major Provisions
    The statute 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 statute 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 final rule, we establish RVUs for CY 
2017 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 final rule includes summaries of public 
comments and final policies regarding:
     Potentially Misvalued Codes.
     Telehealth Services.
     Establishing Values for New, Revised, and Misvalued Codes.
     Target for Relative Value Adjustments for Misvalued 
Services.
     Phase-in of Significant RVU Reductions.
     Chronic Care Management (CCM) and Transitional Care 
Management (TCM) Supervision Requirements in Rural Health Clinics 
(RHCs) and Federally Qualified Health Centers (FQHCs).
     FQHC-Specific Market Basket.
     Appropriate Use Criteria for Advanced Diagnostic Imaging 
Services.
     Reports of Payments or Other Transfers of Value to Covered 
Recipients: Solicitation of Public Comments.
     Release of Part C Medicare Advantage Bid Pricing Data and 
Part C and Part D Medical Loss Ratio (MLR) Data.
     Prohibition on Billing Qualified Medicare Beneficiary 
Individuals for Medicare Cost-Sharing.
     Recoupment or Offset of Payments to Providers Sharing the 
Same Taxpayer Identification Number.
     Accountable Care Organization (ACO) Participants Who 
Report Physician Quality Reporting System (PQRS) Quality Measures 
Separately.
     Medicare Advantage Provider Enrollment.
     Expansion of the Diabetes Prevention Program (DPP) Model.
     Medicare Shared Savings Program.
     Value-Based Payment Modifier and the Physician Feedback 
Program.
     Physician Self-referral Updates.
     Designated Health Services.
3. Summary of Costs and Benefits
    The statute 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 changes in this final rule will 
affect the specialty distribution of Medicare expenditures. When 
considering the combined impact of work, PE, and MP RVU changes, the 
projected payment impacts would be small for most specialties; however, 
the impact would be larger for a few specialties.
    We have determined that this major final rule is economically 
significant. For a detailed discussion of the economic impacts, see 
section VI. of this final rule.

B. Background

    Since January 1, 1992, Medicare has paid for physicians' services 
under section 1848 of the Social Security Act (the Act), ``Payment for 
Physicians' Services.'' The PFS 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 final 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 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

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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. 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.
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.B.2. of this final 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, that 
require the agency to periodically

[[Page 80174]]

identify, review and adjust values for potentially misvalued codes.
e. Application of Budget Neutrality to Adjustments of RVUs
    As described in section VI.C. of this final rule, in accordance 
with section 1848(c)(2)(B)(ii)(II) of the Act, if revisions to the RVUs 
cause 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.
    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 ensure 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 
(Pub. L. 113-93, enacted on April 1, 2014) (PAMA) 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 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 in 
expenditures, 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 amendments 
originally made the target provisions applicable for CYs 2017 through 
2020 and set the target for reduced expenditures at 0.5 percent of 
estimated expenditures under the PFS for each of those 4 years.
    Subsequently, section 202 of the Achieving a Better Life Experience 
Act of 2014 (Division B of Pub. L. 113-295, enacted December 19, 2014) 
(ABLE) accelerated the application of the target, amending section 
1848(c)(2)(O) of the Act to specify that target provisions apply for 
CYs 2016, 2017, and 2018; and setting a 1 percent target for reduced 
expenditures for CY 2016 and a 0.5 percent target for CYs 2017 and 
2018. The implementation of the target legislation was finalized in the 
CY 2016 PFS final rule with comment period, and revisions are discussed 
in section II.G. of this final rule.
    Section 1848(c)(7) of the Act, as added by section 220(e) of the 
PAMA, specified 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. Section 220(e) of the PAMA 
required the phase-in of RVU reductions of 20 percent or more to begin 
for 2017. Section 1848(c)(7) of the Act was later amended by section 
202 of the ABLE Act to require instead that the phase-in must begin in 
CY 2016. The implementation of the phase-in legislation was finalized 
in the CY 2016 PFS final rule with comment period and revisions in this 
year's rulemaking are discussed in section II.H. of this final rule.

II. Provisions of the Final 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 
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).

[[Page 80175]]

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 Medicare Economic Index (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). We have incorporated the available utilization data for 
interventional cardiology, which became a recognized Medicare specialty 
during 2014. We finalized the use of a proxy PE/HR value for 
interventional cardiology in the CY 2016 final rule with comment period 
(80 FR 70892), as there are no PPIS data for this specialty, by 
crosswalking the PE/HR from Cardiology, since the specialties furnish 
similar services in the Medicare claims data.
    Comment: A commenter questioned the validity of the PPIS survey 
data since it is nearly 10 years old. Several other commenters stated 
that CMS' estimated per-minute labor cost inputs are lower than actual 
labor costs.
    Response: We have previously identified several concerns regarding 
the underlying data used in determining PE RVUs in the CY 2014 PFS 
final rule (78 FR 74246-74247). Even when we first incorporated the 
survey data into the PE methodology, many in the community expressed 
serious concerns over the accuracy of this or other PE surveys as a way 
of gathering data on PE inputs from the diversity of providers paid 
under the PFS. However, we currently lack another source of 
comprehensive data regarding PE costs, and as a result, we continue to 
believe that the PPIS survey data is the best data currently available. 
We continue to seek the best broad-based, auditable, routinely-updated 
source of information regarding PE costs.
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 final rule describes the current data 
sources for specialty-specific indirect costs used in our PE 
calculations. We allocated the indirect costs to the code level on the 
basis of the direct costs specifically associated with a code and the 
greater of either the clinical labor costs or the 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 used 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. That is, the initial indirect allocator is

[[Page 80176]]

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 RVU of 8.00 (2.00 is 25 percent of 8.00 and 
6.00 is 75 percent of 8.00).
     Next, we added 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 a work RVU of 
4.00 and the clinical labor portion of the direct PE RVU 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 incorporated 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.
(3) Facility and Nonfacility Costs
    For procedures that can be furnished in a physician's office, as 
well as in a facility setting, where Medicare makes a separate payment 
to the facility for its costs in furnishing a service, 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. 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. For this reason, the facility PE RVUs are 
generally lower than the nonfacility PE RVUs.
(4) 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.)
(5) 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). We also direct interested readers to the file called 
``Calculation of PE RVUs under Methodology for Selected Codes'' which 
is available on our Web site under downloads for the CY 2017 PFS final 
rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. This file 
contains a table that illustrates the calculation of PE RVUs as 
described below for individual codes.
(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.
    Step 2: Calculate the aggregate pool of direct PE costs for the 
current year. We 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.
    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, use the conversion 
factor to calculate a direct PE scaling factor 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 4 
and Step 5. Different CFs will result in different direct PE scaling 
factors, but this has no effect on the final direct cost PE RVUs since 
changes in the CFs and changes in the associated direct scaling factors 
offset one another.
(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.
    We use an average of the 3 most recent years of available Medicare 
claims data to determine the specialty mix assigned to each code. As we 
stated in the CY 2016 final rule with comment period (80 FR 70894), we 
believe that the 3-year average will mitigate the need to use dominant 
or expected specialty instead of the claims data. Because we 
incorporated CY 2015 claims data for use in the CY 2017 proposed rates, 
we believe that the finalized PE RVUs associated with the CY 2017 PFS 
final rule provide a first opportunity to determine whether service-
level overrides of claims data are necessary. Currently, in the 
development of PE RVUs we apply only the overrides that also apply to 
the MP RVU calculation. Since the proposed PE RVUs include a new year 
of claims into the 3-year average for the first time, we solicited 
comment on the proposed CY 2017 PFS rates and whether or not the 
incorporation of a new year of utilization data into a 3-year average 
mitigates the need for alternative service-level overrides such as a 
claims-based approach (dominant specialty) or stakeholder-recommended 
approach

[[Page 80177]]

(expected specialty) in the development of PE (and MP) RVUs for low-
volume codes. Prior year RVUs are available at several locations on the 
PFS Web site located at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/.
    Comment: Several commenters contended that even a multi-year 
average of claims data to determine the mix of specialties that furnish 
the services creates distortions and wide variability for low volume 
services, particularly those services with fewer than 100 annual 
Medicare claims. Commenters stated that low volume codes that use a 
specialty override appear to have stable PE and MP RVUs, while other 
low volume codes without overrides continue to shift from year to year. 
Given these fluctuations, commenters suggested that CMS implement 
service-level overrides to determine the specialty mix for these low 
volume procedures. These commenters provided a list of nearly 2000 
codes and suggested specialty overrides.
    Response: We appreciate commenters' interest in relatively stable 
PE and MP RVUs and for continuing to highlight the challenges faced 
when determining the specialty allocation for low volume services. 
Since we did not make a proposal regarding specialty overrides for low 
volume services, we do not believe that it would be appropriate to 
establish overrides for several thousand codes at this time. However, 
given the continued concerns, we will consider the issue, including 
these specific recommendations, for future rulemaking.
    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 labor 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 the download file 
called ``Calculation of PE RVUs under Methodology for Selected Codes'', 
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 8 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 5 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 sum of steps 
5 and 17 of to the proposed aggregate work RVUs scaled by the ratio of 
current aggregate PE and work RVUs. This adjustment ensures that all PE 
RVUs in the PFS account for the fact that certain specialties are 
excluded from the calculation of PE RVUs but included in maintaining 
overall PFS budget neutrality. (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 NPPs paid at a percentage of the PFS and low-volume 
specialties, from the calculation. These specialties are included for 
the purposes of calculating the BN adjustment. They are displayed in 
Table 1.

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

[[Page 80178]]

 
56.............................  Individual certified prosthetist.
57.............................  Individual certified prosthetist-
                                  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 only..  Preoperative +              Preoperative + Intraoperative portion.
                                                                  Intraoperative
                                                                  Percentages on the
                                                                  payment files used by
                                                                  Medicare contractors to
                                                                  process Medicare claims.
55.................................  Postoperative Care only...  Postoperative Percentage    Postoperative portion.
                                                                  on the payment files used
                                                                  by Medicare contractors
                                                                  to process Medicare
                                                                  claims.
62.................................  Co-surgeons...............  62.5%.....................  50%.
66.................................  Team Surgeons.............  33%.......................  33%.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We also make adjustments to volume and time that correspond to 
other payment rules, including special multiple procedure endoscopy 
rules and multiple procedure payment reductions (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 
final rule.
(6) Equipment Cost Per Minute
    The equipment cost per minute is calculated as:


[[Page 80179]]


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

Where:

minutes per year = maximum minutes per year if usage were continuous 
(that is, usage = 1); generally 150,000 minutes.
usage = 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.
    Stakeholders have often suggested that particular equipment items 
are used less frequently than 50 percent of the time in the typical 
setting and that CMS should reduce the equipment utilization rate based 
on these recommendations. We appreciate and share stakeholders' 
interest in using the most accurate assumption regarding the equipment 
utilization rate for particular equipment items. However, we believe 
that absent robust, objective, auditable data regarding the use of 
particular items, the 50 percent assumption is the most appropriate 
within the relative value system. We welcome the submission of data 
that illustrates an alternative rate.
    Maintenance: This factor for maintenance was finalized in the CY 
1998 PFS final rule (62 FR 33164).
    We continue to investigate potential avenues for determining 
equipment maintenance costs across a broad range of equipment items.
    Comment: One commenter stated that the cost of maintaining imaging 
equipment exceeds the cost of general medical equipment, and that for 
imaging modalities the median maintenance cost is approximately 10 
percent of the equipment purchase price. The commenter stated that the 
current 5 percent equipment maintenance rate continues to be an 
inadequate and outdated reflection of actual maintenance costs. The 
commenter also stated that information on maintenance costs is readily 
available to CMS through both public and private sources. The commenter 
did not identify these sources.
    Response: As we previously stated in the CY 2016 final rule with 
comment period (80 FR 70897), we agree with the commenter that we do 
not believe the annual maintenance factor for all equipment is exactly 
5 percent, and we concur that the current rate likely understates the 
true cost of maintaining some equipment. We also believe it likely 
overstates the maintenance costs for other equipment. When we solicited 
comments regarding sources of data containing equipment maintenance 
rates, commenters were unable to identify an auditable, robust data 
source that could be used by CMS on a wide scale. As a result, in the 
absence of publicly available datasets regarding equipment maintenance 
costs or another systematic data collection methodology for determining 
maintenance factor, we do not believe that we have sufficient 
information at present to adopt a variable maintenance factor for 
equipment cost per minute pricing. We continue to investigate potential 
avenues for determining equipment maintenance costs across a broad 
range of equipment items.
    Interest Rate: In the CY 2013 PFS 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.) We did not propose any changes to 
these interest rates for CY 2017.

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

d. Changes to Direct PE Inputs for Specific Services
    This section focuses on specific PE inputs. The direct PE inputs 
are included in the CY 2017 direct PE input database, which is 
available on our Web site under downloads for the CY 2017 PFS final 
rule 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 the CY 2015 PFS rulemaking cycle, 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 previously specified list 
of codes since these items were 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 typically used in furnishing imaging services. However, 
since we did not receive any invoices for the PACS system prior to that 
year's proposed rule, we were unable to determine the appropriate 
pricing to use for the inputs. For CY 2015, we 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 
(79 FR 67561-67563). We used the 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. We received invoices from one stakeholder that facilitated a 
proposed price update for the PACS workstation in the CY 2016 PFS 
proposed rule, and we updated the price for the PACS workstation to 
$5,557 in the CY 2016 PFS final rule with comment period (80 FR 70899).
    In addition to the workstation used by the clinical staff for 
acquiring the images and furnishing the technical component (TC) 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 (PC) of many of these 
services.
    As we stated in the CY 2015 PFS 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 PC 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, such as the view 
box equipment. Given that the majority of these services are reported 
globally in the nonfacility setting, we believe it is appropriate to 
include these costs as direct inputs for the associated HCPCS codes. 
Based on our established

[[Page 80180]]

methodology in which single codes with professional and technical 
components are constructed by assigning work RVUs exclusively to the 
professional component and direct PE inputs exclusively to the 
technical components, these costs would be incorporated into the PE 
RVUs of the global and technical component of the HCPCS code.
    We stated in the CY 2016 PFS final rule with comment period that 
the costs of the professional workstation may be analogous to costs 
related to the use of film previously incorporated as direct PE inputs 
for these services. We also solicited comments 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. Commenters responded by 
indicating their approval of the concept of a professional PACS 
workstation used for interpretation of digital images. We received 
invoices for the pricing of a professional PACS workstation, as well as 
additional invoices for the pricing of a mammography-specific version 
of the professional PACS workstation. The RUC also included these new 
equipment items in its recommendations for the CY 2017 PFS rulemaking 
cycle.
    Based on our analysis of submitted invoices, we proposed to price 
the professional PACS workstation (ED053) at $14,616.93. We did not 
propose a change in price for the current technical PACS workstation 
(ED050), which will remain at a price of $5,557.00.
    The price of the professional PACS workstation is based upon 
individual invoices submitted for the cost of a PC Tower ($1531.52), a 
pair of 3 MP monitors ($10,500.00 in total), a keyboard and mouse 
($84.95), a UPS power backup devices for TNP ($1098.00), and a switch 
for PACS monitors/workstations ($1402.46).
    We proposed to add the professional PACS workstation to many CPT 
codes in the 70000 series that use the current technical PACS 
workstation (ED050) and include professional work for which such a 
workstation would be used. We did not propose to add the equipment item 
to add-on codes since the base codes would include minutes for the 
item. We also did not propose to add the item to codes that are 
therapeutic in nature, as the professional PACS workstation is intended 
for use in diagnostic services. We therefore did not propose to add the 
item to codes in the Radiation Therapy section (77261 through 77799) or 
the Nuclear Medicine Cardiology section (78414-78499). We also did not 
propose to add the item to image guidance codes where the dominant 
provider is not a radiologist (77002, 77011, 77071, 77077, and 77081) 
according to the most recent year of claims data, since we believe a 
single workstation would be more typical in those cases. We identified 
approximately 426 codes to which we proposed to add a professional PACS 
workstation. Please see Table 4 for the full list of affected codes.
    For the professional PACS workstation, we proposed to assign 
equipment time equal to the intraservice work time plus half of the 
preservice work time associated with the codes, since the work time 
generally reflects the time associated with the professional 
interpretation. We proposed half of the preservice work time for the 
professional PACS workstation because we do not believe that the 
practitioner would typically spend all of the preservice work period 
using the equipment. For older codes that do not have a breakdown of 
physician work time by service period, and only have an overall 
physician work time, we proposed to use half the total work time as an 
approximation of the intraservice work time plus one half of the 
preservice work time. In our review of services that contained an 
existing PACS workstation and had a breakdown of physician work time, 
we found that half of the total time was a reasonable approximation for 
the value of intraservice work time plus one half of preservice work 
time where no such breakdown existed. We also considered using an 
equipment time formula of the physician intraservice time plus 1 minute 
(as a stand-in for the physician preservice work time). We solicited 
public comment on the most accurate equipment time formula for the 
professional PACS workstation.
    We solicited public comment on the proposed list of codes that 
would incorporate the professional PACS workstation. We were interested 
in public comment on the codes for which a professional PACS 
workstation should be included, and whether one of these professional 
workstations should be included for codes outside the 70000 series. In 
cases within the 70000 series where radiologists are not the typical 
specialty reporting the code, such as CPT codes 77002 and 77011, we 
asked whether it would be appropriate to add one of the professional 
PACS workstations to these services.
    The following is a summary of the comments we received on the 
proposed addition of the professional PACS workstation, the pricing of 
the workstation, the list of codes that would incorporate the 
professional PACS workstation, and the equipment minutes to assign to 
the workstation.
    Comment: Commenters supported the general concept of the 
professional PACS workstation and its addition to the proposed list of 
codes. Commenters stated that the professional PACS workstation is an 
essential component of diagnostic imaging procedures due to the switch 
from film to digital technology, and the professional workstation would 
be an appropriate inclusion as a direct PE input for these services.
    Response: We appreciate the support from the commenters for the 
addition of the professional PACS workstation.
    Comment: Many commenters addressed the subject of the proper 
pricing of the professional PACS workstation. Several commenters 
requested that CMS increase the price of the workstation to include a 
third and fourth monitor (for speech recognition) priced at $1,715.98, 
an Admin Monitor (the extra working monitor) priced at $279.27, and a 
Powerscribe Microphone priced at $424.00. Commenters stated that speech 
recognition equipment is typical for a professional PACS workstation, 
and that physicians typically employed a monitor with greater 
resolution than what would be typically used for other purposes (such 
as for electronic health records). Related comments contended that the 
proposed pricing of the workstation remained significantly less than 
what the average imaging facility spends on PACS technology. Other 
commenters disagreed with these sentiments and supported the pricing of 
the professional PACS workstation at the proposed rate of $14,616.93.
    Response: We appreciate the feedback from the commenters regarding 
the proper pricing of the professional PACS workstation. When proposing 
a price for the professional PACS workstation, we did not include the 
cost of the additional monitors and the Powerscribe microphone because 
these items represent indirect costs under the established PE 
methodology and the functionality would unlikely have been included in 
the previously existing film inputs the professional PACS workstation 
is replacing. Generally, we believe that monitors used to access 
electronic health records and microphones used for dictation are often 
used by practitioners who furnish a range a PFS services, are not 
allocable to particular services or patients, and therefore, are 
included in the administrative cost category of practice expense, and 
therefore, are allocated to

[[Page 80181]]

individual codes through indirect PE RVUs.
    Comment: Many commenters stated that CMS should expand the list of 
codes with a professional PACS workstation. Commenters generally 
focused on three of the criteria proposed by CMS: The exclusion of the 
workstation from add-on services, the exclusion of therapeutic (as 
opposed to diagnostic) services, and the exclusion of codes outside the 
70000 series. Commenters stated that add-on codes should be 
incorporated into the professional PACS workstation list, as they 
require additional time to perform, and therefore, more time with the 
technical PACS workstation for the technician, as well as additional 
time for the review and interpretation performed by the physician using 
the professional PACS workstation. Commenters also indicated that many 
therapeutic services would also require a professional PACS 
workstation, and disagreed with limiting the workstation to diagnostic 
services only. Finally, commenters supplied extensive lists of 
additional codes, both inside and outside of the 70000 series, where 
they stated that the inclusion of a professional PACS workstation was 
warranted.
    Response: We appreciate the feedback from the commenters in helping 
to define the criteria for inclusion of the professional PACS 
workstation, along with more specific recommendations about which codes 
should include the workstation. After considering these comments, we 
will be adding the professional PACS workstation to additional 
suggested codes. We took the following into account in making these 
additions:
     We did not add the professional PACS workstation to any 
code that currently lacks a technical PACS workstation (ED050) or lacks 
a work RVU. We continue to believe that procedures which do not include 
a technical workstation, or do not have physician work, would not 
require a professional workstation.
     We did not add the professional PACS workstation to add-on 
codes. Because the base codes include equipment minutes for the 
workstation, we continue to believe it would be duplicative to add 
additional equipment time for the professional PACS workstation in the 
add-on code.
     We agree with commenters that because the clinical utility 
of the PACS workstation is not necessarily limited to diagnostic 
services, there may be therapeutic codes where it would be reasonable 
to assume its use to be typical. We believe that in these specific 
cases, the use of the professional PACS workstation has been 
established to be typical for the code in question by the specialties 
furnishing the service, as a result of the evidence provided in the 
comments submitted in response to our proposal. We have added the 
workstation to many of the therapeutic codes requested by commenters, 
specifically codes listed outside the 70000 series, where use of the 
professional PACS station is typical.
     Within the 70000 series, we reviewed each of the codes 
submitted by commenters. Most of these codes did not fall within one of 
the categories where we proposed to add the professional PACS 
workstation in the proposed rule: They lacked a technical PACS 
workstation, they were add-on codes, or they were diagnostic procedures 
for which radiology is not the dominant specialty providing the 
service. We continue to believe that the professional PACS workstation 
should not be added to codes that do not fall into these categories, 
since we believe that the image must be captured in order to for it to 
be interpreted, that the use of the PACS workstation in the base code 
reported with add-on codes would accurately capture the associated 
resources used, and that the PACS professional workstation is only 
typically used by radiologists. Based on comments, we are adding the 
professional workstation to only one code in the 70000 series, CPT code 
73562, as it includes a technical PACS workstation, is not an add-on 
code, and is typically furnished by radiologists.
     For codes in the 80000 and 90000 series, we are concerned 
about whether it is appropriate to include the technical PACS 
workstation into many of these services. PACS workstations were created 
for imaging purposes, but many of these services that include a 
technical PACS workstation do not appear to make use of imaging. 
Although we are not removing the technical PACS workstation from these 
codes at this time, we do not believe that a professional PACS 
workstation should be added to these procedures. We will consider the 
inclusion of both PACS workstations for future rulemaking.
    Comment: Several commenters addressed the topic of equipment time 
for the professional PACS workstation. Commenters requested that CMS 
allocate the entire preservice physician work time associated with the 
codes, as opposed to the proposed half of the preservice physician work 
time. Commenters stated that although certain physician work activities 
in the preservice period may not directly involve the professional 
workstation, even when the physician is engaged in these parallel work 
activities, the professional workstation is ``open'' to the patient at 
hand and cannot be used for other patients. Commenters also disagreed 
with the proposal to use half the total time for older codes in which 
there is no separation of preservice and intraservice period times. 
Commenters stated that using the entire physician work time would be 
the best option since there is no accurate way to estimate the service 
period times, and that it would avoid potential confusion in equipment 
formulas in the future.
    Response: We continue to believe that the professional PACS 
workstation is more accurately assigned equipment time by using half of 
the preservice physician work time rather than the full preservice 
physician work time. As we stated in the proposed rule, we do not 
believe that the practitioner would typically spend all of the 
preservice work period using the equipment. Commenters agreed that the 
physician may not need the professional workstation for the full 
preservice period, but contended that the equipment would be ``open'' 
and unavailable for use by other physicians or for other patients. We 
disagree with this argument on clinical practice and methodological 
grounds. We do not agree that the professional PACS workstation would 
necessarily be unavailable for use by other physicians when the 
physician in question is not using the machine, Additionally, we note 
that the number of minutes assigned to the predecessor film inputs did 
not generally include the full number of pre-service minutes. Finally, 
our PE methodology is based on the resources typically used to furnish 
the procedure, and we typically assign time for equipment items based 
on when it cannot be used by another practitioner or for another 
patient due to its use in the given procedure. We continue to believe 
that half of the preservice physician work time (along with the full 
physician intraservice work time) is a good approximation of the time 
in the preservice period that the professional PACS workstation will 
typically be in use. As we stated in the proposed rule, we do not 
believe that the practitioner would typically spend all of the 
preservice time using the equipment, and would also spend preservice 
time on other activities, such as scrubbing and dressing, for example.
    For older codes where there is no breakdown of work time values by 
service period, we do not agree with commenters that the professional 
PACS workstation should use the total work time. The comments do not 
provide a

[[Page 80182]]

persuasive rationale for using the total work time instead of our 
proposed alternative, developed for consistency with codes for which we 
do have work time breakdowns by service period. Therefore, in the 
absence of service period work time detail, we continue to believe that 
half of the total work time is a reasonable proxy for the small number 
of old codes affected by this issue. We are not concerned about the 
potential for confusion in the future with differing equipment time 
formulas, as the addition of the professional PACS workstation to these 
codes is a one-time inclusion that will not affect the future review of 
this equipment.
    Finally, we believe that there is a difference in the pattern of 
equipment usage for the professional PACS workstation between 
diagnostic and therapeutic codes. Generally, the intraservice work for 
diagnostic imaging codes describes the review of images, while the 
intraservice work for therapeutic services describes a broader range of 
activities. Therefore, although we used an equipment formula of half 
the preservice physician work time and the full intraservice physician 
work time for the diagnostic procedures, we do not believe that this 
same time formula would be appropriate for therapeutic procedures since 
the professional PACS workstation would not be in use during the 
intraservice portion of these services. Therefore, we will use an 
equipment time formula of half the preservice physician work time and 
half the postservice physician work time for the therapeutic codes to 
which we are adding a professional PACS workstation, which we believe 
is more consistent with the descriptions of work for the codes in 
question. Consistent with our ongoing efforts to improve payment 
accuracy for these costs, we seek recommendations from the RUC and 
other stakeholders on a more precise allocation methodology for 
equipment minutes for these procedures.
    After consideration of comments received, we are finalizing our 
proposal to add a professional PACS workstation (ED053) to the 
equipment database and price it at the proposed rate of $14,616.93. We 
are dividing the codes that will contain a professional PACS 
workstation into diagnostic and therapeutic categories. For diagnostic 
codes, we are assigning equipment minutes equal to half the preservice 
physician work time and the full intraservice physician work time. For 
the relatively smaller group of diagnostic codes with no service period 
time breakdown, we are assigning equipment time equal to half of the 
total physician work time. For therapeutic codes, we are assigning 
equipment minutes equal to half the preservice physician work time and 
half the postservice physician work time for the second group. There 
are no therapeutic codes on our current list which lack a service 
period time breakdown. The following table lists all of the codes that 
include a professional PACS workstation for CY 2017, along with the 
equipment minutes for the workstation.

Table 4--Codes With Professional PACS Workstation in the Direct PE Input
                                Database
------------------------------------------------------------------------
                                                                ED053
            HCPCS                     Procedure type           Minutes
------------------------------------------------------------------------
10030........................  Therapeutic.................           23
10035........................  Therapeutic.................           15
19081........................  Therapeutic.................           19
19083........................  Therapeutic.................           17
19085........................  Therapeutic.................           19
19281........................  Therapeutic.................           18
19283........................  Therapeutic.................           19
19285........................  Therapeutic.................           18
19287........................  Therapeutic.................           19
22510........................  Therapeutic.................           32
22511........................  Therapeutic.................           32
22513........................  Therapeutic.................           32
22514........................  Therapeutic.................           32
32555........................  Therapeutic.................           19
32557........................  Therapeutic.................           19
36221........................  Therapeutic.................           34
36222........................  Therapeutic.................           34
36223........................  Therapeutic.................           34
36224........................  Therapeutic.................           34
36225........................  Therapeutic.................           34
36226........................  Therapeutic.................           34
36251........................  Therapeutic.................           31
36252........................  Therapeutic.................           31
36253........................  Therapeutic.................           31
36254........................  Therapeutic.................           31
36598........................  Therapeutic.................           13
37184........................  Therapeutic.................           30
37187........................  Therapeutic.................           25
37188........................  Therapeutic.................           23
37191........................  Therapeutic.................           22
37192........................  Therapeutic.................           23
37193........................  Therapeutic.................           23
37197........................  Therapeutic.................           26
37220........................  Therapeutic.................           34
37221........................  Therapeutic.................           34
37224........................  Therapeutic.................           34
37225........................  Therapeutic.................           34
37226........................  Therapeutic.................           34
37227........................  Therapeutic.................           34
37228........................  Therapeutic.................           34
37229........................  Therapeutic.................           34
37230........................  Therapeutic.................           34
37231........................  Therapeutic.................           34
37236........................  Therapeutic.................           31
37238........................  Therapeutic.................           31
37241........................  Therapeutic.................           26
37242........................  Therapeutic.................           31
37243........................  Therapeutic.................           38
37244........................  Therapeutic.................           38
47531........................  Therapeutic.................           20
47532........................  Therapeutic.................           22
47533........................  Therapeutic.................           26
47534........................  Therapeutic.................           26
47535........................  Therapeutic.................           19
47536........................  Therapeutic.................           16
47537........................  Therapeutic.................           19
47538........................  Therapeutic.................           22
47539........................  Therapeutic.................           26
47540........................  Therapeutic.................           26
47541........................  Therapeutic.................           26
49083........................  Therapeutic.................           18
49405........................  Therapeutic.................           28
49406........................  Therapeutic.................           28
49407........................  Therapeutic.................           28
49418........................  Therapeutic.................           27
49440........................  Therapeutic.................           29
49441........................  Therapeutic.................           29
49442........................  Therapeutic.................           29
49446........................  Therapeutic.................           22
49450........................  Therapeutic.................           20
49451........................  Therapeutic.................           20
49452........................  Therapeutic.................           20
49460........................  Therapeutic.................           20
49465........................  Therapeutic.................           13
50382........................  Therapeutic.................           28
50384........................  Therapeutic.................           24
50385........................  Therapeutic.................           27
50386........................  Therapeutic.................           25
50387........................  Therapeutic.................           22
50389........................  Therapeutic.................           15
50430........................  Therapeutic.................           23
50431........................  Therapeutic.................           20
50432........................  Therapeutic.................           25
50433........................  Therapeutic.................           25
50434........................  Therapeutic.................           23
50435........................  Therapeutic.................           18
50693........................  Therapeutic.................           25
50694........................  Therapeutic.................           25
50695........................  Therapeutic.................           25
58340........................  Therapeutic.................            7
62302........................  Therapeutic.................           17
62303........................  Therapeutic.................           17
62304........................  Therapeutic.................           17
62305........................  Therapeutic.................           18
70015........................  Diagnostic..................           12
70030........................  Diagnostic..................            3
70100........................  Diagnostic..................            3
70110........................  Diagnostic..................            4
70120........................  Diagnostic..................            3
70130........................  Diagnostic..................            4
70134........................  Diagnostic..................            4
70140........................  Diagnostic..................            3
70150........................  Diagnostic..................            4
70160........................  Diagnostic..................            3
70190........................  Diagnostic..................            3
70200........................  Diagnostic..................            4
70210........................  Diagnostic..................            3
70220........................  Diagnostic..................            4
70240........................  Diagnostic..................            3
70250........................  Diagnostic..................            4
70260........................  Diagnostic..................            7
70300........................  Diagnostic..................            2
70310........................  Diagnostic..................            3
70320........................  Diagnostic..................            3
70328........................  Diagnostic..................            3
70330........................  Diagnostic..................           22
70332........................  Diagnostic..................            6
70336........................  Diagnostic..................           20
70350........................  Diagnostic..................            3
70355........................  Diagnostic..................            5
70360........................  Diagnostic..................            3
70370........................  Diagnostic..................            4
70371........................  Diagnostic..................            9

[[Page 80183]]

 
70380........................  Diagnostic..................            3
70390........................  Diagnostic..................            5
70450........................  Diagnostic..................           12
70460........................  Diagnostic..................           15
70470........................  Diagnostic..................           18
70480........................  Diagnostic..................           13
70481........................  Diagnostic..................           13
70482........................  Diagnostic..................           14
70490........................  Diagnostic..................           13
70491........................  Diagnostic..................           13
70492........................  Diagnostic..................           14
70540........................  Diagnostic..................           14
70542........................  Diagnostic..................           19
70543........................  Diagnostic..................           19
70544........................  Diagnostic..................           13
70545........................  Diagnostic..................           18
70546........................  Diagnostic..................           18
70547........................  Diagnostic..................           13
70548........................  Diagnostic..................           20
70549........................  Diagnostic..................           25
70551........................  Diagnostic..................           21
70552........................  Diagnostic..................           23
70553........................  Diagnostic..................           28
70554........................  Diagnostic..................           43
71010........................  Diagnostic..................            4
71015........................  Diagnostic..................            3
71020........................  Diagnostic..................            4
71021........................  Diagnostic..................            4
71022........................  Diagnostic..................            4
71023........................  Diagnostic..................            5
71030........................  Diagnostic..................            4
71034........................  Diagnostic..................            5
71035........................  Diagnostic..................            3
71100........................  Diagnostic..................            5
71101........................  Diagnostic..................            4
71110........................  Diagnostic..................            4
71111........................  Diagnostic..................            5
71120........................  Diagnostic..................            3
71130........................  Diagnostic..................            3
71250........................  Diagnostic..................           18
71260........................  Diagnostic..................           17
71270........................  Diagnostic..................           13
71275........................  Diagnostic..................           28
71550........................  Diagnostic..................           15
71551........................  Diagnostic..................           30
71552........................  Diagnostic..................           28
71555........................  Diagnostic..................           33
72020........................  Diagnostic..................            3
72040........................  Diagnostic..................            4
72050........................  Diagnostic..................            6
72052........................  Diagnostic..................            6
72070........................  Diagnostic..................            4
72072........................  Diagnostic..................            3
72074........................  Diagnostic..................            3
72080........................  Diagnostic..................            3
72081........................  Diagnostic..................            6
72082........................  Diagnostic..................            7
72083........................  Diagnostic..................            8
72084........................  Diagnostic..................            9
72100........................  Diagnostic..................            4
72110........................  Diagnostic..................            6
72114........................  Diagnostic..................            6
72120........................  Diagnostic..................            4
72125........................  Diagnostic..................           18
72126........................  Diagnostic..................           12
72127........................  Diagnostic..................           12
72128........................  Diagnostic..................           18
72129........................  Diagnostic..................           12
72130........................  Diagnostic..................           12
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------------------------------------------------------------------------

(2) Standardization of Clinical Labor Tasks
    As we noted in the CY 2015 PFS final rule (79 FR 67640-67641), we 
continue to make improvements 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

[[Page 80185]]

clinical labor minutes for the preservice, service, and postservice 
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 would facilitate 
the identification of the usual numbers of minutes for clinical labor 
tasks and the identification of exceptions to the usual values. It 
would 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 preservice time packages. 
We believe such standards would 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 simultaneously for all codes with the applicable clinical labor 
tasks, instead of waiting for individual codes to be reviewed.
    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 CY 2015 PFS rulemaking, 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 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 for each code the minutes 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 that occur in multiple codes, 
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 services for purposes of reviewing individual services 
at present, and for possible broad-based standardization once the 
changes to the direct PE input database facilitate our ability to 
adjust time across services. During the CY 2016 PFS rulemaking cycle, 
we proposed appropriate standard minutes for five different clinical 
labor tasks associated with services that use digital imaging 
technology. In the CY 2016 PFS final rule with comment period (80 FR 
70901), we finalized appropriate standard minutes for four of those 
five activities, which are listed in Table 5.

Table 5--Clinical Labor Tasks Associated With Digital Imaging Technology
------------------------------------------------------------------------
                                                              Typical
                   Clinical labor task                        minutes
------------------------------------------------------------------------
Availability of prior images confirmed..................               2
Patient clinical information and questionnaire reviewed                2
 by technologist, order from physician confirmed and
 exam protocoled by radiologist.........................
Review examination with interpreting MD.................               2
Exam documents scanned into PACS. Exam completed in RIS                1
 system to generate billing process and to populate
 images into Radiologist work queue.....................
------------------------------------------------------------------------

    We did not finalize standard minutes for the activity 
``Technologist QC's images in PACS, checking for all images, reformats, 
and dose page.'' We agreed with commenters that this task may require a 
variable length of time depending on the number of images to be 
reviewed. We stated that it may be appropriate to establish several 
different standard times for this clinical labor task for a low/medium/
high quantity of images to be reviewed, in the same fashion that the 
clinical labor assigned to clean a surgical instrument package has two 
different standard times depending on the use of a basic pack (10 
minutes) or a medium pack (30 minutes). We solicited public comment and 
feedback on this subject, with the anticipation of including a proposal 
in the CY 2017 proposed rule.
    We received many comments suggesting that this clinical labor 
activity should not have a standard time value. Commenters stated that 
the number of minutes varies significantly for different imaging 
modalities; and the time is not simply based on the quantity of images 
to be reviewed, but also the complexity of the images. The commenters 
recommended that time for this clinical labor activity should be 
assigned on a code by code basis. We agree with the commenters that the 
amount of clinical labor needed to check images in a PACS workstation 
may vary depending on the service. However, we do not believe that this 
precludes the possibility of establishing standards for clinical labor 
tasks as we have done in the past by creating multiple standard times, 
for example, those assigned to cleaning different kinds of scopes. We 
continue to believe that the use of clinical labor standards provides 
greater consistency among codes that share the same clinical labor 
tasks and can improve relativity of values among codes. We proposed to 
establish a range of appropriate standard minutes for the clinical 
labor activity, ``Technologist QCs images in PACS, checking for all 
images, reformats, and dose page.'' These standard minutes will be 
applied to new and revised codes that make use of this clinical labor 
activity when they are reviewed by us for valuation. We proposed 2 
minutes as the standard for the simple case, 3 minutes as the standard 
for the intermediate case, and 4 minutes as the standard for the 
complex case. We proposed the simple case of 2 minutes as the standard 
for the typical procedure code involving routine use of imaging. These 
values are based upon a review of the existing minutes assigned for 
this clinical labor activity; we have determined that 2 minutes is the

[[Page 80186]]

duration for most services and a small number of codes with more 
complex forms of digital imaging have higher values. We proposed to use 
2 minutes for services involving routine X-rays (simple), 3 minutes for 
services involving CTs and MRIs (intermediate), and 4 minutes for the 
most highly complex services, which would exceed these more typical 
cases. We solicited comments regarding the most accurate category--
simple, intermediate, or complex for existing codes, and in particular 
what criteria might be used to identify complex cases systematically.
    The following is summary of the comments we received regarding the 
ongoing standardization of clinical labor tasks, and our specific 
proposal regarding the clinical labor task, ``Technologist QCs images 
in PACS, checking for all images, reformats, and dose page.''
    Comment: Many commenters restated their opposition to the principle 
of establishing standard values for clinical labor tasks. Commenters 
contended that clinical labor tasks were highly variable across 
different specialties, that the standardization process would disrupt 
the relativity of direct PE inputs across the PFS, and that the 
proposed standard times were too low and underestimated the staffing 
time needed to carry out the tasks in question. Commenters stressed 
that each code should be evaluated on an individual basis. One 
commenter expressed support for the overall concept regarding efforts 
to streamline the time for clinical labor activities.
    Response: We note the objections raised by the commenters to the 
process of standardizing time values for clinical labor tasks. However, 
as we have stated previously, we believe the establishment of standards 
can provide greater consistency among codes that share the same 
clinical labor tasks, as well as improve relativity of values among 
codes. We also note that we do evaluate each code on an individual 
basis for direct PE inputs, and establishing clinical labor standards 
assists in that process of individual review. We continue to allow 
clinical labor times above the standard values for individual services, 
provided that there is a compelling rationale to explain why that 
particular service requires additional clinical labor time above and 
beyond the standard. We believe that establishing a range of standard 
minutes for this particular digital imaging clinical labor task will 
provide clarity and help maintain relativity across a wide range of 
imaging services.
    Comment: One commenter requested a broad study of the actual 
clinical labor times associated with digital imaging.
    Response: We appreciate the importance of incorporating robust, 
auditable, and routinely updated data sources for use in the 
determination of RVUs. We welcome stakeholder information on the 
availability of such data, while we continue to consider the best means 
of acquiring such data.
    Comment: Several commenters addressed our specific proposal for the 
clinical labor task, ``Technologist QCs images in PACS, checking for 
all images, reformats, and dose page.'' Commenters requested that, 
short of no standard times at all, the establishment of categories for 
this clinical labor task should be as follows: Simple (2 min); 
intermediate (3 min), complex (4 min) and highly complex (5 min).
    Response: We appreciate the suggestion from the commenters to adopt 
a categorization system very similar to our proposal, with the addition 
of an extra category for highly complex services valued at 5 minutes. 
We agree with this addition to our proposal, as it will allow for 
additional specificity in classifying different types of imaging 
services, including those that are unusually complex. However, we note 
that we proposed to define the simple case of 2 minutes as the standard 
for the typical procedure code involving routine use of imaging, and we 
believe only a small number of codes with more complex forms of digital 
imaging would typically involve more time for the task. We proposed to 
use 2 minutes for services involving routine X-rays (the simple case), 
and 3 minutes for services involving CTs and MRIs (the intermediate 
case). We seek recommendations from the RUC and other stakeholders and 
we intend to request feedback from commenters through future rulemaking 
to assist in identifying what we believe would be the small number of 
services that fall into the complex (4 min) and highly complex (5 min) 
categories, and the specific basis used to set the two categories apart 
from one another. In the meantime, we will consider individual codes on 
a case by case basis for this clinical labor task.
    After considering the comments received, we are finalizing a range 
of appropriate standard minutes for the clinical labor activity, 
``Technologist QCs images in PACS, checking for all images, reformats, 
and dose page'' as follows: Simple (2 min); intermediate (3 min), 
complex (4 min) and highly complex (5 min). We are also finalizing our 
criteria for determining the simple and intermediate categories as 
proposed.
(b) Pathology Clinical Labor Tasks
    As with the clinical labor tasks associated with digital imaging, 
many of the currently assigned times for the specialized clinical labor 
tasks associated with pathology services are not consistent across 
codes. In reviewing past RUC recommendations for pathology services, we 
have not identified information that supports 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 
high degree of specificity with which the tasks are described. We 
continue to believe that, in general, a clinical labor task will tend 
to take the same amount of time to perform for one individual service 
as the same clinical labor task when it is performed in a clinically 
similar service.
    Therefore, we developed standard times for clinical labor tasks 
that we have used in finalizing direct PE inputs in recent years, 
starting in the CY 2012 PFS final rule with comment period (76 FR 
73213). These times were based on our review and assessment of the 
current times included for these clinical labor tasks in the direct PE 
input database. We proposed in the CY 2016 PFS proposed rule to 
establish standard times for a list of 17 clinical labor tasks related 
to pathology services, and solicited public feedback regarding our 
proposed standards. Many commenters stated in response to our proposal 
that they did not support the standardization of clinical labor 
activities across pathology services. Commenters stated that 
establishing a single standard time for each clinical labor task was 
infeasible due to the differences in batch size or number of blocks 
across different pathology procedures. Several commenters indicated 
that it might be possible to standardize across codes with the same 
batch sizes, and urged us to consider pathology-specific details, such 
as batch size and block number, in the creation of any future standard 
times for clinical labor tasks related to pathology services.
    As we stated in the CY 2016 PFS proposed rule, we developed the 
proposed standard times based on our review and assessment of the 
current times included for these clinical labor tasks in the direct PE 
input database. We believe that, generally speaking, clinical labor 
tasks with the same description are comparable across different 
pathology procedures. We believe this to be true based on the 
comparability of clinical labor tasks in

[[Page 80187]]

non-pathology services, as well as the high degree of specificity with 
which most clinical labor tasks for pathology services are described 
relative to clinical labor tasks associated with other PFS services. We 
concurred with commenters that accurate clinical labor times for 
pathology codes may be dependent on the number of blocks or batch size 
typically used for each individual service. However, we also believe 
that it is appropriate and feasible to establish ``per block'' 
standards or standards varied by batch size assumptions for many 
clinical labor activities that would be comparable across a wide range 
of individual services. We have received detailed information regarding 
batch size and number of blocks during review of individual pathology 
services on an intermittent basis in the past. We requested regular 
submission of these details on the PE worksheets supplied by the RUC as 
part of the review process for pathology services, as a means to assist 
in the determination of the most accurate direct PE inputs.
    We also stated our belief that many of the clinical labor 
activities for which we proposed to establish standard times were tasks 
that do not depend on number of blocks or batch size. Clinical labor 
activities such as ``Clean room/equipment following procedure'' and 
``Dispose of remaining specimens'' would typically remain standard 
across different services without varying by block number or batch 
size, with the understanding that additional time may be required above 
the standard value for a clinical labor task that is part of an 
unusually complex or difficult service. As a result, we ultimately 
finalized standard times for 6 of the 17 proposed clinical labor 
activities in the CY 2016 final rule with comment period (80 FR 70902). 
We have listed the finalized standard times in Table 6. We are taking 
no further action on the remaining 11 clinical labor activities in this 
final rule, pending further action by the RUC (see below).

    Table 6--Standard Times for Clinical Labor Tasks Associated With
                           Pathology Services
------------------------------------------------------------------------
                                                            Standard
                  Clinical labor task                    clinical labor
                                                         time  (minutes)
------------------------------------------------------------------------
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.......................................
Clean room/equipment following procedure (including                    1
 any equipment maintenance that must be done after the
 procedure)...........................................
Dispose of remaining specimens, spent chemicals/other                  1
 consumables, and hazardous waste.....................
Prepare, pack and transport specimens and records for                  1
 in-house storage and external storage (where
 applicable)..........................................
------------------------------------------------------------------------

    We remain committed to the process of establishing standard 
clinical labor times for tasks associated with pathology services. This 
may include establishing standards on a per-block or per-batch basis, 
as we indicated during the previous rulemaking cycle. However, we are 
aware that the PE Subcommittee of the RUC is currently working to 
standardize the pathology clinical labor activities they use in making 
their recommendations. We believe the RUC's efforts to narrow the 
current list of several hundred pathology clinical labor tasks to a 
more manageable number through the consolidation of duplicative or 
highly similar activities into a single description may serve PFS 
relativity and facilitate greater transparency in PFS ratesetting. We 
also believe that the RUC's standardization of pathology clinical labor 
tasks would facilitate our capacity to establish standard times for 
pathology clinical labor tasks in future rulemaking. Therefore, we did 
not propose any additional changes to clinical labor tasks associated 
with pathology services.
(3) Equipment Recommendations for Scope Systems
    During our routine reviews of direct PE input recommendations, we 
have regularly found unexplained inconsistencies involving the use of 
scopes and the video systems associated with them. Some of the scopes 
include video systems bundled into the equipment item, some of them 
include scope accessories as part of their price, and some of them are 
standalone scopes with no other equipment included. It is not always 
clear which equipment items related to scopes fall into which of these 
categories. We have also frequently found anomalies in the equipment 
recommendations, with equipment items that consist of a scope and video 
system bundle recommended, along with a separate scope video system. 
Based on our review, the variations do not appear to be consistent with 
the different code descriptions.
    To promote appropriate relativity among the services and facilitate 
the transparency of our review process, during review of recommended 
direct PE inputs for the CY 2017 PFS proposed rule, we developed a 
structure that separates the scope and the associated video system as 
distinct equipment items for each code. Under this approach, we 
proposed standalone prices for each scope, and separate prices for the 
video systems that are used with scopes. We would define the scope 
video system as including: (1) A monitor; (2) a processor; (3) a form 
of digital capture; (4) a cart; and (5) a printer. We believe that 
these equipment components represent the typical case for a scope video 
system. Our model for this system is the ``video system, endoscopy 
(processor, digital capture, monitor, printer, cart)'' equipment item 
(ES031), which we proposed to re-price as part of this separate pricing 
approach. We obtained current pricing invoices for the endoscopy video 
system as part of our investigation of these issues involving scopes, 
which we proposed to use for this re-pricing. We understand that there 
may be other accessories associated with the use of scopes; we proposed 
to separately price any scope accessories, and individually evaluate 
their inclusion or exclusion as direct PE inputs for particular codes 
as usual under our current policy based on whether they are typically 
used in furnishing the services described by the particular codes.
    We also proposed standardizing refinements to the way scopes have 
been defined in the direct PE input database. We believe that there are 
four general types of scopes: Non-video scopes; flexible scopes; semi-
rigid scopes, and rigid scopes. Flexible scopes, semi-rigid scopes, and 
rigid scopes would typically be paired with one of the video scope 
systems, while the non-video scopes would not. The

[[Page 80188]]

flexible scopes can be further divided into diagnostic (or non-
channeled) and therapeutic (or channeled) scopes. We proposed to 
identify for each anatomical application: (1) A rigid scope; (2) a 
semi-rigid scope; (3) a non-video flexible scope; (4) a non-channeled 
flexible video scope; and (5) a channeled flexible video scope. We 
proposed to classify the existing scopes in our direct PE database 
under this classification system, to improve the transparency of our 
review process and improve appropriate relativity among the services. 
We plan to propose input prices for these equipment items through 
future rulemaking.
    We proposed these changes only for the reviewed codes that make use 
of scopes; this applies to the codes in the Flexible Laryngoscope 
family (CPT codes 31572, 31573, 31574, 31575, 31576, 31577, 31578, 
31579) (see section II.L) and the Laryngoplasty family (CPT codes 
31551, 31552, 31553, 31554, 31580, 31584, 31587, 31591, 31592) (see 
section II.L) along with updated prices for the equipment items related 
to scopes utilized by these services. We also solicited comment on this 
separate pricing structure for scopes, scope video systems, and scope 
accessories, which we could consider proposing to apply to other codes 
in future rulemaking.
    The following is a summary of the comments we received on this 
separate pricing structure for scopes, scope video systems, and scope 
accessories.
    Comment: Many commenters addressed our general proposal to 
reclassify scopes and their related equipment items. Commenters 
expressed their support for the decision to remove the scopes from the 
proposed scope packages, and the proposed definition of the scope video 
system based on the current endoscopy video system equipment item 
(ES031). There were no comments opposing the general principle behind 
reclassifying scopes and scope equipment.
    Response: We appreciate the support from the commenters for the 
broad project to clarify these issues related to scopes.
    Comment: Many commenters also requested that CMS delay implementing 
the scope proposal until additional time could be devoted to the 
subject. Several commenters asked CMS to wait to make any changes until 
the RUC could form a PE Subcommittee to address this issue. For codes 
with proposed CY 2017 values, commenters urged CMS to adopt the RUC-
recommended direct PE inputs instead of the proposed direct PE inputs, 
pending anticipated RUC recommendations on the subject. Another 
commenter requested that CMS make no change for CY 2017 for any 
endoscopy procedures until proper identification of the capital and 
disposable cost inputs could be confirmed.
    Response: We appreciate commenters' interests in making certain 
that there is appropriate opportunity for stakeholders to provide 
feedback and recommendations on the reclassification of scopes and 
related scope equipment. This was our primary rationale for limiting 
proposed changes regarding these kinds of inputs to codes reviewed for 
the current CY 2017 rule cycle, that is, the Flexible Laryngoscope and 
Laryngoplasty families of codes. Because these codes are under current 
review; however, we believe that they should be valued according to a 
scheme that accurately describes the scope equipment typically used in 
the services. As a result, we continue to believe that our proposed 
classification system for scopes is the more sound methodology to use 
for valuation of these two families of codes for CY 2017. However, we 
note that we would expect to include examination of these codes as part 
of any broader proposal we would make regarding scope equipment items, 
in response to new recommendations on the subject.
    We look forward to receiving recommendations from the upcoming RUC 
PE Subcommittee regarding scopes and related scope equipment items. We 
note that in order for these recommendations to be considered for CY 
2018 rulemaking, we would need to receive these recommendations by the 
same February deadline for the submission of recommendations on code 
valuations.
    Comment: Many commenters disagreed with the CMS proposal to price 
the endoscopy video system (ES031) at a price of $15,045.00. Some 
commenters stated that CMS should use the submitted invoices for the 
pricing of this equipment, which recommended a price of $49,400.00. One 
commenter stated that the proposed amount did not accurately reflect 
the current price of GI endoscopy video systems. Another commenter 
stated that CMS had defined the endoscopy video system as containing 
five items: (1) A monitor; (2) a processor; (3) a form of digital 
capture; (4) a cart; and (5) a printer. However, the commenter pointed 
out that CMS had not included a price for the digital capture device, 
which the commenter stressed was a significant part of the overall cost 
and needed to be included in the equipment's pricing. The commenter 
submitted a series of new invoices for endoscopy video system and 
requested that CMS incorporate them into the pricing of the equipment.
    Response: We appreciate the feedback from the commenters about 
pricing, especially the submission of new data in the form of 
additional invoices. We agree that the cost of a digital capture device 
should be included in the cost of the endoscopy video system; it was 
our belief that the digital capture device was included in the cost of 
the processor. We appreciate the clarification from the commenters 
indicating that this is not the case, and that the digital capture 
device is a separately priced component of the video system. As a 
result, we are averaging the price of the digital capture device on the 
two submitted invoices and pricing it at $18,346.00. We will add this 
into the overall cost of the endoscopy video system.
    For the other four components of the video system, we are 
finalizing the prices as proposed. The invoices submitted for these 
components indicate that they are different forms of equipment with 
different product IDs and different prices. For example, our price for 
the processor comes from a ``Video Processor with keyboard & video 
cable'' (CV-180) as opposed to the newly submitted invoice for a 
``Viscera Elite Video System'' (OTV-S190). These are two distinct 
equipment items, and we do not have any data to indicate that the 
equipment on the newly submitted invoices is more typical in its use 
than the equipment that we are currently using to price the endoscopy 
video system.
    Therefore, we are finalizing the price of the endoscopy video 
system at $33,391.00, based on component prices of $9,000.00 for the 
processor, $18,346.00 for the digital capture device, $2,000.00 for the 
monitor, $2,295.00 for the printer, and $1,750.00 for the cart.
    Comment: A few commenters also addressed the pricing of related 
scope accessories. They stated that the proposed price for the 
fiberscope, flexible, rhinolaryngoscopy (ES020) was decreased by 33 
percent based on one unrepresentative invoice and that this price 
undervalued the actual cost. Similarly, commenters stated that the 
proposed price for the stroboscopy system (ES065) at $19,100 was much 
lower than the manufacturer average invoice pricing. The proposed 
prices for the channeled and non-channeled flexible video 
rhinolaryngoscopes (ES064 and ES063 respectively) were also both two to 
three times lower than the manufacturer's average invoice price. One 
commenter submitted additional invoices for pricing these scopes and 
scope accessories.

[[Page 80189]]

    Response: We appreciate the submission of this additional pricing 
data for review. Although many commenters stated that the price of the 
stroboscopy system was too low, only one commenter supplied additional 
invoices for the same equipment item that we defined in the proposed 
rule, the StrobeLED system, and these invoices reflected lower prices 
than the one we had proposed. These invoices reflected prices of 
$16,431.00 and $15,000.00. We are averaging these together with our 
previously submitted price of $19,100.00 for the stroboscopy system, 
which results in a new price of $16,843.87.
    When we reviewed the invoices for the channeled and non-channeled 
flexible video rhinolaryngoscopes (ES064 and ES063 respectively), we 
found that the product numbers indicated that these were different 
equipment items than the scopes that we priced in the proposed rule. As 
we mentioned for the pricing of the endoscopy video system, we have no 
data to indicate that use of these particular rhinolaryngoscopes would 
be typical, as opposed to the rhinolaryngoscopes that we proposed to 
use to establish prices in the proposed rule. As a result, we are 
maintaining our current prices for these scopes pending the submission 
of additional information.
    We similarly found that the invoices with recommended price 
increases for the endoscope, rigid, sinoscopy (ES013) from the current 
price of $2,414.17 to $4,024.00 and for the videoscope, colonoscopy 
(ES033) from $23,650.00 to $37,273.00 related to different equipment 
items that we do not believe are a better reflection of the typical 
case than the item we currently use. We did not propose to make price 
changes for these scopes, and we have not incorporated these equipment 
items into the new scope classification system. As we stated 
previously, we are currently limiting the scope changes to the CPT 
codes under review for CY 2017 and their associated equipment items. We 
will consider pricing changes for the rest of the scopes and associated 
scope equipment as part of the broader scope reclassification and 
pricing effort in future rulemaking.
    We received invoices for a series of equipment items listed as 
``other capital inputs not included in CMS estimate'' as part of this 
collection of invoices. Since these equipment items were not included 
in the original recommendations or our proposed valuations for the 
Flexible Laryngoscope and Laryngoplasty families of codes, we are not 
adding them to our equipment database at this time. We will consider 
the addition of these equipment items as part of the broader 
recommendations from the RUC PE Subcommittee on the scope 
classification project.
    We did not receive an invoice or other data to support a change in 
the pricing of the fiberscope, flexible, rhinolaryngoscopy (ES020).
    Comment: Many commenters objected to the use of a vendor quote for 
pricing of the scope equipment. Commenters requested that specialty 
societies should also be allowed to submit quotes for pricing as they 
are easier to obtain than paid invoices. Commenters also stated that 
the use of vendor prices created transparency issues and asked CMS to 
explain why they are appropriate to use rather than invoices supplied 
by specialties. One commenter stated that a single invoice was not an 
adequate sample to use as a pricing input for many types of endoscopic 
equipment.
    Response: We are always interested in investigating multiple data 
sources for use in pricing supplies and equipment, provided that the 
information can be verified as accurate. We agree with the commenter 
that a single voluntarily submitted invoice may not be an adequate 
source for making wide ranging pricing decisions. We prefer to have 
pricing information from multiple data sources whenever possible, which 
may include information obtained from vendors of medical supplies and 
equipment. We continue to believe that there are risks of bias in 
submission of price quotes used for purposes of ratesetting. However, 
given the way we use these prices in the current ratesetting 
methodologies, we believe the risk of bias is located in submission of 
overstated, not understated prices. Therefore, we believe it is 
reasonable to assume that practitioners would generally be able acquire 
particular items at the prices vendors submit to CMS.
    After consideration of comments received, we are finalizing our 
proposals as detailed in the proposed rule, with the updated prices for 
the endoscopy video system and the stroboscopy system.
(4) Technical Corrections to Direct PE Input Database and Supporting 
Files
    Subsequent to the publication of the CY 2016 PFS final rule with 
comment period, stakeholders alerted us to several clerical 
inconsistencies in the direct PE database. We proposed to correct these 
inconsistencies as described below and reflected in the CY 2017 direct 
PE input database displayed on our Web site under downloads for the CY 
2017 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    For CY 2017, we proposed the following technical corrections:
     For CPT codes 72081-72084, a stakeholder informed us that 
the equipment time for the PACS workstation (ED050) should be equal to 
the clinical labor during the service period; the equipment time 
formula we used for these codes for CY 2016 erroneously included 4 
minutes of preservice clinical labor. We agree with the stakeholder 
that the PACS workstation should use the standard equipment time 
formula for a PACS workstation for these codes. As a result, we 
proposed to refine the ED050 equipment time to 21 minutes for CPT code 
72081, 36 minutes for CPT code 72082, 44 minutes for CPT code 72083, 
and 53 minutes for CPT code 72084 to reflect the clinical labor time 
associated with these codes. This same commenter also indicated that a 
number of clinical labor activities had been entered in the database in 
the incorrect service period for CPT codes 37215, 50432, 50694, and 
72081. These clinical labor activities were incorrectly listed in the 
``postservice'' period instead of the ``service post'' period. We 
proposed to make these technical corrections as well so that the 
minutes are assigned to the appropriate service period within the 
direct PE input database.
     Another stakeholder alerted us that ileoscopy CPT codes 
44380, 44381 and 44382 did not include the direct PE input equipment 
item called the Gomco suction machine (EQ235) and indicated that this 
omission appeared to be inadvertent. We agreed that it was. We have 
included the item EQ235 in the final direct PE input database for CPT 
code 44380 at a time of 29 minutes, for CPT code 44381 at a time of 39 
minutes, and CPT code 44382 at a time of 34 minutes.
    The PE RVUs displayed in Addendum B on our Web site were calculated 
with the inputs displayed in the CY 2017 direct PE input database.
    Comment: One commenter expressed support for the proposed technical 
corrections to these services.
    Response: We appreciate the support from the commenter. After 
consideration of comments received, we are finalizing these technical 
corrections.
    Comment: Several commenters contacted CMS during the comment period 
after noticing that six services where CMS proposed to accept the 
refinement panel work RVU did not contain the updated work RVU in the

[[Page 80190]]

Addendum B file for the proposed rule. These commenters requested that 
CMS address these discrepancies.
    Response: We appreciate the assistance from the commenters in 
recognizing these discrepancies. We have corrected them and assigned 
the refinement panel work RVUs to the six services in question.
    Comment: One commenter stated that there were potential technical 
errors in the clinical labor inputs for CPT codes 88329, 88331, 88360, 
and 88361.
    Response: We have reviewed these codes and they do not contain 
technical errors. The clinical labor inputs were adjusted in the CY 
2016 rule cycle as a result of CMS refinement (80 FR 70981-70983).
(5) Restoration of Inputs
    Several of the PE worksheets included in the RUC recommendations 
for CY 2016 contained time for the equipment item ``xenon light 
source'' (EQ167). Because there appeared 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 
by the RUC, we believed that the use of only one of these light sources 
would be typical and proposed to remove the xenon light equipment time. 
In the CY 2016 PFS final rule with comment period, we restored the 
xenon light (EQ167) and removed the fiberoptic headlight (EQ170) with 
the same number of equipment minutes for CPT codes 30300, 31295, 31296, 
31297, and 92511.
    We received comments expressing approval for the restoration of the 
xenon light. However, the commenters also stated that the two light 
sources were not duplicative, but rather, both a headlight and a xenon 
light source are required concurrently for otolaryngology procedures 
when scopes are utilized. The commenters requested that the fiberoptic 
headlight be restored to these codes.
    We agreed with the commenters that the use of both light sources 
would be typical for these procedures. Therefore, we proposed in the CY 
2017 proposed rule to add the fiberoptic headlight (EQ170) to CPT codes 
30300, 31295, 31296, 31297, and 92511 at the same number of equipment 
minutes as the xenon light (EQ167).
    Comment: One commenter expressed appreciation for the CMS proposal 
to restore the fiberoptic headlight to the codes in question. The 
commenter also stated that it had supplied invoices for LED lights, 
which are significantly less expensive than the xenon light source, as 
it was this commenter's understanding that xenon lights are no longer 
the typical light source for these procedures and they are no longer 
widely available for purchase from vendors. The commenter expressed 
support for retaining the xenon light as the standard light source line 
item for all endoscopy codes if that remained CMS' preference.
    Response: We appreciate the support for our proposal from the 
commenter, as well as the submission of additional information 
regarding the typical light source for these procedures. We will add 
the LED light source to our equipment database at the submitted invoice 
price of $1,915.00. However, we will not replace the xenon light with 
the LED light at this time, as we believe the subject deserves further 
consideration. We will consider proposing this change in future 
rulemaking.
    Comment: We received new invoices for the xenon light equipment 
from a different commenter which averaged out to a price of $12,298.00.
    Response: We are finalizing our proposed price of $7,000.00 for the 
xenon light source. Since we received a comment stating that xenon 
lights are no longer a typical light source for procedure use, and that 
they have been supplanted by the use of LED lights, we are viewing the 
current input as a proxy item, and therefore, do not believe that it 
would be appropriate to increase the cost of the xenon light source at 
this time. We will consider making a proposal to address this subject 
in future rulemaking.
    After consideration of comments received, we are finalizing our 
proposal to add the fiberoptic headlight (EQ170) to CPT codes 30300, 
31295, 31296, 31297, and 92511 at the same number of equipment minutes 
as the xenon light (EQ167).
(6) Updates to Prices for Existing Direct PE 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. For CY 2017, 
we proposed the following price updates for existing direct PE inputs:
    Several commenters wrote to discuss the price of the Antibody 
Estrogen Receptor monoclonal (SL493). We received information including 
three invoices with new pricing information regarding the SL493 supply. 
We proposed to use this information to propose for the supply item 
SL493 a price of $14.00 per test, which is the average price based on 
the invoices that we received in total for the item.
    Comment: Several commenters supported the proposed price increase 
and urged CMS to finalize the proposal.
    Response: We appreciate the support from the commenters. After 
consideration of comments received, we are finalizing the price of the 
Antibody Estrogen Receptor monoclonal (SL493) supply at $14.00 as 
proposed.
    We also proposed to update the price for two supplies in response 
to the submission of new invoices. The proposed price for ``antigen, 
venom'' supply (SH009) reflects an increase from $16.67 to $20.14 per 
milliliter, and the proposed price for ``antigen, venom, tri-vespid'' 
supply (SH010) reflects an increase from $30.22 to $44.05 per 
milliliter.
    Comment: Several commenters stated that they strongly supported the 
proposed price updates for antigen supplies and urged CMS to finalize 
the proposal.
    Response: We appreciate the support from the commenters. After 
consideration of comments received, we are finalizing the price of the 
``antigen, venom'' (SH009) and ``antigen, venom, tri-vespid'' (SH010) 
supplies as proposed.
    We proposed to remove the laser tip, diffuser fiber supply (SF030) 
and replace it with the laser tip, bare (single use) supply (SF029) for 
CPT code 31572 (formerly placeholder code 317X1). We did not propose a 
price change for the SF030 supply.
    Comment: In reference to CPT code 52648, a commenter stated that 
the price for the laser tip, diffuser fiber supply (SF030) was 
decreasing from $850 to $197.50. The commenter stated that the 
methodology for this adjustment was opaque, unanticipated, and not 
proposed for comment in the proposed rule. The commenter stated that 
the $850 supply cost would be more appropriate for the laser tip, 
diffuser fiber supply.
    Response: We stated in the CY 2017 proposed rule (81 FR 46247) that 
we did not believe that the submitted invoice for the laser tip, 
diffuser supply at $197.50 was current enough to establish a new price 
for the supply. As a result, we proposed to remove the laser tip, 
diffuser fiber supply (SF030) and replaced it with the laser tip, bare 
(single use) supply (SF029) for CPT code 31572 (Laryngoscopy, flexible; 
with ablation or destruction of lesion(s) with laser, unilateral), as 
we did not believe that it was appropriate to use a supply with an 
outdated invoice. However, we inadvertently set the price of the laser 
tip, diffuser fiber supply to

[[Page 80191]]

$197.50 in the proposed direct PE input database in contradiction of 
our written proposal. We apologize for the confusion caused by this 
error. In the final direct PE input database, we are restoring the 
price of the laser tip, diffuser fiber supply to $850.00, since we did 
not intend to propose a change the price of this supply. We are also 
requesting the submission of additional current pricing information for 
the laser tip, diffuser fiber supply, given the significant difference 
between the $197.50 and $850.00 prices.
    Comment: A commenter submitted two invoices containing pricing data 
for a Cook Biopsy device.
    Response: While we appreciate the submission of this pricing 
information from the commenter, we are unable to determine which supply 
or equipment item these invoices were in reference to. The invoices 
were not mentioned in the text of the commenter's letter. We request 
that invoices submitted for pricing updates should contain clear 
documentation regarding the item in question: its name, the CMS supply/
equipment code that it references (if any), the unit quantity if the 
item is shipped in boxes or batches, and any other information relevant 
for pricing.
    We routinely accept public submission of invoices as part of our 
process for developing payment rates for new, revised, and potentially 
misvalued codes. Often these invoices are submitted in conjunction with 
the RUC-recommended values for the codes. For CY 2017, we note that 
some stakeholders have submitted invoices for new, revised, or 
potentially misvalued codes after the February deadline established for 
code valuation recommendations. To be considered for a given year's 
proposed rule, we generally need to receive invoices by the same 
February deadline. In similar fashion, we generally need to receive 
invoices by the end of the comment period for the proposed rule in 
order to consider them for supply and equipment pricing in the final 
rule for that calendar year. Of course, we consider invoices submitted 
as public comments during the comment period following the publication 
of the proposed rule when relevant for services with values open for 
comment, and will consider any other invoices received after February 
and/or outside of the public comment process as part of our established 
annual process for requests to update supply and equipment prices as 
finalized in the CY 2011 final rule with comment period (75 FR 73205).
(7) Radiation Treatment Delivery Practice Expense RVUs
    Comment: Several commenters noticed that there was a 10 percent 
decrease in the proposed Non Facility PE RVUs for HCPCS code G6011 
despite proposed changes in direct PE inputs. Commenters requested an 
explanation for why this decrease was taking place, and referenced 
section 3 of the Patient Access and Medicare Protection Act (PAMPA) 
(Pub. L. 114-115, enacted December 18, 2015), which requires CMS to 
maintain the associated ``definitions, units, and inputs'' for certain 
radiation treatment and related services for CY 2017 and CY 2018. 
Several commenters stated that they believed that this decrease in the 
PE RVU was in violation of section 1848(c)(2)(C)(i-ii) of the Act 
(added by section 3 of the PAMPA), which requires inputs for these 
services to remain unchanged for CY 2017 and 2018.
    Response: We agree with the commenters that we did not propose to 
change any of the direct PE inputs for HCPCS code G6011, and we 
understand the proposed change in the nonfacility PE RVUs would 
generally not be expected absent a corresponding change in direct PE 
inputs. However, the change in the PE RVU for HCPCS code G6011 is 
caused by a significant shift in the specialties furnishing the service 
in the Medicare claims data. In the claims data we used to establish 
the PE RVUs for CY 2016, dermatology furnished 51 percent of the 
services, while radiation oncology furnished 43 percent. The most 
recent claims data reflects a major shift, with radiation oncology now 
furnishing about 85 percent of the services and dermatology only about 
6 percent. The decrease in the PE RVU between CY 2016 and CY 2017 
resulted from this shift in specialty mix, as the specialties actually 
furnishing the service, reflected in the claims data, have a higher 
percentage of direct PE relative to indirect PE, and therefore, a lower 
percentage of indirect PE, than the specialties that were previously 
furnishing the service in the claims data. In other words, consistent 
with the established methodology for allocating indirect PE to 
services, a specialty mix with a lower percentage of indirect PE 
results in fewer indirect PE RVUs being allocated and a lower overall 
PE RVU for the code even though the direct PE inputs have remained the 
same. This kind of shift is relatively unusual outside of low-volume 
codes, but it is consistent with our established methodology for 
allocating indirect PE to services. We believe that in many cases, the 
change in specialty utilization for a particular service would warrant 
a re-examination of the direct PE inputs for the service under the 
misvalued code initiative. Given the statutory provision that prohibits 
us from changing the direct PE inputs prior to CY 2019 or considering 
these services as potentially misvalued, we will consider this issue 
further for future rulemaking.
    We recognize that this change would be unanticipated, but we do not 
believe there is a straightforward, transparent way to offset the 
change since the statutory provision requires that we maintain the 
direct inputs for the PE RVUs. We note that this change is unique among 
the radiation therapy and related imaging codes where the maintenance 
of inputs has generally resulted in payment rate stability 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 composed 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 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 comprehensive 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).
    To determine MP RVUs for individual PFS services, our MP 
methodology is comprised of three factors: (1) Specialty-level risk 
factors derived from data on specialty-specific MP premiums incurred by 
practitioners, (2) service level risk factors derived from Medicare 
claims data of the weighted average risk factors of the specialties 
that furnish each service, and (3) an intensity/complexity of service 
adjustment to the service level risk factor based on either the higher 
of the work RVU or clinical labor RVU. Prior to CY 2016, MP RVUs were 
only updated once every 5 years, except in the case of new and revised 
codes.
    As explained in the CY 2011 PFS final rule with comment period (75 
FR

[[Page 80192]]

73208), MP RVUs for new and revised codes effective before the next 5-
year review of MP RVUs were 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 RVU (or, if greater, 
the difference in 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 were 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.
    In the CY 2016 PFS final rule with comment period (80 FR 70906 
through 70910), we finalized a policy to begin conducting annual MP RVU 
updates to reflect changes in the mix of practitioners providing 
services (using Medicare claims data), and to adjust MP RVUs for risk 
for intensity and complexity (using the work RVU or clinical labor 
RVU). We also finalized a policy to modify the specialty mix assignment 
methodology (for both MP and PE RVU calculations) to use an average of 
the 3 most recent years of data instead of a single year of data. We 
stated that under this approach, the specialty-specific risk factors 
would continue to be updated through notice and comment rulemaking 
every 5 years using updated premium data, but would remain unchanged 
between the 5-year reviews.
    For CY 2016, we did not propose to discontinue our current approach 
for determining MP RVUs for new/revised codes. For the new and revised 
codes for which we proposed work RVUs and PE inputs, we also published 
the proposed MP crosswalks used to determine their MP RVUs. We address 
comments regarding valuation of new and revised codes in section II.L 
of this final rule, which makes clear the codes with interim final 
values for CY 2016 had newly proposed values for CY 2017, all of which 
were again open for comment. The MP crosswalks for new and revised 
codes with interim final values were established in the CY 2016 PFS 
final rule with comment period; we proposed these same crosswalks in 
the CY 2017 PFS proposed rule.
2. Updating Specialty Specific Risk Factors
    The proposed CY 2017 GPCI update (eighth update), discussed in 
section II.E of this final rule, reflects updated MP premium data, 
collected for the purpose of proposing updates to the MP GPCIs. 
Although we could have used the updated MP premium data obtained for 
the purposes of the proposed eighth GPCI update to propose updates to 
the specialty risk factors used in the calculation of MP RVUs, this 
would not be consistent with the policy we previously finalized in the 
CY 2016 PFS final rule with comment period. In that rule, we indicated 
that the specialty-specific risk factors would continue to be updated 
through notice and comment rulemaking every 5 years using updated 
premium data, but would remain unchanged between the 5-year reviews. 
Additionally, consistent with the statutory requirement at section 
1848(e)(1)(C) of the Act, only one half of the adjustment to MP GPCIs 
would be applied for CY 2017 based on the new MP premium data. As such, 
we did not think it would be appropriate to propose to update the 
specialty risk factors for CY 2017 based on the updated MP premium data 
that is reflected in the proposed CY 2017 GPCI update. Therefore, we 
did not propose to update the specialty-risk factors based on the new 
premium data collected for the purposes of the 3-year GPCI update for 
CY 2017 at this time. However, we solicited comment on whether we 
should consider doing so, perhaps as early as for 2018, prior to the 
fourth review and update of MP RVUs that must occur no later than CY 
2020.
    The following is summary of the comments we received on whether we 
should consider updating the specialty-risk factors based on the new 
premium data collected for the purposes of the 3-year GPCI update, 
perhaps as early as for 2018, prior to the fourth review and update of 
MP RVUs that must occur no later than CY 2020.
    Comment: We received few comments regarding this issue. Some 
commenters, including the RUC, recommended that CMS use the updated MP 
premium data collected as part of the CY 2017 GPCI update in the 
creation of the MP RVUs for CY 2017. One commenter stated that CMS 
should follow its normal process to update MP RVUs for CY 2020. Another 
commenter supported the technical and policy changes that CMS made 
related to the MP RVUs for the CY 2016 PFS, and appreciated CMS' 
reluctance to change direction a year later and use the updated 
malpractice premium data gathered for the purpose of the GPCI update, 
in advance of the next 5-year review of the MP RVUs, to propose updates 
to the specialty risk factors used in the calculation of MP RVUs. The 
commenter suggested that CMS consider using the updated data to update 
the specialty-risk factors in the MP RVU methodology as early as CY 
2018, noting that by CY 2018, the adjustment of the malpractice GPCIs 
would be complete, so the potential disconnect in the use of the 
updated premium data would no longer be an issue.
    Response: We appreciate the commenters' feedback. In response to 
the commenters who recommended that CMS use the updated MP premium data 
collected as part of the CY 2017 GPCI update in the creation of the MP 
RVUs for CY 2017, we reiterate that we did not propose to update the 
specialty-risk factors based on the new premium data collected for the 
purposes of the 3-year GPCI update for the CY 2017 MP RVUs. Instead, we 
solicited comment on whether we should consider doing so prior to the 
next 5-year interval, perhaps as early as for CY 2018. We will consider 
the possibility of using the updated MP data to update the specialty 
risk factors used in the calculation of the MP RVUs prior to the next 
5-year update in future rulemaking.
    Comment: One commenter stated that CPT code 93355 should be added 
to the MP RVUs Invasive Cardiology Outside of Surgical Range list so 
that the surgical risk factor is applied when calculating the MP RVU.
    Response: We did not previously propose to include this code on the 
list of Invasive Cardiology Outside of Surgical Range when we updated 
MP risk factors for CY 2015 and we did not propose the change in the CY 
2017 PFS proposed rule. We will consider that request for future 
rulemaking in conjunction with the next update of MP risk factors.

C. 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 other 
authorized practitioner.
     The service must be furnished to an eligible telehealth 
individual.

[[Page 80193]]

     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 professional 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 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 a 
telehealth 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 MACs 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 facility fee under the PFS for 
each Medicare telehealth service. The statute 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 area (MSA).
    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 Federal Office of Rural Health 
Policy 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 https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/index.html.
    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 CY 2003 PFS final rule (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 CY 2012 PFS final rule (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 
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 furnish the service produces 
demonstrated 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

[[Page 80194]]

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 telehealth services, see the CMS Web site at 
https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/index.html. 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 2016 will 
be considered for the CY 2018 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, requesters 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 https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/index.html.
3. Submitted Requests To Add Services to the List of Telehealth 
Services for CY 2017
    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 for 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, but also 
expedite our ability to identify codes for the telehealth list that 
resemble those services already on this list.
    We received several requests in CY 2015 to add various services as 
Medicare telehealth services effective for CY 2017. The following 
presents a discussion of these requests, and our decisions regarding 
additions to the CY 2017 telehealth list. Of the requests received, we 
found that four services were sufficiently similar to ESRD-related 
services currently on the telehealth list to qualify on a category 1 
basis. Therefore, we proposed to add the following services to the 
telehealth list on a category 1 basis for CY 2017:
     CPT codes 90967 (End-stage renal disease (ESRD) related 
services for dialysis less than a full month of service, per day; for 
patients younger than 2 years of age; 90968 (End-stage renal disease 
(ESRD) related services for dialysis less than a full month of service, 
per day; for patients 2-11 years of age; 90969 (End-stage renal disease 
(ESRD) related services for dialysis less than a full month of service, 
per day; for patients 12-19 years of age); and 90970 (End-stage renal 
disease (ESRD) related services for dialysis less than a full month of 
service, per day; for patients 20 years of age and older).
    As we indicated in the CY 2015 final rule with comment period (80 
FR 41783), for the ESRD-related services (CPT codes 90963-90966) added 
to the telehealth list for CY 2016, 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, CNS, NP, or PA. This requirement also applies to CPT codes 
90967-90970.
    While we did not receive a specific request, we also proposed to 
add two advance care planning services to the telehealth list. We have 
determined that these services are similar to the annual wellness 
visits (HCPCS codes G0438 & G0439) currently on the telehealth list:
     CPT codes 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 care professional; first 30 minutes, face-to-
face with the patient, family member(s), or surrogate); and 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 care 
professional; each additional 30 minutes (list separately in addition 
to code for primary procedure)).

We also received requests to add services to the telehealth list that 
do not meet our criteria for Medicare telehealth services. We did not 
propose to add the following procedures for observation care, emergency 
department visits, critical care E/M, psychological testing, and 
physical, occupational and speech therapy, for the reasons noted:
a. Observation Care: CPT Codes--
     99217 (observation care discharge day management (this 
code is to be utilized to report all services provided to a patient on 
discharge from ``observation status'' if the discharge is on other than 
the initial date of ``observation status.'' To report services to a 
patient designated as ``observation status'' or ``inpatient status'' 
and discharged on the same date, use the codes for observation or 
inpatient care services [including admission and discharge services, 
99234-99236 as appropriate.]));
     99218 (initial observation care, per day, for the 
evaluation and management of a patient which requires these three key 
components: A detailed or comprehensive history; a detailed or 
comprehensive examination; and medical decision making that is 
straightforward or of low complexity. Counseling and coordination of 
care with other physicians, other qualified health care professionals, 
or agencies are provided consistent with the nature of the problem(s) 
and the patient's and family's needs. Usually, the problem(s) requiring 
admission to ``observation status'' are of low severity. Typically, 30 
minutes are spent at the bedside and on the patient's hospital floor or 
unit);
     99219 (initial observation care, per day, for the 
evaluation and management of a patient, which requires these three key 
components: A comprehensive history; a comprehensive examination; and 
medical decision making of moderate complexity. Counseling and 
coordination of care with other physicians, other qualified health care 
professionals, or agencies are provided consistent with the nature of 
the problem(s) and the patient's and family's needs. Usually, the 
problem(s) requiring admission to ``observation status'' are of 
moderate severity.

[[Page 80195]]

Typically, 50 minutes are spent at the bedside and on the patient's 
hospital floor or unit);
     99220 (initial observation care, per day, for the 
evaluation and management of a patient, which requires these three key 
components: A comprehensive history; a comprehensive examination; and 
medical decision making of high complexity. Counseling and coordination 
of care with other physicians, other qualified health care 
professionals, or agencies are provided consistent with the nature of 
the problem(s) and the patient's and family's needs. Usually, the 
problem(s) requiring admission to ``observation status'' are of high 
severity. Typically, 70 minutes are spent at the bedside and on the 
patient's hospital floor or unit);
     99224 (subsequent observation care, per day, for the 
evaluation and management of a patient, which requires at least two of 
these three key components: Problem focused interval history; problem 
focused examination; medical decision making that is straightforward or 
of low complexity. Counseling and coordination of care with other 
physicians, other qualified health care professionals, or agencies are 
provided consistent with the nature of the problem(s) and the patient's 
and family's needs. Usually, the patient is stable, recovering, or 
improving. Typically, 15 minutes are spent at the bedside and on the 
patient's hospital floor or unit);
     99225 (subsequent observation care, per day, for the 
evaluation and management of a patient, which requires at least two of 
these three key components: An expanded problem focused interval 
history; an expanded problem focused examination; medical decision 
making of moderate complexity. Counseling and coordination of care with 
other physicians, other qualified health care professionals, or 
agencies are provided consistent with the nature of the problem(s) and 
the patient's and family's needs. Usually, the patient is responding 
inadequately to therapy or has developed a minor complication. 
Typically, 25 minutes are spent at the bedside and on the patient's 
hospital floor or unit);
     99226 (subsequent observation care, per day, for the 
evaluation and management of a patient, which requires at least two of 
these three key components: A detailed interval history; a detailed 
examination; medical decision making of high complexity. Counseling and 
coordination of care with other physicians, other qualified health care 
professionals, or agencies are provided consistent with the nature of 
the problem(s) and the patient's and family's needs. Usually, the 
patient is unstable or has developed a significant complication or a 
significant new problem. Typically, 35 minutes are spent at the bedside 
and on the patient's hospital floor or unit);
     99234 (observation or inpatient hospital care, for the 
evaluation and management of a patient including admission and 
discharge on the same date, which requires these three key components: 
A detailed or comprehensive history; a detailed or comprehensive 
examination; and medical decision making that is straightforward or of 
low complexity. Counseling and coordination of care with other 
physicians, other qualified health care professionals, or agencies are 
provided consistent with the nature of the problem(s) and the patient's 
and family's needs. Usually the presenting problem(s) requiring 
admission are of low severity. Typically, 40 minutes are spent at the 
bedside and on the patient's hospital floor or unit);
     99235 (observation or inpatient hospital care, for the 
evaluation and management of a patient including admission and 
discharge on the same date, which requires these three key components: 
A comprehensive history; a comprehensive examination; and medical 
decision making of moderate complexity. Counseling and coordination of 
care with other physicians, other qualified health care professionals, 
or agencies are provided consistent with the nature of the problem(s) 
and the patient's and family's needs. Usually the presenting problem(s) 
requiring admission are of moderate severity. Typically, 50 minutes are 
spent at the bedside and on the patient's hospital floor or unit);
     99236 (observation or inpatient hospital care, for the 
evaluation and management of a patient including admission and 
discharge on the same date, which requires these three key components: 
A comprehensive history; a comprehensive examination; and medical 
decision making of high complexity. Counseling and coordination of care 
with other physicians, other qualified health care professionals, or 
agencies are provided consistent with the nature of the problem(s) and 
the patient's and family's needs. Usually the presenting problem(s) 
requiring admission are of high severity. Typically, 55 minutes are 
spent at the bedside and on the patient's hospital floor or unit);
    The request to add these observation services referenced various 
studies supporting the use of observation units. The studies indicated 
that observation units provide safe, cost effective care to patients 
that need ongoing evaluation and treatment beyond the emergency 
department visit by having reduced hospital admissions, shorter lengths 
of stay, increased safety and reduced cost. Additional studies cited 
indicated that observation units reduce the work load on emergency 
department physicians, and reduce emergency department overcrowding.
    In the CY 2005 PFS proposed rule (69 FR 47510), we considered a 
request but did not propose to add the observation CPT codes 99217-
99220 to the list of Medicare telehealth services on a category two 
basis for the reasons described in that rule. The most recent request 
did not include any information that would cause us to question the 
previous evaluation under the category one criterion, which has not 
changed, regarding the significant differences in patient acuity 
between these services and services on the telehealth list. While the 
request included evidence of the general benefits of observation units, 
it did not include specific information demonstrating that the services 
described by these codes provided clinical benefit when furnished via 
telehealth, which is necessary for us to consider these codes on a 
category two basis. Therefore, we did not propose to add these services 
to the list of approved telehealth services.
b. Emergency Department Visits: CPT Codes--
     99281 (emergency department visit for the evaluation and 
management of a patient, which requires these three key components: A 
problem focused history; a problem focused examination; and 
straightforward medical decision making. Counseling and coordination of 
care with other physicians, other qualified health care professionals, 
or agencies are provided consistent with the nature of the problem(s) 
and the patient's and family's needs. Usually, the presenting 
problem(s) are self-limited or minor);
     99282 (emergency department visit for the evaluation and 
management of a patient, which requires these three key components: An 
expanded problem focused history; an expanded problem focused 
examination; and medical decision making of low complexity. Counseling 
and coordination of care with other physicians, other qualified health 
care professionals, or agencies are provided consistent with the nature 
of the problem(s) and the patient's and family's needs. Usually, the 
presenting problem(s) are of low to moderate severity);

[[Page 80196]]

     99283 (emergency department visit for the evaluation and 
management of a patient, which requires these three key components: An 
expanded problem focused history; an expanded problem focused 
examination; and medical decision making of moderate complexity. 
Counseling and coordination of care with other physicians, other 
qualified health care professionals, or agencies are provided 
consistent with the nature of the problem(s) and the patient's and 
family's needs. Usually, the presenting problem(s) are of moderate 
severity);
     99284 (emergency department visit for the evaluation and 
management of a patient, which requires these three key components: A 
detailed history; a detailed examination; and medical decision making 
of moderate complexity. Counseling and coordination of care with other 
physicians, other qualified health care professionals, or agencies are 
provided consistent with the nature of the problem(s) and the patient's 
and family's needs. Usually, the presenting problem(s) are of high 
severity, and require urgent evaluation by the physician, or other 
qualified health care professionals but do not pose an immediate 
significant threat to life or physiologic function); and
     99285 (emergency department visit for the evaluation and 
management of a patient, which requires these three key components 
within the constraints imposed by the urgency of the patient's clinical 
condition and mental status: A comprehensive history; a comprehensive 
examination; and medical decision making of high complexity. Counseling 
and coordination of care with other physicians, other qualified health 
care professionals, or agencies are provided consistent with the nature 
of the problem(s) and the patient's and family's needs. Usually, the 
presenting problem(s) are of high severity and pose an immediate 
significant threat to life or physiologic function).
    In the CY 2005 PFS proposed rule (69 FR 47510), we considered a 
request but did not propose to add the emergency department visit CPT 
codes 99281-99285 to the list of Medicare telehealth services for the 
reasons described in that rule.
    The current request to add the emergency department E/M services 
stated that the codes are similar to outpatient visit codes (CPT codes 
99201-99215) that have been on the telehealth list since CY 2002. As we 
noted in the CY 2005 PFS final rule, while the acuity of some patients 
in the emergency department might be the same as in a physician's 
office; we believe that, in general, more acutely ill patients are more 
likely to be seen in the emergency department, and that difference is 
part of the reason there are separate codes describing evaluation and 
management visits in the Emergency Department setting. The practice of 
emergency medicine often requires frequent and fast-paced patient 
reassessments, rapid physician interventions, and sometimes the 
continuous physician interaction with ancillary staff and consultants. 
This work is distinctly different from the pace, intensity, and acuity 
associated with visits that occur in the office or outpatient setting. 
Therefore, we did not propose to add these services to the list of 
approved telehealth services on a category one basis.
    The requester did not provide any studies supporting the clinical 
benefit of managing emergency department patients with telehealth which 
is necessary for us to consider these codes on a category two basis. 
Therefore, we did not propose to add these services to the list of 
approved telehealth services on a category two basis.
    Many requesters of additions to the telehealth list urged us to 
consider the potential value of telehealth for providing beneficiaries 
access to needed expertise. We note that if clinical guidance or advice 
is needed in the emergency department setting, a consultation may be 
requested from an appropriate source, including consultations that are 
currently included on the list of telehealth services.
c. Critical Care Evaluation and Management: 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 believe critical care services are 
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 considered 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, based on the category 2 criteria at the time of that 
request. 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 new request 
for CY 2016 that 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 furnished via telehealth is still described 
accurately by the requested code and produces a clinical benefit for 
the patient via telehealth. However, in reviewing the information 
provided by the ATA and a study titled, ``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 telemedicine 
significantly reduced mortality rates or hospital length of stay, which 
could be indicators of clinical benefit. Therefore, we stated that we 
do not believe that the submitted evidence demonstrates a clinical 
benefit to patients. Therefore, we did not propose to add these 
services on a category 2 basis to the list of Medicare telehealth 
services for CY 2016 (80 FR 71061).
    This year, requesters cited additional studies to support adding 
critical care services to the Medicare telehealth list on a category 2 
basis. Eight of the studies dealt with telestroke and one with 
teleneurology. Telestroke is an approach that allows a neurologist to 
provide remote treatment to vascular stroke victims. Teleneurology 
offers consultations for neurological problems from a remote location. 
It may be initiated by a physician or a patient, for conditions such as 
headaches, dementia, strokes, multiple sclerosis and epilepsy.
    However, according to the literature, the management of stroke via 
telehealth requires more than a single practitioner and is distinct 
from the work described by the above E/M codes, 99291 and 99292. One 
additional study cited involved pediatric patients, while another noted 
that the Department of Defense has used telehealth to provide critical 
care services to hospitals in Guam for many years. Another reference 
study indicated that consulting intensivists thought that telemedicine 
consultations were superior to telephone consultations. In all of these 
cases, we believe the evidence demonstrates that interaction between 
these patients and distant site practitioners can have clinical 
benefit.

[[Page 80197]]

However, we do not agree that the kinds of services described in the 
studies are those that are included in the above critical care E/M 
codes 99291 and 99292. We note that CPT guidance makes clear that a 
variety of other services are bundled into the payment rates for 
critical care, including gastric intubations and vascular access 
procedures among others We do not believe these kinds of services are 
furnished via telehealth. Public comments, included cited studies, can 
be viewed at https://www.regulations.gov/#!documentDetail;D=CMS-2015-
0081-0002. Therefore, we did not propose to add CPT codes 99291 or 
99292 to the list of Medicare telehealth services for CY 2017.
    However, we are persuaded by the requests that we recognize the 
potential benefit of critical care consultation services that are 
furnished remotely. We note that there are currently codes on the 
telehealth list that could be reported when consultation services are 
furnished to critically ill patients. In consideration of these public 
requests, we recognize that there may be greater resource costs 
involved in furnishing these services relative to the existing 
telehealth consultation codes. We also agree with the requesters that 
there may be potential benefits of remote care by specialists for these 
patients. For these reasons, we think it would be advisable to create a 
coding distinction between telehealth consultations for critically ill 
patients, for example stroke patients, relative to telehealth 
consultations for other hospital patients. Such a coding distinction 
would allow us to recognize the additional resource costs in terms of 
time and intensity involved in furnishing such services, under the 
conditions where remote, intensive consultation is required to provide 
access to appropriate care for the critically ill patient. We recognize 
that the current set of E/M codes, including current CPT codes 99291 
and 99292, may not adequately describe such services because current E/
M coding presumes that the services are occurring in-person, in which 
case the expert care would be furnished in a manner described by the 
current codes for critical care.
    Therefore, we proposed to make payment through new HCPCS codes 
G0508 and G0509, initial and subsequent, used to describe critical care 
consultations furnished via telehealth. This new coding would provide a 
mechanism to report an intensive telehealth consultation service, 
initial or subsequent, for the critically ill patient, such as a stroke 
patient, under the circumstance when a qualified health care 
professional has in-person responsibility for the patient but the 
patient benefits from additional services from a distant-site 
consultant specially trained in providing critical care services. We 
proposed limiting these services to once per day per patient. Like the 
other telehealth consultations, these services would be valued relative 
to existing E/M services.
    More details on the new coding (G0508 and G0509) and valuation for 
these services are discussed in section II.L. of this final rule and 
the final RVUs for this service are included in Addendum B of this 
final rule, including a summary of the public comments we received and 
our responses to the comments. Like the other telehealth consultation 
codes, we proposed that these services would be added to the telehealth 
list and would be subject to the geographic and other statutory 
restrictions that apply to telehealth services.
d. Psychological Testing: CPT Codes--
     96101 (psychological testing (includes psychodiagnostic 
assessment of emotionality, intellectual abilities, personality and 
psychopathology, e.g., MMPI, Rorschach, WAIS), per hour of the 
psychologist's or physician's time, both face-to-face time 
administering tests to the patient and time interpreting these test 
results and preparing the report);
     96102 psychological testing (includes psychodiagnostic 
assessment of emotionality, intellectual abilities, personality and 
psychopathology, e.g., MMPI and WAIS), with qualified health care 
professional interpretation and report, administered by technician, per 
hour of technician time, face-to-face);
     96118 Neuropsychological testing (e.g., Halstead-Reitan 
neuropsychological battery, Wechsler memory scales and Wisconsin card 
sorting test), per hour of the psychologist's or physician's time, both 
face-to-face time administering tests to the patient and time 
interpreting these test results and preparing the report); and,
     96119 Neuropsychological testing (e.g., Halstead-Reitan 
neuropsychological battery, Wechsler memory scales and Wisconsin card 
sorting test), with qualified health care professional interpretation 
and report, administered by technician, per hour of technician time, 
face-to-face).
    Requesters indicated that there is nothing in the Minnesota 
Multiphasic Personality Inventory (MMPI), the Rorschach inkblot test, 
the Wechsler Adult Intelligence Scale (WAIS), the Halstead-Reitan 
Neuropsychological Battery and Allied Procedures, or the Wisconsin Card 
Sorting Test (WCST), that cannot be done via telehealth nor is 
different than neurological tests done for Parkinson's disease, seizure 
medication side effects, gait assessment, nor any of the many 
neurological examinations done via telehealth with the approved 
outpatient office visit and inpatient visit CPT codes currently on the 
telehealth list. As an example, requesters indicated that the MPPI is 
administered by a computer, which generates a report that is 
interpreted by the clinical psychologist, and that the test requires no 
interaction between the clinician and the patient.
    We previously considered the request to add these codes to the 
Medicare telehealth list in the CY 2015 final rule with comment period 
(79 FR 67600). We decided not to add these codes, indicating that these 
services are not similar to other services on the telehealth list 
because they require close observation of how a patient responds. We 
noted that the requesters did not submit evidence supporting the 
clinical benefit of furnishing these services via telehealth so that we 
could evaluate them on a category 2 basis. While we acknowledge that 
requesters believe that some of these tests require minimal, if any, 
interaction between the clinician and patient, we disagree. We continue 
to believe that successful completion of the tests listed as examples 
in these codes require the clinical psychologist to closely observe the 
patient's response, which cannot be performed via telehealth. Some 
patient responses, for example, sweating and fine tremors, may be 
missed when the patient and examiner are not in the same room. 
Therefore, we did not propose to add these services to the list of 
Medicare telehealth services for CY 2017.
e. Physical and Occupational Therapy and Speech-Language Pathology 
Services: CPT Codes--
     92507 (treatment of speech, language, voice, 
communication, and auditory processing disorder; individual); and, 
92508 (treatment of speech, language, voice, communication, and 
auditory processing disorder; group, 2 or more individuals); 92521 
(evaluation of speech fluency (e.g., stuttering, cluttering)); 92522 
(evaluation of speech sound production (e.g., articulation, 
phonological process, apraxia, dysarthria)); 92523 (evaluation of 
speech sound production (e.g., articulation, phonological process, 
apraxia, dysarthria); with evaluation of language comprehension and 
expression

[[Page 80198]]

(e.g., receptive and expressive language)); 92524 (behavioral and 
qualitative analysis of voice and resonance); (evaluation of oral and 
pharyngeal swallowing function); 92526 (treatment of swallowing 
dysfunction or oral function for feeding); 92610 (evaluation of oral 
and pharyngeal swallowing function); CPT codes 97001 (physical therapy 
evaluation); 97002 (physical therapy re-evaluation); 97003 
(occupational therapy evaluation); 97004 (occupational therapy re-
evaluation); 97110 (therapeutic procedure, 1 or more areas, each 15 
minutes; therapeutic exercises to develop strength and endurance, range 
of motion and flexibility); 97112 (therapeutic procedure, 1 or more 
areas, each 15 minutes; neuromuscular reeducation of movement, balance, 
coordination, kinesthetic sense, posture, or proprioception for sitting 
or standing activities); 97116 (therapeutic procedure, 1 or more areas, 
each 15 minutes; gait training (includes stair climbing)); 97532 
(development of cognitive skills to improve attention, memory, problem 
solving (includes compensatory training), direct (one-on-one) patient 
contact, each 15 minutes); 97533 (sensory integrative techniques to 
enhance sensory processing and promote adaptive responses to 
environmental demands, direct (one-on-one) patient contact, each 15 
minutes); 97535 (self-care/home management training (e.g., activities 
of daily living (adl) and compensatory training, meal preparation, 
safety procedures, and instructions in use of assistive technology 
devices/adaptive equipment) direct one-on-one contact, each 15 
minutes); 97537 (community/work reintegration training (e.g., shopping, 
transportation, money management, avocational activities or work 
environment/modification analysis, work task analysis, use of assistive 
technology device/adaptive equipment), direct one-on-one contact, each 
15 minutes); 97542 (wheelchair management (e.g., assessment, fitting, 
training), each 15 minutes); 97750 (physical performance test or 
measurement (e.g., musculoskeletal, functional capacity), with written 
report, each 15 minutes); 97755 (assistive technology assessment (e.g., 
to restore, augment or compensate for existing function, optimize 
functional tasks and maximize environmental accessibility), direct one-
on-one contact, with written report, each 15 minutes); 97760 
Orthotic(s) management and training (including assessment and fitting 
when not otherwise reported), upper extremity(s), lower extremity(s) 
and/or trunk, each 15 minutes); 97761 (prosthetic training, upper and 
lower extremity(s), each 15 minutes); and 97762 (checkout for orthotic/
prosthetic use, established patient, each 15 minutes).
    The statute defines who is an authorized practitioner of telehealth 
services. Physical therapists, occupational therapists and speech-
language pathologists are not authorized practitioners of telehealth 
under section 1834(m)(4)(E) of the Act, as defined in section 
1842(b)(18)(C) of the Act. Because the above services are predominantly 
furnished by physical therapists, occupational therapists and speech-
language pathologists, we do not believe it would be appropriate to add 
them to the list of telehealth services at this time. One requester 
suggested that we can add telehealth practitioners without legislation, 
as evidenced by the addition of nutritional professionals. However, we 
do not believe we have such authority and note that nutritional 
professionals are included as practitioners in the definition at 
section 1834(b)(18)(C)(vi) of the Act, and thus, are within the 
statutory definition of telehealth practitioners. Therefore, we did not 
propose to add these services to the list of Medicare telehealth 
services for CY 2017.
    In summary, we proposed to add the following codes to the list of 
Medicare telehealth services beginning in CY 2017 on a category 1 
basis:
     ESRD-related services 90967 through 90970. 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, CNS, NP, or PA.
     Advance care planning (CPT codes 99497 and 99498).
     Telehealth Consultations for a Patient Requiring Critical 
Care Services (G0508 and G0509).
    The following is summary of the comments we received regarding the 
proposed addition of services to the list of Medicare telehealth 
services:
    Comment: Many commenters supported one or more of our proposals to 
add ESRD-related services (CPT codes 90967, 90968, 90969 and 90970) and 
advance care planning services (CPT codes 99497 and 99498) to the list 
of Medicare telehealth services for CY 2017.
    Response: We appreciate the commenters' support for the proposed 
additions to the list of Medicare telehealth services. After 
consideration of the public comments received, we are finalizing our 
proposal to add these services to the list of Medicare telehealth 
services for CY 2017 on a category 1 basis.
    Comment: Many commenters also supported the proposal to make 
payment through new codes, initial and subsequent, used to describe 
critical care consultations furnished via telehealth. Commenters 
indicated that the codes will improve patient outcomes and quality of 
care.
    Response: We thank the commenters for their support. We believe the 
new coding G0508 and G0509 would provide a mechanism to report an 
intensive telehealth consultation service, initial or subsequent, for 
the critically ill patient, for example a stroke patient, under the 
circumstance when a qualified health care professional has in-person 
responsibility for the patient but the patient benefits from additional 
services from a distant-site consultant specially trained in furnishing 
critical care services. After consideration of the public comments 
received, we are finalizing our proposal to add these critical care 
consultation services to the list of Medicare telehealth services for 
CY 2017 on a category 1 basis. We are finalizing these services as 
limited to once per day per patient.
    We are also finalizing our proposal to make payment for these 
critical care consultation services through new codes G0508 and G0509, 
initial and subsequent, used to describe critical care consultations 
furnished via telehealth. More details on the new coding and valuation 
for these services are discussed in section II.L. of this final rule 
and the final RVUs for this service are included in Addendum B of this 
final rule. Like the other telehealth consultation codes, we proposed 
and are finalizing that these services would be added to the telehealth 
list and would be subject to the geographic and other statutory 
restrictions that apply to telehealth services.
    Comment: Several commenters agreed with our decision not to add 
psychological and neuropsychological testing services to the telehealth 
list, noting that the face-to-face contact between the psychologist or 
technician and the beneficiary is critical for detecting behaviors 
related to test taking, such as movements or other nonverbal signals 
that could be missed by using current telehealth media.
    A few commenters disagreed with our decision not to add 
psychological and neuropsychological testing services. Commenters cited 
general benefits, such as increased access to care, improved health 
outcomes, and as a remedy to address provider shortages. One commenter 
maintained that the requested codes are similar to many

[[Page 80199]]

neurological examinations done via telehealth with the approved 
outpatient office visit and inpatient visit CPT codes currently on the 
telehealth list.
    Response: As noted above, we previously considered the request to 
add these codes to the telehealth list, on a category 1 basis, in the 
CY 2015 final rule with comment period (79 FR 67600). We decided not to 
add these codes, indicating that these services are not similar to 
other services on the telehealth list because they require close 
observation of how a patient responds. Commenters provided no evidence 
of clinical benefit, which is necessary to support adding these 
services on a category 2 basis. Therefore, we are not adding these 
services to the list of Medicare list telehealth services for CY 2017.
    Comment: A few commenters disagreed with our decision not to add 
observation care and emergency department visits. Commenters cited 
general benefits, such as improved quality of care, reduced physician 
workload, reduced emergency department overcrowding, and reduced 
shortage of available specialty services. Concerning CPT codes 99281-
99283, one commenter indicated that none of these codes include what is 
categorized as a ``detailed'' or ``comprehensive'' history or exam; 
none of these codes include complexity in medical decision making that 
is categorized as ``high;'' and none of these codes include presenting 
problems of ``high'' or ``high severity/immediate significant threat to 
life or physiological function.''
    Response: As noted above, we previously considered and rejected 
adding these codes to the list of Medicare telehealth services in the 
CY 2005 PFS final rule (69 FR 66276) on a category 1 basis because of 
the difference in typical patient acuity relative to any services on 
the current list of Medicare telehealth services. While CPT codes 
99281-99283 may not include a detailed or comprehensive history or exam 
or a high level of medical decision making, we do not agree that these 
codes are similar to outpatient visit codes (CPT codes 99201-99215) 
currently on the list of Medicare telehealth services. As previously 
stated, more acutely ill patients are more likely to be seen in the 
emergency department, and that difference is part of the reason there 
are separate codes describing evaluation and management visits in the 
Emergency Department setting. The work in an Emergency Department 
setting is distinctly different from the pace, intensity, and acuity 
associated with visits that occur in the office or outpatient setting. 
Commenters provided no evidence of clinical benefit for these services 
when furnished via telehealth specifically, which is necessary to 
support adding these services on a category 2 basis. Therefore, we are 
not adding these services to the list of Medicare telehealth services 
for CY 2017.
    We remind stakeholders that if consultative telehealth services are 
required for patients where emergency department or observation care 
services would ordinarily be reported, multiple codes describing 
consultative services are currently on the telehealth list and can be 
used to bill for such telehealth services.
    Comment: Concerning various services primarily furnished by 
physical therapists, occupational therapists, and speech-language 
pathologists, commenters recognized that a statutory change is required 
to allow such services to be added to the list of Medicare telehealth 
services.
    Response: We appreciate commenters recognizing the statutory 
limitation on adding these services. Therefore, we are not adding these 
services to the list of Medicare telehealth services for CY 2017.
4. Place of Service (POS) Code for Telehealth Services
    We have received multiple requests from various stakeholders to 
establish a POS code to identify services furnished via telehealth. 
These requests have come from other payers, but may also be related to 
confusion concerning whether to use the POS where the distant site 
physician is located or the POS where the patient is located. The 
process for establishing POS codes is managed by the POS Workgroup 
within CMS, is available for use by all payers, and is not contingent 
upon Medicare PFS rulemaking. We noted in the CY 2017 proposed rule (81 
FR 46184) that, if such a POS code were created, in order to make it 
valid for use in Medicare, we would have to determine the appropriate 
payment rules associated with the code. Therefore, we proposed how a 
POS code for telehealth would be used under the PFS with the 
expectation that, if such a code is available, it would be used as 
early as January 1, 2017. We proposed that the physicians or 
practitioners furnishing telehealth services would be required to 
report the telehealth POS code to indicate that the billed service is 
furnished as a telehealth service from a distant site. As noted below, 
since the publication of the CY 2017 proposed rule, the telehealth POS 
code has been created.
    Our requirement for physicians and practitioners to use the 
telehealth POS code to report that telehealth services were furnished 
from a distant site would improve payment accuracy and consistency in 
telehealth claims submission. Currently, for services furnished via 
telehealth, we have instructed practitioners to report the POS code 
that would have been reported had the service been furnished in person. 
However, some practitioners use the POS where they are located when the 
service is furnished, while others use the POS corresponding to the 
patient's location.
    Under the PFS, the POS code determines whether a service is paid 
using the facility or non-facility practice expense relative value 
units (PE RVUs). The facility rate is paid when a service is furnished 
in a location where Medicare is making a separate facility payment to 
an entity other than the physician or practitioner that is intended to 
reflect the facility costs associated with the service (clinical staff, 
supplies and equipment). We note that in accordance with section 
1834(m)(2)(B) of the Act, the payment amount for the telehealth 
facility fee paid to the originating site is a national fee, paid 
without geographic or site of service adjustments that generally are 
made for payments to different kinds of Medicare providers and 
suppliers. In the case of telehealth services, we believe that facility 
costs (clinical staff, supplies, and equipment) associated with 
furnishing the service would generally be incurred by the originating 
site, where the patient is located, and not by the practitioner at the 
distant site. The statute requires Medicare to pay a fee to the site 
that hosts the patient. This is analogous to the circumstances under 
which the facility PE RVUs are used to pay for services under the PFS. 
Therefore, we proposed to use the facility PE RVUs to pay for 
telehealth services reported by physicians or practitioners with the 
telehealth POS code. We note that there are only three codes on the 
telehealth list with a difference greater than 1.0 PE RVUs between the 
facility PE RVUs and the non-facility PE RVUs. We did not anticipate 
that this proposal would result in a significant change in the total 
payment for the majority of services on the telehealth list. Moreover, 
many practitioners already use a facility POS when billing for 
telehealth services (those that report the POS of the originating site 
where the beneficiary is located). The policy to use the telehealth POS 
code for telehealth services would not affect payment for

[[Page 80200]]

telehealth services for these practitioners.
    The POS code for telehealth would not apply to originating sites 
billing the facility fee. Originating sites are not furnishing a 
service via telehealth since the patient is physically present in the 
facility. Accordingly, the originating site would continue to use the 
POS code that applies to the type of facility where the patient is 
located.
    We also proposed a change to Sec.  414.22(b)(5)(i)(A) that 
addresses the PE RVUs used in different settings. These revisions would 
improve clarity regarding our current policies. Specifically, we 
proposed to amend this section to specify that the facility PE RVUs are 
paid for practitioner services furnished via telehealth under Sec.  
410.78. In addition, we proposed a change to resolve any potential 
ambiguity and clarify that payment under the PFS is made at the 
facility rate (facility PE RVUs) when services are furnished in a 
facility setting paid by Medicare, including in off-campus provider 
based departments. As proposed, the regulation reflected the policy 
being proposed, for CY 2017 only, to pay the physician the nonfacility 
rate for services furnished in an off-campus provider based department 
that was not excepted under section 603 of the Bipartisan Budget Act of 
2015. Finally, to streamline the existing regulation, we also proposed 
to delete Sec.  414.32 of our regulation that refers to the calculation 
of payments for certain services prior to 2002.
    The following is summary of the comments we received regarding the 
proposal to use a POS code for services furnished via telehealth:
    Comment: Many commenters supported the proposal to use the POS code 
for telehealth, indicating that it would clarify and simplify billing 
requirements, improve payment accuracy and consistency in telehealth 
claims submissions, and provide more reliable data regarding telehealth 
services.
    Response: We appreciate the support for this proposal.
    Comment: One commenter asked us to reconsider the proposal, noting 
that the AMA's CPT Editorial Panel has adopted a telehealth modifier 
for those medical services that are currently covered telehealth 
services by Medicare or other payers, which obviates the need for the 
POS code.
    Response: The POS code was requested by other payers, and we 
continue to believe that adopting it for use in the Medicare program 
would provide consistency in reporting and identifying services 
furnished via telehealth. We have had longstanding HCPCS modifiers for 
telehealth. While these modifiers were not adopted by CPT, they have 
been available for use by other payers. Despite the availability of 
these HCPCS modifiers noting telehealth services, payers have requested 
creation of the new POS code. Therefore, we do not understand why 
introduction of a new CPT modifier as opposed to a HCPCS modifier would 
obviate the need for a POS code. Instead, we agree with other payers 
that the POS code would provide consistency in reporting and 
identifying services furnished via telehealth, since it eliminates the 
need for service-specific rules regarding appropriate POS reporting for 
telehealth services.
    Comment: Another commenter stated that use of the POS code, or 
originating site restrictions, would place additional administrative 
barriers for telepsychiatric access.
    Response: We note that the POS is a required field on the 
professional claim, regardless of whether the service is furnished via 
telehealth. Since a selection needs to be made, we believe that 
requiring the selection of a specific code is no more burdensome than 
requiring the claim to specify the POS appropriate to either the 
setting of the telehealth patient or the setting of the distant site 
practitioner. The POS code does not entail any new originating site 
restrictions.
    Comment: Various commenters asked for clarification of the 
following:
     Whether the POS code would replace the GT modifier.
     Whether the description of telehealth as a service 
furnished via an interactive audio and video telecommunications system 
applies to the POS code as it does to the GT modifier.
     How to ensure proper payment when the distant site 
practitioner is at a facility, but the patient is not.
    Response: Under current policy, use of the GT and GQ modifiers 
certifies that the service meets the telehealth requirements, and would 
continue to be required. The POS code would be used in addition to the 
GT and GQ modifiers. We did not propose to implement a change in the 
requirement to use either the GT and GQ modifier because at the time of 
the proposed rule, we did not know whether the telehealth POS code 
would be made effective for January 1, 2017. However, because under our 
proposal the POS code would serve to identify telehealth services 
furnished under section 1834(m) of the Act via an interactive audio and 
video telecommunications system, we believe that we should consider 
eliminating the required use of the GT and GQ telehealth modifiers, and 
we may revisit this question through future rulemaking. Like the 
modifiers, use of the POS code certifies that the service meets the 
telehealth requirements. Distant site providers will be paid using the 
facility PE RVUs, regardless of their location. The setting of the 
patient does not affect the payment to the distant site provider.
    Comment: Commenters also asked for clarification that the proposal 
to adopt the telehealth POS relates solely to payment, and not to 
licensure requirements. The commenter noted that practitioners who 
furnish telehealth services must adhere to the standard of care and 
licensure rules, regulations and laws of the state where the patient is 
located, just as the practitioner would in a traditional face-to-face 
encounter.
    Response: The commenters are correct that the purpose of our POS 
proposal is to assist in determining proper payment. It will also help 
us to accurately track telehealth utilization and spending. The 
proposal to adopt the telehealth POS code has no bearing on state 
licensure requirements or other state regulations. We appreciate the 
commenters' request for clarification.
    Comment: Several commenters supported the proposal to use the 
facility PE RVUs for telehealth services. One commenter said paying 
some telehealth services at non-facility rates creates undesirable 
financial incentives to prefer telehealth services over services that 
are furnished in person at the originating site.
    Response: We appreciate the support for the proposal and agree with 
the commenter's articulation regarding the importance of developing 
payment rates that reflect the relative resource costs of furnishing 
the services and that do not create unintended financial incentives.
    Comment: Many other commenters opposed the proposal. Commenters 
stated that it would result in lower fees for telehealth services 
furnished by psychologists. Commenters also stated that PE costs 
increase for services furnished via telehealth due to the costs of 
HIPAA-compliant telecommunication equipment.
    One commenter remarked that use of a POS code should not be the 
basis for reducing payments and that many codes would experience a 
significant payment change. The commenter noted that a 1.0 RVU 
reduction would result in a $36 payment reduction for the service. One 
commenter stated CMS should propose budget neutral PE and originating 
site fees, based on data, for CY 2018. One commenter noted that there 
are no facility PE RVUs for several codes.

[[Page 80201]]

    Response: We do not believe that use of the telehealth POS code 
produces a significant payment change in the vast majority of 
circumstances. For distant site practitioners who are already paid 
using the facility PE RVUs and for services where there is no payment 
difference between the facility and non-facility PE RVUs, there will be 
no change in payment as a result of the telehealth POS code.
    There is utilization data for 56 of the 81 codes on the telehealth 
list. For these codes, 20 are not paid differently based on site of 
service, and 27 codes are paid differently by fewer than 0.5 RVUs. 
There are only three codes on the telehealth list with a difference 
greater than 1.0 PE RVUs between the facility PE RVUs and the non-
facility PE RVUs.
    Concerning psychotherapy and psychological testing services, we 
note that for the vast majority of psychiatric services the difference 
between the two rates is very small. For example, the difference 
between the facility and non-facility national rates for 45 minutes of 
psychotherapy is 0.02 RVUs per service: Less than $1.00. The 
differences between the facility PE RVUs and non-facility PE RVUS 
ranges from 0.01-0.03 RVUs for nine of the psychological testing codes 
on the Medicare telehealth list, and 0.12 RVUs lower for two other 
codes. We do not consider these reductions significant, nor do we have 
any evidence that practice expense costs are greater for furnishing 
such services via telehealth than for furnishing a face-to-face 
service. Commenters provided no evidence that practice expense costs 
for services furnished via telehealth are greater, due to the 
requirement for HIPAA-compliant equipment, than for furnishing in-
person services, even in the facility setting.
    There are a few HCPCS codes on the telehealth list that do not have 
a calculated facility PE RVU. For these services, the non-facility PE 
RVUs would serve as a proxy, and therefore, there would be no payment 
change for these codes.
    Finally, we note that the originating site facility fee is 
established by statute (section 1834(m)(2)(B) of the Act) and is not 
affected by this proposal.
    We note that we believe that payment using the facility PE RVUs for 
telehealth services is consistent our belief that the direct practice 
expense costs are generally incurred at the location of the beneficiary 
and not by the distant site practitioner. After reviewing the current 
list of telehealth services in the context of the comments, we continue 
to believe this is accurate.
    After consideration of the public comments received, we are 
finalizing our proposal to use the POS code for telehealth and to use 
the facility PE RVUs to pay for telehealth service reported by 
physicians or practitioners with the telehealth POS code for CY 2017. 
However, we understand commenters' concerns and will consider the 
concerns regarding use of the facility payment rate as we monitor 
utilization of telehealth services. We will welcome information from 
stakeholders regarding any potential unintended consequences of the 
payment policy. We will also consider the applicability of the facility 
rate to any codes newly added to the list of telehealth services.
    We have updated the POS code list on our Web site at https://www.cms.gov/Medicare/Coding/place-of-service-codes/Place_of_Service_Code_Set.html to include POS 02: Telehealth 
(Descriptor: The location where health services and health related 
services are provided or received, through telecommunication 
technology). The new code will be used for services furnished on or 
after January 1, 2017.
    We are finalizing proposed revisions to our regulation at Sec.  
414.22(b)(5)(i)(A) that addresses the PE RVUs used in different 
settings as described above, except that we are not finalizing the 
proposed change that would have resulted in the payment of the 
nonfacility rate for services furnished in off-campus provider based 
departments that are not excepted under Section 603 of the Bipartisan 
Budget Act of 2015 since we are finalizing that payments to such non-
excepted PBDs will be made under the PFS. In a separate interim final 
rule with comment period issued in conjunction with the CY 2017 OPPS/
ASC final rule with comment period (see Medicare Program: Hospital 
Outpatient Prospective Payment and Ambulatory Surgical Center Payment 
Systems and Quality Reporting Programs; Organ Procurement Organization 
Reporting and Communication; Transplant Outcome Measures and 
Documentation Requirements; Electronic Health Record (EHR) Incentive 
Programs; Payment to Certain Off-Campus Outpatient Departments of a 
Provider; Hospital Value-Based Purchasing (VBP) Program; Establishment 
of Physician Fee Schedule Payment Rates for Nonexcepted Items and 
Services Billed by Applicable Departments of a Hospital), we are 
finalizing other payment policies for nonexcepted items and services 
furnished by such non-excepted off-campus provider based departments. 
Accordingly, physicians furnishing services in such provider-based 
departments will continue to be paid the facility rate. We are also 
finalizing the proposal to delete Sec.  414.32 of our regulation that 
refers to the calculation of payments for certain services prior to 
2002.
    We remind the public that we are currently soliciting requests to 
add services to the list of Medicare telehealth services. To be 
considered during PFS rulemaking for CY 2018, these requests must be 
submitted and received by December 31, 2016. 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 https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/index.html.
5. Telehealth Originating Site Facility Fee Payment Amount Update
    Section 1834(m)(2)(B) of the Act establishes the Medicare 
telehealth originating site facility fee for telehealth services 
furnished from October 1, 2001 through December 31, 2002, at $20.00. 
For telehealth services furnished on or after January 1 of each 
subsequent calendar year, the telehealth originating site facility fee 
is increased by the percentage increase in the MEI as defined in 
section 1842(i)(3) of the Act. The originating site facility fee for 
telehealth services furnished in CY 2016 is $25.10. The MEI increase 
for 2017 is 1.2 percent and is based on the most recent historical 
update through 2016Q2 (1.6 percent), and the most recent historical MFP 
through calendar year 2015 (0.4 percent). Therefore, for CY 2017, the 
payment amount for HCPCS code Q3014 (Telehealth originating site 
facility fee) is 80 percent of the lesser of the actual charge or 
$25.40. The Medicare telehealth originating site facility fee and the 
MEI increase by the applicable time period is shown in Table 6.

 Table 6--The Medicare Telehealth Originating Site Facility Fee and MEI
                [Increase by the applicable time period]
------------------------------------------------------------------------
                                                       MEI      Facility
                    Time period                      increase     fee
------------------------------------------------------------------------
10/01/2001-12/31/2002.............................        N/A     $20.00
01/01/2003-12/31/2003.............................        3.0      20.60
01/01/2004-12/31/2004.............................        2.9      21.20
01/01/2005-12/31/2005.............................        3.1      21.86
01/01/2006-12/31/2006.............................        2.8      22.47
01/01/2007-12/31/2007.............................        2.1      22.94
01/01/2008-12/31/2008.............................        1.8      23.35
01/01/2009-12/31/2009.............................        1.6      23.72

[[Page 80202]]

 
01/01/2010-12/31/2010.............................        1.2      24.00
01/01/2011-12/31/2011.............................        0.4      24.10
01/01/2012-12/31/2012.............................        0.6      24.24
01/01/2013-12/31/2013.............................        0.8      24.43
01/01/2014-12/31/2014.............................        0.8      24.63
01/01/2015-12/31/2015.............................        0.8      24.83
01/01/2016-12/31/2016.............................        1.1      25.10
01/01/2017-12/31/2017.............................        1.2      25.40
------------------------------------------------------------------------

D. 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 II.B. of this final 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 as authorized by the 
law. We may also consider analyses of work time, work RVUs, or direct 
PE inputs using other data sources, such as Department of Veteran 
Affairs (VA), National Surgical Quality Improvement Program (NSQIP), 
the Society for Thoracic Surgeons (STS), and the Physician Quality 
Reporting 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 for 
our review. 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 and requires us to take into 
account the results of consultations with organizations representing 
physicians who provide the services. In accordance with section 1848(c) 
of the Act, we determine and make appropriate adjustments to the RVUs.
    In its March 2006 Report to the Congress (http://www.medpac.gov/documents/reports/Mar06_EntireReport.pdf?sfvrsn=0), MedPAC discussed 
the importance of appropriately valuing physicians' services, noting 
that misvalued services can distort the market for physicians' 
services, as well as for other health care services that physicians 
order, such as hospital services. In that same report MedPAC postulated 
that physicians' services under the PFS can become misvalued over time. 
MedPAC stated, ``When a new service is added to the physician fee 
schedule, it may be assigned a relatively high value because of the 
time, technical skill, and psychological stress that are often required 
to furnish that service. Over time, the work required for certain 
services would be expected to decline as physicians become more 
familiar with the service and more efficient in furnishing it.'' We 
believe services can also become overvalued when PE declines. This can 
happen when the costs of equipment and supplies fall, or when equipment 
is used more frequently than is estimated in the PE methodology, 
reducing its cost per use. Likewise, services can become undervalued 
when physician work increases or PE rises.
    As MedPAC noted in its March 2009 Report to Congress (http://www.medpac.gov/documents/reports/march-2009-report-to-congress-medicare-payment-policy.pdf?sfvrsn=0), in the intervening years since 
MedPAC made the initial recommendations, CMS and the RUC have taken 
several steps to improve the review process. Also, 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 
physician fee schedule.
     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

[[Page 80203]]

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 physician fee schedule.
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 1,671 
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 through 
73055). In the CY 2012 PFS 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 PFS 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 (76 FR 32410), we 
requested recommendations from the RUC to aid in our review of Harvard-
valued codes with annual utilization of greater than 30,000. In the CY 
2013 PFS final rule with comment period, we identified specific 
Harvard-valued services with annual allowed charges that total at least 
$10,000,000 as potentially misvalued. In addition to the Harvard-valued 
codes, in the CY 2013 PFS 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 that have listed work time).
    In the CY 2016 PFS final rule with comment period, we finalized for 
review a list of potentially misvalued services, which included eight 
codes in the neurostimulators analysis-programming family (CPT 95970-
95982). We also finalized as potentially misvalued 103 codes identified 
through our screen of high expenditure services across specialties.
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 are included in the CY 2011 PFS final rule with comment 
period (75 FR 73217) and the CY 2012 PFS final rule with comment period 
(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 develop 
empirical time estimates based on data collected from several health 
systems with multispecialty group practices. The Urban Institute 
collected data by directly observing the delivery of services and 
through the use of electronic health records for services selected by 
the contractor in consultation with CMS and is using this data to 
produce objective time estimates. We expect the final Urban Institute 
report will be made available on the CMS Web site later this year.
    The second contract is with the RAND Corporation, which used 
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 under downloads on the Web site 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.
    After posting RAND's report on the models and results on our Web 
site, we received comments indicating that the models did not 
adequately address global surgery services due to the lack of available 
data on included visits. Therefore, we modified the RAND contract to 
include the development of G-codes that could be used to collect data 
about post-surgical follow-up visits on Medicare claims to meet the 
requirements in section 1848(c)(8)(B) of the Act regarding collection 
of data on global services. Our discussion related to this data 
collection requirement is in section II.D.6. Also, the data from this 
project would provide information that would allow the time for these 
services to be included in the model for validating RVUs.

[[Page 80204]]

4. CY 2017 Identification and Review of Potentially Misvalued Services
a. 0-Day Global Services That Are Typically Billed With an Evaluation 
and Management (E/M) Service With Modifier 25
    Because routine E/M is included in the valuation of codes with 0-, 
10-, and 90-day global periods, Medicare only makes separate payment 
for E/M services that are provided in excess of those considered 
included in the global procedure. In such cases, the physician would 
report the additional E/M service with Modifier 25, which is defined as 
a significant, separately identifiable E/M service performed by the 
same physician on the day of a procedure above and beyond other 
services provided or beyond the usual preservice and postservice care 
associated with the procedure that was performed. Modifier 25 allows 
physicians to be paid for E/M services that would otherwise be denied 
as bundled.
    In reviewing misvalued codes, both CMS and the RUC have often 
considered how frequently particular codes are reported with E/M codes 
to account for potential overlap in resources. Some stakeholders have 
expressed concern with this policy especially with regard to the 
valuation of 0-day global services that are typically billed with a 
separate E/M service with the use of Modifier 25. For example, when we 
established our valuation of the osteopathic manipulative treatment 
(OMT) services, described by CPT codes 98925-98929, we did so with the 
understanding that these codes are usually reported with E/M codes.
    For our CY 2017 proposal (81 FR 46187), we investigated Medicare 
claims data for CY 2015 and found that 19 percent of the codes that 
described 0-day global services were billed over 50 percent of the time 
with an E/M with Modifier 25. Since routine E/M is included in the 
valuation of 0-day global services, we believed that the routine 
billing of separate E/M services may have indicated a possible problem 
with the valuation of the bundle, which is intended to include all the 
routine care associated with the service.
    In the proposed rule (81 FR 46187), we stated that reviewing the 
procedure codes typically billed with an E/M with Modifier 25 may be 
one avenue to appropriate valuation for these services. Therefore, we 
developed and proposed a screen for potentially misvalued codes that 
identified 0-day global codes billed with an E/M 50 percent of the time 
or more, on the same day of service, with the same physician and same 
beneficiary. We included a list of codes with total allowed services 
greater than 20,000. There are 83 codes that met the proposed criteria 
for the screen and were proposed as potentially misvalued. We also 
sought comment regarding additional ways to address appropriate 
valuations for all services that are typically billed with an E/M with 
Modifier 25.
    The following is the summary of the comments we received.
    Comment: Several commenters disagreed with CMS' assertion that 
there is a possible valuation problem with the bundle when an E/M with 
Modifier 25 is typically reported on the same day of service as a 0-day 
global procedure. Commenters stated that billing an E/M with Modifier 
25 pays physicians for the justifiable and appropriate services they 
render to patients; allowing for a patient-centered approach to care. 
Some commenters considered the possibility that there could be 
fraudulent billing practices when reporting an E/M with Modifier 25 and 
a few offered various solutions for rectifying the problem from a 
program integrity perspective. For example, one commenter suggested 
that further education on the appropriate use of Modifier 25 or penalty 
for misuse would be effective alternatives to combat inappropriate 
billing while another commenter suggested investigating the diagnosis 
coding for services.
    Commenters overwhelmingly opposed any change to billing policies or 
standard valuation for 0-day services that are billed with an E/M with 
Modifier 25.
    Response: We appreciate commenters' perspective on this issue. 
While we understand the commenters' views, since routine E/M is 
included in the valuation of 0-day global services we continue to 
believe that the routine billing of separate E/M services may still 
indicate a possible problem with the valuation of the global period or 
the assignment of the global period for particular codes, given that 
the period is intended to include all the routine care associated with 
the service. As discussed below, we are finalizing some of the 0-day 
global services as potentially misvalued. We will also continue to 
consider this issue for future rulemaking.
    Comment: Several commenters expressed appreciation for the 
identification of an objective screen and reasonable query. While some 
commenters were accepting of the screen as proposed, others stated 
their preference for the screen to be withdrawn entirely or limited in 
scope, with some commenters suggesting the screen be limited to the 
codes that met the criteria and for which the overlap had not already 
been considered by the RUC in developing recommended values. Several 
thousand commenters suggested withdrawing or limiting the scope of this 
screen, particularly as it pertains to the OMT codes.
    Response: Section 1848(c)(2)(K) of the Act requires the Secretary 
to periodically identify potentially misvalued services and to review 
and make appropriate adjustments to the relative values for those 
services. Section 1848(c)(2)(K) of the Act identifies several 
categories of services as potentially misvalued, including codes for 
services where there may be efficiencies when a service is furnished at 
the same time as other services, along with codes as determined 
appropriate by the Secretary. Based on the comments received, we 
understand that stakeholders would have us identify as potentially 
misvalued only those individual codes with obvious overlapping resource 
costs when typically reported with an E/M, rather than consider the 
issue of misvaluation of the global period more broadly. In response to 
these comments, we are finalizing the use of our screen for 0-day 
global services that are typically billed with an E/M with Modifier 25 
as a mechanism for identifying services that are potentially misvalued.
    Because we recognize that the primary purpose in displaying lists 
of misvalued codes in rulemaking has been to seek recommendations 
regarding appropriate valuation from stakeholders, including the RUC, 
for 2017 we are only identifying the services for which we believe 
there might be the kind of misvaluation the RUC and the medical 
specialty societies recognize. Based on the comments from these 
organizations, we believe that for codes reviewed in the past 5 years, 
the RUC has already addressed that kind of misvaluation. In other 
words, commenters have made clear that external review of these 
services is likely to be limited to clear overlap in resource costs, 
but will not address the broader concerns we have about developing 
rates for services that include routine E/M when evaluation and 
management is also routinely separately reported. As a result, we will 
continue to consider that issue for future rulemaking. We note that we 
are required under statute to improve the valuation of the 10- and 90-
day global periods, and therefore, we will consider this issue in that 
context, as well.
    Comment: While some commenters supported our review of the 83 codes 
that were proposed as potentially

[[Page 80205]]

misvalued through the screen, the majority of commenters, including the 
RUC, stated that the codes detailed in Table 7 did not meet the 
criteria for the screen because they were either reviewed in the last 5 
years and/or are not typically reported with an E/M, and therefore, 
should be removed. While commenters largely disagreed on the list of 
proposed codes, most agreed that the services they believed met the 
screen criteria should be reviewed.

   Table 7--Codes Requested To Be Removed From the List of Potentially
                           Misvalued Services
------------------------------------------------------------------------
               HCPCS                           Long descriptor
------------------------------------------------------------------------
11000.............................  Removal of inflamed or infected
                                     skin, up to 10% of body surface.
11100.............................  Biopsy of single growth of skin and/
                                     or tissue.
11300.............................  Shaving of 0.5 centimeters or less
                                     skin growth of the trunk, arms, or
                                     legs.
11301.............................  Shaving of 0.6 centimeters to 1.0
                                     centimeters skin growth of the
                                     trunk, arms, or legs.
11302.............................  Shaving of 1.1 to 2.0 centimeters
                                     skin growth of the trunk, arms, or
                                     legs.
11305.............................  Shaving of 0.5 centimeters or less
                                     skin growth of scalp, neck, hands,
                                     feet, or genitals.
11306.............................  Shaving of 0.6 centimeters to 1.0
                                     centimeters skin growth of scalp,
                                     neck, hands, feet, or genitals.
11307.............................  Shaving of 1.1 to 2.0 centimeters
                                     skin growth of scalp, neck, hands,
                                     feet, or genitals.
11310.............................  Shaving of 0.5 centimeters or less
                                     skin growth of face, ears, eyelids,
                                     nose, lips, or mouth.
11311.............................  Shaving of 0.6 centimeters to 1.0
                                     centimeters skin growth of face,
                                     ears, eyelids, nose, lips, or
                                     mouth.
11312.............................  Shaving of 1.1 to 2.0 centimeters
                                     skin growth of face, ears, eyelids,
                                     nose, lips, or mouth.
11740.............................  Removal of blood accumulation
                                     between nail and nail bed.
11900.............................  Injection of up to 7 skin growths.
11901.............................  Injection of more than 7 skin
                                     growths.
12001.............................  Repair of wound (2.5 centimeters or
                                     less) of the scalp, neck,
                                     underarms, trunk, arms and/or legs.
12002.............................  Repair of wound (2.6 to 7.5
                                     centimeters) of the scalp, neck,
                                     underarms, genitals, trunk, arms
                                     and/or legs.
12004.............................  Repair of wound (7.6 to 12.5
                                     centimeters) of the scalp, neck,
                                     underarms, genitals, trunk, arms
                                     and/or legs.
12011.............................  Repair of wound (2.5 centimeters or
                                     less) of the face, ears, eyelids,
                                     nose, lips, and/or mucous
                                     membranes.
12013.............................  Repair of wound (2.6 to 5.0
                                     centimeters) of the face, ears,
                                     eyelids, nose, lips, and/or mucous
                                     membranes.
17250.............................  Application of chemical agent to
                                     excessive wound tissue.
20550.............................  Injections of tendon sheath,
                                     ligament, or muscle membrane.
20552.............................  Injections of trigger points in 1 or
                                     2 muscles.
20553.............................  Injections of trigger points in 3 or
                                     more muscles.
20600.............................  Aspiration and/or injection of small
                                     joint or joint capsule.
20604.............................  Arthrocentesis, aspiration and/or
                                     injection, small joint or bursa
                                     (eg, fingers, toes); with
                                     ultrasound guidance, with permanent
                                     recording and reporting.
20605.............................  Aspiration and/or injection of
                                     medium joint or joint capsule.
20606.............................  Arthrocentesis, aspiration and/or
                                     injection, intermediate joint or
                                     bursa (eg, temporomandibular,
                                     acromioclavicular, wrist, elbow or
                                     ankle, olecranon bursa); with
                                     ultrasound guidance, with permanent
                                     recording and reporting.
20610.............................  Aspiration and/or injection of large
                                     joint or joint capsule.
20611.............................  Arthrocentesis, aspiration and/or
                                     injection, major joint or bursa
                                     (eg, shoulder, hip, knee,
                                     subacromial bursa); with ultrasound
                                     guidance, with permanent recording
                                     and reporting.
20612.............................  Aspiration and/or injection of
                                     cysts.
29125.............................  Application of non-moveable, short
                                     arm splint (forearm to hand).
29515.............................  Application of short leg splint
                                     (calf to foot).
30901.............................  Simple control of nose bleed.
30903.............................  Complex control of nose bleed.
31231.............................  Diagnostic examination of nasal
                                     passages using an endoscope.
31238.............................  Control of nasal bleeding using an
                                     endoscope.
31500.............................  Emergent insertion of breathing tube
                                     into windpipe cartilage using an
                                     endoscope.
31575.............................  Diagnostic examination of voice box
                                     using flexible endoscope.
31579.............................  Examination to assess movement of
                                     vocal cord flaps using an
                                     endoscope.
31645.............................  Aspiration of lung secretions from
                                     lung airways using an endoscope.
32551.............................  Removal of fluid from between lung
                                     and chest cavity, open procedure.
32554.............................  Removal of fluid from chest cavity.
40490.............................  Biopsy of lip.
46600.............................  Diagnostic examination of the anus
                                     using an endoscope.
51701.............................  Insertion of temporary bladder
                                     catheter.
51702.............................  Insertion of indwelling bladder
                                     catheter.
51703.............................  Insertion of indwelling bladder
                                     catheter.
56605.............................  Biopsy of external female genitals.
57150.............................  Irrigation of vagina and/or
                                     application of drug to treat
                                     infection.
57160.............................  Fitting and insertion of vaginal
                                     support device.
58100.............................  Biopsy of uterine lining.
64418.............................  Injection of anesthetic agent,
                                     collar bone nerve.
65222.............................  Removal of foreign body, external
                                     eye, cornea with slit lamp
                                     examination.
67810.............................  Biopsy of eyelid.
67820.............................  Removal of eyelashes by forceps.
68200.............................  Injection into conjunctiva.
69100.............................  Biopsy of ear.
69200.............................  Removal of foreign body from ear
                                     canal.
69210.............................  Removal of impact ear wax, one ear.
69220.............................  Removal of skin debris and drainage
                                     of mastoid cavity.
92511.............................  Examination of the nose and throat
                                     using an endoscope.
92941.............................  Insertion of stent, removal of
                                     plaque and/or balloon dilation of
                                     coronary vessel during heart
                                     attack, accessed through the skin.
92950.............................  Attempt to restart heart and lungs.

[[Page 80206]]

 
98925.............................  Osteopathic manipulative treatment
                                     to 1-2 body regions.
98926.............................  Osteopathic manipulative treatment
                                     to 3-4 body regions.
98927.............................  Osteopathic manipulative treatment
                                     to 5-6 body regions.
98928.............................  Osteopathic manipulative treatment
                                     to 7-8 body regions.
98929.............................  Osteopathic manipulative treatment
                                     to 9-10 body regions.
------------------------------------------------------------------------

    Response: After considering the comments received, we are 
significantly reducing the number of codes identified as potentially 
misvalued. We agree with commenters that the majority of the codes that 
we are not finalizing have been recently reviewed. Due to a drafting 
error in the proposed rule, we stated that we had exempted codes that 
had been reviewed in the past 5 years. While that exclusion has been 
standard for many other misvalued code screens, we did not intend to 
apply it in this case, given our concerns with the valuation of the 
global period when E/M visits are routinely reported at the same time. 
As displayed in the proposed rule, the list of codes reflected our 
intention to include codes that have been recently reviewed. 
Regardless, we understand based on comments that any review by 
stakeholders for recently reviewed codes would be likely to result in 
similar valuation. Therefore, we do not believe that we should include 
codes reviewed in the past 5 years on this list of misvalued codes, 
given the limited nature of the likely review. Regarding the accuracy 
of which of the codes are typically reported with E/M codes, we note 
that our review included analysis was based on more recent, full claims 
data than had yet been made public. In the interest of transparency, we 
are finalizing the list of services based on the publically available 
data.

 Table 8--List of Potentially Misvalued Services Identified Through the
   Screen for 0-Day Global Services That Are Typically Billed With an
        Evaluation and Management (E/M) Service With Modifier 25
------------------------------------------------------------------------
               HCPCS                           Long descriptor
------------------------------------------------------------------------
11755.............................  Biopsy of finger or toe nail.
20526.............................  Injection of carpal tunnel.
20551.............................  Injections of tendon attachment to
                                     bone.
20612.............................  Aspiration and/or injection of
                                     cysts.
29105.............................  Application of long arm splint
                                     (shoulder to hand).
29540.............................  Strapping of ankle and/or foot.
29550.............................  Strapping of toes.
43760.............................  Change of stomach feeding, accessed
                                     through the skin.
45300.............................  Diagnostic examination of rectum and
                                     large bowel using an endoscope.
57150.............................  Irrigation of vagina and/or
                                     application of drug to treat
                                     infection.
57160.............................  Fitting and insertion of vaginal
                                     support device.
58100.............................  Biopsy of uterine lining.
64405.............................  Injection of anesthetic agent,
                                     greater occipital nerve.
64455.............................  Injections of anesthetic and/or
                                     steroid drug into nerve of foot.
65205.............................  Removal of foreign body in external
                                     eye, conjunctiva.
65210.............................  Removal of foreign body in external
                                     eye, conjunctiva or sclera.
67515.............................  Injection of medication or substance
                                     into membrane covering eyeball.
G0168.............................  Wound closure utilizing tissue
                                     adhesive(s) only.
G0268.............................  Removal of impacted cerumen (one or
                                     both ears) by physician on same
                                     date of service as audiologic
                                     function testing.
------------------------------------------------------------------------

b. End-Stage Renal Disease Home Dialysis Services (CPT Codes 90963 
Through 90970)
    In the CY 2004 PFS final rule with comment period (68 FR 63216), we 
established new Level II HCPCS G-codes for end-stage renal disease 
(ESRD) services and established payment for those codes through monthly 
capitation payment (MCP) rates. For ESRD center-based patients, payment 
for the G-codes varied based on the age of the beneficiary and the 
number of face-to-face visits furnished each month (for example, 1 
visit, 2-3 visits and 4 or more visits). We believed that many 
physicians would provide 4 or more visits to center-based ESRD patients 
and a small proportion will provide 2-3 visits or only one visit per 
month. Under the MCP methodology, to receive the highest payment, a 
physician would have to provide at least four ESRD-related visits per 
month. However, payment for home dialysis MCP services only varied by 
the age of beneficiary. Although we did not initially specify a 
frequency of required visits for home dialysis MCP services, we stated 
that we expect physicians to provide clinically appropriate care to 
manage the home dialysis patient.
    The CPT Editorial Panel created new CPT codes to replace the G-
codes for monthly ESRD-related services, and we accepted the new codes 
for use under the PFS in CY 2009. The CPT codes created were 90963-
90966 for monthly ESRD-related services for home dialysis patient and 
CPT codes 90967-90970 for dialysis with less than a full month of 
services.
    In a GAO report titled ``END-STAGE RENAL DISEASE Medicare Payment 
Refinements Could Promote Increased Use of Home Dialysis'' dated 
October 2015, http://www.gao.gov/products/GAO-16-125, the GAO stated 
that experts and stakeholders they interviewed indicated that home 
dialysis could be clinically appropriate for at least half of patients. 
Also, at a meeting in 2013, the chief medical officers of 14 dialysis 
facility chains jointly estimated that a realistic target for home 
dialysis would be 25 percent of dialysis patients. The GAO noted that 
CMS data showed that about 10 percent of adult Medicare dialysis 
patients use home dialysis as of March 2015.

[[Page 80207]]

    In the report, the GAO noted that CMS intended for the existing 
payment structure to create an incentive for physicians to prescribe 
home dialysis, because the monthly payment rate for managing the 
dialysis care of home patients, which requires a single in-person 
visit, was approximately equal to the rate for managing and providing 
two to three visits to ESRD center-based patients. However, GAO found 
that, in 2013, the rate of $237 for managing home patients was lower 
than the average payment of $266 and maximum payment of $282 for 
managing ESRD center-based patients. The GAO stated that this 
difference in payment rates may discourage physicians from prescribing 
home dialysis.
    Physician associations and other physicians GAO interviewed stated 
that the visits with home patients are often longer and more 
comprehensive than in-center visits; this is in part because physicians 
may conduct visits with individual home patients in a private setting, 
but they may be able to more easily visit multiple in-center patients 
on a single day as they receive dialysis. The physician associations 
GAO interviewed also said that they may spend a similar amount of time 
outside of visits to manage the care of home patients and that they are 
required to provide at least one visit per month to perform a complete 
assessment of the patient.
    It is important to note that, as stated in the CY 2011 PFS final 
rule with comment period (75 FR 73296), we believe that furnishing 
monthly face-to-face visits is an important component of high quality 
medical care for ESRD patients being dialyzed at home and generally 
would be consistent with the current standards of medical practice. 
However, we also acknowledged that extenuating circumstances may arise 
that make it difficult for the MCP physician (or NPP) to furnish a 
visit to a home dialysis patient every month. Therefore, we allow 
Medicare contractors the discretion to waive the requirement for a 
monthly face-to-face visit for the home dialysis MCP service on a case-
by-case basis, for example, when the MCP physician's (or NPP's) notes 
indicate that the MCP physician (or NPP) actively and adequately 
managed the care of the home dialysis patient throughout the month.
    The GAO recommended, and we agreed, that CMS examine Medicare 
policies for monthly payments to physicians to manage the care of 
dialysis patients and revise them if necessary to ensure that these 
policies are consistent with our goal of encouraging the use of home 
dialysis among patients for whom it is appropriate. Therefore, we 
proposed to identify CPT codes 90963 through 90970 as potentially 
misvalued codes based on the volume of claims submitted for these 
services relative to those submitted for facility ESRD services.
    The following is summary of the comments we received.
    Comment: Commenters supported the proposal to identify these codes 
as potentially misvalued and supported CMS' goal of encouraging the use 
of home dialysis among patients for whom it is appropriate. Some 
commenters suggested we establish parity between payment for four ESRD-
related visits per month for in-center dialysis patients and payment 
for the care of home dialysis patients for an entire month. One 
commenter cautioned that CMS should also consider factors other than 
payment that play a critical role in whether a patient decides to use a 
home dialysis modality as outlined in a recent GAO report and requested 
that CMS work closely with nephrologists on this issue. One commenter 
encouraged CMS to focus on incentives for the adult population 
separately from pediatrics as they see no benefit from reanalysis of 
the pediatric home and daily dialysis CPT codes 90963-90965 and 90967-
90969.
    Response: We appreciate all of the comments and agree that CPT 
codes 90963 through 90970 should be identified as potentially 
misvalued. After considering the comments, we are finalizing the 
addition of CPT codes 90963 through 90970 to the list of potentially 
misvalued codes. We will also continue to consider these issues for 
future rulemaking.
c. Direct PE Input Discrepancies
i. Appropriate Direct PE Inputs Involved in Procedures Involving 
Endoscopes
    In the proposed rule (81 FR 46190), we stated that stakeholders had 
raised concerns about potential inconsistencies with the inputs and the 
prices related to endoscopic procedures in the direct PE database. Upon 
review, we noted that there are 45 different pieces of endoscope 
related-equipment and 25 different pieces of endoscope related-supplies 
that are currently associated with these services. Relative to other 
kinds of equipment items in the direct PE input, these items are much 
more varied and used for many fewer services. Given the frequency with 
which individual codes can be reviewed and the importance of 
standardizing inputs for purposes of maintaining relativity across PFS 
services, we believed that this unusual degree of variation was likely 
to result in code misvaluation. To facilitate efficient review of this 
particular kind of misvaluation, and because we believed that 
stakeholders would prefer the opportunity to contribute to such 
standardization, we requested that stakeholders like the AMA RUC review 
and make recommendations on the appropriate endoscopic equipment and 
supplies typically provided in all endoscopic procedures for each 
anatomical body region, along with their appropriate prices.
    The following is summary of the comments we received.
    Comment: Many commenters stated that the RUC is the appropriate 
resource for the review of appropriate direct PE inputs involved in 
procedures involving endoscopes and urged CMS to work with the RUC to 
address this issue. Additionally, the RUC stated that due to the 
complexity of this issue and the need to incorporate input from various 
specialty societies that the RUC planned to form a workgroup of the PE 
subcommittee to review the issue.
    Response: We appreciate the comments and will review any 
recommendation provided to us by the RUC for use in future rulemaking, 
consistent with our normal review processes.
ii. Appropriate Direct PE Inputs in the Facility Post-Service Period 
When Post-Operative Visits Are Excluded
    In the proposed rule (81 FR 46190), we identified a potential 
inconsistency in instances where there are direct PE inputs included in 
the facility postservice period even though post-operative visit is not 
included in a service. We identified 13 codes affected by this issue 
and stated that we were unclear if the discrepancy was caused by 
inaccurate direct PE inputs or inaccurate post-operative data in the 
work time file. We requested that stakeholders including the AMA RUC 
review these discrepancies and provide their recommendations on the 
appropriate direct PE inputs for the codes.
    The following is summary of the comments we received.
    Comment: The RUC stated that for CPT codes 21077 (Impression and 
preparation of eye socket prosthesis), 21079 (Impression and custom 
preparation of temporary oral prosthesis), 21080 (Impression and custom 
preparation of permanent oral prosthesis), 21081 (Impression and custom 
preparation of lower jaw bone prosthesis), 21082 (Impression and custom 
preparation of prosthesis for

[[Page 80208]]

roof of mouth enlargement), 21083 (Impression and custom preparation of 
roof of mouth prosthesis), and 21084 (Impression and custom preparation 
of speech aid prosthesis) the practice expense time in the postservice 
period in the facility setting is completely distinct from the 
physician post-operative visit and that time must be accounted for the 
manufacture and fitting of the prosthetics. The RUC stated that the 
following codes all had inaccurate post-operative data in the work time 
file and provided recommendations on appropriate post-operative visits: 
CPT codes 28636 (Insertion of hardware to foot bone dislocation with 
manipulation, accessed through the skin), 28666 (Insertion of hardware 
to toe joint dislocation with manipulation, accessed through the skin), 
43652 (Incision of vagus nerves of stomach using an endoscope), 47570 
(Connection of gall bladder to bowel using an endoscope), and 66986 
(Exchange of lens prosthesis). Additionally, another commenter stated 
that CPT code 46900 (Chemical destruction of anal growths) also had 
inaccurate post-operative data in the work time file and provided a 
recommendation on the appropriate post-operative visit.
    Response: We thank stakeholders for their comments. We will review 
the recommendations provided to us by the AMA RUC and other commenters 
and will consider for future rulemaking, consistent with our normal 
review processes.
d. Insertion and Removal of Drug Delivery Implants--CPT Codes 11981 and 
11983
    In the proposed rule (81 FR 46190), we stated that stakeholders had 
urged CMS to create new coding describing the insertion and removal of 
drug delivery implants for buprenorphine hydrochloride, formulated as a 
4 rod, 80 mg, long acting subdermal drug implant for the treatment of 
opioid addiction. The stakeholders suggested that current coding 
describing insertion and removal of drug delivery implants was too 
broad and that new coding was needed to account for specific additional 
resource costs associated with particular treatment. We identified 
existing CPT codes 11981 (Insertion, non-biodegradable drug delivery 
implant), 11982 (Removal, non-biodegradable drug delivery implant), and 
11983 (Removal with reinsertion, non-biodegradable drug delivery 
implant) as potentially misvalued codes and sought comment and 
information regarding whether the current resource inputs in work and 
practice expense for the codes appropriately accounted for variations 
in the service relative to which devices and related drugs are inserted 
and removed.
    The following is summary of the comments we received.
    Comment: One commenter stated that CMS should create distinct codes 
and payment levels for a four-rod implant as opposed to the one-rod 
implant detailed in CPT codes 11981-11983. In contrast, another 
commenter stated that the identified codes adequately describe the work 
and practice expense for drug implant delivery and removal services. 
Additionally, another commenter stated the codes should be removed from 
the potentially misvalued list. The RUC stated that a coding change 
proposal had been submitted for the services under the CPT process and 
that the RUC anticipated providing relevant recommendations for CY 
2018.
    Response: We thank stakeholders for their comments. We will review 
new coding and recommended valuations for future rulemaking, consistent 
with our normal review processes.
5. Valuing Services That Include Moderate Sedation as an Inherent Part 
of Furnishing the Procedure
    The CPT manual identifies more than 400 diagnostic and therapeutic 
procedures (listed in Appendix G) for which the CPT Editorial Panel has 
determined that moderate sedation is an inherent part of furnishing the 
procedure. In developing RVUs for these services, we include the 
relative resources associated with moderate sedation in the valuation 
since the CPT codes include moderate sedation as an inherent part of 
the procedure. Therefore, practitioners only report the procedure code 
when furnishing the service. Endoscopic procedures constitute a 
significant portion of the services identified in Appendix G. 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, 
meaning that the relative resources associated with sedation were no 
longer incurred by the practitioner reporting the Appendix G procedure. 
We indicated that, in order to reflect apparent changes in medical 
practice, we were considering establishing a uniform approach to the 
appropriate valuation of all Appendix G services for which moderate 
sedation is no longer inherent, rather than addressing the issue at the 
procedure level as individual codes are revalued. We solicited public 
comment on approaches to the appropriate valuation of these services.
    In the CY 2016 PFS proposed rule (80 FR 41707), we again solicited 
public comment and recommendations on approaches to address the 
appropriate valuation of moderate sedation related to Appendix G 
services. Following our comment solicitation, the CPT Editorial Panel 
created CPT codes for separately reporting moderate sedation services 
in association with the elimination of Appendix G from the CPT manual 
for CY 2017. This coding change would provide for payment for moderate 
sedation services only in cases where they are furnished. In addition 
to providing recommended values for the new codes used to separately 
report moderate sedation, the RUC provided a methodology for revaluing 
all services previously identified in Appendix G, without moderate 
sedation, in order to make appropriate corresponding adjustments for 
the procedural services. The RUC recommended this methodology to 
address moderate sedation valuation generally instead of recommending 
that it be addressed as individual codes are reviewed. The RUC's 
recommended methodology would remove work RVUs for moderate sedation 
from Appendix G codes based on a code-level assessment of whether the 
procedures are typically furnished to straightforward patients or more 
difficult patients. Based on its recommended methodology, the RUC 
recommended removal of fewer RVUs from each of the procedural services 
than it recommended for valuing the moderate sedation services. If we 
were to use the RUC-recommended values for both the moderate sedation 
codes and the Appendix G procedural codes without refinement, overall 
payments for these procedures, when moderate sedation is furnished, 
would increase relative to the current payment.
    We direct readers to section II.L. of this final rule, which 
includes more detail regarding our valuation of the new moderate 
sedation codes, our methodology for revaluation of the procedural codes 
previously identified in Appendix G, and discussion and responses to 
the public comments we received regarding our proposal. We believe that 
the RVUs assigned under the PFS should reflect the overall relative 
resources of PFS services, regardless of how many codes are used to 
report the services. Therefore, our methodology for valuation of 
Appendix G procedural services maintains current resource assumptions 
for the procedures when furnished with moderate sedation and 
redistributes the RVUs associated with moderate sedation (previously

[[Page 80209]]

included in the Appendix G procedural codes) to other PFS services. We 
believe that this methodology for revaluation of Appendix G services 
without moderate sedation is consistent with our general principle that 
the overall relative resources for the procedures do not change based 
solely on changes in coding.
    We also noted in the CY 2017 PFS proposed rule that stakeholders 
presented information to CMS regarding specialty group survey data for 
physician work. The stakeholders shared survey results for physician 
work involved in furnishing moderate sedation that demonstrated a 
significant bimodal distribution between procedural services furnished 
by gastroenterologists (GI) and procedural services furnished by other 
specialties. Since we believe that gastroenterologists furnish the 
highest volume of services previously identified in Appendix G, and 
services primarily furnished by gastroenterologists prompted the 
concerns that led to our identification of changes in medical practice 
and potentially duplicative payment for these codes, we have addressed 
the variations between GI and other specialties in our review of the 
new moderate sedation CPT codes and their recommended values. We again 
direct readers to section II.L. of this final rule where we discuss our 
establishment of an endoscopy-specific moderate sedation G-code that 
augments the new CPT codes for moderate sedation, the public comments 
we received, and our finalized valuations reflecting the differences in 
the physician survey data between GI and other specialties.
6. Collecting Data on Resources Used in Furnishing Global Services
a. Background
(1) Current Payment Policy for Global Packages
    Under the PFS, certain services, such as surgery, are valued and 
paid for as part of global packages that include the procedure and the 
services typically furnished in the periods immediately before and 
after the procedure. For each of these global packages, we establish a 
single PFS payment that includes payment for particular services that 
we assume to be typically furnished during the established global 
period. There are three primary categories of global packages that are 
labeled based on the number of post-operative days included in the 
global period: 0-day; 10-day; and 90-day. The 0-day global packages 
include the surgical procedure and the pre-operative and post-operative 
services furnished by the physician on the day of the service. The 10-
day global packages include these services and, in addition, visits 
related to the procedure during the 10 days following the day of the 
procedure. The 90-day global packages include the same services as the 
0-day global codes plus the pre-operative services furnished one day 
prior to the procedure and post-operative services during the 90 days 
immediately following the day of the procedure. Section 40.1 of Chapter 
12 of the Claims Processing Manual (Pub. 100-04) defines the global 
surgical package to include the following services related to the 
surgery when furnished during the global period by the same physician 
or another practitioner in the same group practice:
     Pre-operative Visits: Pre-operative visits after the 
decision is made to operate beginning with the day before the day of 
surgery for major procedures and the day of surgery for minor 
procedures;
     Intra-operative Services: Intra-operative services that 
are normally a usual and necessary part of a surgical procedure;
     Complications Following Surgery: All additional medical or 
surgical services required of the surgeon during the post-operative 
period of the surgery because of complications that do not require 
additional trips to the operating room;
     Post-operative Visits: Follow-up visits during the post-
operative period of the surgery that are related to recovery from the 
surgery;
     Post-surgical Pain Management: By the surgeon; and
     Miscellaneous Services: Items such as dressing changes; 
local incisional care; removal of operative pack; removal of cutaneous 
sutures and staples, lines, wires, tubes, drains, casts, and splints; 
insertion, irrigation and removal of urinary catheters, routine 
peripheral intravenous lines, nasogastric and rectal tubes; and changes 
and removal of tracheostomy tubes.
    In the CY 2015 PFS proposed and final rules we extensively 
discussed the problems with accurate valuation of 10- and 90-day global 
packages. Our concerns included the fact that we do not use actual data 
on services furnished to update the rates, questions regarding the 
accuracy of our current assumptions about typical services, whether we 
will be able to adjust values on a regular basis to reflect changes in 
the practice of medicine and health care delivery, and how our global 
payment policies affect what services are actually furnished (79 FR 
67582 through 67585). In finalizing a policy to transform all 10- and 
90-day global codes to 0-day global codes in CY 2017 and CY 2018, 
respectively, to improve the accuracy of valuation and payment for the 
various components of global packages, including pre- and post-
operative visits and the procedure itself, we stated that we were 
adopting this policy because it is critical that PFS payment rates be 
based upon RVUs that reflect the relative resources involved in 
furnishing the services. We also stated our belief that transforming 
all 10- and 90-day global codes to 0-day global packages would:
     Increase the accuracy of PFS payment by setting payment 
rates for individual services that more closely reflect 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 packages; and
     Facilitate the availability of more accurate data for new 
payment models and quality research.
(2) Data Collection & Revaluation of Global Packages Required by MACRA
    Section 523(a) of the Medicare Access and CHIP Reauthorization Act 
of 2015 (MACRA) (Pub. L. 114-10, enacted April 16, 2015) added section 
1848(c)(8)(A) of the Act, which prohibits the Secretary from 
implementing the policy, described above, that would have transformed 
all 10-day and 90-day global surgery packages to 0-day global packages.
    Section 1848(c)(8)(B) of the Act, which was also added by section 
523(a) of the MACRA, requires us to collect data to value surgical 
services. Section 1848(c)(8)(B)(i) of the Act requires us 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 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 and furnished during the global period, 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,

[[Page 80210]]

every 4 years, we reassess the value of this collected information; and 
allows us to discontinue the collection of this information if the 
Secretary determines that we have adequate information from other 
sources to accurately value global surgical services. Section 
1848(c)(8)(B)(iii) of the Act specifies that the Inspector General 
shall audit a sample of the collected information to verify its 
accuracy. Section 1848(c)(9) of the Act (added by section 523(b) of the 
MACRA) 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.
    Section 1848(c)(8)(C) of the Act, which was also added by section 
523(a) of the MACRA, 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.
(3) Public Input
    As noted above, 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 the CY 2015 PFS final rule 
(79 FR 67582 through 67591) the limitations and difficulties involved 
in the appropriate valuation of the global packages, especially when 
the resources and the related values assigned to the component services 
are not defined. To gain input from stakeholders on implementation of 
this data collection, we sought comment on various aspects of this task 
in the CY 2016 proposed rule (80 FR 41707 through 41708). We solicited 
comments from the public regarding the kinds of auditable, objective 
data (including the number and type of visits and other services 
furnished during the post-operative period by the practitioner 
furnishing the procedure) needed to increase the accuracy of the 
valuation and payment for 10- and 90-day global packages. We also 
solicited comment on the most efficient means of acquiring these data 
as accurately and efficiently as possible. For example, we sought 
information on the extent to which individual practitioners or 
practices may currently maintain their own data on services furnished 
during the post-operative period, and how we might collect and 
objectively analyze those data and use the results for increasing the 
accuracy of the values beginning in CY 2019.
    We received many comments in response to the comment solicitation 
in the CY 2016 proposed rule regarding potential methods of valuing the 
individual components of the global surgical package. A large number of 
comments expressed strong support for our proposal to hold an open door 
forum or town hall meetings with the public. In response, we held a 
national listening session on January 20, 2016. Prior to the listening 
session, the topics for which guidance was being sought were sent 
electronically to those who registered for the session and made 
available on our Web site. The topics were:
     Capturing the types of services typically furnished during 
the global period.
     Determining the representative sample for the claims-based 
data collection.
     Determining whether we should collect data on all surgical 
services or, if not, which services should be sampled.
     Potential for designing data collection elements to 
interface with existing infrastructure used to track follow-up visits 
within the global period.
     Consideration of using the 5 percent withhold until 
required information is furnished to encourage reporting.
    The 658 participants in the national listening session provided 
valuable information on this task. A written transcript and an audio 
recording of this session are available at https://www.cms.gov/Outreach-and-Education/Outreach/NPC/National-Provider-Calls-and-Events-Items/2016-01-20-MACRA.html.
b. Data Collection Required To Accurately Value Global Packages
    Resource-based valuation of individual physicians' services is a 
critical foundation for Medicare payment to physicians. It is essential 
that the RVUs under the PFS be based as closely and accurately as 
possible on the actual resources used in furnishing specific services 
to make appropriate payment and preserve relativity among services. For 
global surgical packages, this requires using objective data on all of 
the resources used to furnish the services that are included in the 
package. Not having such data for some components may significantly 
skew relativity and create unwarranted payment disparities within the 
PFS.
    The current valuations for many services valued as global packages 
are based upon the total package as a unit rather than by determining 
the resources used in furnishing the procedure and each additional 
service/visit and summing the results. As a result, we do not have the 
same level of information about the components of global packages as we 
do for other services. To value global packages accurately and relative 
to other procedures, we need accurate information about the resources--
work, PEs and malpractice--used in furnishing the procedure, similar to 
what is used to determine RVUs for all services. In addition we need 
the same information on the post-operative services furnished in the 
global period (and pre-operative services the day before for 90-day 
global packages). Public comments about our CY 2015 proposal to value 
all global services as 0-day global services and pay separately for 
additional post-operative services when furnished indicated that there 
were no reliable data available on the value of the underlying 
procedure that did not also incorporate the value of the post-operative 
services, reinforcing our view that more data are needed across the 
board.
    While we believe that most of the services furnished in the global 
period are visits for follow-up care, we do not have accurate 
information on the number and level of visits typically furnished 
because those billing for global services are not required to submit 
claims for post-operative visits. A May 2012 Office of Inspector 
General (OIG) report, titled Cardiovascular Global Surgery Fees Often 
Did Not Reflect the Number of Evaluation and Management Services 
Provided (http://oig.hhs.gov/oas/reports/region5/50900054.pdf) found 
that for 202 of the 300 sampled cardiovascular global surgeries, the 
Medicare payment rates were based on a number of visits that did not 
reflect the actual number of services provided. Specifically, 
physicians provided fewer services than the visits included in the 
payment calculation for 132 global surgery services and provided more 
services than were included in the payment calculations for 70 
services. Similar results were found in OIG reports titled 
``Musculoskeletal Global Surgery Fees Often Did Not Reflect The Number 
Of Evaluation And Management Services Provided'' (http://oig.hhs.gov/oas/reports/region5/50900053.asp) and ``Review of Cataract Global 
Surgeries and Related Evaluation and Management Services, Wisconsin 
Physicians Service Insurance Corporation Calendar Year 2003, March 
2007.'' (http://oig.hhs.gov/oas/reports/region5/50600040.pdf).
    Claims data plays a major role in PFS ratesetting. Specifically, 
Medicare claims data are a primary driver in the allocation of indirect 
PE RVUs and MP RVUs across the codes used by

[[Page 80211]]

particular specialties, and in making overall budget neutrality and 
relativity adjustments. In most cases, a claim must be filed for all 
visits. Such claims provide information such as the place of service, 
the type and, if relevant, the level of the service, the date of the 
service, and the specialty of the practitioner furnishing the services. 
Because we have not required claims reporting of visits included in 
global surgical packages, we do not have any of this information for 
the services bundled in the package.
    In addition to the lack of information about the number and level 
of visits actually furnished, the current global valuations rely on 
crosswalks to E/M visits, based upon the assumption that the resources, 
including work, used in furnishing pre- and post-operative visits are 
similar to those used in furnishing E/M visits. We are unaware of any 
studies or surveys that verify this assertion. Although we generally 
value the visits included in global packages using the same direct PE 
inputs as are used for E/M visits, for services for which the RUC 
recommendations include specific PE inputs in addition to those 
typically included for E/M visits, we generally use the additional 
inputs in the global package valuation. In contrast, when a visit 
included in a global package would use fewer resources than a 
comparable E/M service, the RUC generally does not include 
recommendations to decrease the PE inputs of the visit included in the 
global package, and we have not generally made comparable reductions. 
Another inconsistency with our current global package valuation 
approach is that even though we effectively assume that the E/M codes 
are appropriate for valuing pre- and post-operative services, the 
indirect PE inputs used for calculating payments for global services 
are based upon the specialty mix furnishing the global service, not the 
specialty mix of the physicians furnishing the E/M services, resulting 
in a different valuation for the E/M services contained in global 
packages than for separately billable E/M services. There is a critical 
need to obtain complete information if we are to value global packages 
accurately and in a way that preserves relativity across the fee 
schedule.
    In response to the requirement of section 1848(c)(8)(B)(i) of the 
Act that we develop, through rulemaking, a process to gather 
information needed to value surgical services, we proposed a rigorous 
data collection effort to provide us the data needed to accurately 
value the 4,200 codes with a 10- or 90-day global period. Using our 
authority under sections 1848(c)(2)(M) and (c)(8)(B)(i) of the Act, we 
proposed to gather the data needed to determine how to best structure 
global packages with post-operative care that is typically delivered 
days, weeks or months after the procedure and whether there are some 
procedures for which accurate valuation for packaged post-operative 
care is not possible. Finally, we indicated that these data would 
provide useful information to assess the resources used in furnishing 
pre- and post-operative care in global periods. To accurately do so, we 
need to know the volume and costs of the resources typically used.
    We proposed a three-pronged approach to collect timely and accurate 
data on the frequency of and the level of pre- and post-operative 
visits and the resources involved in furnishing the pre-operative 
visits, post-operative visits, and other services for which payment is 
included in the global surgical payment. By analyzing these data, we 
would not only have the most comprehensive information available on the 
resources used in furnishing these services, but also would be able to 
determine the appropriate packages for such services. Specifically, the 
proposal included:
     A requirement for claims-based reporting about the number 
and level of pre- and post-operative visits furnished for 10- and 90-
day global services.
     A survey of a representative sample of practitioners about 
the activities involved in and the resources used in providing a number 
of pre- and post-operative visits during a specified, recent period of 
time, such as two weeks.
     A more in-depth study, including direct observation of the 
pre- and post-operative care delivered in a small number of sites, and 
a separate survey module for practitioners practicing in ACOs.
    The information collected and analyzed through the activities would 
be the first comprehensive look at the volume and level of services in 
a global period, and the activities and inputs involved in furnishing 
global services. The data from these activities would ultimately inform 
our revaluation of global surgical packages as required by statute.
    To expand awareness of the proposal for data collection, we held a 
national listening session in which CMS reviewed the proposal for 
participants. Subsequent to this national listening session, we held a 
town hall meeting at the CMS headquarters in which participants, in 
person and virtual, shared their views on the proposal with CMS. The 
transcript from these town halls is available on the CMS Web site with 
the CY 2017 final rule downloads.
(1) Statutory Authority for Data Collection
    As described in this section of the final rule, section 
1848(c)(8)(B)(i) of the Act requires us to develop, through rulemaking, 
a process to gather information needed to value surgical services from 
a representative sample of physicians. The statute requires that the 
collected information include the number and level of medical visits 
furnished during the global period and other items and services related 
to the surgery and furnished during the global period, as appropriate.
    In addition, section 1848(c)(2)(M) of the Act, which was added to 
the Act by section 220 of the PAMA, authorizes the Secretary to collect 
or obtain information on resources directly or indirectly related to 
furnishing services for which payment is made under the PFS. Such 
information may be collected or obtained from any eligible professional 
or any other source. Information may be collected or obtained from 
surveys of physicians, other suppliers, providers of services, 
manufacturers, and vendors. That section also authorizes the Secretary 
to collect information through any other mechanism determined 
appropriate. When using information gathered under this authority, the 
statute requires the Secretary to disclose the information source and 
discuss the use of such information in the determination of relative 
values through notice and comment rulemaking.
    As described in this section of the final rule, to gain information 
to assist CMS in determining the appropriate packages for global 
services and to revalue those services, CMS needs more information on 
the resources used in furnishing such services. Through the claims-
based data collection and the study we are finalizing in this final 
rule, we would have better information about the actual number of 
services furnished to Medicare beneficiaries to use in valuation for 
these codes than has been typically available, such as from RUC surveys 
that reflect practitioner's estimates of the number of services 
typically furnished. We anticipate that such efforts would inform how 
to more regularly collect data on the resources used in furnishing 
physicians' services. To the extent that such mechanisms prove 
valuable, they may be used to collect data for valuing other services. 
To achieve this significant data collection, we proposed to collect 
data under the authority of both section 1848(c)(8)(B) and (c)(2)(M) of 
the Act.

[[Page 80212]]

(2) Claims-Based Data Collection
    We proposed a claims-based data collection that would have required 
all those providing 10- or 90-day global services to report on services 
furnished during the global period using a series of G-codes specially 
created for this purpose, beginning January 1, 2017.
    In response to the comments submitted on the proposal, we are 
finalizing a claims-based data collection that differs from this 
proposal in the following significant ways:
     CPT code 99024 will be used for reporting post-operative 
services rather than the proposed set of G-codes. Reporting will not be 
required for pre-operative visits included in the global package or for 
services not related to patient visit.
     Reporting will be required only for services related to 
codes reported annually by more than 100 practitioners and that are 
reported more than 10,000 times or have allowed charges in excess of 
$10 million annually.
     Practitioners are encouraged to begin reporting post-
operative visits for procedures furnished on or after January 1, 2017, 
but the mandatory requirement to report will be effective for services 
related to global procedures furnished on or after July 1, 2017.
     Only practitioners who practice in groups with 10 or more 
practitioners in Florida, Kentucky, Louisiana, Nevada, New Jersey, 
North Dakota, Ohio, Oregon, and Rhode Island will be required to 
report. Practitioners who only practice in smaller practices or in 
other geographic areas are encouraged to report data, if feasible.
    Given that the data collection will be limited to only some states, 
a subset of global services, and only to those who practice in larger 
practices the information collected through claims for global packages 
services will not parallel the claims data that are available in 
pricing other PFS services. However, we believe that the information 
collected through this data collection will be a significant 
improvement over the information currently available to value these 
services and will be supplemented with information obtained through 
other mechanisms.
    In the following sections, we discuss the comments on each element 
of our data collection proposal, our responses and our final decision.
(a) Information To Be Reported
    A key element of claims-based reporting is using codes that 
appropriately reflect the services furnished. In response to the 
comment solicitation in the CY 2016 PFS proposed rule and the input 
received via the January 2016 listening session, we received numerous 
recommendations for the information to be reported on claims. The most 
frequently recommended approach was for practitioners to report the 
existing CPT code for follow-up visits included in the surgical package 
(CPT 99024--Postoperative follow-up visit, normally included in the 
surgical package, to indicate that an E/M service was performed during 
a postoperative period for a reason(s) related to the original 
procedure). Others suggested using this code for outpatient visits and 
using length of stay data to estimate the number of inpatient visits 
during the global period. In response to our concerns that CPT code 
99024 would provide only the number of visits and not the level of 
visits as required by the statute, one commenter suggested using 
modifiers in conjunction with CPT code 99024 to indicate the level of 
the visit furnished. Others recommended using existing CPT codes for E/
M visits to report post-operative care. One commenter suggested that 
CMS analyze data from a sample of large systems and practices that are 
using electronic health records that require entry of some CPT code for 
every visit to capture the number of post-operative visits. After 
noting that the documentation requirements and PEs required for post-
operative visits differ from those of E/M visits outside the global 
period, one commenter encouraged us to develop a separate series of 
codes to capture the work of the post-operative services and to 
measure, not just estimate, the number and complexity of visits during 
the global period.
    Other commenters opposed the use of a new set of codes or the use 
of modifiers to report post-operative visits. Commenters also noted 
several issues for us to consider in developing data collection 
mechanisms, including that many post-operative services do not have CPT 
codes to bill separately, that surgeons perform a wide range of 
collaborative care services, and that patient factors, including 
disease severity and comorbidities, influence what post-operative care 
is furnished.
    To assist us in determining appropriate coding for claims-based 
reporting, we added a task to the RAND validation contract for 
developing a model to validate the RVUs in the PFS, which was awarded 
in response to a requirement in the Affordable Care Act. Comments that 
we received on the validation report suggested the models did not 
adequately address global surgery services due to the lack of available 
data on visits included in the global package. Therefore, we modified 
the validation contract to include the development of G-codes that 
could be used to collect data about post-surgical follow-up visits on 
Medicare claims for valuing global services under MACRA so that this 
time could be included in the model for validating RVUs.
    To inform its work on developing coding for claims-based reporting, 
the contractor conducted interviews with surgeons and other physicians/
non-physician practitioners (NPP) who provide post-operative care. A 
technical expert panel (TEP), convened by the contractor, reviewed the 
findings of the interviews and provided input on how to best capture 
care provided in the post-operative period on claims.
    In summarizing the input from the interviews and the TEP, the 
contractor indicated that several considerations were important in 
developing a claims-based method for capturing post-operative services. 
First, a simple system to facilitate reporting was needed. Since it was 
reported that a majority of post-operative visits are straightforward, 
the contractor found that a key for any proposed system is identifying 
the smaller number of complex post-operative visits. Another 
consideration was not using the existing CPT E/M structure to capture 
postoperative care because of concerns that E/M codes are inadequately 
designed to capture the full scope of post-operative care and that 
using such codes might create confusion. Another consideration was that 
the TEP was most enthusiastic about a set of codes that used site of 
care, time, and complexity to report visits. The contractor also 
believed it was important to distinguish--particularly in the inpatient 
setting--between circumstances where a surgeon is providing primary 
versus secondary management of a patient. Finally, a mechanism for 
reporting the postoperative care occurs outside of in-person visits and 
by clinical staff was needed. The report noted that in the inpatient 
setting in particular, surgeons spend considerable time reviewing test 
results and coordinating care with other practitioners.
    After reviewing various approaches, a set of time-based, post-
operative visit codes that could be used for reporting care provided 
during the post-operative period was recommended.
    The recommended codes distinguish services by the setting of care 
and whether they are furnished by a physician/NPP or by clinical staff. 
All codes are intended to be reported in 10-minute increments. A copy 
of the report

[[Page 80213]]

is available on the CMS Web site under downloads for the CY 2017 PFS 
proposed rule with comment period at http://www.cms.gov/physicianfeesched/downloads/.
    We proposed the following no-pay codes be used for reporting on 
claims the services actually furnished but not paid separately because 
they are part of global packages.

                 Table 9--Proposed Global Service Codes
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Inpatient......................  GXXX1          Inpatient visit,
                                                 typical, per 10
                                                 minutes, included in
                                                 surgical package.
                                 GXXX2          Inpatient visit,
                                                 complex, per 10
                                                 minutes, included in
                                                 surgical package.
                                 GXXX3          Inpatient visit,
                                                 critical illness, per
                                                 10 minutes, included in
                                                 surgical package.
Office or Other Outpatient.....  GXXX4          Office or other
                                                 outpatient visit,
                                                 clinical staff, per 10
                                                 minutes, included in
                                                 surgical package.
                                 GXXX5          Office or other
                                                 outpatient visit,
                                                 typical, per 10
                                                 minutes, included in
                                                 surgical package.
                                 GXXX6          Office or other
                                                 outpatient visit,
                                                 complex, per 10
                                                 minutes, included in
                                                 surgical package.
Via Phone or Internet..........  GXXX7          Patient interactions via
                                                 electronic means by
                                                 physician/NPP, per 10
                                                 minutes, included in
                                                 surgical package.
                                 GXXX8          Patient interactions via
                                                 electronic means by
                                                 clinical staff, per 10
                                                 minutes, included in
                                                 surgical package.
------------------------------------------------------------------------

(i) Coding for Inpatient Global Service Visits
    Our proposal included three codes for reporting inpatient pre- and 
post-operative visits that distinguish the intensity involved in 
furnishing the services. Under this proposal, visits that involve any 
combination or number of the services listed in Table 10, which were 
recommended by the contractor as those in a typical visit, would be 
reported using GXXX1. Based on the findings from the interviews and the 
TEP, the report indicated that the vast majority of inpatient post-
operative visits would be expected to be reported using GXXX1.

     Table 10--Activities Included in Typical Visit (GXXX1 & GXXX5)
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Review vitals, laboratory or pathology results, imaging, progress notes.
Take interim patient history and evaluate post-operative progress.
Assess bowel function.
Conduct patient examination with a specific focus on incisions and
 wounds, post-surgical pain, complications, fluid and diet intake.
Manage medications (for example, wean pain medications).
Remove stitches, sutures, and staples.
Change dressings.
Counsel patient and family in person or via phone.
Write progress notes, post-operative orders, prescriptions, and
 discharge summary.
Contact/coordinate care with referring physician or other clinical
 staff.
Complete forms or other paperwork.
------------------------------------------------------------------------

    Under our proposal, inpatient pre- and post-operative visits that 
are more complex than typical visits but do not qualify as critical 
illness visits would be coded using GXXX2 (Inpatient visit, complex, 
per 10 minutes, included in surgical package). To report this code, the 
practitioner would be required to furnish services beyond those 
included in a typical visit and have documentation that indicates what 
services were provided that exceeded those included in a typical visit. 
In the proposed rule, we noted some circumstances that might merit the 
use of the complex visit code are secondary management of a critically 
ill patient where another provider such as an intensivist is providing 
the primary management, primary management of a particularly complex 
patient such as a patient with numerous comorbidities or high 
likelihood of significant decline or death, management of a significant 
complication, or complex procedures outside of the operating room (For 
example, significant debridement at the bedside).
    The highest level of inpatient pre- and post-operative visits, 
critical illness visits (GXXX3--Inpatient visit, critical illness, per 
10 minutes, included in surgical package) would be reported when the 
physician is providing primary management of the patient at a level of 
care that would be reported using critical care codes if it occurred 
outside of the global period. This involves acute impairment of one or 
more vital organ systems such that there is a high probability of 
imminent or life threatening deterioration in the patient's condition.
    Similar to how time is now counted for the existing CPT critical 
care codes, we proposed that all time spent engaged in work directly 
related to the individual patient's care would count toward the time 
reported with the inpatient visit codes; this includes time spent at 
the immediate bedside or elsewhere on the floor or unit, such as time 
spent with the patient and family members, reviewing test results or 
imaging studies, discussing care with other staff, and documenting 
care.
(ii) Coding for Office and Other Outpatient Global Services Visits
    For the three codes in our proposal that would be used for 
reporting post-operative visits in the office or other outpatient 
settings, codes, time would be defined as the face-to-face time with 
patient, which reflects the current rules for time-based outpatient 
codes.
    Like GXXX1, GXXX5 (Office or other outpatient visit, typical, per 
10 minutes, included in surgical package) would be used for reporting 
any combination of activities in Table 10 under our proposal.
    We proposed only face-to-face time spent by the practitioner with 
the patient and their family members would count toward the time 
reported with the office visit codes.
(iii) Coding for Services Furnished via Electronic Means
    Services that are furnished via phone, the internet, or other 
electronic means outside the context of a face-to-face visit would be 
reported using GXXX7 when furnished by a practitioner and GXXX8 when 
provided by clinical staff under our proposal. We proposed that 
practitioners would not report these services if they are furnished the 
day before, the day of, or the day after a visit as we believe these 
would be included in the pre- and post-service activities in the 
typical visit. However, we proposed that these codes be used to report 
non-face-to-face services provided by clinical staff prior to the 
primary procedure since global surgery codes are typically valued with 
assumptions regarding pre-service clinical labor time. Given that some 
practitioners have indicated that services they furnish commonly 
include activities outside the face-to-face service, we believed it was 
important to capture information about those activities in both the 
pre- and post-service periods. We also believed these requirements to 
report on clinical

[[Page 80214]]

labor time are consistent with and no more burdensome than those used 
to report clinical labor time associated with chronic care management 
services, which similarly describe care that takes place over more than 
one patient encounter.
    In addition, we proposed for services furnished via interactive 
telecommunications that meet the requirements of a Medicare telehealth 
service visit, the appropriate global service G-code for the services 
would be reported with the GT modifier to indicate that the service was 
furnished ``via interactive audio and video telecommunications 
systems.''
(iv) Rationale for Use of G-Codes
    After considering the contractor report, the comments in response 
to the comment solicitation in the CY 2016 proposed rule and other 
stakeholder input that we have received, and our needs for data to 
fulfill our statutory mandate and to value surgical services 
appropriately, we proposed this new set of codes because we believe it 
provides us the most robust data upon which to determine the most 
appropriate way and amounts to pay for PFS surgical services. We noted 
that these proposed codes would provide data of the kind that can 
reasonably collected through claims data and that reflect what we 
believe are key issues in the valuation of post-operative care--where 
the service is provided, who furnishes the service, its relative 
complexity, and the time involved in the service.
    We solicited public comments about all aspects of these codes, 
including the nature of the services described, the time increment, and 
any other areas of interest to stakeholders. We noted particular 
interest in any pre- or post-operative services furnished that could 
not be appropriately captured by these codes. We solicited comments on 
whether the proposed codes were appropriate for collecting data on pre-
operative services. We also sought comment on any activities that 
should be added to the list of activities in Table 10 to reflect 
typical pre-operative visit activities.
(v) Alternative Approach to Coding
    In making the proposal for G-codes, we noted that many stakeholders 
had expressed strong support for the use of CPT code 99024 
(Postoperative follow-up visit, normally included in the surgical 
package, to indicate that an evaluation and management service was 
performed during a post-operative period for a reason(s) related to the 
original procedure) to collect data on post-operative care. In response 
to stakeholders noting that practitioners are familiar with this 
existing CPT code and the burden on practitioners would be minimized by 
only having to report that a visit occurred, not the level of the 
visit, we noted that we did not believe that this code alone would 
provide the information that we need for valuing surgical services nor 
do we believe it alone can meet the statutory requirement that we 
collect data on the number and level of visits. Given the strong 
support for the use of CPT code 99024, we solicited comments 
specifically on how we could use this code to capture the statutorily 
required data on the number and level of visits and the data that we 
would need to value global services in the future.
    We also discussed in the proposed rule our concern that using CPT 
code 99024 with modifiers to indicate to which of the existing levels 
of E/M codes the visit corresponds may not accurately capture what 
drives greater complexity in post-operative visits. We noted that as 
outlined in the contractor's report, E/M billing requirements are built 
upon complexity in elements such as medical history, review of systems, 
family history, social history, and how many organ systems are 
examined. In the context of a post-operative visit, many of these 
elements may be irrelevant. The contractor's report also notes that 
there was significant concern from interviewees and the expert panel 
about documentation that is required for reporting E/M codes. 
Specifically, they stated that documentation requirements for surgeons 
to support the relevant E/M visit code would place undue administrative 
burden on surgeons given that many surgeons currently use minimal 
documentation when they provide a postoperative visit. We also noted 
that to value surgical packages accurately we need to understand the 
activities involved in furnishing post-operative care and as discussed 
above, we lack information that would demonstrate that activities 
involved in post-operative care are similar to those in E/M services. 
In addition, the use of modifiers to report levels of services is more 
difficult to operationalize than using unique HCPCS codes. However, we 
sought comments on whether, and if so, why, practitioners would find it 
easier to report CPT code 99024 with modifiers corresponding to the 
proposed G-code levels rather than the new G-codes, as proposed. We 
also sought comment on whether practitioners would find it difficult to 
use this for pre-operative visits since the CPT code descriptor 
specifically defines it as a ``post-operative follow-up'' service.
    We also sought comment on whether time of visits could alone be a 
proxy for the level of visit. If pre- and post-operative care varies 
only by the time the practitioner spends on care so that time could be 
a proxy for complexity of the service, then we could use the reporting 
of CPT code 99024 in 10-minute increments to meet the statutory 
requirement of collecting claims-based data on the number and level of 
visits. In addition to comments on whether time is an accurate proxy 
for level of visit, we solicited comment on the feasibility and 
desirability of reporting CPT code 99024 in 10-minute increments.
    The following is a summary of the comments that we received on our 
proposal to use G-codes for reporting the services furnished during the 
pre- and post-operative periods of 10- and 90-day global services.
    Comment: Many commenters offered critiques of the G-codes. Most 
objected to reporting using the proposed G-codes. Some commenters 
raised concerns with the code definitions. These included: Lack of 
alignment with clinical workflow, failure to adequately account for 
variation in complexity and medical decision-making, and use of the 
term ``typical'' to define visits in a different way than the term is 
generally used in PFS valuations. One commenter suggested that CMS 
should require care plans for outpatient visits in the post-operative 
period. It was also suggested that the complex visit code could be 
improved by using a term other than ``complex'' in the definition. A 
commenter questioned whether that vast majority of cases would be 
complex instead of ``typical,'' since the definition of ``complex'' 
included management of a patient with multiple comorbidities and most 
Medicare beneficiaries have multiple comorbidities. A commenter also 
suggested that CMS refine the G-codes to distinguish physician visits 
from NPP visits. In addition, several commenters objected to the 
proposed G-codes for on-line and telephone services because they 
believed it would be nearly impossible to track these data and 
extremely burdensome to do so. Commenters indicated that the G-codes 
were not well-defined overall and should not be used without testing to 
determine their validity.
    Response: We appreciate the detailed comments on the design of the 
G-codes and the concerns regarding their limitations in appropriately 
reflecting the services furnished in 10- and 90-day global periods. 
These comments provide information for how the G-codes could

[[Page 80215]]

be modified to better reflect services furnished in global periods, 
however, as is discussed at the outset of this section, we are not 
using the proposed G-codes for this data collection effort.
    Comment: Most commenters objected to using codes based on time 
increments and the proposed 10-minute increments, specifically. Some 
stated that reporting of services by time did not reflect the way 
surgeons practiced and would divert practitioners from patient care. 
One commenter stated that it was not feasible for practitioners to 
collect time data for every task that they or their clinical staff 
performed. Another stated that requesting physicians and/or their staff 
to use a stop-watch to, in effect, conduct time and motion studies for 
all their non-operating room patient care activities is an incredible 
burden. Another stated that reporting time in 10-minute increments ``is 
untenable,'' noting that, except for a few specialties, physicians do 
not think of providing care in terms of timed increments. The commenter 
added that surgeons, in particular, are not accustomed to reporting 
time for all pre- and post-operative visits and to do so would be a 
huge disruption to workflow. In addition to objections about the burden 
of reporting time data, some commenters objected to the use of time 
data as a factor in valuations.
    Three organizations commented that it was appropriate to collect 
time data, but recommended that we do so based upon 15-minute 
increments as these were more familiar to physicians than the proposed 
10-minue increments. In addition, some other groups, including MedPAC, 
agreed that data on time was needed for valuations.
    Response: Time is a key factor in valuing physician services under 
the physician fee schedule. Section 1848(c)(1) of the Act defines the 
work component as the portion of the resources used in furnishing the 
service that reflects physician time and intensity in furnishing the 
service. We also note that time-based codes are used by practitioners 
for a range of services in the PFS including psychotherapy, 
anesthesiology and critical care services. Critical care services are 
notable because these services are likely to be furnished 
intermittently as many commenters suggested is typical for post-
operative follow-up services. Since issues have not been raised about 
the difficulty of using the current critical care codes, it is unclear 
why reporting of time would be burdensome and disruptive of care in 
this area. We have no reason to believe the documentation of time is 
more difficult or burdensome for those furnishing 10- and 90-day global 
services than for other practitioners. However, based on the comments, 
it is clear that many practitioners would perceive reporting of time 
involved in furnishing these services to be a significant increase in 
burden relative to existing practice. Before implementing a change 
considered by so many to be so burdensome, we are exploring other ways 
of obtaining information that can be used to improve the accuracy of 
valuing these services. Accordingly, we are not finalizing, at this 
time, the requirement to use time-based codes.
    Comment: Many commenters stated that the use of these codes would 
be costly, requiring extensive education of practitioners and staff and 
necessitating updates to EHR systems and billing software. Some also 
noted the cost of processing additional claims. Many commenters noted 
that this would be particularly difficult as this additional 
administrative burden would come at the same time practitioners are 
adjusting the Merit-based Incentive Payment System (MIPS). One 
commenter provided the results of a survey of surgical practitioners in 
20 specialties in which 30 percent of respondents stated that the cost 
of integrating the new G-codes into their practice would cost more than 
$100,000 and only about 10 percent stated that it would cost less than 
$25,000.
    Some commenters expressed specific concern about the documentation 
burden that would come from using these codes. On the other hand, other 
commenters suggested that providers of visits during the global 
surgical services should be held to the same documentation standards as 
providers of E/M services. One stated that the ``administrative burden 
on surgeons should be no different and certainly no less than that on 
non-surgeons when it comes to documenting a visit with a patient. If 
many surgeons currently use minimal documentation when they provide a 
post-operative visit that is no excuse for expecting the same 
inadequate level of documentation going forward. To require anything 
less than the same level of documentation for all clinicians providing 
E/M services would be irresponsible and unfair and would defeat the 
very purpose of documenting the actual types and extent of these 
services in the post-operative period.''
    Response: The need for accurate, complete and useful data must be 
balanced with administrative burden and cost. We articulated that using 
a select number of G-codes based on time would impose a burden on 
providers, but that burden is necessary for us to comply with the 
statutory requirement to gather the data necessary to value global 
procedures. We note that CPT routinely incorporates more than 100 new 
codes in annual updates, and for this reason we did not anticipate that 
the inclusion of eight new G-codes was likely to present significant 
challenges to EHR systems or other infrastructure. Based on the 
comments we received, however, it is clear that the majority of 
stakeholders believe the burden is much greater than we had assumed. In 
general, we agree with commenters that comparable documentation is 
appropriate for all physicians furnishing and being paid by Medicare 
for similar services.
    Comment: Several commenters noted that the difficulties of using 
these codes would affect the accuracy of the data reported. One 
commenter stated that the G-code proposal would be impossible to 
implement and ``at the very least'' would yield incomplete and 
unreliable results.
    Response: We agree with commenters that implementation burden is an 
important consideration in determining how practitioners should report 
on care provided in the post-operative period and that if practitioners 
find the reporting requirements to be excessive and require great 
expenditures to incorporate into their practice, the accuracy of the 
data could be undermined. We considered this in determining the final 
policy described below.
    Comment: Some commenters criticized the proposed G-codes because 
they were not directly linked to E/M codes or comparable to existing E/
M codes. On the other hand, some commenters preferred the codes 
describing such visits not be linked or comparable to E/M codes to 
avoid confusion or unintentional, inappropriate payments. One commenter 
stated that the follow-up work performed within the global periods and 
the continuity work performed by cognitive physicians should not be 
represented by the same codes. Another commenter stated that the care 
required by a patient recovering from a procedure is fundamentally 
different from the typical follow-up of an established outpatient or 
inpatient, especially when there are multiple simultaneous interacting 
conditions, a single metastable chronic illness, or one or more acute 
exacerbated chronic illnesses that requires inpatient care and 
expertise.
    Response: Commenters' belief that the work in follow-up visits 
included in the global package is not necessarily well described by the 
work of current E/M

[[Page 80216]]

codes is worth exploring. Current data does not allow us to determine 
the validity of these commenters' assertion but given its importance, 
we believe it is critical to gather data on whether follow-up visits 
provided in the post-operative period are different than other E/M 
services. To the extent the services in the post-operative period are 
different from other E/M services, it would not make sense to use E/M 
codes in valuing global services as is ostensibly the case under the 
current process the RUC uses in developing recommended values for PFS 
services.
    Comment: Most commenters supported using CPT codes, rather than the 
proposed G-codes. A few pointed to the existing E/M codes, but most 
recommended that any claims-based reporting use CPT code 99024, an 
existing CPT code that describes post-operative services in a global 
period. Commenters noted that since this is a current CPT code the 
administrative burden would be much less than that associated with 
using the proposed new G-codes. These commenters suggest that 
practitioners are likely already familiar with the code, some already 
use it to track services within their practice, and some others already 
report it to other payers. Also, they suggest that because EHR and 
billing systems already include CPT code 99024, it will be less costly 
to implement than the proposal. Some also preferred using CPT code 
99024 because unlike the proposed G-codes it does not require the 
reporting of time units.
    Most commenters disagreed that time could be a proxy for the 
complexity of the visit and objected to reporting time for the same 
reasons discussed above. These commenters did not agree that CPT code 
99024 could be reported in time units as a proxy for collecting the 
required information about the level of visits.
    Three organizations disagreed, however, stating that time is a 
sufficient proxy for work relativity in post-operative visits and that 
the number units of CPT code 99024 could reflect the complexity 
involved. These commenters recommended reporting data in 15-minute 
intervals, rather than the proposed 10-minute increments, stating that 
physicians are familiar with 15-minute increments and thus the use of 
15-minute increments would greatly reduce the administrative burden. 
They recommended that CMS clearly define how time is to be reported and 
suggested that the 8-minute rule is already a familiar concept that 
could be used.
    Many commenters suggested that other approaches, such as a survey, 
clinical registries, or on-line portals be used to collect data on 
level of visits.
    Several commenters stated that CMS should not collect data on the 
level of visits based on these commenters' perspective that there is no 
problem with the level of visits currently used in the valuation of 
global packages. One commenter pointed out that only 1 percent of all 
established patient office visits used in valuing 10-day and 90-day 
global surgery packages have a visit level above a CPT code 99213. 
Another commenter suggested that the survey be used to collect data on 
the level of visits. Others suggested that RUC surveys be used to 
measure level of visits.
    Response: We understand that stakeholders believe that using CPT 
code 99024 rather than the proposed G-codes will significantly lower 
administrative burden and lower costs related to the collection of this 
data. We do not have data showing that the level of visits used in 
valuation of global packages are correct or incorrect; to the best of 
our knowledge, this has never been assessed outside of the RUC process. 
While the current valuations for global packages rely primarily on CPT 
codes 99212 and 99213 for the visit component, we do not agree that 
this means that the levels are accurate. Further, as some commenters 
have made clear, there is not consensus among stakeholders that the 
post-operative visits are equivalent to other E/M visits. Additionally, 
the relationship between the number and level of visits assumed to be 
in the global period and the overall work RVUs for the global codes is 
often unclear. For all of these reasons, we disagree with commenters 
that we do not need to collect data on the level of services.
    In addition to the statutory reference to collecting data on the 
level of visits, we believe that code valuations can be more accurate 
with more complete information. While we continue to believe that data 
only on the number of visits furnished would not provide data on both 
the number and level of visits needed for valuation of services, data 
on the number of visits alone is an important input in valuing global 
packages and having accurate data on the number of visits could be a 
useful first step in analyzing the global packages.
    After considering the comments, we are finalizing a requirement to 
report post-operative visits furnished during 10- and 90-day global 
periods. However, rather than using the proposed set of G-codes for 
this reporting, we are requiring that CPT code 99024 be used to report 
such visits. We will not, at this time, require time units or modifiers 
to distinguish levels of visits to be reported. Since this code is 
specifically limited to post-operative care, we are only requiring 
reporting of post-operative visits. We expect that the reporting of 
this information through Medicare claims will provide us with 
information about the actual number of visits furnished during the 
post-operative periods for many services reported using global codes. 
Because the number of visits is a major factor in valuation of global 
services, we believe that examination of such information, when 
available, can improve the accuracy of the global codes. The use of a 
simple code that practitioners are familiar with should facilitate the 
submission of accurate information. We expect practitioners to note the 
visit in the medical chart documenting the post-operative visit.
    Since CPT code 99024 will only provide data on the number of visits 
and no data on the level or resources used in furnishing the visit, we 
believe this is only the first step in gathering the data required by 
Section 1848(c)(8). The proposed G-codes could have provided 
information to better understand the resources used in furnishing 
services during global periods and in valuation of such services 
assuming that they could be accurately reported. However, widespread 
concerns from groups representing the practitioners that would be 
reporting these services, including concerns about the burdens 
regarding and the inability of physicians to track time and the need to 
learn a new 8-code coding system, persuade us that we should pursue 
less burdensome ways of obtaining information. We will assess whether 
these methods will lead to the collection of necessary data, including 
data on time and intensity, of these services.
    As suggested by commenters, we will explore whether the data 
collected from the survey that we are conducting, which is discussed 
later in this preamble, can provide information on the level of visits 
and other resources needed to value surgical services accurately. 
Stakeholders should be aware that since this a new approach for 
collecting data, and one that has not been used previously, we are 
concerned that additional or different reporting will be necessary to 
collect data on the number and level of visits and other information 
needed to value surgical services as required by Section 1848(c)(8).

[[Page 80217]]

b. Reporting of Claims
    We proposed that the G-codes detailed above would be reported for 
services related to and within 10- and 90-day global periods for 
procedures furnished on or after January 1, 2017. Services related to 
the procedure furnished following recovery and otherwise within the 
relevant global period would be required to be reported. These codes 
would be included on claims filed through the usual process. Through 
this mechanism, we would collect all of the information reported on a 
claim for services, including information about the practitioner, 
service furnished, date of service, and the units of service. By not 
imposing special reporting requirements on these codes, we proposed to 
allow practitioners the flexibility to report the services on a rolling 
basis as they are furnished or to report all of the services on one 
claim once all have been furnished, as long as the filed claims meet 
the requirements for filing claims.
    We did not propose any special requirements for inclusion of 
additional data on claims that could be used for linking the post-
operative care furnished to a particular service. To use the data 
reported on post-operative visits for analysis and valuation, we 
proposed to link the data reported on post-operative care to the 
related procedure using date of service, practitioner, beneficiary, and 
diagnosis. While we believed this approach to matching would allow us 
to accurately link the preponderance of G-codes to the related 
procedure, we sought comment on the extent to which post-operative care 
may not be appropriately linked to related procedures whether we should 
consider using additional variables to link these aspects of the care, 
and whether additional data should be required to be reported to enable 
a higher percentage of matching.
    The following is summary of the comments we received on our 
proposal to require reporting on pre- and post-operative care 
associated with all procedures with 10- and 90-day global periods.
    Comment: Many commenters objected to the proposal to require 
reporting on post-operative services for all 10- or 90-day global 
services. Some suggested that many of the global services are low 
volume and have little impact on Medicare spending. It was also noted 
that it would be difficult to obtain a meaningful sample of low-volume 
services. Others discussed the burden of reporting on all services. The 
RUC recommended that CMS only require reporting on services that are 
furnished by more than 100 providers and that either are furnished more 
than 10,000 times or have allowed charges of more than $10 million 
annually to obtain meaningful data for valuation. The RUC noted that 
many procedures were infrequently furnished and thus useful data would 
not be obtained. This position was supported by a significant number of 
commenters. In response to the stated concern about having complete 
data when more than one surgical service is furnished during the global 
period, a commenter pointed out that a review of the 2014 Medicare 5 
percent sample file shows that, two surgical global codes are performed 
on the same date of service, by the same physician, only 18 percent of 
the time.
    Response: The commenters are correct that the vast majority of 10- 
and 90-day procedures are furnished infrequently and thus have little 
effect on Medicare expenditures or direct impact on the valuations of 
other services under the PFS. We proposed to collect data on all 
procedures since we believed the data we collected would be more 
accurate if physicians reported on all services as it would be routine 
and would not have required physicians to determine at each pre- and 
post-operative visit whether or not reporting the service was required. 
Moreover, as pointed out by commenters, we believe that reporting on 
all applicable services would have provided more complete data when 
multiple surgeries occurred during the global period.
    Having specific data on all procedures would provide specific 
information for each service that Medicare pays for using a global 
period. In assessing the likely benefit of the additional data as 
compared to the burden of reporting based on the comments we received, 
we agree with commenters that collecting the data from high volume/high 
cost procedures could provide adequate information to improve the 
accuracy of valuation of global packages overall. Even if all 
practitioners reported data on all procedures, it is likely that we 
would not receive enough data on low-volume services for the data to be 
reliable for use in valuations. There are more than 1,500 services that 
are furnished less than 100 times per year. Because of this, data that 
we could collect on these services would be extremely limited. We also 
find that data on services with low volumes are not reliable due to 
variability from year to year. Since we often value related services by 
extrapolating data on one service to other services in the family, with 
adjustments as necessary to reflect variations in the procedure, the 
data gathered on high-volume services could similarly be used to value 
low-volume services in the same family. As a result we, believe that 
the data on high-volume services can improve the accuracy of values for 
all 10- and 90-day services.
    After consideration of the comments, we are implementing a 
requirement for reporting on services that are furnished by more than 
100 practitioners and are either furnished more than 10,000 times or 
have allowed charges of more than $10 million annually as recommended 
by the RUC and many other commenters. Under this policy, we estimate 
that we would collect data on about 260 codes that describe 
approximately 87 percent of all furnished 10- and 90-day global 
services and about 77 percent of all Medicare expenditures for 10- and 
90-day global services under the PFS. Given that this data would 
provide information on the codes describing the vast majority of 10- 
and 90-day global services and expenditures, it will provide 
significant data for valuation. For 2017, we will use the CY 2014 
claims data to determine the codes for which reporting is required and 
display the list on the CMS Web site. In subsequent years, we will 
update the list to reflect more recent claims data and publish a list 
of codes prior to the beginning of the reporting year. The services for 
which reporting is required will include successor codes to those 
deleted or modified since CY 2014 for which reporting would have been 
required if the code had not been deleted or modified.
    The following is summary of the comments we received on our 
proposal to require claims-based reporting for services related to 
procedures furnished on or after January 1, 2017.
    Comments: Many commenters expressed concerns regarding the 
difficulty of making the changes required to implement this new 
reporting by January 1, 2017. Some commenters noted that this change 
was coming at the same time as the new MIPS program. Some commenters 
stated that the statute required a process to be in place by January 1, 
2017, but that CMS has flexibility regarding when to begin the required 
reporting. Some commenters suggested that CMS consider conducting the 
proposed survey before implementing any claims-based reporting.
    Response: We proposed to begin required reporting on January 1, 
2017, based upon the statutory language regarding both the collection 
and use of the data for revaluation of services. We understand that 
some practices will need to make modifications to their EHR and billing 
systems to report this data to

[[Page 80218]]

us. We also acknowledge that an opportunity for testing the systems and 
training will enhance the quality of data that we receive.
    After consideration of comments, we are encouraging practitioners 
to begin reporting data on post-operative services for procedures 
furnished on or after January 1, 2017. However, the requirement to 
report will become mandatory for post-operative services related to 
procedures furnished on or after July 1, 2017 rather than as of January 
1, 2017, as proposed. This delay will not negatively impact the use 
value of the collected data since we expect that data received early in 
the year might be less complete than data submitted once practitioners 
adjusted to the requirements. Also, by allowing time for practitioners 
to adjust EHR and billing software, to test such systems and to train 
staff, we think the quality of the data will be enhanced by providing 
flexibility with regard to the effective date of the requirement. 
Finally, because we are limiting required reporting to high-volume 
codes, meaningful data for CY 2017 should be available from 6 months of 
reporting. Our systems can now accept the post-operative visit data so 
practitioners can begin submitting such claims at any time.
c. Special Provisions for Teaching Physicians
    We sought comment on whether special provisions are needed to 
capture the pre- and post-operative services provided by residents in 
teaching settings. If the surgeon is present for the key portion of the 
visit, should the surgeon report the joint time spent by the resident 
and surgeon with the patient? If the surgeon is not present for the key 
portion of the visit, should the resident report the service? If we 
value services without accounting for services provided by residents 
that would otherwise be furnished by the surgeon in non-teaching 
settings, subsequent valuations based upon the data we collect may 
underestimate the resources used, particularly for the types of 
surgeries typically furnished in teaching facilities. However, there is 
also a risk of overvaluing services if the reporting includes services 
that are provided by residents when those services would otherwise be 
furnished by a physician other than the surgeon, such as a hospitalist 
or intensivist, and as such, should not be valued in the global 
package.
    Comment: We received only a few comments on this issue. Some 
commenters suggested using the CMS policies that apply to other 
services that teaching surgeons report to CMS for the reporting of CPT 
code 99024. More specifically, when the appropriate conditions are met 
they would use the GC or GE modifier to identify those services in 
which surgical residents are involved. One of these suggested that once 
we have the data we discuss with stakeholders how to use the data 
involving residents in future valuations. Others suggested that we 
capture data on resident's time as it could be important for valuation, 
especially for the more complex cases in a teaching facility setting. 
Some urged that we provide clear guidance on when the resident's time 
could be reported. One commenter stated that teaching physicians should 
be exempt from reporting requirements.
    Response: These comments reinforce the importance of collecting 
data from teaching physicians and to do so using the existing Medicare 
rules that teaching physicians use in reporting services in which 
residents are involved in furnishing. Because we are finalizing data 
collection using CPT code 99024, the issues regarding the reporting of 
time data are no longer relevant.
    After consideration of the comments, we are finalizing a 
requirement that teaching physicians will be subject to the reporting 
requirements in the same way that other physicians are. Such physicians 
should report CPT code 99024 only when the services furnished would 
meet the general requirements for reporting services and should use the 
GC or GE modifier as appropriate.
e. Who Reports
    In both the comments on the CY 2016 proposed rule and in input from 
the January 2016 national listening session, there was a great deal of 
discussion regarding the challenges that we are likely to encounter in 
obtaining adequate data to support appropriate valuation. Some 
indicated that a broad sample and significant cooperation from 
physicians would be necessary to understand what is happening as part 
of the global surgical package. One commenter suggested that 
determining a representative sample would be difficult and, due to the 
variability related to the patient characteristics, it would be easier 
to have all practitioners report. Many suggested that we conduct an 
extensive analysis across surgical specialties with a sample that is 
representative of the entire physician community and covers the broad 
spectrum of the various types of physician practice to avoid problems 
that biased or inadequate data collection would cause. Suggestions of 
factors to account for in selecting a sample include specialty, 
practice size (including solo practices), practice setting, volume of 
claims, urban, rural, type of surgery, and type of health care delivery 
systems. Another commenter pointed out that small sample sizes may lead 
to unreliable data. Some commenters stated that requiring all 
practitioners to report this information is unreasonable and would be 
an insurmountable burden. A participant acknowledged that it would be 
difficult for practitioners to report on only certain procedures, while 
another stated that this would not be an administrative burden.
    After considering the input of stakeholders on the CY 2016 proposed 
rule and at the January 2016 national listening session discussed 
above, we proposed that any practitioner who furnishes a procedure that 
is a 10- or 90-day global service report the pre- and post-operative 
services furnished on a claim using the proposed G-codes. We agreed 
with stakeholders that it would be necessary to obtain data from a 
broad, representative sample. However, as we struggled to develop a 
nationally representative sampling approach that would result in 
statistically reliable and valid data, it became apparent that we do 
not have adequate information about how post-operative care is 
delivered, how it varies and, more specifically, what drives variation 
in post-operative care to develop a sampling frame. In its work to 
develop the coding used for its study, the contractor found a range of 
opinions on what drives variation in post-operative care. (The report 
is available on the CMS Web site under downloads for the CY 2017 PFS 
proposed rule with comment period at http://www.cms.gov/physicianfeesched/downloads/.) Without information on what drives 
variation in pre- and post-operative care, we would have to speculate 
about the factors upon which to base a sample or assume that the 
variation in such care results from the same variables as are 
frequently identified for explaining variation in health care and 
clinical practice. In addition, we expressed concern about whether a 
sample could provide sufficient volume to value accurately the global 
package, except in the case of a few high-volume procedures.
    In addition to concerns about achieving a statistically 
representative sample of all practitioners nationally, we noted in the 
proposed rule significant operational concerns with limiting data 
collection to a subset of practitioners or a subset of services. These 
include how to gain sufficient information on practitioners to stratify 
the sample, how to identify the

[[Page 80219]]

practitioners who must report, and for those who practice in multiple 
settings or with multiple groups in which settings the practitioner 
would report. We concluded that establishing the rules to govern which 
post-operative care should be reported based on our proposed G-codes 
would be challenging for us to develop and difficult for physicians to 
apply in the limited time between the issuance of the CY 2017 PFS final 
rule with comment period and the beginning of reporting on January 1, 
2017. We do not believe that the same problems apply to the same extent 
to our final policy to use a single code that already exists to report 
services described only by codes reported in high volumes. For example, 
implementation of new sets of codes associated with annual PFS updates 
are often supported by informational and educational efforts undertaken 
by national organizations, like the national medical specialty 
societies. Given that many practitioners are already familiar with CPT 
code 99024 (as noted by many commenters), the need for such efforts is 
significantly mitigated.
    We also noted in the proposed rule that the more robust the 
reported data, the more accurate our ultimate valuations can be. We 
stated that given the importance of data on visits in accurate 
valuations for global packages, collecting data on all pre- and post-
operative visits in the global period is the best way to accurately 
value surgical procedures with global packages.
    We recognized that reporting would require submission of additional 
claims by those practitioners furnishing global services, but indicated 
that we believed the benefits of accurate data for valuation of 
services merited the imposition of this requirement. By using the 
claims system to report the data, we believed the additional burden 
would be minimized and referred to stakeholder reports that many 
practitioners are already required by their practice or health care 
system to report a code for each visit for internal control purposes 
and some of these systems already submit claims for these services, 
which are denied. We noted that requiring only some physicians to 
report this information, or requiring reporting for only some codes, 
could actually be more burdensome to physicians than requiring this 
information from all physicians on all services because of the 
additional steps necessary to determine whether a report is required 
for a particular service and adopting a mechanism to assure that data 
is collected and reported when required. Moreover, we stated that the 
challenges with implementing a limited approach at the practice level 
as compared to a requirement for all global services would result in 
less reliable data being reported.
    We noted that as we analyzed the data collected and made decisions 
about valuations, we would reassess the data needed and what should be 
required from whom. Through the data collected under our proposal, we 
indicated that we would have the information to assess whether the 
post-operative care furnished varies by factors such as specialty, 
geography, practice setting, and practice size, and thus, the 
information needed for a sample selection to be representative.
    While section 1848(c)(8)(B) of the Act requires us to collect data 
from a representative sample of physicians on the number and level of 
visits provided during the global period, we stated that it does not 
prohibit us from collecting data from a broad set of practitioners. In 
addition, section 1848(c)(2)(M) of the Act authorizes the collection of 
data from a wide range of physicians. Given the benefits of more robust 
data, including avoiding sample bias, obtaining more accurate data, and 
facilitating operational simplicity, we noted that we believed 
collecting data on all post-operative care initially is the best way to 
undertake an accurate valuation of surgical services in the future.
    The following is a summary of the comments that we received on our 
proposal to require all practitioners furnishing 10- or 90-day global 
services to submit claims for the pre- and post-operative services 
furnished.
    Comment: Commenters overwhelmingly opposed requiring all 
practitioners to submit claims for postoperative services. Several 
reasons were cited for the opposition. The most significant reason was 
the administrative burden and costs to physicians. Many commenters also 
stated that requiring all practitioners who furnish 10- or 90-day 
global services to report data is counter to the statute because the 
statute refers to collection of data from a representative sample of 
physicians.
    One commenter stated that requiring every practitioner to report 
these codes will be in many ways less representative than a targeted 
sample, explaining that given the limited time for education, only 
large, technologically rich practices will have the ability to properly 
report these services. The commenter noted that this will leave many, 
smaller or rural practices without the proper education and robust 
billing systems in place to adequately, if at all, report these G-
codes. The commenter also noted that smaller, rural practices have 
smaller patient populations, which can often be older and sicker than 
the typical patient seen in a large practice and by creating a complex 
system that favors one type of practice, the collected data is more 
likely to be biased rather than representative. Another commenter 
suggested that a small number of representative practices could provide 
us with the same level of accuracy as collected data from all 
physicians.
    Response: In response to commenters' opposition to our proposal to 
require all providers of covered services to report data, we 
acknowledge that the stakeholders describe a much larger burden from 
using the G-codes than we anticipated. On the other hand, we also 
believe that our final policy will result in a much lower burden than 
the proposed policy would have. As noted above, we are not finalizing 
the proposed requirements to use the G-codes or the proposed 
requirement to report on all 10- and 90-day global procedures and thus, 
we believe that the overall administrative burden is significantly 
reduced.
    We do not agree with commenters that state that we do not have the 
statutory authority to require reporting by all practitioners 
furnishing certain services. We point commenters to section 
1848(c)(2)(M) of the Act, which authorizes the collection of data to 
use in valuing PFS services. We continue to believe that section 
1848(c)(8) of the Act requires us to collect data that is 
representative. We also continue to believe that requiring all 
practitioners to report is more likely to be representative than a 
sample given our lack of information about what drives variation in 
post-operative care. However, after considering the information 
presented by commenters regarding the difficulties that would be placed 
on many physicians by the proposal, we believe that requiring reporting 
by all practitioners for CY 2017 may present unforeseen, alternative 
impediments to the sample being nationally representative of all 
practitioners, such as practitioners being unable to report data 
accurately due to constraints of time, finances or technical ability.
    Comment: We did not receive any comments on the appropriate sample 
size. Nor did we receive data on variations in the delivery of post-
operative care in response to our concern that we lacked data on how 
post-operative care was delivered to select a representative sample. 
Many commenters stated that it was possible to select a representative 
sample, but none provided details on how to do so.

[[Page 80220]]

    Several commenters suggested broadly sampling using the 
characteristics that are frequently used for health care sampling 
generally, such as geographic areas, urban and rural, practice types, 
practice sizes, specialties and academic and non-academic. One 
commenter recommended that we select a sample using geographical data 
to identify a sample including practices of all sizes. The commenter 
suggested, for example, that large hospital-based practices often have 
practice patterns that are different from the majority of the 
practicing physicians in suburban and rural areas. Another commenter 
stated that we should not only collect data from MSAs but also from 
rural and less urban areas.
    One commenter suggested that we consider phasing in the 
requirement, perhaps starting with larger groups. The commenter stated 
that through one of these approaches we could avoid ``burdening 
providers with unfunded work that has not yet been tested.''
    One commenter suggested that we use a geographic sampling approach 
similar to that one used for Comprehensive Care for Joint Replacement 
(CJR) model or the episode payment models proposed for cardiac and 
surgical hip/femur fraction and modify it to choose a geographic 
sampling unit of MSAs and non-MSAs.
    Response: We agree with commenters that we could select a sample 
using an approach typically used in health care surveys or in Medicare 
models and other programs. To the extent that the delivery of post-
operative care varies only based upon the criteria we selected, a 
sample based on being representative for that criteria would be likely 
to produce valid data.
    However, instead of sampling by practice or practitioner or type of 
service, a geographic approach to sampling (for example, sampling all 
practitioners in a selected state) could help to alleviate the need to 
stratify the sample on a long list of criteria. By using broad 
geographical areas from varied areas of the country, we believe our 
sample will capture data from practitioners who practice in a variety 
of settings, single and multispecialty practices, urban and rural, a 
variety of medical specialties, and practitioners operating in both 
academic and non-academic institutions. Surgeons interviewed for the G-
code development suggested that post-operative care might vary across 
these dimensions. A geographic approach could also mitigate some of the 
practical operational barriers. For example, we believe that by having 
all practitioners in the practice participate in reporting, we avoid 
concerns about incomplete data when a required reporter furnishes a 
procedure and another practitioner in the practice furnishes the post-
operative visits. A geographic approach also makes it easier to educate 
practitioners on data collection requirements.
    Comment: In response to operational difficulties with a 
representative sample, such as how to make sure participants were aware 
of the requirement to report and how to do so, one commenter stated 
that notifying a small targeted sample is a much smaller task than 
notifying the entire population of participating Medicare 
practitioners. They also stated that a targeted approach will encourage 
open dialogue between the participating practices and CMS, ensuring the 
data collected are reliable. Others suggested providing compensation 
for a sample of physicians to submit detailed data, would lead to 
capturing accurate data because they would more likely to understand 
and prioritize reporting because of their participation in this type of 
study.
    Response: We disagree that it is operationally easier to notify a 
small segment of broadly diverse practitioners than the entire 
population of practitioners unless that small segment has a degree of 
cohesiveness, such as being in the same geographic area or specialty. 
We have long appreciated the stakeholder community's collaboration in 
broad communication efforts. In general, we have found that when 
something affects a small number of providers it does not receive the 
same response from entities that are critical for widespread adoption 
such as associations, who are key purveyors of information, and those 
developing software systems. We appreciate the suggestion that 
interaction among those that need to report will facilitate compliance 
and the quality of the data. With regard to compensation, we note that 
the statute provided for a 5 percent withhold to encourage compliance 
and we chose not to propose to implement this provision.
    After consideration of the comments, we are finalizing a 
requirement for reporting that only applies to practitioners in 
selected states. In addition, those practicing only in small practices 
are excluded from required reporting. Those not required to report can 
do so voluntarily and we encourage them to do so.
Geographic Sample
    As we noted in the proposed rule, we do not have adequate data on 
what drives variations in the delivery of pre- and post-operative care 
to design a sampling methodology that is certain to be representative. 
We also believe that submission by all practitioners would be 
consistent with our extensive use of claims data for other PFS 
services. Additionally, we understand the statute directs us to gather 
data from more than a select group of practitioners based on any 
particular attributes, such as gathering data only from ``efficient'' 
practices, consistent with longstanding recommendations from MedPAC 
regarding limiting data collection. We also believed that there were 
significant operational impairments to data reporting by a limited 
sample of physicians. In consideration of these factors, we proposed to 
require reporting by all physicians to make sure that the data we 
obtained reflected all services furnished. In light of the comments 
regarding the burden that would be created by requiring reporting by 
all physicians and the data that was actually needed for valuation, we 
think that reporting by a subset of practitioners could provide us 
valuable information on the number of visits typically furnished in 
global periods. This data could enhance the information we currently 
use to establish values for these services. While we acknowledge that 
we believe the data under this less burdensome approach will provide 
less information than necessary for optimal valuation for these 
services, we believe that the information on the number of actual 
visits from a subset of practitioners is preferable to the information 
on which we currently rely, which is the results of survey data 
reflecting respondents' assessment of the number of visits considered 
to be typical.
    One commenter suggested that we could develop a geographic sample 
using a similar approach used by the Center for Medicare and Medicaid 
Innovation for the Comprehensive Care for Joint Replacement (CJR) or 
other proposed episode payment models, with an adjustment that would 
make certain we received data from rural, as well as urban areas. We 
reviewed these approaches and concluded that such an approach for 
sample selection could maximize the variability of the sample, mitigate 
some of our concerns, and provide a robust set of data for 
consideration.
    Commenters suggested a sample should include geographic diversity. 
Studies show that health care delivery patterns often vary between 
geographic areas and while we have no specific information that the 
number of post-operative visits varies by geographic areas, it seems 
prudent to gather data from a variety of geographic areas to determine 
if there is such variation and

[[Page 80221]]

to account for it in our data collection if it exists. In order to 
maximize the variability of our limited sample, we are using a 
methodology that requires reporting from practices in 9 states of 
various sizes and from various geographic areas of the country. We are 
using whole states for the geographic areas rather than MSAs as are 
used for the CJR and proposed for other models for several reasons. 
First, MSAs are not used for geographic adjustments under the PFS. 
Indeed, practitioners in most states receive state-wide geographic 
adjustments under the PFS. Additionally, an MSA-based approach would, 
by definition, not include large rural areas, something mentioned by 
many commenters as an important factor in variation in medical 
practice, and therefore, a critical criterion for sampling. Also, due 
to a variety of governmental and institutional requirements, the 
practice of medicine is primarily a state-based activity and thus the 
use of states will reduce the number of practitioners for whom we have 
only partial data based on geographic location. In contrast, we believe 
that practitioners often practice across county lines or in more than 
one MSA. We also believe that the state-wide approach will be helpful 
for compliance and education because there are state medical 
associations in every state and specialty associations in many.
    To make sure that we had states of a variety of sizes, we ranked 
states according to the number of Medicare beneficiaries in each state. 
We chose the number of Medicare beneficiaries to reflect the general 
need for Medicare services. We divided states into four groups: The top 
5 states in terms of the number of Medicare beneficiaries (group 1); 
6th through 15th largest states in terms Medicare beneficiaries (group 
2); the 16th through 25th largest states in terms of Medicare 
beneficiaries (group 3); and all remaining states (26 including the 
District of Columbia, group 4). The states in each group are:
     Group 1--California, Florida, New York, Pennsylvania & 
Texas.
     Group 2--Georgia, Illinois, Massachusetts, Michigan, New 
Jersey, North Carolina, Ohio, Tennessee, Virginia, and Washington.
     Group 3--Alabama, Arizona, Indiana, Kentucky, Louisiana, 
Maryland, Minnesota, Missouri, Wisconsin, and South Carolina.
     Group 4--Alaska, Arkansas, Colorado, Connecticut, District 
of Columbia, Delaware, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, 
Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, 
Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West 
Virginia and Wyoming.
    We also recorded the Census region for each state using the Census 
Bureau's nine regions (New England, Middle Atlantic, South Atlantic, 
East South Central, West South Central, East North Central, West North 
Central, Mountain, and Pacific). Puerto Rico and other territories were 
excluded.
    To ensure a mix of states in terms of size (measured by number of 
Medicare beneficiaries), we selected 1 state at random from group 1, 
followed by 2 states each at random from groups 2 and 3, and lastly 4 
states from group four. After each random selection, we eliminated the 
remaining states in the same Census region from the remaining groups 
for which selection was pending to maximize geographic variation in the 
selection of states. In the event that this process resulted in fewer 
than 9 selected states (for example if none of the three Middle 
Atlantic states--all in Group 1 and 2--were selected in the first three 
picks), the last selection(s) were made randomly from states in the 
remaining Census region from which selections previously had not been 
made.
    Practitioners located in the following states who meet the criteria 
for required reporting will be required to report the data discussed in 
this section of the final rule:
     Florida.
     Kentucky.
     Louisiana.
     Nevada.
     New Jersey.
     North Dakota.
     Ohio.
     Oregon.
     Rhode Island.
Exclusion for Practitioners in Small Practices
    In response to comment about the burden of our proposed requirement 
and the concern that the burden would result in the submission of data 
of poor quality, we are exempting practitioners who only practice in 
practices with fewer than 10 practitioners from the reporting. Based 
upon the comments, we believe larger practices are more likely to 
currently require practitioners to track all visits and often use CPT 
code 99024 to do so. Moreover, larger practices are more likely to have 
coding and billing staff that can more easily adapt to this claims-
based requirement. The combination of experience with reporting CPT 
code 99024 and the staff and resource base to devote to developing the 
infrastructure for such reporting will result in greater accuracy from 
such practitioners. By excluding practitioners who only practice in 
practices with fewer than 10 practitioners, we estimate that about 45 
percent of practitioners will not be required to report. In defining 
small practices, we reviewed other programs. We chose 10 practitioners 
as the threshold for reporting as practices of this size are large 
enough to support coding and billing staff, which will make this 
reporting less burdensome. Also, this is the same threshold used by the 
value-based modifier program for its phase-in of a new requirement 
because of concerns about the burden of small practices.
    For this purpose, we define practices as a group of practitioners 
whose business or financial operations, clinical facilities, records, 
or personnel are shared by two or more practitioners. For the purposes 
of this reporting requirement, such practices do not necessarily need 
to share the same physical address; for example, if practitioners 
practice in separate locations but are part of the same delivery system 
that shares business or financial operations, clinical facilities, 
records, or personnel, all practitioners in the delivery system would 
be included when determining if the practice includes at least 10 
practitioners. Because qualified non-physician practitioners may also 
furnish procedures with global periods, the exception for reporting 
post-operative visits applies only to practices with fewer than ten 
physicians and qualified non-physician practitioners regardless of 
specialty. We are including all practitioners and specialties in the 
count because the exception policy uses practice size as a proxy for 
the likely ability of the practice to meet the reporting requirements 
without undue administrative burden. We recognize that physicians and 
qualified non-physician practitioners furnish services under a variety 
of practice arrangements. In determining whether a practitioner 
qualifies for the exception based on size of the practice, all 
physicians and qualified non-physician practitioners that furnish 
services as part of the practice should be included. This would include 
all practitioners, regardless of whether they are furnishing services 
under an employment model, a partnership model, or an independent 
contractor model under which they practice as a group and share 
facility and other resources but continue to bill Medicare 
independently instead of reassigning benefits. We also recognize that 
practice size can fluctuate over the year and anticipate that practices 
will determine their eligibility for the exception based

[[Page 80222]]

on their expected staffing. Generally, practitioners in short-term 
locum tenens arrangements would not be included in the count of 
practitioners. When practitioners are also providing services in 
multiple settings, the count may be adjusted to reflect the estimated 
proportion of time spent in the group practice and other settings.
    Although this policy excludes a significant number of 
practitioners, a majority of the global procedures furnished will be 
included in the reporting requirements and thus we will have data on a 
majority of services.
    Several commenters also expressed concern that data from small 
practices be included to have complete information. If those practicing 
in small practices are motivated to report and either have the 
infrastructure to do so in place or the resources to develop such 
infrastructure, then, taken together, these attributes would minimize 
concerns with accuracy of data from small practices. Accordingly, we 
are encouraging, but not requiring, small practices to report the 
visits. As we collect data, we will explore mechanisms to appropriately 
use the voluntarily submitted claims data. Analysis of this and other 
data we are able to procure will allow us to assess whether the number 
of post-operative visits varies based upon the size of practice. To the 
extent that it does and that we do not have adequate data on the 
practice patterns in small practices from voluntarily submitted data 
and other sources, we will reconsider for future notice and comment 
rulemaking the exemption of practitioners in small practices from the 
reporting requirements.
    The claims data received from practitioners in these states will 
provide more information about the number of visits typically provided 
in post-operative periods than is available from any other source. 
Through analysis of this data, we hope to learn more about what drives 
variations in the delivery of post-operative care. Many of the 
characteristics that were suggested by commenters, such as size of 
practice, type of practice, geographic, urban/rural, academic, hospital 
based, specialty, etc., will be able to be evaluated using the claims 
data. Moreover, we hope to be able to stratify the data received based 
upon comparisons to the national characteristics so that the submitted 
claims data can contribute to improved valuation of PFS services.
    In summary, our claims-based data collection policy requires that, 
for procedures furnished on or after July 1, 2017, practitioners who 
practice in practices that includes of 10 or more practitioners in 
Florida, Kentucky, Louisiana, Nevada, New Jersey, North Dakota, Ohio, 
Oregon, and Rhode Island will be required to report on claims data on 
post-operative visits furnished during the global period of a specified 
procedure using CPT code 99024. The specified procedures are those that 
are furnished by more than 100 practitioners and either are nationally 
furnished more than 10,000 times annually or have more than $10 million 
in annual allowed charges. The final list of codes subject to required 
reporting will be available on the CMS Web site. Although required 
reporting begins for global procedures furnished on or after July 1, 
2017, we encourage all practitioners to begin reporting for procedures 
furnished on or after January 1, 2017, if feasible. Similarly, we 
encourage those practicing in practices with fewer than 10 
practitioners to report data if they can do so.
(1) Survey of Practitioners
    We agreed with commenters on the CY 2016 proposed rule and at the 
listening session that we need more information than is currently 
provided on claims and that we should utilize a number of different 
data sources and collection approaches to collect the data needed to 
assess and revalue global surgery services. In addition to the claims-
based reporting, we proposed to survey a large, national sample of 
practitioners and their clinical staff in which respondents would 
report information about approximately 20 discrete pre-operative and 
post-operative visits and other global services like care coordination 
and patient training. This sample would be stratified based upon 
specialty and geography, as well as by physician volume (procedures 
billed) and practice setting. The proposed survey would produce data on 
a large sample of pre-operative and post-operative visits and is being 
designed so that we could analyze the data collected in conjunction 
with the claims-based data that we would be collecting. We expect to 
obtain data from approximately 5,000 practitioners.
    We noted that, if our proposal was finalized, RAND would develop 
and conduct this survey. RAND would also assist us in collecting and 
analyzing data for this survey and the claims-based data. While the 
primary data collection would be via a survey instrument, semi-
structured interviews would be conducted and direct observations of 
post-operative visits would occur in a small number of pilot sites to 
inform survey design, validate survey results, and collect information 
that is not conducive to survey-based reporting.
    Our proposed sampling approach would sample practitioners rather 
than specific procedures or visits to streamline survey data collection 
and minimize respondent burden. Specifically, we will use a random 
sample from a frame of practitioners who billed Medicare for more than 
a minimum threshold of surgical procedures with a 10- or 90-day global 
period (for example, 200 procedures) in the most recent available prior 
year of claims data. The sampling frame would provide responses from 
approximately 5,000 practitioners, stratified by specialty, geography, 
and practice type. Based upon preliminary analysis, we believe this 
number of participants will allow us to collect information on post-
operative care following the full range of CPT level-2 surgical 
procedure code groups. For many common types of post-operative visits, 
we anticipate a standard deviation of the time distribution at around 9 
minutes. To achieve a 95 percent confidence intervals with a width of 2 
minutes, we would need 311 reported post-operative visits per 
procedure/procedure group. The most comprehensive approach would be to 
sample sufficient practitioners to observe 311 post-operative visits 
for each HCPCS procedure, but this approach would be cost- and time-
prohibitive. Since post-operative care following similar procedures may 
involve similar activities and times even if there are differences in 
the number of visits, we proposed to sample differentially by specialty 
to maximize our ability to estimate attributes of post-operative care 
for the largest range of procedures.
    Sample sizes for each specialty will be determined on the basis of 
number of procedures billed by the specialty and number of 
practitioners billing, assuming a uniform distribution of procedures 
across the year, an average of 2 post-operative visits by each patient 
and an equal distribution of procedures across practitioners within a 
specialty. If the procedure represented only 5 percent of total billed 
procedures for the specialty, we could expect only one of 20 visits 
sampled and reported by each practitioner would be for the particular 
procedure, and thus we would need to sample 311 practitioners within 
the specialty to achieve the target precision level on estimated post-
operative visit time.
    We propose targeting 311 reporting practitioners from each 
specialty which is the only specialty contributing at least 5 percent 
of billings for any one

[[Page 80223]]

procedure group code, defined as procedures sharing a CPT level 2 
heading. For other specialties, the target will be defined by the 
maximum value of 311 divided by the number of specialties contributing 
at least 5 percent for any procedure group code for which that 
specialty contributes. The target sample size for a specialty will be 
capped at 25 percent of the eligible practitioners within the 
specialty. For example, if a specialty contributed to two procedure 
group codes, one of which had four contributing specialties and the 
other had three contributing specialties, the specialty of interest 
would have a target of 104 reporting practitioners (which is driven by 
the procedure group code that is tied to three specialties). These 
guidelines will target at least 311 reporting practitioners for each 
procedure group code, and result in a total target sample size of 4,872 
providers. A smaller sample size would reduce the precision of 
estimates from the survey and more importantly risk missing important 
differences in post-operative care for specific specialties or 
following different types of surgical procedures. We expect a response 
rate in excess of 50 percent. Given this response rate (and some 
uncertainty in this response rate estimate), we will need to approach 
at least 9,722 practitioners for our target of 4,872 practitioners. 
Should the response rate be lower than expected, we will continue to 
sample in waves until we reach the target of approximately 4,872 
practitioners. Non-response bias will be assessed by comparing 
available characteristics of non-respondents (for example, practice 
type, geography, procedure volume etc.) to those of respondents.
    We did not propose that respondents report on the entire period of 
post-operative care for individual patients, as a 90-day follow-up 
window (for surgeries currently with a 90-day global period) is too 
long to implement practically in this study setting and would be more 
burdensome to practitioners. Instead, we proposed to collect 
information on a range of different post-operative services resulting 
from surgeries furnished by the in-sample practitioner prior to or 
during a fixed reporting period.
    Practitioners will be asked to describe 20 post-operative visits 
furnished to Medicare beneficiaries or other patients during the 
reporting period. The information collected through the survey 
instrument, which will be developed based upon direct observation and 
discussions in a small number of pilot sites, will include contextual 
information to describe the background for the post-operative care, 
including, for example:
     Procedure codes(s) and date of service for procedure upon 
which the global period is based.
     Procedure place of service.
     Whether or not there were complications during or after 
the procedure.
     The number in sequence of the follow-up visit (for 
example, the first visit after the procedure).
    The survey instrument will also collect information on the visit in 
question including, for example:
     Which level of visit using existing billing codes.
     Specific face-to-face and non-face-to-face activities 
furnished on the day of the visit.
     The total time spent on face-to-face and non-face-to-face 
activities on the day of the visit.
     Direct practice expense items used during the visit, for 
example supplies like surgical dressings and clinical staff time.
    Finally, the instrument will ask respondents to report other prior 
or anticipated care furnished to the patient by the practice outside of 
the context of a post-operative visit, for example non-face-to-face 
services.
    The survey approach will complement the claims data collection by 
collecting detailed information on the activities, time, intensity, and 
resources involved in delivering global services. The resulting visit-
level survey data would allow us to explore in detail the variation in 
activities, time, intensity, and resources associated with global 
services within and between physicians and procedures, and would help 
to validate the information gathered through claims. A summary of the 
work that RAND would be doing is available on the CMS Web site under 
downloads for the CY 2017 PFS proposed rule with comment period at 
http://www.cms.gov/physicianfeesched/downloads/.
    The following is a summary of the comments that we received on our 
proposal to conduct a survey of practitioners furnishing 10- and 90-day 
global services to obtain information about the face-to-face activities 
and other activities included in post-operative care.
    Comment: Most commenters were generally supportive of the survey 
effort and noted that the provider survey will collect useful 
information on the level of visits, as well as important contextual 
detail that will not be available from the claims-based reporting. One 
commenter stated that a limited approach through surveys of physicians 
and practices looking at a targeted selection of services, and using 
CPT code 99024 for the claims based component would yield meaningful 
and actionable data for the agency and stakeholders.
    Response: We agree that the survey portion of the data collection 
approach will provide useful information on level and context. The 
survey will complement claims-based reporting and will provide us with 
important information on non-face-to-face activities and other 
activities that are not reported with CPT code 99024.
    Comment: One commenter pointed out challenges in survey response 
and in estimating time for visits by aggregating practitioner time 
estimates for specific activities.
    Response: While we have not finalized the design of the survey 
instrument, we are aware of challenges in collecting detailed time 
estimates for specific activities. We do not intend to sum estimated 
times for specific activities to arrive at a total duration for the 
visit. We also recognize the challenges related to survey response 
rates and are working with our contractor accordingly.
    Comment: Several commenters suggested that the survey effort should 
not target all 4,200 procedure codes.
    Response: The survey component of the data collection effort is not 
designed to collect information on visits following all global 
procedure codes. Rather, we expect the sample to be stratified by 
specialty and to result in a sufficient qualitative data to address key 
procedures in each specialty furnishing procedures with global periods.
    Comment: Some commenters believed that the purpose of the direct 
observation component of the data collection effort was unclear.
    Response: The direct observation component will consist of external 
observers capturing the activities conducted in a sample of post-
operative visits at a small number of practices. It is designed to 
provide additional context to inform future data collection efforts and 
to gauge where the practitioner survey does or does not capture the 
full range of activities. It is not a data collection activity per se.
    After consideration of the comments, we are finalizing our proposal 
to conduct a survey of practitioners to gain information on post-
operative activities to supplement our claims-based data collection as 
proposed. We expect that the survey will be in the field mid-2017.
(2) Required Participation in Data Collection
    Using the authority we are provided under sections 1848(c)(8) and

[[Page 80224]]

1848(c)(2)(M) of the Act, we proposed to require all practitioners who 
furnish a 10- or 90-day global service to submit a claim(s) providing 
information on all services furnished within the relevant global 
service period in the form and manner described in this section of the 
final rule, beginning with surgical or procedural services furnished on 
or after January 1, 2017. We also proposed to require participation by 
practitioners selected for the broad-based survey through which we 
proposed to gather additional data needed to value surgical services, 
such as the clinical labor and equipment involved that cannot be 
efficiently collected on claim (see below).
    Given the importance of the proposed survey effort, making sure 
that we get valid data is critical. By eliminating the bias that would 
be associated with using only data reported voluntarily, we stated that 
we expected to get more accurate and representative data. In addition 
to the potential bias inherent in voluntary surveys, we expressed 
concern that relying on voluntary data reporting would limit the 
adequacy of the volume of data we obtain, would require more effort to 
recruit participants, and may make it impossible to obtain data for 
valuation for CY 2019 as required by the statute.
    Based on our previous experience with requesting voluntary 
cooperation in data collection activity, voluntary participation poses 
a significant challenge in collection and use of data. Specifically, 
the Urban Institute's work (under contract with us) to validate work 
RVUs by conducting direct observation of the time it took to furnish 
certain elements of services paid under the physician fee schedule 
provides evidence of this challenge. (See https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Downloads/RVUs-Validation-Urban-Interim-Report.pdf for an interim report that 
describes challenges in securing participation in voluntary data 
collection.) Similarly, we routinely request invoices on equipment and 
supplies that are used in furnishing PFS services and often receive no 
more than one invoice. These experiences support the idea that 
mandatory participation in data collection activities is essential if 
we are to collect valid and unbiased data.
    Section 1848(a)(9) of the Act authorizes us, through rulemaking, to 
withhold payment of up to 5 percent of the payment for services on 
which the practitioner is required to report under section 
1848(c)(8)(B)(i) of the Act until the practitioner has completed the 
required reporting. Some commenters opposed the imposition of this 
payment consequence for failure to report, and others stated that it 
was too large a penalty. While withholding a portion of payment would 
encourage practitioners to report the required information, we did not 
propose to implement this option for CY 2017. We stated that requiring 
physicians to report the information on claims, combined with the 
incentive to report complete information so that revaluations of 
payment rates for global services are based on accurate data, would 
result in compliance with the reporting requirements. However, we noted 
that if we find that compliance with required claims-based reporting is 
not acceptable, we would consider in future rulemaking imposing up to a 
5 percent payment withhold as authorized by the statute.
    Consistent with the requirements of section 1848(c)(2)(M) of the 
Act, should the data collected under this requirement be used to 
determine RVUs, we will disclose the information source and discuss the 
use of such information in such determination of relative values 
through future notice and comment rulemaking.
    The following is a summary of the comments we received on our 
proposal to require reporting in the claims-based survey and 
participation in the survey.
    Comment: Many commenters objected overall to the administrative 
burden of our proposal and questioned the need for some of the data we 
were proposing to collect, primarily through the claims-based 
reporting, and made many recommendations for less burdensome data 
collection to achieve our goals. Some objected to any claims-based 
reporting at this time. A few recommended a different approach that 
involved collecting information from a small number of practices that 
agree to participate and that we pay such practices for participation. 
However, none recommended that we go forward with data collection on a 
totally voluntary basis. Some indicated concern that practitioners 
would not provide required information.
    Response: We appreciate the many ideas for how to improve our data 
collection effort, particularly those that provided information on how 
to collect the information that we need while imposing a lower 
administrative burden on practitioners.
    Comment: A few commenters supported our not proposing to implement 
the 5 percent withhold until claims on the post-operative care were 
submitted.
    Response: We appreciate the support of commenters.
    After considering the comments, we are finalizing our proposal to 
require participation in the claims-based reporting. It should be 
noted, however, due to our modifying the requirement to apply only to 
those identified as part of the geographic sample, on selected 
procedures, using one code, and exempting those practicing in groups 
with fewer than 10 practitioners, as discussed above, the impact of the 
requirement is significantly reduced overall, including for the subset 
of practitioners who will have to report under the finalized 
requirements.
    We are not implementing the statutory provision that authorizes a 5 
percent withhold of payment for the global services until claims are 
filed for the post-operative care, if required. We reiterate that 
should we find that compliance with required claims-based reporting 
limits confidence in the use of the information for improving the 
accuracy of payments for the global codes, we would consider in future 
rulemaking imposing up to a 5 percent payment withhold as authorized by 
the statute.
(3) Data Collection From Accountable Care Organizations (ACOs)
    We are particularly interested in knowing whether physicians and 
practices affiliated with ACOs expend greater time and effort in 
providing post-operative global services in keeping with their goal of 
improving care coordination for their assigned beneficiaries. ACOs are 
organizations in which practitioners and hospitals voluntarily come 
together to provide high-quality and coordinated care for their 
patients. Because such organizations share in the savings realized by 
Medicare, their incentive is to minimize post-operative visits while 
maintaining high quality post-operative care for patients. In addition, 
we believe that such organizations offer us the opportunity to gain 
more in-depth information about delivery of surgical services.
    We proposed to collect data on the activities and resources 
involved in delivering services in and around surgical events in the 
ACO context by surveying a small number of ACOs (Pioneer and Next 
Generation ACOs). Similar to the approach of the more general 
practitioner survey, this effort would begin with an initial phase of 
primary data collection using a range of methodologies in a small 
number of ACOs; development, piloting, and validation of an additional 
survey module specific to ACOs. A survey of practitioners participating 
in approximately 4 to 6 ACOs using the

[[Page 80225]]

survey instrument along with the additional ACO-specific module will be 
used to collect data from on pre- and post-operative visits.
    The following is summary of the comments we received about our 
proposal for data ACO data collection.
    Comment: Several commenters supported a separate survey of 
practitioners participating in ACOs. One commenter agreed with CMS that 
this data collection effort may provide a unique and useful perspective 
on the matter at hand. Several commenters indicated that there are 
likely differences in pre- and post-operative care between 
practitioners who do participate in ACOs and those that do not. One 
commenter cautioned against extrapolating information gathered from 
ACOs to value global surgery services that are provided outside of the 
ACO setting because ACOs are structured differently than other practice 
settings and data from ACOs may, therefore, be skewed [and] that ACO 
participants typically are larger practices and thus would 
underrepresent smaller or solo practitioners.
    Response: We agree that ACOs may be structured differently than 
other practice settings and that these differences may contribute to 
variations in the provision of outpatient care. By separately surveying 
ACOs we will be able to investigate whether there are differences in 
pre- and post-operative care in ACO settings compared to non-ACO 
settings.
    After consideration of the comments received, we are finalizing our 
proposal for data collection in ACOs. We recognize and will continue to 
consider the concerns raised by commenters as we implement this 
project.
(6) Re-Valuation Based Upon Collected Data
    We recognize that the some of the data collection activities being 
undertaken vary from how information is currently gathered to support 
PFS valuations for global surgery services. However, we believe the 
proposed claims-based data collection is generally consistent with how 
claims data is reported for other kinds of services paid under the PFS. 
We believe that the authority and requirements included in the statute 
through the MACRA and PAMA were intended to expand and enhance data 
that might be available to enhance the accuracy of PFS payments. In the 
proposed rule, we indicated that because these are new approaches to 
collecting data and in an area--global surgery--where very little data 
has previously been collected, we cannot describe exactly how this 
information would be used in valuing services. What is clear is that 
the claims-based data would provide information parallel to the kinds 
of claims-data used in developing RVUs for other PFS services and that 
by collecting these data, we would know far more than we do now about 
how post-operative care is delivered and gain insight to support 
appropriate packaging and valuation. We would include any revaluation 
proposals based on these data in subsequent notice and comment 
rulemaking.
    Even though we did not make a proposal regarding how future re-
valuations would use the data collected under these proposals, we 
received several comments on such revaluations. The following is 
summary of the comments we received regarding use of the data we obtain 
through this three-pronged data collection activity in future re-
valuations.
    Comment: Some commenters stated that the RUC process worked well to 
value services and should continue to be used to value these and other 
services. Some of these objected to any claims-based data collection 
for a variety of reasons including that it was unlikely to provide 
valid and reliable data, that the RUC process worked well and should 
continue to be used, and the that since other codes would not be valued 
on the basis of similar data use of this data would harm the fee 
schedule's relativity. Some suggested that we use the data obtained 
here to identify misvalued codes and refer them to the RUC for further 
evaluation under the usual process. Some commenters suggested that we 
not collect any data until we could describe how it would be used.
    Response: We believe that the Congress enacted the two data 
collection provisions included in the Act to further the accuracy of 
PFS rates by having additional data available to the RUC as it makes 
recommendations to us and to us to inform our evaluation of those 
recommendations. We do not believe this data collection was intended to 
replace the RUC or the processes that have been established over the 
last two decades for valuing physician services. We agree with 
commenters that one way the data might be used is to identify 
potentially misvalued codes for the RUC to evaluate. However, we also 
stress that we do not agree that the use of claims data to value 
services within global surgery packages would be inconsistent with the 
valuation of other PFS services. On the contrary, very few other PFS 
services include estimated work RVUs based on face-to-face patient 
encounters over multiple days or months. Outside of these services, 
work RVUs are estimated per patient encounter (or in other cases over 
longer periods of time for non-face-to-face work). Therefore, the outer 
limit of any misvaluation between the estimated typical and the actual 
is the overall value for a single face-to-face service. Under the 
global packages, potential misvaluations can range from the difference 
between the estimated typical services for a full global period and the 
actual services furnished for a full global period for a given patient. 
We are not finalizing any provisions regarding valuation of global 
surgical services. Instead, such issues will be addressed in future 
rulemaking after we collect data and analyze data.

E. Improving Payment Accuracy for Primary Care, Care Management and 
Patient-Centered Services

1. Overview
    In recent years, we have undertaken ongoing efforts to support 
primary care and patient-centered care management within the PFS as 
part of HHS' broader efforts to achieve better care, smarter spending 
and healthier people through delivery system reform. We have recognized 
the need to improve payment accuracy for these services over several 
years, especially beginning in the CY 2012 PFS proposed rule (76 FR 
42793) and continuing in each subsequent year of rulemaking. In the CY 
2012 proposed rule, we acknowledged the limitations of the current code 
set that describes evaluation and management (E/M) services within the 
PFS. For example, E/M services represent a high proportion of PFS 
expenditures, but have not been recently revalued to account for 
significant changes in the disease burden of the Medicare patient 
population and changes in health care practice that are underway to 
meet the current population's health care needs. These trends in the 
Medicare population and health care practice have been widely 
recognized in the provider community and by health services researchers 
and policymakers alike.\1\ We believe the focus of the

[[Page 80226]]

health care system has shifted to delivery system reforms, such as 
patient-centered medical homes, clinical practice improvement, and 
increased investment in primary and comprehensive care management/
coordination services for chronic and other conditions. This shift 
requires more centralized management of patient needs and extensive 
care coordination among practitioners and providers, often on a non-
face-to-face basis across an extended period of time. In contrast, the 
current CPT code set is designed with an overall orientation to pay for 
discrete services and procedural care as opposed to ongoing primary 
care, care management and coordination, and cognitive services. It 
includes thousands of separately paid, individual codes, most of which 
describe highly specialized procedures and diagnostic tests, while 
there are relatively few codes that describe care management and 
cognitive services. The term ``cognitive services'' refers to the type 
of work that is usually classified and described under the current code 
set for E/M services, such as the critical thinking involved in data 
gathering and analysis, planning, management, decision-making, and 
exercising judgment in ambiguous or uncertain situations.\2\ It is 
often used to describe PFS services that are not procedural or strictly 
diagnostic in nature. Further, in the past, we have not recognized as 
separately payable many existing CPT codes that describe care 
management and cognitive services, viewing them as bundled and paid as 
part of other services including the broadly drawn E/M codes that 
describe face-to-face visits billed by physicians and practitioners in 
all specialties.
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    \1\ See, for example, http://content.healthaffairs.org/content/25/5/w378.full; http://www.commonwealthfund.org/publications/issue-
briefs/2008/feb/how-disease-burden-influences-medication-patterns-
for-medicare-beneficiaries--implications-for-polic; http://www.hhs.gov/ash/about-ash/multiple-chronic-conditions/index.html; 
http://www.nejm.org/doi/full/10.1056/NEJMp1600999#t=article; https://www.pcpcc.org/about; https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/MACRA-MIPS-and-APMs/MACRA-MIPS-and-APMs.html.
    \2\ http://www.nejm.org/doi/full/10.1056/NEJMp1600999#t=article.
---------------------------------------------------------------------------

    This has resulted in minimal service variation for ongoing primary 
care, care management and coordination, and cognitive services relative 
to other PFS services, and in potential misvaluation of E/M services 
under the PFS (76 FR 42793). Some stakeholders believe that there is 
substantial misvaluation of physician work within the PFS, and that the 
current service codes fail to capture the range and intensity of 
nonprocedural physician activities (E/M services) and the ``cognitive'' 
work of certain specialties (http://www.nejm.org/doi/full/10.1056/NEJMp1600999#t=article).
    Recognizing the inverse for specialties that furnish other kinds of 
services, MedPAC has noted that the PFS allows some specialties to more 
easily increase the volume of services they provide, and therefore, 
their revenue from Medicare relative to other specialties, particularly 
those that spend most of their time providing E/M services. (MedPAC 
March 2015 Report to the Congress, available at http://www.medpac.gov/-documents-/reports). We agree with this analysis, and we recognize that 
the current set of E/M codes limits Medicare's ability under the PFS to 
appropriately recognize the relative resource costs of primary care, 
care management/coordination and cognitive services relative to 
specialized procedures and diagnostic tests.
    In recent years, we have been engaged in an ongoing incremental 
effort to update and improve the relative value of primary care, care 
management/coordination, and cognitive services within the PFS by 
identifying gaps in appropriate payment and coding. These efforts 
include changes in payment and coding for a broad range of PFS 
services. This effort is particularly vital in the context of the 
forthcoming transition to the Quality Payment Program that includes the 
Merit-Based Incentive Payment System (MIPS) and Alternative Payment 
Models (APMs) incentives under the Medicare Access and CHIP 
Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10, enacted April 16, 
2015), since MIPS and many APMs will adopt and build on PFS coding, 
RVUs and PFS payment as their foundation.
    In CY 2013, we began by focusing on post-discharge care management 
and transition of beneficiaries back into the community, establishing 
new codes to pay separately for transitional care management (TCM) 
services. Next we finalized new coding and separate payment beginning 
in CY 2015 for chronic care management (CCM) services provided by 
clinical staff. In the CY 2016 PFS proposed rule (80 FR 41708 through 
41711), we solicited public comments on three additional policy areas 
of consideration: (1) Improving payment for the professional work of 
care management services through coding that would more accurately 
describe and value the work of primary care and other cognitive 
specialties for complex patients (for example, monthly timed services 
including care coordination, patient/caregiver education, medication 
management, assessment and integration of data, care planning); (2) 
establishing separate payment for collaborative care, particularly, how 
we might better value and pay for robust inter-professional 
consultation between primary care physicians and psychiatrists 
(developing codes to describe and provide payment for the evidence-
based psychiatric collaborative care model (CoCM)), and between primary 
care physicians and other (non-mental health) specialists; and (3) 
assessing whether current PFS payment for CCM services is adequate and 
whether we should reduce the administrative burden associated with 
furnishing and billing these services.
    We received substantial feedback on this comment solicitation, 
which we summarized in the CY 2017 PFS proposed rule and used to 
develop the following coding and payment proposals for CY 2017 (81 FR 
46200 through 46215, and 46263 through 46265):
     Separate payment for existing codes describing prolonged 
E/M services without direct patient contact by the physician (or other 
billing practitioner), and increased payment for prolonged E/M services 
with direct patient contact by the physician (or other billing 
practitioner) adopting the RUC-recommended values.\3\
---------------------------------------------------------------------------

    \3\ ``Without direct patient contact'' and ``with direct patient 
contact'' in this sentence are the terms used in the CPT code 
descriptor or prefatory language for these prolonged E/M services.
---------------------------------------------------------------------------

     New coding and payment mechanisms for behavioral health 
integration (BHI) services including substance use disorder treatment, 
specifically three codes to describe services furnished as part of the 
psychiatric CoCM and one code to address other BHI care models.
     Separate payment for complex CCM services, reduced 
administrative burden for CCM, and an add-on code to the visit during 
which CCM is initiated (the CCM initiating visit) to reflect the work 
of the billing practitioner in assessing the beneficiary and 
establishing the CCM care plan.
     A new code for cognition and functional assessment and 
care planning, for treatment of cognitive impairment.
     An adjustment to payment for routine visits furnished to 
beneficiaries for whom the use of specialized mobility-assistive 
technology (such as adjustable height chairs or tables, patient lifts, 
and adjustable padded leg supports) is medically necessary.
    We noted that the development of coding for these and other kinds 
of services across the PFS is typically an iterative process that 
responds to changes in medical practice and may be best refined over 
several years, with PFS rulemaking and the development of CPT codes as 
important parts of that process. We noted with interest that the CPT 
Editorial Panel and AMA/RUC restructured the former Chronic Care 
Coordination Workgroup to establish a

[[Page 80227]]

new Emerging CPT and RUC Issues Workgroup that we hope will continue to 
consider the issues raised in this section of our CY 2017 proposed 
rule. At the time of publication of the proposed rule, we were aware 
that CPT had approved a code to describe assessment and care planning 
for treatment of cognitive impairment; however, it would not be ready 
in time for valuation in CY 2017. Therefore, we proposed to make 
payment using a G-code (G0505 \4\) for this service in CY 2017. We were 
also aware that CPT had approved three codes that describe services 
furnished consistent with the psychiatric CoCM, but that they would 
also not be ready in time for valuation in CY 2017. We discuss these 
services in more detail in the next section of this final rule.
---------------------------------------------------------------------------

    \4\ We note that we used placeholder codes (GPPP1, GPPP2, GPPP3, 
GPPPX, GPPP6, GPPP7, and GDDD1) in the proposed rule. In order to 
avoid confusion, we have replaced those codes with those that have 
been finalized as part of the 2017 HCPCS set, even when describing 
the language in the proposed rule.
---------------------------------------------------------------------------

    To facilitate separate payment for these services furnished to 
Medicare beneficiaries during CY 2017, we proposed to make payment 
through the use of three G-codes (G0502, G0503, and G0504--see below) 
that parallel the new CPT codes, as well as a fourth G-code (G0507--see 
below) to describe services furnished using other models of BHI in the 
primary care setting. We intended for these to be temporary codes and 
would consider whether to adopt and establish values for the new CPT 
codes under our standard process, potentially for CY 2018. We 
anticipated continuing the multi-year process of implementing 
initiatives designed to improve payment for, and recognize long-term 
investment in, primary care, care management and cognitive services, 
and patient-centered services. While we recognized that there may be 
some overlap in the patient populations for the proposed new codes, we 
noted that time spent by a practitioner or clinical staff could not be 
counted more than once for any code (or assigned to more than one 
patient), consistent with PFS coding conventions. We expressed 
continued consideration of additional codes for CCM services that would 
describe the time of the physician or other billing practitioner. We 
also expressed interest in whether there should be changes under the 
PFS to reflect additional models of inter-professional collaboration 
for health conditions, in addition to those we proposed for BHI.
    We proposed to pay under the PFS for services described by new 
coding as follows (please note that the descriptions included for 
G0502, G0503, and G0504 are from Current Procedural Terminology 
(CPT[supreg]) Copyright 2016 American Medical Association (and we 
understand from CPT that they will be effective as part of CPT codes 
January 1, 2018). All rights reserved):
     G0502: Initial psychiatric collaborative care management, 
first 70 minutes in the first calendar month of behavioral health care 
manager activities, in consultation with a psychiatric consultant, and 
directed by the treating physician or other qualified health care 
professional, with the following required elements:
    ++ Outreach to and engagement in treatment of a patient directed by 
the treating physician or other qualified health care professional;
    ++ Initial assessment of the patient, including administration of 
validated rating scales, with the development of an individualized 
treatment plan;
    ++ Review by the psychiatric consultant with modifications of the 
plan if recommended;
    ++ Entering patient in a registry and tracking patient follow-up 
and progress using the registry, with appropriate documentation, and 
participation in weekly caseload consultation with the psychiatric 
consultant; and
    ++ Provision of brief interventions using evidence-based techniques 
such as behavioral activation, motivational interviewing, and other 
focused treatment strategies.
     G0503: Subsequent psychiatric collaborative care 
management, first 60 minutes in a subsequent month of behavioral health 
care manager activities, in consultation with a psychiatric consultant, 
and directed by the treating physician or other qualified health care 
professional, with the following required elements:
    ++ Tracking patient follow-up and progress using the registry, with 
appropriate documentation;
    ++ Participation in weekly caseload consultation with the 
psychiatric consultant;
    ++ Ongoing collaboration with and coordination of the patient's 
mental health care with the treating physician or other qualified 
health care professional and any other treating mental health 
providers;
    ++ Additional review of progress and recommendations for changes in 
treatment, as indicated, including medications, based on 
recommendations provided by the psychiatric consultant;
    ++ Provision of brief interventions using evidence-based techniques 
such as behavioral activation, motivational interviewing, and other 
focused treatment strategies;
    ++ Monitoring of patient outcomes using validated rating scales; 
and relapse prevention planning with patients as they achieve remission 
of symptoms and/or other treatment goals and are prepared for discharge 
from active treatment.
     G0504: Initial or subsequent psychiatric collaborative 
care management, each additional 30 minutes in a calendar month of 
behavioral health care manager activities, in consultation with a 
psychiatric consultant, and directed by the treating physician or other 
qualified health care professional (List separately in addition to code 
for primary procedure) (Use G0504 in conjunction with G0502, G0503).
     G0507: Care management services for behavioral health 
conditions, at least 20 minutes of clinical staff time, directed by a 
physician or other qualified health care professional time, per 
calendar month.
     G0505: Cognition and functional assessment using 
standardized instruments with development of recorded care plan for the 
patient with cognitive impairment, history obtained from patient and/or 
caregiver, by the physician or other qualified health care professional 
in office or other outpatient setting or home or domiciliary or rest 
home.
     G0506: Comprehensive assessment of and care planning by 
the physician or other qualified health care professional for patients 
requiring chronic care management services, including assessment during 
the provision of a face-to-face service (billed separately from monthly 
care management services) (Add-on code, list separately in addition to 
primary service).
     G0501: Resource-intensive services for patients for whom 
the use of specialized mobility-assistive technology (such as 
adjustable height chairs or tables, patient lifts, and adjustable 
padded leg supports) is medically necessary and used during the 
provision of an office/outpatient evaluation and management visit (Add-
on code, list separately in addition to primary procedure).
    Regarding the majority of these proposals, the public comments were 
broadly supportive, some viewing our proposals as a temporary solution 
to an underlying need to revalue E/M services, especially outpatient E/
M. Several commenters recommended that CMS utilize the global surgery 
data collection effort or another major research initiative to 
distinguish and revalue different kinds of E/M work.

[[Page 80228]]

The commenters made recommendations about the scope and definition of 
the proposed services, what types of individuals should be able to 
provide them, and potential alignment and overlap. The commenters 
agreed with the need to increase the relative value of primary care, 
care management and other cognitive care under the PFS and minimize 
administrative burden for such services, while ensuring value to the 
program and beneficiaries. The public comments raise or inform a number 
of issues around how to define and pay for care that is collaborative, 
integrative or continuous, and we discuss the comments in greater 
detail below.
2. Non-Face-to-Face Prolonged Evaluation & Management (E/M) Services
    In public comments on the CY 2016 PFS proposed rule, many 
commenters recommended that CMS should establish separate payment for 
non-face-to-face prolonged E/M service codes that we currently consider 
to be ``bundled'' under the PFS (CPT codes 99358, 99359). The CPT 
descriptors are:
     CPT code 99358 (Prolonged evaluation and management 
service before and/or after direct patient care, first hour); and
     CPT code 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).
    Commenters believed that separate payment for these existing CPT 
codes would provide a means for physicians and other billing 
practitioners to receive payment that more appropriately accounts for 
time that they spend providing non-face-to-face care. We agreed that 
these codes would provide a means to recognize the additional resource 
costs of physicians and other billing practitioners, when they spend an 
extraordinary amount of time outside of an E/M visit performing work 
that is related to that visit and does not involve direct patient 
contact (such as extensive medical record review, review of diagnostic 
test results or other ongoing care management work). We also believed 
that doing so in the context of the ongoing changes in health care 
practice to meet the current population's health care needs would be 
beneficial for Medicare beneficiaries and consistent with our 
overarching goals related to patient-centered care.
    These non-face-to-face prolonged service codes are broadly 
described (although they include only time spent personally by the 
physician or other billing practitioner) and have a relatively high 
time threshold (the time counted must be an hour or more beyond the 
usual service time for the primary or ``companion'' E/M code that is 
also billed). They are not reported for time spent in care plan 
oversight services or other non-face-to-face services that have more 
specific codes and no upper time limit in the CPT code set. We believed 
this made these codes sufficiently distinct from the other codes we 
proposed for CY 2017 as part of our primary care/cognitive care/care 
management initiative described in this section of our final rule. 
Accordingly, we proposed to recognize CPT codes 99358 and 99359 for 
separate payment under the PFS beginning in CY 2017. We noted that time 
could not be counted more than once towards the provision of CPT codes 
99358 or 99359 and any other PFS service. We addressed their valuation 
in the valuation section of the CY 2017 proposed rule.
    Through a drafting error, we stated in the proposed rule that we 
would require these services to be furnished on the same day by the 
same physician or other billing practitioner as the companion E/M code. 
We intended to propose conformity with CPT guidance that requires that 
time counted towards the codes describe services furnished during a 
single day directly related to a discrete face-to-face service that may 
be provided on a different day, provided that the services are directly 
related to those furnished in a face-to-face visit.
    We also solicited public comment on our interpretation of existing 
CPT guidance governing concurrent billing or overlap of CPT codes 99358 
and 99359 with complex CCM services (CPT codes 99487 and 99489) and TCM 
services (CPT codes 99495 and 99496). Specifically CPT provides, ``Do 
not report 99358, 99359 during the same month with 99487-99489. Do not 
report 99358, 99359 when performed during the service time of codes 
99495 or 99496.'' Complex CCM services and TCM services are similar to 
the non-face-to-face prolonged services in that they include 
substantial non-face-to-face work by the billing physician or other 
practitioner. The TCM and CCM codes similarly focus on a broader 
episode of patient care that extends beyond a single day, although they 
have a monthly service period and the prolonged service codes do not. 
We sought public input on the intersection of the non-face-to-face 
prolonged service codes with CCM and TCM services, and with the 
proposed add-on code to the CCM initiating visit G0506 (Comprehensive 
assessment of and care planning for patients requiring CCM services). 
We also solicited comment regarding how distinctions could be made 
between time associated with prolonged services and the time bundled 
into other E/M services, particularly pre- and post-service times, 
which would continue to be bundled with the other E/M service codes. 
For all of these services, we expressed concern that there would 
potentially be program integrity risks as the same or similar non-face-
to-face activities could be undertaken to meet the billing requirements 
for a number of codes. We solicited public comment to help us identify 
the full extent of program integrity considerations, as well as options 
for mitigating program integrity risks.
    Comment: Many commenters recommended that we adopt the CPT coding 
provision for CPT codes 99358 and 99359 that allows the prolonged 
services to be provided on a different day than the companion E/M code. 
At the same time, several commenters indicated that they request 
changes to the codes through the established processes of the CPT 
Editorial Panel. For example, some commenters suggested that CPT codes 
99358 and 99359 should be revised so that they have a limited (calendar 
month) service period or measure shorter time increments (15 minutes). 
Some commenters recommended that a given physician should not be 
allowed to report CPT codes 99358 and 99359 for the same beneficiary 
during the same time he or she reported CCM, TCM, or G0506. These 
commenters stated that CCM, TCM, and proposed G0506 encompass non-face-
to-face care provided to the beneficiary during a given period of time 
that would be duplicated if the physician is also allowed to report CPT 
codes 99358 and 99359 during the same time period. Other commenters 
stated that it would be unusual for G0506 and non-face-to-face 
prolonged services (CPT codes 99358 and 99359) to be reported for 
services on the same day, but that both should be allowed if time 
thresholds are met. To facilitate determination of whether time 
thresholds are met for various potential code combinations, some 
commenters recommended that CMS establish a time for G0506 and publish 
typical times for the companion codes to the prolonged service codes. 
This would enable practitioners to determine when they have exceeded 
``usual'' or average times for E/M services and may bill prolonged 
services. Some commenters recommended that CMS provide tables

[[Page 80229]]

showing times for E/M visits, CCM, G0506 and prolonged services with 
specific clinical examples for concurrent billing.
    Some commenters believed there might be some overlap between the 
proposed non-face-to-face prolonged service codes and the post-service 
work of G0505 (Cognition and functional assessment by the physician or 
other qualified health care professional in office or other 
outpatient). Some commenters believed there is a discrepancy between 
our proposal to allow G0505 to be a companion code to prolonged 
services, and CPT's intent that G0505 should only be billed on the same 
day as another E/M visit if they are unrelated.
    MedPAC commented that the companion E/M codes should be revalued 
instead of providing separate payment for prolonged services associated 
with the companion codes. However, if we finalize as proposed, MedPAC 
recommended that we clarify what situations the prolonged codes are 
appropriate for, beyond average times. Another commenter recommended an 
alternative policy instead of the non-face-to-face prolonged service 
codes, namely several modifiers and add-on codes to E/M services, 
associated with increased work RVUs. A typical time for the primary 
service would not need to be established. This coding schema would 
focus on visits actively treating patients with four or more chronic 
conditions; patients with three or more chronic problems introducing an 
acute problem during their visit; unexpected abnormal studies; and 
electronic communication after visits with the patient, lab, and other 
clinicians. One commenter drew a distinction between prolonged service 
work and care management services, where care management does not 
include extensive review of medical records, review of diagnostic tests 
and further discussion with a caregiver.
    Response: We appreciate the comments. First, we had intended to 
propose to adopt the CPT coding provision for CPT codes 99358 and 99359 
that allows the prolonged time to be provided on a different day than 
the companion E/M code, along with the rest of the CPT prefatory 
language for these codes. Our final policy will adopt the CPT guidance 
that allows the prolonged time to be reported for time on a different 
day than the companion E/M code, along with the rest of the CPT 
prefatory language for CPT codes 99358 and 99359.
    Second, the public comments elucidate that it is difficult to 
assess potential overlap between prolonged services and many other 
codes because the included services, service periods and timeframes are 
not aligned. For example, most services paid under the PFS are valued 
based on assumptions regarding the typical pre-service, intra-service 
and post-service time, but do not have required thresholds for time 
spent. It is difficult to distinguish the times associated with these 
services from the times for codes that include time requirements in 
their descriptor. It is also difficult to distinguish the time and 
other work included in codes that generally describe services furnished 
during one day (prolonged services and E/M visits) with codes that 
describe time and work over substantially different service periods 
(such as the calendar month services like CCM or BHI services) or add-
on codes with no pre or post-service time (such as G0506). In addition, 
because portions of many services are likely describing work that is 
furnished ``incident to'' a physician's or practitioner's services, the 
time and effort of the billing practitioner may not be the only 
relevant time and effort to consider. Moreover, the comments reflect a 
desire and intent on the part of stakeholders to alter the prolonged 
service codes in the near future, which would, in turn, alter their 
intersection with the codes proposed in this section of our 2017 rule 
and many other codes. The public comments also reflect a lack of 
consensus regarding appropriate medical practice and reporting patterns 
for prolonged services in relation to the services described by the 
CCM, TCM, proposed G0505 and proposed G0506 codes.
    Having considered this feedback, we have decided to finalize our 
proposal for separate payment of the non-face-to-face prolonged service 
codes (CPT 99358, 99359) and adopt the CPT code descriptors and 
prefatory language for reporting these services. We stress that we 
intend these codes to be used to report extended non-face-to-face time 
that is spent by the billing physician or other practitioner (not 
clinical staff) that is not within the scope of practice of clinical 
staff, and that is not adequately identified or valued under existing 
codes or the 2017 finalized new codes. We appreciate the commenters' 
suggestion to display the typical times associated with relevant 
services. We have posted a file that notes the times assumed to be 
typical for purposes of PFS rate-setting. That file is available on our 
Web site under downloads for the CY 2017 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. We note that 
while these typical times are not required to bill the displayed codes, 
we would expect that only time spent in excess of these times would be 
reported under a non-face-to-face prolonged service code.
    Based on our analysis of comments, we do not believe there is 
significant overlap between CPT codes 99358 and 99359 and the CCM codes 
(CPT 99487, 99489, 99490) or our finalized BHI service codes (G0502, 
G0503, G0504, G0507 discussed below). The work of the billing 
practitioner in the provision of non-complex CCM and the BHI services 
is related to the direction of ongoing care management and coordination 
activities of other individuals, compared to the work of 99358 and 
99359 which is described as personally performed and directly related 
to a face-to-face service. On that basis, we do not believe that there 
is significant overlap in the description of services or the valuation.
    The potential intersection of CPT codes 99358 and 99359 with the 
complex CCM codes is harder to assess because complex CCM explicitly 
includes medical decision-making of moderate to high complexity by the 
billing practitioner, which is not performed by clinical staff. The 
complex CCM codes, however, only measure or count the time of clinical 
staff. Similarly, TCM includes moderate to high complexity medical 
decision-making during the service period as well as a level 4 or 5 
face-to-face visit, even though clinical staff may perform a number of 
other aspects of the service. For CY 2017, for administrative 
simplicity, we are adopting the CPT provision (and finalizing as 
proposed) that complex CCM cannot be reported during the same month as 
non-face-to-face prolonged services, CPT codes 99358 and 99359 (by a 
single practitioner). Similarly, we are adopting the CPT provision that 
non-face-to-face prolonged services, CPT codes 99358 and 99359 may not 
be reported when performed during the service time of TCM (CPT codes 
99495 and 99496) (by a single practitioner). We interpret the CPT 
provision to mean that CPT codes 99358 and 99359 cannot be reported 
during the TCM 30-day service period, by the same practitioner who is 
reporting the TCM.
    Regarding potential intersection of CPT codes 99358 and 99359 with 
proposed G0505 (Cognition and functional assessment by the physician or 
other qualified health care professional in office or other 
outpatient), we are finalizing our proposal that G0505 be designated as 
a

[[Page 80230]]

companion or ``base'' E/M code to non-face-to-face prolonged services 
(CPT codes 99358 and 99359) (see section II.E.5 for a detailed 
discussion of G0505). That is, for CY 2017 CPT codes 99358 and 99359 
may be reported with G0505 as the associated companion code, whether 
furnished on the same day or a different day. We believe CPT intended 
the code on which G0505 is modeled to function like a specific E/M 
service, and that while the specificity of the service explicitly 
includes care planning unique to the needs of patients with particular 
conditions, there may well be circumstances where the pre- or post-time 
for a particular beneficiary may be prolonged. In their current form, 
the non-face-to-face prolonged service codes exist for the purpose of 
providing additional payment to account for the biller's additional 
time related to E/M visits. Therefore, we believe the non-face-to-face 
prolonged service codes should be reportable when related to E/M 
services, including those such as G0505 that describe more specific E/M 
work. We look forward to continued feedback on this issue, including 
through potential revisions to CPT guidance.
    Regarding intersection of CPT codes 99358 and 99359 with G0506, we 
note that G0506 is already an add-on code to another E/M service (the 
CCM initiating visit, which can be the AWV/IPPE or a qualifying face-
to-face E/M visit). We are providing in section II.E.4.a that at this 
time (beginning in CY 2017), G0506 will be a code that is only billable 
one time, at the outset of CCM services. We agree with commenters that 
it would be unusual for physicians to spend enough time with a given 
beneficiary on a given day to warrant reporting all three codes (the 
initiating visit code, G0506, and a prolonged service code). We also 
believe that a simpler approach is preferable at this time (two related 
codes for CCM initiation, instead of possibly three). Therefore our 
final policy for CY 2017 is that prolonged services (whether face-to-
face or non-face-to-face) cannot be reported in addition to G0506 in 
association with a companion E/M code that also qualifies as the CCM 
initiating visit. In association with the CCM initiating visit, a 
billing practitioner may choose to report either prolonged services or 
G0506 (if requirements to bill both prolonged services and G0506 are 
met), but cannot report both a prolonged service code and G0506.
3. Establishing Separate Payment for Behavioral Health Integration 
(BHI)
    In the CY 2016 PFS final rule with comment period (80 FR 70920), we 
stated that we believe the care and management for Medicare 
beneficiaries with behavioral health conditions often requires 
extensive discussion, information-sharing and planning between a 
primary care physician and a specialist. In CY 2016 rulemaking, we 
described that in recent years, many randomized controlled trials have 
established an evidence base for an approach to caring for patients 
with behavioral health conditions called the psychiatric Collaborative 
Care Model (CoCM). We sought information to assist us in considering 
refinements to coding and payment to address this model in particular. 
The psychiatric CoCM is one of many models for behavioral health 
integration or BHI, a term that refers broadly to collaborative care 
that integrates behavioral health services principally with primary 
care, but that may also integrate behavioral health care with inpatient 
and other clinical care. BHI is a team-based approach to care that 
focuses on integrative treatment of patients with medical and mental or 
behavioral health conditions. In the CY 2017 proposed rule (81 FR 46203 
through 46205), we proposed four new G-codes for BHI services: Three 
describing the psychiatric CoCM specifically, and one generally 
describing related models of care.
a. Psychiatric Collaborative Care Model (CoCM)
    A specific model for BHI, psychiatric CoCM 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. As we previously noted, several 
resources have been published that describe the psychiatric CoCM in 
greater detail and assess the impact of the model, including pieces 
from the University of Washington (http://aims.uw.edu/), the Institute 
for Clinical and Economic Review (http://icer-review.org/announcements/icer-report-presents-evidence-based-guidance-to-support-integration-of-behavioral-health-into-primary-care/), and the Cochrane Collaboration 
(http://www.cochrane.org/CD006525/DEPRESSN_collaborative-care-forpeople-with-depression-and-anxiety). Because this particular kind of 
collaborative care model has been tested and documented in medical 
literature, in the CY 2016 proposed rule we expressed particular 
interest in how coding used to describe PFS services might facilitate 
appropriate valuation of the services furnished under this model. We 
solicited public comments to assist us in considering refinements to 
coding and payment to address this model in particular relative to 
current coding and payment policies, as well as information related to 
various requirements and aspects of these services.
    After consideration of the comments, we proposed in the CY 2017 PFS 
proposed rule to begin making separate payment for services furnished 
using the psychiatric CoCM, beginning January 1, 2017. We were aware 
that the CPT Editorial Panel, recognizing the need for new coding for 
services under this model of care, had approved three codes to describe 
the psychiatric collaborative care that is consistent with this model, 
but the codes would not be ready in time for valuation in CY 2017. 
Current CPT coding does not accurately describe or facilitate 
appropriate payment for the treatment of Medicare beneficiaries under 
this model of care. For example, under current Medicare payment policy, 
there is no payment made specifically for regular monitoring of 
patients using validated clinical rating scales or for regular 
psychiatric caseload review and consultation that does not involve 
face-to-face contact with the patient. We believed that these resources 
are directly involved in furnishing ongoing care management services to 
specific patients with specific needs, but they are not appropriately 
recognized under current coding and payment mechanisms. Because PFS 
valuation is based on the relative resource costs of the PFS services 
furnished to Medicare beneficiaries, we believed that appropriate 
coding for these services for CY 2017 will facilitate accurate payment 
for these and other PFS services. Therefore, we proposed separate 
payment for services under the psychiatric CoCM using three new G-
codes, as detailed below: G0502, G0503, and G0504, which would parallel 
the CPT codes that are being created to report these services.
    The proposed code descriptors were as follows (from Current 
Procedural Terminology (CPT[supreg]) Copyright 2016 American Medical 
Association (and we understand from CPT that they will be effective as 
part of CPT codes January 1, 2018). All rights reserved):
     G0502: Initial psychiatric collaborative care management, 
first 70 minutes in the first calendar month of

[[Page 80231]]

behavioral health care manager activities, in consultation with a 
psychiatric consultant, and directed by the treating physician or other 
qualified health care professional, with the following required 
elements:
    ++ Outreach to and engagement in treatment of a patient directed by 
the treating physician or other qualified health care professional;
    ++ Initial assessment of the patient, including administration of 
validated rating scales, with the development of an individualized 
treatment plan;
    ++ Review by the psychiatric consultant with modifications of the 
plan if recommended;
    ++ Entering patient in a registry and tracking patient follow-up 
and progress using the registry, with appropriate documentation, and 
participation in weekly caseload consultation with the psychiatric 
consultant; and
    ++ Provision of brief interventions using evidence-based techniques 
such as behavioral activation, motivational interviewing, and other 
focused treatment strategies.
     G0503: Subsequent psychiatric collaborative care 
management, first 60 minutes in a subsequent month of behavioral health 
care manager activities, in consultation with a psychiatric consultant, 
and directed by the treating physician or other qualified health care 
professional, with the following required elements:
    ++ Tracking patient follow-up and progress using the registry, with 
appropriate documentation;
    ++ Participation in weekly caseload consultation with the 
psychiatric consultant;
    ++ Ongoing collaboration with and coordination of the patient's 
mental health care with the treating physician or other qualified 
health care professional and any other treating mental health 
providers;
    ++ Additional review of progress and recommendations for changes in 
treatment, as indicated, including medications, based on 
recommendations provided by the psychiatric consultant;
    ++ Provision of brief interventions using evidence-based techniques 
such as behavioral activation, motivational interviewing, and other 
focused treatment strategies;
    ++ Monitoring of patient outcomes using validated rating scales; 
and relapse prevention planning with patients as they achieve remission 
of symptoms and/or other treatment goals and are prepared for discharge 
from active treatment.
     G0504: Initial or subsequent psychiatric collaborative 
care management, each additional 30 minutes in a calendar month of 
behavioral health care manager activities, in consultation with a 
psychiatric consultant, and directed by the treating physician or other 
qualified health care professional (List separately in addition to code 
for primary procedure) (Use G0504 in conjunction with G0502, G0503).
    We stated that we intend these to be temporary codes and would 
consider whether to adopt and establish values for the associated new 
CPT codes under our standard process once those codes are active.
    We proposed that these services would be furnished under the 
direction of a treating physician or other qualified health care 
professional during a calendar month. These services would be furnished 
when a patient has a diagnosed psychiatric disorder that requires a 
behavioral health care assessment; establishing, implementing, 
revising, or monitoring a care plan; and provision of brief 
interventions. The diagnosis could be either pre-existing or made by 
the billing practitioner. These services would be reported by the 
treating physician or other qualified health care professional and 
include the services of the treating physician or other qualified 
health care professional, the behavioral health care manager (see 
description below) who would furnish services incident to services of 
the treating physician or other qualified health care professional, and 
the psychiatric consultant (see description below) whose consultative 
services would be furnished incident to services of the treating 
physician or other qualified health care professional. We proposed that 
beneficiaries who are appropriate candidates for care reported using 
the psychiatric CoCM codes could have newly diagnosed conditions, need 
help in engaging in treatment, have not responded to standard care 
delivered in a non-psychiatric setting, or require further assessment 
and engagement prior to consideration of referral to a psychiatric care 
setting. Beneficiaries would be treated for an episode of care, defined 
as beginning when the behavioral health care manager engages in care of 
the beneficiary under the appropriate supervision of the billing 
practitioner and ending with:
     The attainment of targeted treatment goals, which 
typically results in the discontinuation of care management services 
and continuation of usual follow-up with the treating physician or 
other qualified healthcare professional; or
     Failure to attain targeted treatment goals culminating in 
referral to a psychiatric care provider for ongoing treatment; or
     Lack of continued engagement with no psychiatric 
collaborative care management services provided over a consecutive 6-
month calendar period (break in episode).

A new episode of care would start after a break in episode of 6 
calendar months or more.
    The treating physician or other qualified health care professional 
would direct the behavioral health care manager and continue to oversee 
the beneficiary's care, including prescribing medications, providing 
treatments for medical conditions, and making referrals to specialty 
care when needed. Medically necessary E/M and other services could be 
reported separately by the treating physician or other qualified health 
care professional, or other physicians or practitioners, during the 
same calendar month. Time spent by the treating physician or other 
qualified health care professional on activities for services reported 
separately could not be included in the services reported using G0502, 
G0503, and G0504. We proposed that the behavioral health care manager 
would be a member of the treating physician or other qualified health 
care professional's clinical staff with formal education or specialized 
training in behavioral health (which could include a range of 
disciplines, for example, social work, nursing, and psychology) who 
provides care management services, as well as an assessment of needs, 
including the administration of validated rating scales,\5\ the 
development of a care plan, provision of brief interventions, ongoing 
collaboration with the treating physician or other qualified health 
care professional, maintenance of a registry,\6\ all in consultation 
with a psychiatric consultant. The behavioral health care manager would 
furnish these services both face-to-face and non-face-to-face, and 
consult with the psychiatric consultant minimally on a weekly basis. We 
proposed that the behavioral health care manager would be on-site at 
the location where the treating physician or other qualified health 
care professional furnishes services to the beneficiary.
---------------------------------------------------------------------------

    \5\ For example, see https://aims.uw.edu/resource-library/measurement-based-treatment-target.
    \6\ For example, see https://aims.uw.edu/collaborative-care/implementation-guide/plan-clinical-practice-change/identify-population-based.
---------------------------------------------------------------------------

    We proposed that the behavioral health care manager may or may not 
be a professional who meets all the requirements to independently 
furnish and report services to Medicare. If otherwise eligible, then 
that individual

[[Page 80232]]

could report separate services furnished to a beneficiary receiving the 
services described by G0502, G0503, G0504, and G0507 in the same 
calendar month. These could include: Psychiatric evaluation (90791, 
90792), psychotherapy (90832, 90833, 90834, 90836, 90837, 90838), 
psychotherapy for crisis (90839, 90840), family psychotherapy (90846, 
90847), multiple family group psychotherapy (90849), group 
psychotherapy (90853), smoking and tobacco use cessation counseling 
(99406, 90407), and alcohol or substance abuse intervention services 
(G0396, G0397). Time spent by the behavioral health care manager on 
activities for services reported separately could not be included in 
the services reported using time applied to G0502, G0503, and G0504.
    The psychiatric consultant involved in the ``incident to'' care 
furnished under this model would be a medical professional trained in 
psychiatry and qualified to prescribe the full range of medications. 
The psychiatric consultant would advise and make recommendations, as 
needed, for psychiatric and other medical care, including psychiatric 
and other medical diagnoses, treatment strategies including appropriate 
therapies, medication management, medical management of complications 
associated with treatment of psychiatric disorders, and referral for 
specialty services, that are communicated to the treating physician or 
other qualified health care professional, typically through the 
behavioral health care manager. The psychiatric consultant would not 
typically see the patient or prescribe medications, except in rare 
circumstances, but could and should facilitate a referral to a 
psychiatric care provider when clinically indicated.
    In the event that the psychiatric consultant furnished services to 
the beneficiary directly in the calendar month described by other 
codes, such as E/M services or psychiatric evaluation (CPT codes 90791 
and 90792), those services could be reported separately by the 
psychiatric consultant. Time spent by the psychiatric consultant on 
activities for services reported separately could not be included in 
the services reported using G0502, G0503, and G0504.
    We also noted that, although the psychiatric CoCM has been studied 
extensively in the setting of specific behavioral health conditions 
(for example, depression), we received persuasive comments in response 
to the CY 2016 proposed rule recommending that we not specify 
particular diagnoses required for use of the codes for several reasons, 
including that: There may be overlap in behavioral health conditions; 
there are concerns that there could be modification of diagnoses to fit 
within payment rules which could skew the accuracy of submitted 
diagnosis code data; and for many patients for whom specialty care is 
not available, or who choose for other reasons to remain in primary 
care, primary care treatment will be more effective if it is provided 
within a model of integrated care that includes care management and 
psychiatric consultation.
    Comment: The public comments were very supportive of our creation 
of the three G-codes for CY 2017 to pay for services furnished using 
the psychiatric CoCM. The commenters offered a number of 
recommendations regarding valuation of the codes. Some commenters 
requested additional codes, sought clarification, or presented 
statements in favor of including the services of practitioners other 
than psychiatrists, especially psychologists and social workers, within 
the proposed codes.
    Response: We thank the commenters for their support of coding and 
valuation for services furnished using the psychiatric CoCM, and for 
their recommendations regarding appropriate valuation. We address the 
comments on valuation in section II.L of this final rule. We address 
the comments regarding payment for services of psychologists and social 
workers below.
    Comment: Several commenters expressed concern that making separate 
payment for psychiatric CoCM for the treatment of mood disorders might 
result in neglecting treatment for other mental health conditions. 
Other commenters expressed support for not designating a limited set of 
eligible behavioral health diagnoses. One commenter stated that 
requiring a diagnosed behavioral health condition might mean that 
subclinical issues or undiagnosed behavioral health conditions would be 
neglected.
    Response: We continue to believe that we should not limit billing 
and payment for the psychiatric CoCM codes to a limited set of 
behavioral health conditions. As we understand it, the psychiatric CoCM 
model of care may be used to treat patients with any behavioral health 
condition that is being treated by the billing practitioner, including 
substance use disorders. In the Collaborative Care literature reviewed 
by the Cochrane Collaboration and others, there is stronger evidence of 
effectiveness and cost-effectiveness for certain behavioral disorders, 
particularly mood and anxiety disorders, than for others. However, we 
continue to receive persuasive comments indicating that the psychiatric 
CoCM is recommended for broader incorporation into clinical practice, 
and recommending that we not specify the use of the psychiatric CoCM 
codes for only particular behavioral health diagnoses. Therefore we are 
not limiting billing and payment for the psychiatric CoCM codes to a 
specified set of behavioral health conditions.
    In response to the public comment regarding whether we should 
require a diagnosed psychiatric disorder (as opposed to a subclinical 
or undiagnosed condition), we are clarifying that as described, the 
services require that there must be a presenting psychiatric or 
behavioral health condition(s) that, in the clinical judgment of the 
treating physician or other qualified health professional, warrants 
``referral'' to the behavioral health care manager for further 
assessment and treatment through provision of psychiatric CoCM 
services. ``Referral'' is placed in quotes because the behavioral 
health care manager may be located in the same practice as the treating 
physician or other qualified health professional, who in any event 
provides ongoing oversight and continues to treat the beneficiary. 
However, the referring diagnosis (or diagnoses) may be either pre-
existing or made by the treating physician or other qualified health 
professional, and we are not establishing any specific list of eligible 
or included diagnoses or conditions. The treating physician or other 
qualified health professional may not be qualified or able to fully 
diagnose all relevant psychiatric or behavioral health condition(s) 
prior to referring the beneficiary for psychiatric CoCM services. If in 
the course of providing psychiatric CoCM services, it becomes clear 
that the referring condition(s) or other diagnoses cannot be addressed 
by psychiatric CoCM services, then we understand that the beneficiary 
should be referred for other psychiatric treatment or should continue 
usual follow-up care with the treating practitioner, because the 
episode of psychiatric CoCM services ends if there is failure to attain 
targeted treatment goals after or despite changes in treatment, as 
indicated. Beneficiaries receiving care reported using the psychiatric 
CoCM codes may, but are not required to have comorbid chronic or other 
medical condition(s) that are being managed by the treating 
practitioner.
    Comment: Several commenters who supported payment for the proposed 
codes for psychiatric CoCM services in primary care settings, raised 
questions about whether these codes could be

[[Page 80233]]

used to bill for services furnished in other settings that are not 
traditional primary care settings, such as inpatient or long-term care, 
oncology practices, or emergency departments. Some of these commenters 
recommended additional new codes to pay for services furnished in these 
other settings.
    Response: The psychiatric CoCM trials and real world implementation 
have mainly included primary care practice that broadly includes 
pediatrics, obstetrics/gynecology, and geriatrics as well as family 
practice and general internal medicine. The psychiatric CoCM has also 
been used in cardiology and oncology practice, and we believe it could 
be used in various medical specialty settings, as long as the 
specialist physician or practitioner is managing the beneficiary's 
behavioral health condition(s) as well as other medical conditions (for 
example, cancer, status-post acute myocardial infarction and other 
conditions where co-morbid depression is common). Accordingly, we are 
not limiting the code to reporting by only ``traditional'' primary care 
specialties. We believe primary care practitioners will most frequently 
perform the services described by the new psychiatric CoCM codes, but 
if other specialist practitioners perform these services and meet all 
of the requirements to bill the code(s), then they may report the 
psychiatric CoCM codes. We are interested in receiving additional, more 
specific information from stakeholders regarding which specialties 
furnish psychiatric CoCM services. We note that we would generally not 
expect psychiatrists to bill the psychiatric CoCM codes, because 
psychiatric work is defined as a sub-component of the psychiatric CoCM 
codes.
    Regarding psychiatric CoCM services furnished to inpatients or 
beneficiaries in long-term care settings such as nursing or custodial 
care facilities, we note that the forthcoming CPT codes are not limited 
to office or other outpatient or domiciliary services. Moreover, our 
goal is to separately identify and pay for psychiatric CoCM services 
furnished to beneficiaries in any appropriate setting of care, whether 
inpatient or outpatient, in recognition of the associated time and 
service complexity. Care of beneficiaries who are admitted to a 
facility, are in long-term care, or are transitioning among settings 
during the month may be more complex than the care of other types of 
patients. While there is some overlap between psychiatric CoCM and CCM 
services, they are distinct services with differing patient 
populations, as discussed elsewhere in this section of our final rule. 
Therefore, we have valued the psychiatric CoCM services in both 
facility and non-facility settings (see section II.L on valuation). We 
are not limiting the time that can be counted towards the monthly time 
requirement to bill the psychiatric CoCM code(s) to time that is spent 
in the care of an outpatient or a beneficiary residing in the 
community. However, we also stress that G0502, G0503 and G0504 can only 
be reported by a treating physician or other qualified health care 
professional when he or she has directed the psychiatric CoCM service 
for the duration of time that he or she is reporting it, and has a 
qualifying relationship with individuals providing the service under 
his or her direction and control. Also, time and effort that is spent 
managing care transitions for CCM or TCM patients and that is counted 
towards reporting TCM or CCM services, cannot also be counted towards 
reporting any transitional care management activities reported under a 
BHI service code(s), either the psychiatric CoCM codes or the code 
describing other BHI services. We welcome additional input from 
stakeholders regarding appropriate (or inappropriate) sites of service 
for G0502, G0503 and G0504.
    We note that for CY 2017, the facility PE RVU for psychiatric CoCM 
services will include the indirect PE allocated based on the work RVUs, 
but no direct PE (which is explicitly comprised of other labor, 
equipment and supplies). This is because historically, the PFS facility 
rate for a given professional service assumes that the billing 
practitioner is not bearing a significant resource cost in labor by 
other individuals, equipment or supplies. We generally assume that 
those costs are instead borne by the facility, and are adequately 
accounted for in a separate payment made to the facility to account for 
these costs and other costs incurred by the facility for the 
beneficiary's facility stay. For BHI services and similar care 
management services such as CCM, we have been considering whether this 
approach to PFS valuation is optimal because the PFS service, in 
significant part, may be provided by the behavioral health care 
manager, clinical staff, or even other physicians under the employment 
of the billing practitioner or under contract to the billing 
practitioner. These individuals may provide much of the PFS service 
remotely, and are not necessarily employees or staff of the facility. 
Indeed, the BHI services are defined in terms of activities performed 
by individual(s) other than the billing practitioner and who may not be 
affiliated with or located within the facility, even though as we 
discuss below the billing practitioner must also perform certain work. 
For this type of PFS service, there may be more direct practice expense 
borne by the billing practitioner even though the beneficiary is 
located, for part or all of the month, in a facility receiving 
institutional payment. We plan to consider these issues further in the 
future.
    Comment: One specialty association supported the proposed 
psychiatric CoCM codes, noting that although few of their members would 
use these codes, they set an important precedent to recognize 
interdisciplinary care that requires significant non-face-to-face work. 
This commenter anticipated that similar code series may be developed in 
the future to describe complex management in other specialties 
including neurology, and supported the adoption of language approved at 
CPT that carefully defined the roles of multiple professionals. Other 
commenters similarly expressed support for separate payment for 
additional collaborative care services, including inter-professional 
consultation in the treatment of other illnesses such as cancer or 
multiple sclerosis.
    Response: We continue to be interested in new coding that describes 
integrative, collaborative or consultative care among specialties other 
than primary care and behavioral health/psychiatry. We are especially 
interested in new coding that describes such care in sufficient detail 
that distinguishes it from existing service codes, and that would 
further the appropriate valuation of cognitive services. We will 
continue to follow any new coding proposals at CPT relevant for the 
Medicare population. We note that we have followed CPT's lead in 
finalizing proposed code G0505 for cognitive impairment assessment and 
care planning (see section II.E.5) as well as for psychiatric CoCM 
services. BHI is a unique type of service that we believe until now has 
not been well identified nor appropriately valued under existing codes. 
BHI is not comprised of mere consultation among professionals and has a 
unique evidence base, in addition to being recently addressed by 
forthcoming CPT coding. In addition, given the shortage of available 
psychiatric and other mental health professionals in many parts of the 
country, we believe it is important to identify and make accurate 
payment for models of care that facilitate access to psychiatric and 
other behavioral health specialty care through innovations in medical 
practice, like the ones described by these codes.

[[Page 80234]]

    Comment: One commenter asked CMS to clarify inclusion of nurse 
practitioners who are primary care practitioners and, in the specialty 
of psychiatry, psychiatric nurse practitioners who can perform 
psychiatric evaluations and treat psychiatric problems.
    Response: Nurse practitioners are authorized to independently bill 
Medicare for their services, and can also bill Medicare for services 
furnished incident to their services. Therefore, nurse practitioners 
who furnish the psychiatric CoCM services as described may bill for the 
psychiatric CoCM codes. Nurse practitioners who meet our final 
qualifications to serve as the behavioral health care manager may 
provide the behavioral health care manager services incident to the 
services of another (billing) practitioner. Nurse practitioners who 
meet all of our final requirements to serve as the psychiatric 
consultant may provide the psychiatric consultant services incident to 
the services of the billing practitioner.
    Comment: Regarding the care planning requirements for psychiatric 
CoCM services, some commenters noted that there is not necessarily 
value in accumulating or enumerating a number of different types of 
care plans addressing different aspects of the beneficiary's problems, 
such as a behavioral or psychiatric care plan, a CCM care plan, and a 
cognitive impairment care plan (see G0505 in section II.E.5).
    Response: While the proposed descriptors for the psychiatric CoCM 
services referred to an ``individualized treatment plan,'' not a ``care 
plan,'' we proposed in addition that the behavioral health care manager 
would ``develop a care plan.'' While any care planning should take into 
account the whole patient, our intent is that the care planning 
included in the CCM coding (and G0506, the CCM initiating visit add-on 
code) will be the most comprehensive in nature, addressing all health 
issues with particular focus on the multiple chronic conditions being 
managed by the billing practitioner. In that sense, the CCM care plan 
is an integrative care plan incorporating more comprehensive health 
information on all of the beneficiary's health issues, or reconciling 
care plans of other practitioners. In contrast, the BHI care planning 
will focus on behavioral health or psychiatric issues, in particular, 
just as cognitive impairment care planning will focus on cognitive 
impairment issues, in particular (see section II.E.5). We are not 
requiring the psychiatric CoCM treating practitioner or behavioral 
health consultant to perform care planning that incorporates 
comprehensive health information on all of the beneficiary's health 
issues or reconciles the care plans of other practitioners, as would be 
expected for CCM care planning.
    We understand that adoption of EHRs may be lower among behavioral 
health practitioners \7\ and note that resources are available to help 
inform how care plans can support team-based care and BHI.\8\ Our 
understanding from the public comments last year and subsequent 
discussions with experts on the psychiatric CoCM model of care, is that 
no specific electronic technology or format is necessary or 
indispensable to carry out the psychiatric CoCM model of care, or 
perform the services included in the codes we are creating to describe 
the services furnished using that model. We believe the format of the 
behavioral health care plan (or any care plan) is less important than 
having a process whereby feedback and expertise from all relevant 
practitioners and providers, whether internal or external to the 
billing practice, are integrated into the beneficiary's treatment plan 
and goals; that this plan be regularly assessed and revisited by the 
practitioner who is assuming an overall care management role for the 
beneficiary in a given month; that the patient is engaged in the care 
planning process; and that the care planning be documented in the 
medical record (as with any required element of any PFS service). We 
are revising the requirement for care planning by the behavioral health 
care manager accordingly, that he or she will perform ``behavioral 
health care planning in relation to behavioral/psychiatric health 
problems, including revision for patients who are not progressing or 
whose status changes.''
---------------------------------------------------------------------------

    \7\ See for instance http://dashboard.healthit.gov/quickstats/pages/physician-ehr-adoption-trends.php and https://www.thenationalcouncil.org/wp-content/uploads/2012/10/HIT-Survey-Full-Report.pdf.
    \8\ For instance, AHRQ has a variety of resources on how shared 
care plans can support team-based care and behavioral health 
integration at https://integrationacademy.ahrq.gov/playbook/develop-shared-care-plan.
---------------------------------------------------------------------------

    Comment: A number of commenters recommended that we should not 
require the behavioral health care manager for the psychiatric CoCM 
services to be located on site within the primary care practice. The 
commenters noted that in some settings, particularly rural areas or 
smaller practices, this may be especially important. Some commenters 
assumed that there is also a behavioral health care manager for G0507 
(discussed below). These commenters compared BHI services (the 
psychiatric CoCM services and G0507) to CCM and recommended that CMS 
adopt the same requirements for all the BHI codes as for CCM, regarding 
supervision, location of a behavioral health care manager, and third 
party outsourcing.
    Response: For the psychiatric CoCM services, we proposed that the 
behavioral health care manager would be a member of the treating 
physician or other qualified health care professional's clinical staff, 
and would be required to be located on site but able to work under 
general supervision. In addition, we proposed that the behavioral 
health care manager provides his or her services both face-to-face and 
non-face-to-face. We believed that services provided using the 
psychiatric CoCM model of care commonly involve face-to-face 
interaction between the behavioral health care manager and the 
beneficiary on appropriate occasions, such as the outset of services (a 
``warm hand-off'' from the treating physician or other qualified health 
care professional). In addition, whether face-to-face or non-face-to-
face, many of the included behavioral health care manager duties could 
be performed while the treating practitioner is not in the office and 
could be performed after hours. We note that the behavioral health care 
manager duties are listed in full above, and include care management 
services, as well as an assessment of needs, including the 
administration of validated rating scales, behavioral health care 
planning, provision of brief interventions, ongoing collaboration with 
the treating physician or other qualified health care professional, and 
maintenance of a registry, all in consultation with a psychiatric 
consultant.
    The delivery of the psychiatric CoCM depends, in part, on 
continuity of care between a given patient and the assigned behavioral 
health care manager. Also it requires collaboration, integration and 
ongoing data flow between the behavioral health care manager and the 
treating practitioner the behavioral health care manager is supporting, 
as well as with the psychiatric consultant who is usually remotely 
located under the psychiatric CoCM model of care. As previously 
discussed, the psychiatric CoCM is an integrative model of care, and in 
considering our proposal we were concerned that allowing the behavioral 
health care manager to be located remotely would compromise their 
ability to collaborate, communicate, and timely treat and share 
information with the beneficiary and the rest of the care team. We are 
aware of many care

[[Page 80235]]

management companies and health information technology companies that 
may seek to provide remote care management and related services under 
all of the new BHI codes, as they have for CCM and similar services 
recently adopted under the PFS. We received public comments from 
several such stakeholders that indicated an interest in the provision 
of BHI services and related health information technology. We 
understand that there have been successful implementations (positive 
randomized controlled trials) of the psychiatric CoCM using remote call 
centers; however, in these implementations, call center staff were not 
randomly rotated among patients and there was ongoing data flow and 
connectivity between the behavioral health care manager and the other 
members of the care team, as well as the patient. Moreover, the 
behavioral health care manager would presumably have to be on site at 
least some of the time (even if under general supervision), in order to 
provide some of their services in-person with the beneficiary.
    The fact that we proposed and are finalizing general supervision 
for the psychiatric CoCM codes as we did for CCM services (see section 
II.E.3.b) does not mean that general supervision alone suffices to meet 
the requirements of the psychiatric CoCM for continuity, collaboration 
and integration among the care team members, including the beneficiary. 
General supervision means that the service is furnished under the 
overall direction and control of the practitioner billing the service, 
but without the presence of the practitioner being required during the 
performance of the service. This definition does not directly govern 
where individual(s) providing the service on an incident to basis are 
located, whether on site or remote. Rather, it governs the location and 
informs the involvement of the billing practitioner.
    For payment purposes, we are assigning general supervision to the 
psychiatric CoCM codes because we do not believe it is clinically 
necessary that the professionals on the team who provide services other 
than the treating practitioner (namely, the behavioral health care 
manager and the psychiatric consultant) must have the billing 
practitioner immediately available to them at all times, as would be 
required under a higher level of supervision. However, general 
supervision sets the minimum standard for supervision and does not, by 
itself, meet the requirements we are setting for billing new codes 
G0502, G0503 and G0504. While certain aspects of psychiatric CoCM 
services might be furnished under general supervision, we do not 
believe the general supervision requirement adequately describes the 
nature of the relationship and interactions of the respective team 
members for services furnished using the psychiatric CoCM or the codes 
we are creating to describe those services. Moreover it only directly 
addresses the physical location of the billing practitioner, not the 
behavioral health care manager, necessarily.
    After considering the public comments, we are not finalizing our 
proposal that the behavioral health care manager must be a member of 
the treating physician or other qualified health care professional's 
clinical staff. As some of the psychiatric CoCM services can be 
contracted out to a third party (subject to rules discussed below), the 
contracted individuals are not necessarily employees of the treating 
practitioner.
    Regarding the face-to-face provision of services by the behavioral 
health care manager, we are requiring that the behavioral health care 
manager must be available to provide services on a face-to-face basis, 
but not that face-to-face services must be provided. We are not 
finalizing the proposed requirement that the behavioral health care 
manager must be located on site, in order to allow for after-hours or 
appropriate remote provision of services. However, to ensure clinical 
integration with the treating practitioner and familiarity and 
continuity with the beneficiary, which are characteristic of services 
furnished under the psychiatric CoCM model of care, we are requiring 
that the behavioral health care manager must have a collaborative, 
integrated relationship with the rest of the care team members, and be 
able to perform all of the required elements of the psychiatric CoCM 
services delineated for the behavioral health care manager. The 
behavioral health care manager must have the ability to engage the 
beneficiary outside of regular clinic hours as necessary to perform 
their duties under the CoCM model, and have a continuous relationship 
with the beneficiary. This does not mean the behavioral health care 
manager is necessarily an employee of or always physically located 
within the practice, nor does it require provision of behavioral health 
care manager services to the beneficiary on site. The behavioral health 
care manager may provide his or her services from a remote location 
that is remote from the billing practitioner or remote from the 
beneficiary, subject to incident to rules and regulations in 42 CFR 
410.26, if he or she has a qualifying relationship with the rest of the 
care team including the beneficiary, and is available to provide 
services face-to-face.
    We will monitor this issue going forward, not just for the 
psychiatric CoCM but also for the general BHI service code (G0507) we 
are finalizing, as well as for TCM and CCM services. As we discuss in 
the final rule section on CCM below, we are continuing to consider 
whether outsourcing certain aspects of these services to a third party 
fragments care, leads to insufficient involvement and oversight of the 
billing practitioner or results in services that do not actually 
represent or facilitate continuous, seamless transitional care and 
other required aspects of these services. We will continue to consider 
how to best define the continuity of care that is required for services 
furnished and billed under all of these codes, and whether arrangements 
for remote provision of services whether by a case management company 
or another entity increases rather than reduces service fragmentation. 
Advances in health information technology provide opportunities for 
remote connectivity and interoperability that may assist and be useful, 
if not necessary, for reducing care fragmentation. However, remote 
provision of services by entities having only a loose association with 
the treating practitioner can detract from continuous, patient-centered 
care, whether or not those entities employ certified or other 
electronic technology.
    We note that while time spent by the treating practitioner is not 
explicitly counted for in codes G0502, G0503 and G0504, these codes are 
valued to include work performed directly by the treating practitioner. 
The treating practitioner directs the behavioral health care manager 
and continues to oversee the patient's care, including prescribing 
medications, providing treatments for medical conditions, and making 
referrals to specialty care when needed. We are finalizing as proposed 
that some of these services may be separately billable. However, we 
wish to emphasize that the treating practitioner must remain involved 
in ongoing oversight, management, collaboration and reassessment as 
appropriate to bill the psychiatric CoCM codes.
    Comment: We received a number of comments requesting that we allow 
or recognize pharmacists, especially neurologic or psychiatric 
pharmacists, or doctoral-level clinical psychologists to serve as the 
psychiatric consultant. Some commenters were concerned that CMS is 
advocating pharmacotherapy over psychotherapy by requiring a 
psychiatric consultant who can prescribe medication.

[[Page 80236]]

    Response: We agree with the commenters that there are multiple 
types of indicated treatment for behavioral health conditions, 
including psychotherapy and other psychosocial interventions as well as 
pharmacotherapy that are available and should be offered to 
beneficiaries receiving psychiatric CoCM services. Our intent is not to 
inappropriately steer beneficiaries into medication-based treatment, 
but rather that the psychiatric consultant be able to present and 
recommend the full range of treatment options including but not limited 
to medications, and to advise regarding any medications the beneficiary 
chooses to take. Under the psychiatric CoCM, the psychiatric consultant 
must be able to prescribe medication. As we discuss in section II.L on 
valuation of G0502, G0503 and G0504, we agree with the commenters who 
stated that the role of the psychiatric consultant under these codes is 
primarily evaluation and management, which is not within the scope of 
pharmacists or clinical psychologists under Medicare rules. Therefore, 
we are finalizing the role and qualifications of the psychiatric 
consultant as proposed. The general BHI code (G0507), which we are 
finalizing, was intended and may be used to report other models of 
care, where the beneficiary may not receive E/M services from the 
consultant and the consultant may only be authorized to provide 
psychotherapy or consultation regarding medications (see section 
II.E.3.b).
    Comment: We received a number of comments recommending various 
types of professionals as qualified to serve as the behavioral health 
care manager, such as licensed clinical social workers (LCSWs) and 
psychologists.
    Response: Unlike CCM and the general BHI service (code G0507), the 
psychiatric CoCM codes are used to report time that is spent in 
specified activities performed by a behavioral health care manager 
having formal education or specialized training in those activities, 
whether or not the behavioral health care manager is eligible to 
directly bill Medicare for other services. The behavioral health care 
manager may or may not be a professional who meets all the requirements 
to independently furnish and report services to Medicare. The 
behavioral health care manager must also meet any applicable licensure 
and state law requirements, which is required under 42 CFR 410.26 for 
all services provided under the PFS. LCSWs would meet these 
requirements, as would qualified registered nurses, clinical 
psychologists and other qualified clinical staff. Time spent by 
administrative or clerical staff cannot be counted towards the time 
required to bill G0502, G0503 or G0504.
    Evaluation and management services (such as face-to-face E/M 
visits) may be separately billed during the service period or on the 
same day as the psychiatric CoCM services, provided time is not counted 
twice towards the same code.
b. General Behavioral Health Integration (BHI)
    We recognize that the psychiatric CoCM is prescriptive and that 
much of its demonstrated success may be attributable to adherence to a 
set of elements and guidelines of care. We are finalizing the code set 
discussed above to pay accurately for care furnished using this 
specific model of care, given its widespread adoption and recognized 
effectiveness. However, we note that PFS coding, in general, does not 
dictate how physicians practice medicine and believe that it should, 
instead, reflect the practice of medicine. We also recognize that there 
are primary care practices that are incurring, or may incur, resource 
costs inherent to treatment of patients with similar conditions based 
on BHI models of care other than the psychiatric CoCM that may benefit 
beneficiaries with behavioral health conditions (see, for example, the 
approaches described at http://www.integration.samhsa.gov/integrated-care-models). There are a variety of care models ranging from 
behavioral health professionals embedded within a primary care office 
for same-day treatment, to remote consultation, to assessment-and-
referral (see, for example, http://www.commonwealthfund.org/publications/newsletters/quality-matters/2014/august-september/profiles; and http://www.integration.samhsa.gov/integrated-care-models). These models of care have tended to arise from clinical 
practice as opposed to the research environment (http://psychnews.psychiatryonline.org/doi/full/10.1176/appi.pn.2014.10b25), 
and include resource costs that differ in various respects from those 
associated with the psychiatric CoCM.
    To recognize the resource costs associated with furnishing such BHI 
services to Medicare beneficiaries, we also proposed to make payment 
using a new G-code that describes care management for beneficiaries 
with behavioral health conditions under other models of care. We 
believe that the resources associated with such care are not currently 
adequately recognized under the PFS. The proposed code was G0507 (Care 
management services for behavioral health conditions, at least 20 
minutes of clinical staff time, directed by a physician or other 
qualified health care professional, per calendar month). We noted that 
we would expect this code to be refined over time as we receive more 
information about other BHI models being used and how they are 
implemented.
    We sought stakeholder input on whether we should consider different 
increments of time for this code, such as a base code plus an add-on 
code comprised of additional 20 minute increments. We recognized that 
BHI services furnished under the proposed code may range in resource 
costs. We believed that appropriate payment for these services would 
further the refinement and implementation of BHI models of care, and 
that having utilization data would inform future refinement of the 
proposed code's valuation.
    Comment: The commenters were supportive of new coding to support 
payment for other BHI models of care. They believed G0507 could be used 
by some smaller or medium sized practices who could not conform to the 
strict parameters of the psychiatric CoCM but provide very similar 
services. They also stated that G0507 would be appropriate to report 
services furnished under other BHI models of care that may not require 
psychiatric services. We received a few comments describing particular 
models of care in great detail; a few commenters referenced the 
Veterans' Administration BHI care models, the Primary Care Behavioral 
Health/Behavioral Health Consultation (PCBH/BHC) Model, or general 
models in place within other health care systems. However, there was 
consensus among the commenters that another code(s) in addition to the 
psychiatric CoCM codes would be useful to collect information on how 
other behavioral health care models are being used and implemented.
    Many commenters recommended that CMS provide more of a framework or 
description of included services and provider types without being 
unduly burdensome. Some commenters recommended service elements similar 
to the CCM service elements (continuity of care with a designated 
member of the care team; a written care plan; a comprehensive 
assessment of behavioral health or psychiatric and other medical 
conditions as well as any functional and psychosocial needs, updated as 
necessary; routine evaluation of patient progress using a tracking 
system; services should be documented in the medical record and 
available to other treating professionals). These

[[Page 80237]]

commenters recommended that eligible patients should have a diagnosed 
psychiatric or substance use disorder that requires care management 
services. Several commenters recommended that BHI payments be tied to 
the use of behavioral health assessment tools for screening and 
collection of treatment outcomes throughout the sessions of care in 
primary care. These commenters believed this would better position 
behavioral health to benefit from the movement toward value-based 
payment in the future. Some commenters assumed there is a designated 
behavioral health care manager for the service described by G0507, and 
recommended that we adopt similar rules for this care manager as apply 
for clinical staff providing CCM services.
    Response: We continue to believe that another code, or set of BHI 
codes, in addition to the psychiatric CoCM code set would be useful to 
pay appropriately for BHI services furnished to Medicare beneficiaries. 
We also believe that such payment could facilitate our ability to 
identify and collect data regarding similar or related BHI service 
models. We agree with the commenters that we should provide more 
specificity around the services eligible for reporting under this other 
code(s). One way to do this would be to create codes with tiered times. 
Some commenters supported such an approach, while others believed it 
would be premature. At this time, we are not creating multiple levels 
of codes distinguishing levels of general BHI services using time or 
any other metric, but we may reconsider this in the future (also see 
section II.L on G0507 valuation).
    Regarding included elements of the general BHI service (G0507), we 
agree with the commenters that we should be more specific in our 
definition of this service. We wish to provide greater specificity 
without being overly prescriptive, since a range of activities may be 
included in BHI models of care other than the psychiatric CoCM. We 
believe we should include a core set of service elements that are 
similar to core elements of the psychiatric CoCM, especially a 
systematic process for initial assessment and routine follow up 
evaluation, revising the treatment approach or methods for patients who 
are not progressing or whose status changes; facilitating and 
coordinating behavioral health expertise and treatment; and designating 
a member of the care team with whom the beneficiary has a continuous 
relationship. We may revisit the included services in future years, but 
for CY 2017 the required service elements for the general BHI service 
(G0507) will be:
     Initial assessment or follow-up monitoring, including the 
use of applicable validated rating scales;
     Behavioral health care planning in relation to behavioral/
psychiatric health problems, including revision for patients who are 
not progressing or whose status changes;
     Facilitating and coordinating treatment such as 
psychotherapy, pharmacotherapy, counseling and/or psychiatric 
consultation; and
     Continuity of care with a designated member of the care 
team.
    Accordingly, the final code descriptor will be, G0507: Care 
management services for behavioral health conditions, 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:
     Initial assessment or follow-up monitoring, including the 
use of applicable validated rating scales;
     Behavioral health care planning in relation to behavioral/
psychiatric health problems, including revision for patients who are 
not progressing or whose status changes;
     Facilitating and coordinating treatment such as 
psychotherapy, pharmacotherapy, counseling and/or psychiatric 
consultation; and
     Continuity of care with a designated member of the care 
team.
    We are aware of a number of validated rating scales that are 
available for use for a number of conditions addressed by BHI models of 
care, such as those described by the Kennedy Forum (see http://thekennedyforum-dot-org.s3.amazonaws.com/documents/MBC_supplement.pdf). 
We are requiring the use of such scales when applicable to the 
condition(s) that are being treated. Medication Assisted Treatment 
(MAT) may be a treatment that is facilitated under the facilitating 
treatment service element.
    Regarding diagnosis, we believe we should specify similar 
diagnostic criteria for G0507 and the psychiatric CoCM services (G0502, 
G0503 and G0504). Accordingly we are providing that beneficiaries who 
are appropriate candidates for services billed under G0507 will have an 
identified psychiatric or behavioral health condition(s) that requires 
a behavioral health care assessment, behavioral health care planning, 
and provision of interventions. Eligible beneficiaries must present 
with a condition(s) that in the treating practitioner's clinical 
judgment, warrants the services included in G0507. The presenting 
condition(s) may be pre-existing or newly diagnosed by the treating 
practitioner, and may be refined as treatment progresses. Beneficiaries 
receiving services reported under G0507 may, but are not required to 
have comorbid chronic or other medical condition(s) that are being 
managed by the treating practitioner. We are not limiting billing and 
payment for G0507 to a specified set of behavioral health conditions, 
because there may be overlap in behavioral health conditions; if we 
specified only certain diagnoses, practitioners might modify diagnoses 
to fit within payment rules; and for many beneficiaries for whom 
specialty care is not available, or who choose for other reasons to 
remain within primary care, their behavioral health condition(s) can be 
addressed using a model of integrated care.
    Regarding rules for clinical staff, we are clarifying that services 
included in the code G0507 may be provided directly by the treating 
practitioner or provided by other qualifying individuals (whom we term 
``clinical staff'') under his or her direction, during the calendar 
month service period. Unlike the psychiatric CoCM codes, for G0507 
there is not necessarily a specific individual designated as a 
``behavioral health care manager'' with formal or specialized education 
in providing the services (although there could be). Similarly, there 
is not necessarily a psychiatric or other behavioral health specialist 
consultant (although there could be), and we note that G0507 is not 
valued to explicitly account for such a consultant. We will apply the 
same definition of the term ``clinical staff'' that we have applied for 
CCM to G0507, namely, the CPT definition of this term, subject to the 
incident to rules and regulations and applicable state law, licensure 
and scope of practice at 42 CFR 410.26. For G0507, then, we note that 
the term ``clinical staff'' will encompass or include a psychiatric or 
other behavioral health specialist consultant, if the treating 
practitioner obtains consultative expertise. Clinical staff that 
provide included services do not have to be employed by the treating 
practitioner or located on site, necessarily, and may or may not be a 
professional who is permitted to independently furnish and report 
services to Medicare. Time spent by administrative or clerical staff 
cannot be counted towards the time required to bill G0507.
    G0507 is valued to include minimal work by the treating 
practitioner; the bulk of the valuation is based on clinical staff time 
(see section II.L on valuation). However, we want to emphasize that the

[[Page 80238]]

treating practitioner must direct the service, continue to oversee the 
beneficiary's care, and perform ongoing management, collaboration and 
reassessment. If the service (or part thereof) is provided incident to 
the treating practitioner's services, whether on site or remotely, the 
clinical staff providing services must have a collaborative, integrated 
relationship with the treating practitioner. They must also have a 
continuous relationship with the beneficiary.
    Evaluation and management services, such as face-to-face E/M 
visits, may be separately billed during the service period or on the 
same day as G0507, provided time is not counted twice towards the same 
code.
    For payment purposes, we are categorizing this service as a 
designated care management service assigned general supervision for 
purposes of ``incident to'' billing, because we do not believe it is 
clinically necessary for the individuals on the team who provide 
services other than the treating practitioner (namely, clinical staff) 
to have the treating practitioner immediately available to them at all 
times, as would be required under a higher level of supervision. 
However, general supervision sets the minimum standard for supervision 
and does not, by itself, meet the requirements we are setting for 
billing new code G0507. While certain aspects of G0507 might be 
furnished under general supervision, we do not believe the general 
supervision requirement adequately describes the nature of the 
relationship and interactions of the respective team members for 
services furnished using BHI models of care or the codes we are 
creating to describe those services. Moreover the general supervision 
requirement only directly addresses the physical location of the 
treating practitioner, not the location of clinical staff, necessarily.
    Comment: Regarding behavioral health care planning, some commenters 
noted that there is not necessarily value in accumulating or 
enumerating a number of different types of care plans addressing 
different aspects of the beneficiary's problems, such as a behavioral 
or psychiatric care plan, a CCM care plan, and a cognitive impairment 
care plan (see G0505 in section II.E.5).
    Response: While any care planning should take into account the 
whole patient, our intent is that the care planning included in the CCM 
coding (and G0506, the CCM initiating visit add-on code) will be the 
most comprehensive in nature, addressing all health issues with 
particular focus on the multiple chronic conditions being managed by 
the treating practitioner. In contrast, the BHI care planning will 
focus on behavioral health or psychiatric issues, in particular, just 
as the cognitive impairment care planning will focus on cognitive 
impairment issues, in particular (see section II.E.5. of this final 
rule).
    However, we understand that adoption of EHRs may be lower among 
behavioral health practitioners \9\ and note that resources are 
available to help inform how care plans can support team-based care and 
BHI.\10\ While we understand that practitioners, in general, are 
exploring a wide variety of innovative approaches and tools that 
facilitate care plan integration across clinical disciplines, at this 
time, there may not be sufficient adoption of interoperable health IT 
interoperability among all practitioners and providers treating a given 
beneficiary to necessarily have a single, master care plan that 
adequately addresses the progress of the beneficiary in relation to all 
of these issues. In general, practitioners are encouraged to pursue 
approaches that integrate health information from multiple sources into 
a single care plan, but we understand that practitioners may need to 
create separate documents or the relevant care planning may be 
documented in another format within the medical record.
---------------------------------------------------------------------------

    \9\ See for instance http://dashboard.healthit.gov/quickstats/pages/physician-ehr-adoption-trends.php and https://www.thenationalcouncil.org/wp-content/uploads/2012/10/HIT-Survey-Full-Report.pdf.
    \10\ For instance, AHRQ has a variety of resources on how shared 
care plans can support team-based care and behavioral health 
integration at https://integrationacademy.ahrq.gov/playbook/develop-shared-care-plan.
---------------------------------------------------------------------------

    We believe the format of the care plan(s) is less important than 
having a process whereby feedback and expertise from all relevant 
practitioners and providers, whether internal or external to the 
billing practice, are integrated into the beneficiary's treatment plan 
and goals; that this plan be regularly assessed and revisited by the 
practitioner who is assuming an overall care management role for the 
beneficiary in a given month; that the patient is engaged in the care 
planning process; and that the care planning be documented in the 
medical record (as with any required element of any PFS service). We 
have framed the care planning service element for G0507 accordingly, 
``Behavioral health care planning in relation to behavioral/psychiatric 
health problems, including revision for patients who are not 
progressing or whose status changes.''
    Comment: We received a few comments recommending codes in addition 
to the psychiatric CoCM codes that would pay for similar services to 
inpatients, or for behavioral health services by psychologists to 
psychologically and medically complex patients in skilled nursing 
facilities (SNF) and nursing homes. Some of these commenters stated 
that in SNF and long-term care settings, psychologists work closely 
with primary care physicians, psychiatrists, nurses, and other 
consultants to improve outcomes by reducing inappropriate use or dosing 
of psychotropic medications, improving activities of daily living, and 
preventing avoidable admissions/falls. These commenters stated that 
many health systems employ psychologists as BHI team leaders or 
coordinators, and sought clarification on how psychologist-led teams 
would operationalize the new BHI codes. These commenters believe that 
psychology training provides unique skills in facilitating 
interdisciplinary teams. While they acknowledged that psychologists are 
not qualified to perform the full range of BHI services and 
interventions, they believed psychologists should be able to separately 
report and bill for care coordination and BHI initiation activities.
    We received similar comments supporting the addition of psychiatric 
collaborative care services to the PFS, and other evidence-based models 
in a variety of primary care-based treatment settings. However, these 
commenters supported the inclusion of social workers at all levels of 
licensures as reimbursable providers of these services.
    Response: We appreciate the commenters' descriptions of some 
particular working models of care, and we welcome additional 
information in this regard. We continue to believe it would be 
appropriate to have new coding for a range of BHI care models 
applicable to inpatient as well as outpatient and facility settings. 
Our goal in separately identifying and paying for BHI services is to 
prioritize accurate payment for these services, in recognition of the 
associated time and complexity of the services. We agree that 
beneficiaries who are admitted to a facility, are in long-term care, or 
are transitioning among settings during the month are likely to be more 
complex than other types of patients, and to warrant more- not less- 
BHI services. Therefore, we have valued G0507 in both facility and non-
facility settings (see section II.L on valuation). We are not limiting 
the time that can be counted towards the monthly time

[[Page 80239]]

requirement to bill G0507 to time that is spent in the care of an 
outpatient or a beneficiary residing in the community. As we provide 
for the psychiatric CoCM services, G0507 may be reported by specialties 
that are not ``traditional'' primary care specialties, if such 
specialists furnish the included services. However, we stress that 
G0507 can only be reported by a treating physician or other qualified 
health care professional when he or she has directed the BHI service 
for the duration of time that he or she is reporting it, and has a 
qualifying relationship with individuals providing the service under 
his or her direction and control. Also, time and effort that is spent 
managing care transitions for CCM or TCM patients and that is counted 
towards reporting TCM or CCM services, cannot also be counted towards 
reporting any transitional care management activities reported under a 
BHI service code(s). We welcome additional input from stakeholders 
regarding appropriate (or inappropriate) settings of service for G0507.
    Since the BHI initiating visit that is required to bill G0507 is 
not within the scope of practice of a psychologist or social worker 
(see below), psychologists and social workers will not be able to 
report G0507 directly (although a psychiatrist may be able to do so). 
Psychologists and social workers may provide care management services 
included in G0507 incident to the services of another (billing) 
practitioner. They may also provide services that are separately 
billable during the service period. We appreciate the commenters' 
support for team-based care, and we recognize the substantial role of 
various types of mental health professionals within a primary care 
team. We are interested in receiving additional input from stakeholders 
as to whether and why behavioral health care management services by a 
social worker, psychologist or similarly qualified professional should 
be reportable in its own right, rather than incident to the services of 
a practitioner authorized to bill Medicare for a BHI initiating visit. 
Consistent with our recent approaches to making proposals under PFS 
notice and comment rulemaking, we could consider adopting new coding 
under a different construct that was not defined as BHI, if 
stakeholders provided sufficient input on how to design, define and 
value the services. We would also consider such changes if adopted by 
the CPT Editorial Panel, per our usual process. BHI integrates 
behavioral health expertise into evaluation and management care. 
Therefore G0507 is designed to include services that require the 
oversight and involvement of a practitioner who can perform evaluation 
and management services, including facilitation of any needed 
pharmacotherapy, referral for specialty care, and overall management of 
the beneficiary's treatment in relation to primary care treatment. We 
note that G0507 would not be independently billed by psychologists or 
social workers, though from our understanding of various models of BHI, 
these professionals seem likely to be participants in team-based care 
for beneficiaries receiving these services.
c. BHI Initiating Visit
    Similar to CCM services (see section II.E.4), we proposed to 
require an initiating visit for all of the BHI codes (G0502, G0503, 
G0504 and G0507) that would be billable separate from the BHI services 
themselves. We proposed that the same services that can serve as the 
initiating visit for CCM services (see section II.E.4.a. of this final 
rule) could serve as the initiating visit for the proposed BHI codes. 
The initiating visit would establish the beneficiary's relationship 
with the billing practitioner (most aspects of the BHI services would 
be furnished incident to the billing practitioner's professional 
services), ensure the billing practitioner assesses the beneficiary 
prior to initiating care management processes, and provide an 
opportunity to obtain beneficiary consent (discussed below). We 
solicited public comment on the types of services that are appropriate 
for an initiating visit for the BHI codes, and within what timeframe 
the initiating visit should be conducted prior to furnishing BHI 
services.
    Comment: The commenters were largely supportive of our proposal to 
allow the same services to qualify for the initiating visit to CCM as 
for the initiating visit to BHI services. We received a few comments 
stating that in addition to the qualifying E/M services (or an AWV or 
IPPE), initiating services should include in-depth psychological 
evaluations delivered by a psychologist including CPT codes 90791, 
96116 or 96118 which, in turn, include care plan development. These 
commenters agreed that psychologists cannot personally furnish all BHI 
services (for example, medication reconciliation), but believe 
psychologists effectively coordinate care and perform other aspects of 
BHI services as part of a team under current practice models. They 
believe this approach would be particularly effective for reducing 
inappropriate use or dosing of psychotropic medications in elderly and 
complex patients, improving activities of daily living, and preventing 
avoidable admissions and falls.
    Response: We appreciate the commenters' feedback. We agree that 
psychologists would be qualified to perform care coordination that is 
included in the psychiatric CoCM codes (G0502, G0503 and G0504) and the 
general BHI code (G0507) under the direction of a physician or other 
qualified health care professional. In addition, beneficiaries 
receiving BHI services under any of those codes may be referred to 
psychologists for psychotherapy or other services that are separately 
billable and within the scope of practice of psychologists, as 
discussed elsewhere in this section of our final rule. However many 
commenters acknowledged, and we agree, that a BHI initiating visit is 
necessary. The initiating visit is not, in its entirety, within the 
scope of psychologist practice. Therefore, we are finalizing our 
proposal that the same services that qualify as the initiating visit 
for CCM will also qualify as initiating services for BHI, and they do 
not include in-depth psychological evaluation by a psychologist. Also, 
we will require an initiating visit for BHI only for new patients or 
beneficiaries not seen within a year of commencement of BHI services 
(the same requirement we are finalizing for CCM, see section II.E.4.a). 
As more experience is gained with the psychiatric CoCM services and 
other models of BHI care, we may reassess these provisions.
    As discussed above, we are interested in receiving input from 
stakeholders regarding circumstances other than BHI in which behavioral 
health care management services by a psychologist, social worker or 
similarly qualified professional should be reportable in its own right, 
rather than incident to the services of a practitioner authorized to 
bill Medicare for a BHI initiating visit.
    Comment: Some commenters recommended that CMS establish an add-on 
code to the initiating visit for BHI services, parallel to G0506 (the 
proposed add-on code for the CCM initiating visit).
    Response: We do not believe we have enough information about 
practice patterns at this time to create an add-on code to the BHI 
initiating visit, and we did not propose such a code. We may re-examine 
this issue in the future.
d. Beneficiary Consent for BHI Services
    Commenters to the CY 2016 PFS proposed rule indicated that they did 
not believe a specific patient consent for BHI services is necessary 
and indicated that requiring special informed consent

[[Page 80240]]

for these services may reduce access due to stigma associated with 
behavioral health conditions. Instead, the commenters recommended 
requiring a more general consent prior to initiating these services 
whereby the beneficiary gives the initiating physician or practitioner 
permission to consult with relevant specialists, which would include 
conferring with a psychiatric consultant. Accordingly, we proposed to 
require a general beneficiary consent to consult with relevant 
specialists prior to initiating these services, recognizing that 
applicable rules continue to apply regarding privacy. The proposed 
general consent would encompass conferring with a psychiatric 
consultant when furnishing the psychiatric CoCM codes (G0502, G0503, 
and G0504) or the proposed broader BHI code (G0507). Similar to the 
proposed beneficiary consent process for CCM services, we proposed that 
the billing practitioner must document in the beneficiary's medical 
record that the beneficiary's consent was obtained to consult with 
relevant specialists including a psychiatric consultant, and that, as 
part of the consent, the beneficiary is informed that there is 
beneficiary cost-sharing, including potential deductible and 
coinsurance amounts, for both in-person and non-face-to-face services 
that are provided. We solicited stakeholder comments on this proposal.
    We recognized that special informed consent could also be helpful 
in cases when a particular service is limited to being billed by a 
single practitioner for a particular beneficiary. We did not believe 
that there are circumstances where it would reasonable for multiple 
practitioners to be reporting these codes during the same month. 
However, we did not propose a formal limit at this time. We solicited 
comment on whether such a limitation would be beneficial or whether 
there are circumstances under which a beneficiary might reasonably 
receive BHI services from more than one practitioner during a given 
month.
    Comment: The commenters were largely supportive of our proposal 
regarding BHI consent, some noting that physician-to-physician 
communication as well as communication within treatment teams happens 
routinely, without an extra layer of formal written consent, for other 
medical conditions. A few commenters intimated that CMS might pursue a 
single broad consent that could be used across care management 
services; for example, applying for both CCM and BHI. We did not 
receive any public comments delineating the circumstances under which 
it would be appropriate to bill for services furnished using more than 
one BHI service model per month, or appropriate for more than one 
practitioner (whether in the same practice or different practices) to 
bill for services furnished in a BHI care model per month.
    Response: We agree with the commenters that physician-to-physician 
communication as well as communication within treatment teams happens 
routinely, without an extra layer of formal written consent, for other 
medical conditions. However there are particular privacy concerns 
addressed by other rules and regulations for some behavioral health or 
substance use care. Also we are concerned that beneficiaries should not 
incur unexpected expenses for care that is largely, or in significant 
part, non-face-to-face in nature. Finally, there are issues to 
consider, that we considered for CCM, regarding prevention of 
duplicative practitioner billing, and whether BHI services can actually 
be furnished under the direction and control of any given practitioner 
if for a given service period, more than one practitioner is furnishing 
BHI services and billing them.
    The public comments were supportive of our proposal for a broad 
consent that could be verbally obtained but must be documented in the 
medical record, and we are finalizing as proposed. At this time, we do 
not believe a single consent process for both BHI and CCM is advisable. 
It is not clear how frequently BHI and CCM would or should be furnished 
concurrently. BHI and CCM are distinct, separate services, having 
significant differences in time thresholds, the nature of the services, 
types of individuals providing the services, and payment and cost 
sharing amounts. Therefore, at this time, we are maintaining separate 
consent processes for CCM and BHI, as provided in the respective 
sections of this final rule. Also, as discussed in section II.E.4 on 
CCM, CCM and BHI may be billed during the same service period.
    It remains unclear whether it would be reasonable and necessary for 
more than one practitioner (whether in the same practice or different 
practices) to bill BHI services for a given beneficiary for a given 
service period, given the lack of public response and input on this 
issue. It may depend on the conditions(s) being treated and whether 
specialty care, other than psychiatric or behavioral health specialty 
care, and primary care are both involved. We are not proposing a formal 
limit at this time, but we stress that BHI services can only be 
reported by a treating physician or other qualified health care 
professional when he or she has obtained the required beneficiary 
consent, directed the BHI services he or she reports for the duration 
of time reported, and has a qualifying relationship with individuals 
providing the reported services under his or her direction and control. 
We would not expect a single practitioner to furnish care to a given 
beneficiary under more than one BHI model of care during a given month. 
Therefore a single practitioner must choose whether to report 
psychiatric CoCM code(s) (G0502, G0503, and G0504 as applicable) or the 
general BHI code (G0507) for a given month for a given beneficiary. We 
remind stakeholders that time cannot be counted more than once towards 
any code(s), all services must be medically reasonable and necessary, 
and that beneficiary cost sharing and advance consent apply. We will be 
monitoring the claims data and studying the utilization patterns. We 
will continue to assess appropriate reporting patterns, and we expect 
that potential coding changes by the CPT Editorial Panel may inform 
this issue.
    Comment: We received a number of comments recommending that cost 
sharing be removed for all care management services, whether through 
legislative change, demonstration, waiver safe harbor, or designation 
as preventive services.
    Response: We appreciate commenters' concerns and recognize many of 
the challenges associated with patient cost-sharing for these kinds of 
services. At this time, we do not have authority to waive cost sharing 
for the BHI or other care management services. We appreciate the 
commenters' acknowledgement of our current limitations and we will 
continue to consider this issue.
e. Summary of Final BHI Policies
    Beginning in CY 2017, we are providing separate payment for a range 
of BHI services. Specifically, we are providing payment for psychiatric 
CoCM services under the following codes:
     G0502: Initial psychiatric collaborative care management, 
first 70 minutes in the first calendar month of behavioral health care 
manager activities, in consultation with a psychiatric consultant, and 
directed by the treating physician or other qualified health care 
professional, with the following required elements:
    ++ Outreach to and engagement in treatment of a patient directed by 
the treating physician or other qualified health care professional;
    ++ Initial assessment of the patient, including administration of 
validated rating scales, with the development of an individualized 
treatment plan;

[[Page 80241]]

    ++ Review by the psychiatric consultant with modifications of the 
plan if recommended;
    ++ Entering patient in a registry and tracking patient follow-up 
and progress using the registry, with appropriate documentation, and 
participation in weekly caseload consultation with the psychiatric 
consultant; and
    ++ Provision of brief interventions using evidence-based techniques 
such as behavioral activation, motivational interviewing, and other 
focused treatment strategies.
     G0503: Subsequent psychiatric collaborative care 
management, first 60 minutes in a subsequent month of behavioral health 
care manager activities, in consultation with a psychiatric consultant, 
and directed by the treating physician or other qualified health care 
professional, with the following required elements:
    ++ Tracking patient follow-up and progress using the registry, with 
appropriate documentation;
    ++ Participation in weekly caseload consultation with the 
psychiatric consultant;
    ++ Ongoing collaboration with and coordination of the patient's 
mental health care with the treating physician or other qualified 
health care professional and any other treating mental health 
providers;
    ++ Additional review of progress and recommendations for changes in 
treatment, as indicated, including medications, based on 
recommendations provided by the psychiatric consultant;
    ++ Provision of brief interventions using evidence-based techniques 
such as behavioral activation, motivational interviewing, and other 
focused treatment strategies;
    ++ Monitoring of patient outcomes using validated rating scales; 
and relapse prevention planning with patients as they achieve remission 
of symptoms and/or other treatment goals and are prepared for discharge 
from active treatment.
     G0504: Initial or subsequent psychiatric collaborative 
care management, each additional 30 minutes in a calendar month of 
behavioral health care manager activities, in consultation with a 
psychiatric consultant, and directed by the treating physician or other 
qualified health care professional (List separately in addition to code 
for primary procedure) (Use G0504 in conjunction with G0502, G0503).
    These psychiatric CoCM services are reported by the treating 
physician or other qualified health care professional for services 
furnished during a calendar month service period. These services may be 
furnished when a beneficiary has a psychiatric or behavioral health 
condition(s) that in the treating physician or other qualified health 
care professional's clinical judgment, requires a behavioral health 
care assessment; establishing, implementing, revising, or monitoring a 
care plan; and provision of brief interventions. The diagnosis or 
diagnoses may be pre-existing or made by the treating physician or 
other qualified health care professional, and may be refined over time. 
The psychiatric CoCM services may be furnished to beneficiaries with 
any psychiatric or behavioral health condition(s) that is being treated 
by the physician or other qualified health care professional, including 
substance use disorders. Beneficiaries receiving psychiatric CoCM 
services may, but are not required to have comorbid chronic or other 
medical condition(s) that are being managed by the treating 
practitioner.
    Psychiatric CoCM services include the services of the treating 
physician or other qualified health care professional, the behavioral 
health care manager (see description below) who provides services 
incident to services of the treating physician or other qualified 
health care professional, and the psychiatric consultant (see 
description below) whose consultative services are furnished incident 
to services of the treating physician or other qualified health care 
professional. Time spent by administrative or clerical staff cannot be 
counted towards the time required to bill the psychiatric CoCM service 
codes.
    Beneficiaries receiving psychiatric CoCM services may have newly 
diagnosed conditions, need help in engaging in treatment, have not 
responded to standard care delivered in a non-psychiatric setting, or 
require further assessment and engagement prior to consideration of 
referral to a psychiatric care setting. Beneficiaries are treated for 
an episode of care, defined as beginning when the behavioral health 
care manager engages in care of the beneficiary under the appropriate 
supervision of the billing practitioner and ending with:
     The attainment of targeted treatment goals, which 
typically results in the discontinuation of care management services 
and continuation of usual follow-up with the treating physician or 
other qualified healthcare professional; or
     Failure to attain targeted treatment goals culminating in 
referral to a psychiatric care provider for ongoing treatment; or
     Lack of continued engagement with no psychiatric 
collaborative care management services provided over a consecutive 6-
month calendar period (break in episode).

A new episode of care will start after a break in episode of 6 calendar 
months or more.
    The treating physician or other qualified health care professional 
directs the behavioral health care manager and continues to oversee the 
beneficiary's care, including prescribing medications, providing 
treatments for medical conditions, and making referrals to specialty 
care when needed. The treating physician or other qualified health care 
professional must remain involved in ongoing oversight, management, 
collaboration and reassessment as appropriate to bill the psychiatric 
CoCM codes.
    The behavioral health care manager has formal education or 
specialized training in behavioral health (which could include a range 
of disciplines, for example, social work, nursing, and psychology). The 
behavioral health care manager provides care management services, as 
well as an assessment of needs, including the administration of 
validated rating scales; \11\ behavioral health care planning in 
relation to behavioral/psychiatric health problems, including revision 
for patients who are not progressing or whose status changes; provision 
of brief interventions; ongoing collaboration with the treating 
physician or other qualified health care professional; maintenance of a 
registry; \12\ all in consultation with the psychiatric consultant. The 
behavioral health care manager is available to provide these services 
face-to-face and non-face-to-face, and consults with the psychiatric 
consultant minimally on a weekly basis.
---------------------------------------------------------------------------

    \11\ For example, see https://aims.uw.edu/resource-library/measurement-based-treatment-target.
    \12\ For example, see https://aims.uw.edu/collaborative-care/implementation-guide/plan-clinical-practice-change/identify-population-based.
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    The behavioral health care manager must have a collaborative, 
integrated relationship with the rest of the care team members, and be 
able to perform all of the required elements of the service delineated 
for the behavioral health care manager. The behavioral health care 
manager must have the ability to engage the beneficiary outside of 
regular clinic hours as necessary to perform the behavioral health care 
manager's duties under the psychiatric CoCM model, and must have a 
continuous relationship with the beneficiary. The behavioral health 
care manager may or may not be a

[[Page 80242]]

professional who meets all the requirements to independently furnish 
and report services to Medicare. The behavioral health care manager is 
subject to the incident to rules and regulations and applicable state 
law, licensure and scope of practice (see 42 CFR 410.26).
    The psychiatric consultant is a medical professional trained in 
psychiatry and qualified to prescribe the full range of medications. 
The psychiatric consultant advises and makes recommendations, as 
needed, for psychiatric and other medical care, including psychiatric 
and other medical diagnoses, treatment strategies including appropriate 
therapies, medication management, medical management of complications 
associated with treatment of psychiatric disorders, and referral for 
specialty services, that are communicated to the treating physician or 
other qualified health care professional, typically through the 
behavioral health care manager. The psychiatric consultant does not 
typically see the beneficiary or prescribe medications, except in rare 
circumstances, but can and should facilitate referral for direct 
provision of psychiatric care when clinically indicated. The 
psychiatric consultant is subject to the incident to rules and 
regulations and applicable state law, licensure and scope of practice 
(see 42 CFR 410.26).
    Beginning in CY 2017, we are providing separate payment for BHI 
services furnished under models of care other than the psychiatric CoCM 
model, under HCPCS code G0507: Care management services for behavioral 
health conditions, 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:
     Initial assessment or follow-up monitoring, including the 
use of applicable validated rating scales;
     Behavioral health care planning in relation to behavioral/
psychiatric health problems, including revision for patients who are 
not progressing or whose status changes;
     Facilitating and coordinating treatment such as 
psychotherapy, pharmacotherapy, counseling and/or psychiatric 
consultation; and
     Continuity of care with a designated member of the care 
team.
    G0507 is reported by the treating physician or other qualified 
health care professional for services furnished during a calendar month 
service period. This service may be furnished when the beneficiary has 
a psychiatric or behavioral health condition(s) that in the treating 
physician or other qualified health care professional's clinical 
judgment, requires a behavioral health care assessment, behavioral 
health care planning, and provision of interventions. The presenting 
condition(s) may be pre-existing or newly diagnosed by the treating 
physician or other qualified health care professional, and may be 
refined over time. Beneficiaries receiving services reported under 
G0507 may have any psychiatric or behavioral health condition(s) that 
is being treated by the physician or other qualified health care 
professional, including substance use disorders. Beneficiaries 
receiving services reported under G0507 may, but are not required to 
have comorbid chronic or other medical condition(s) that are being 
managed by the treating practitioner.
    Services reported under G0507 may be provided directly by the 
treating physician or other qualified health care professional, or 
provided by clinical staff under his or her direction, during a 
calendar month service period. For G0507, there is not necessarily a 
specific individual designated as a ``behavioral health care manager'' 
with formal or specialized education in providing the services 
(although there could be). Similarly, there is not necessarily a 
psychiatric or other behavioral health specialist consultant (although 
there could be) and we note that G0507 is not valued to explicitly 
account for expert consultation. For G0507, the term ``clinical staff'' 
means the CPT definition of this term, subject to the incident to rules 
and regulations and applicable state law, licensure and scope of 
practice at 42 CFR 410.26. For G0507, then, we note that the term 
``clinical staff'' will encompass or include any psychiatric or other 
behavioral health specialist consultant that may provide consultative 
services. Clinical staff providing services are not required to be 
employed by the treating practitioner or located on site, and these 
individuals may or may not be a professional permitted to independently 
furnish and report services to Medicare. Time spent by administrative 
or clerical staff cannot be counted towards the time required to report 
G0507. We emphasize that the physician or other qualified health care 
professional must direct the service, continue to oversee the 
beneficiary's care, and perform ongoing management, collaboration and 
reassessment. If the service (or part thereof) is provided incident to 
services of the treating practitioner, whether on site or remotely, the 
clinical staff providing services must have a collaborative, integrated 
relationship with the treating practitioner. They must also have a 
continuous relationship with the beneficiary.
    For all of the BHI service codes (G0502, G0503, G0504 and G0507), 
we are requiring an initiating visit that is billable separate from the 
BHI services themselves. The same services that qualify as initiating 
visits for CCM services can serve as the initiating visit for BHI 
services (certain face-to-face E/M services including the face-to-face 
visit required for TCM services, and the AWV or IPPE). The BHI 
initiating visit establishes the beneficiary's relationship with the 
treating practitioner (BHI services may be furnished incident to the 
treating practitioner's professional services); ensures that the 
treating practitioner assesses the beneficiary prior to initiating care 
management processes; and provides an opportunity to obtain beneficiary 
consent (consent may also be obtained outside of the BHI initiating 
visit, as long as it is obtained prior to commencement of BHI 
services).
    For all of the BHI service codes, we are also requiring prior 
beneficiary consent, recognizing that applicable rules continue to 
apply regarding privacy. The consent will include permission to consult 
with relevant specialists including a psychiatric consultant, and 
inform the beneficiary that cost sharing will apply to in-person and 
non-face-to-face services provided. Consent may be verbal (written 
consent is not required) but must be documented in the medical record.
    For payment purposes, we are assigning general supervision to all 
of the BHI service codes (G0502, G0503, G0504 and G0507). However we 
note that general supervision does not, by itself, comprise a 
qualifying relationship between the treating practitioner and other 
individuals providing BHI services under the incident to relationship. 
Also we note that we valued BHI services in both facility and non-
facility settings. BHI services may be furnished to beneficiaries in 
any setting of care. Time that is spent furnishing BHI services to a 
beneficiary who is an inpatient or in any other facility setting during 
service provision or for any part of the service period may be counted 
towards reporting a BHI code(s). We refer the reader to our discussion 
above on this matter, as well as reporting by specialty, intersection 
with other services, and potential reporting by more than one 
practitioner for a given beneficiary within a service period. A single 
practitioner must choose whether to report psychiatric CoCM code(s) 
(G0502, G0503, and

[[Page 80243]]

G0504 as applicable) or the general BHI code (G0507) for a given month 
(service period) for a given beneficiary.
4. Reducing Administrative Burden and Improving Payment Accuracy for 
Chronic Care Management (CCM) Services
    Beginning in CY 2015, we implemented separate payment for CCM 
services under CPT code 99490 (Chronic care management services, at 
least 20 minutes of clinical staff time directed by a physician or 
other qualified health 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).
    In the CY 2015 final rule with comment period, we finalized a 
proposal to make separate payment for CCM services as one initiative in 
a series of initiatives designed to improve payment for, and encourage 
long-term investment in, care management services (79 FR 67715). In 
particular, we sought to address an issue raised to us by the physician 
community, which stated that the care management included in many of 
the existing E/M services, such as office visits, does not adequately 
describe the typical non-face-to-face care management work required by 
certain categories of beneficiaries (78 FR 43337). We began to re-
examine how Medicare should pay under the PFS for non-face-to-face care 
management services that were bundled into the PFS payment for face-to-
face E/M visits, being included in the pre- and post-encounter work (78 
FR 43337). In proposing separate payment for CCM, we acknowledged that, 
even though we had previously considered non-face-to-face care 
management services as bundled into the payment for face-to-face E/M 
visits, the E/M office/outpatient visit CPT codes may not reflect all 
the services and resources required to furnish comprehensive, 
coordinated care management for certain categories of beneficiaries. We 
stated that we believed that the resources required to furnish complex 
chronic care management services to beneficiaries with multiple (that 
is, two or more) chronic conditions were not adequately reflected in 
the existing E/M codes. Medical practice and patient complexity 
required physicians, other practitioners and their clinical staff to 
spend increasing amounts of time and effort managing the care of 
comorbid beneficiaries outside of face-to-face E/M visits, for example, 
complex and multidisciplinary care modalities that involve regular 
physician development and/or revision of care plans; subsequent report 
of patient status; review of laboratory and other studies; 
communication with other health care professionals not employed in the 
same practice who are involved in the patient's care; integration of 
new information into the care plan; and/or adjustments of medical 
therapy.
    Therefore, in the CY 2014 PFS final rule with comment period, we 
established a separate payment under the PFS for CPT code 99490 (78 FR 
43341 through 43342). We sought to include a relatively broad eligible 
patient population within the code descriptor, established a moderate 
payment amount, and established bundled payment for concurrently new 
CPT codes that were reserved for beneficiaries requiring ``complex'' 
CCM services (base CPT code 99487 and its add-on code 99489) (79 FR 
67716 through 67719). We stated that we would evaluate the services 
reported under CPT code 99490 to assess whether the service is targeted 
to the right population and whether the payment amount is appropriate 
(79 FR 67719). We remind stakeholders that CMS did not limit the 
eligible population to any particular list of chronic conditions other 
than the language in the CPT code descriptor. Accordingly, one or more 
of the chronic conditions being managed through CCM services could be 
chronic mental health or behavioral health conditions or chronic 
cognitive disorders, as long as the chronic conditions meet the 
eligibility language in the CPT code descriptor for CCM services and 
the billing practitioner meets all of Medicare's requirements to bill 
the code including comprehensive, patient-centered care planning for 
all health conditions.
    In finalizing separate payment for CPT code 99490, we considered 
whether we should develop standards to ensure that physicians and other 
practitioners billing the service would have the capability to fully 
furnish the service (79 FR 67721). We sought to make certain that the 
newly payable PFS code(s) would provide beneficiary access to 
appropriate care management services that are characteristic of 
advanced primary care, such as continuity of care; patient support for 
chronic diseases to achieve health goals; 24/7 patient access to care 
and health information; receipt of preventive care; patient, family and 
caregiver engagement; and timely coordination of care through 
electronic health information exchange. Accordingly, we established a 
set of scope of service elements and payment rules in addition to or in 
lieu of those established in CPT guidance (in the CPT code descriptor 
and CPT prefatory language), that the physician or nonphysician 
practitioner must satisfy to fully furnish CCM services and report CPT 
code 99490 (78 FR 74414 through 74427, 79 FR 67715 through 67730, and 
80 FR 14854). We established requirements to furnish a preceding 
qualifying visit, obtain advance written beneficiary consent, use 
certified electronic health record (EHR) technology to furnish certain 
elements of the service, share the care plan and clinical summaries 
electronically, document specified activities, and other items 
summarized in Table 11 of our CY 2017 proposed rule. For the CCM 
service elements for which we required use of a certified EHR, the 
billing practitioner must use, at a minimum, technology meeting the 
edition(s) of certification criteria that is acceptable for purposes of 
the EHR Incentive Programs as of December 31st of the calendar year 
preceding each PFS payment year. (For the CY 2017 PFS payment year, 
this would mean technology meeting the 2014 edition of certification 
criteria).
    These elements and requirements for separately payable CCM services 
are extensive and generally exceed those required for payment of codes 
describing procedures, diagnostic tests, or other E/M services under 
the PFS. In addition, both CPT guidance and Medicare rules specify that 
only a single practitioner who assumes the care management role for a 
given beneficiary can bill CPT code 99490 per service period (calendar 
month). Because the new CCM service closely overlapped with several 
Medicare demonstration models of advanced primary care (the Multi-Payer 
Advanced Primary Care Practice (MAPCP) demonstration and the 
Comprehensive Primary Care Initiative (CPCI)), we provided that 
practitioners participating in one of these two initiatives could not 
be paid for CCM services furnished to a beneficiary attributed by the 
initiative to their practice (79 FR 67729).
    Given the non-face-to-face nature of CCM services, we also sought 
to ensure that beneficiaries would receive advance notice that Part B 
cost sharing applies since we currently have no legislative authority 
to ``waive'' cost sharing for this service. Also since only one 
practitioner can bill for CCM each service period, we believed the

[[Page 80244]]

beneficiary notice requirement would help prevent duplicate payment to 
multiple practitioners.
    Since the establishment of CPT code 99490 for separate payment of 
CCM services, in a number of forums and in public comments to the CY 
2016 PFS final rule (80 FR 70921), many practitioners have stated that 
the service elements and billing requirements are burdensome, redundant 
and prevent them from being able to provide the services to 
beneficiaries who could benefit from them. Stakeholders have stated 
that CPT code 99490 is underutilized because it is underpaid relative 
to the resources involved in furnishing the services, especially given 
the extensive Medicare rules for payment, and they have suggested a 
number of potential changes to our current payment rules. Stakeholders 
continue to believe that many of the CCM payment rules are duplicative, 
and to recommend that we reduce the rules and expand CCM coding and 
payment to distinguish among different levels of patient complexity. We 
also note that section 103 of the MACRA requires CMS to assess and 
report to Congress (no later than December 31, 2017) on access to CCM 
services by underserved rural and racial and ethnic minority 
populations and to conduct an outreach/education campaign that is 
underway.
    The professional claims data for CPT code 99490 show that 
utilization is steadily increasing but may remain low considering the 
number of eligible Medicare beneficiaries. To date, approximately 
513,000 unique Medicare beneficiaries received the service an average 
of four times each, totaling $93 million in total payments. Since CPT 
code 99490 describes a minimum of 20 minutes of clinical staff time 
spent furnishing CCM services during a month and does not have an upper 
time limit, and since we currently do not separately pay the other 
codes in the CCM family of CPT codes (which would provide us with 
utilization data on the number of patients requiring longer service 
times during a billing period), we do not know how often beneficiaries 
required more than 20 minutes of CCM services per month. We also do not 
know their complexity relative to one another, other than meeting the 
acuity criteria in the CPT code descriptor. Initial information from 
practitioner interviews conducted as part of our CCM evaluation efforts 
indicates that practitioners overwhelmingly meet and exceed the 20-
minute threshold time for billing CCM. Typically, these practitioners 
reported spending between 45 minutes and an hour per month on CCM 
services for each patient, with times ranging between 20 minutes and 
several hours per month. CCM beneficiaries tend to exhibit a higher 
disease burden, are more likely to be dually eligible for Medicare and 
Medicaid, and are older than the general Medicare fee-for-service 
population.\13\ However, absent multiple levels of CCM coding, we do 
not have comprehensive data on the relative complexity of the CCM 
services furnished to beneficiaries.
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    \13\ Schurrer, John, and Rena Rudavsky. ``Evaluation of the 
Diffusion and Impact of the Chronic Care Management (CCM) Fees: 
Third Quarterly Report.'' Report submitted to the Center for 
Medicare and Medicaid Innovation. Washington, DC: Mathematica Policy 
Research, May 6, 2016.
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    In light of this stakeholder feedback and our mandate under MACRA 
section 103 to encourage and report on access to CCM services, we 
proposed several changes in the payment rules for CCM services. Our 
primary goal, and our statutory mandate, is to pay as accurately as 
possible for services furnished to Medicare beneficiaries based on the 
relative resources required to furnish PFS services, including CCM 
services. In so doing, we also expect to facilitate beneficiaries' 
access to reasonable and necessary CCM services that improve health 
outcomes. First, for CY 2017 we proposed to more appropriately 
recognize and pay for the other codes in the CPT family of CCM services 
(CPT codes 99487 and 99489 describing complex CCM), consistent with our 
general practice to price services according to their relative ranking 
within a given family of services. We direct the reader to section II.L 
of this final rule for a discussion of valuation for base CPT code 
99487 and its add-on CPT code 99489. The CPT code descriptors are:
     CPT code 99487--Complex chronic care management services, 
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;
    ++ Establishment or substantial revision of a comprehensive care 
plan;
    ++ Moderate or high complexity medical decision making;
    ++ 60 minutes of clinical staff time directed by a physician or 
other qualified health care professional, per calendar month.
     CPT code 99489--Each additional 30 minutes of clinical 
staff time directed by a physician or other qualified health care 
professional, per calendar month (List separately in addition to code 
for primary procedure).
    As CPT provides, less than 60 minutes of clinical staff time in the 
service period could not be reported separately, and similarly, less 
than 30 minutes in addition to the first 60 minutes of complex CCM in a 
service period could not be reported. We would require 60 minutes of 
services for reporting CPT code 99487 and 30 additional minutes for 
each unit of CPT code 99489.
    We proposed to adopt the CPT provision that CPT codes 99487, 99489 
and 99490 may only be reported once per service period (calendar month) 
and only by the single practitioner who assumes the care management 
role with a particular beneficiary for the service period. That is, a 
given beneficiary would be classified as eligible to receive either 
complex or non-complex CCM during a given service period, not both, and 
only one professional claim could be submitted to the PFS for CCM for 
that service period by one practitioner.
    Comment: Several commenters were supportive of separate payment for 
complex CCM services.
    Response: We thank the commenters for their support and are 
finalizing separate payment for CPT codes 99487 and 99489 as proposed. 
As finalized, these separate payments for complex CCM services will 
support care management for the most complex and time-consuming cases 
of beneficiaries with multiple chronic conditions.
    Except for differences in the CPT code descriptors, we proposed to 
require the same CCM service elements for CPT codes 99487, 99489 and 
99490. In other words, all the requirements in Table 11 of our proposed 
rule would apply, whether the code being billed for the service period 
is CPT code 99487 (plus CPT code 99489, if applicable) or CPT code 
99490. These three codes would differ in the amount of clinical staff 
service time provided; the complexity of medical decision-making as 
defined in the E/M guidelines (determined by the problems addressed by 
the reporting practitioner during the month); and the nature of care 
planning that was performed (establishment or substantial revision of 
the care plan for complex CCM versus establishment, implementation, 
revision or monitoring of the care plan for non-complex CCM). Billing 
practitioners could consider identifying beneficiaries who require 
complex CCM services using criteria suggested in CPT guidance (such as 
number of illnesses, number of medications or repeat admissions or 
emergency department visits) or the profile of typical patients in the 
CPT

[[Page 80245]]

prefatory language, but these would not comprise Medicare conditions of 
eligibility for complex CCM.
    We proposed several changes to our current scope of service 
elements for CCM, and proposed that the same scope of service elements, 
as amended, would apply to all codes used to report CCM services 
beginning in 2017 (i.e., CPT codes 99487, 99489 and 99490). In 
particular, we proposed changes in the requirements for the initiating 
visit, 24/7 access to care and continuity of care, format and sharing 
of the care plan and clinical summaries, beneficiary receipt of the 
care plan, beneficiary consent and documentation.
    Comment: Commenters were broadly supportive of these proposals. We 
received several comments recommending changes to the scope of service 
for non-complex CCM that might improve the distinction between non-
complex and complex CCM and inform which ``level'' of service a given 
beneficiary is eligible for. For example, these commenters suggested 
changes to the time included in the code descriptor to reflect two or 
more time increments for CPT code 99490 using add-on codes, or 
retaining the current low time threshold while allowing practitioners 
to choose among certain service elements. Some commenters do not 
believe CPT code 99490 is intended for beneficiaries who require all 
the current service elements in a given month, and that only a more 
limited set of elements is medically necessary for the non-complex 
population.
    Response: We appreciate the commenters' recommendations about how 
we might better distinguish complex CCM services from non-complex CCM 
services. The CPT Editorial Panel currently maintains the coding for 
CCM services. Further changes in codes and/or descriptors may be 
appropriately addressed by CPT and in subsequent PFS rulemaking.
a. CCM Initiating Visit & Add-On Code (G0506)
    As provided in the CY 2014 PFS final rule with comment period (78 
FR 74425) and subregulatory guidance (available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Downloads/Payment_for_CCM_Services_FAQ.pdf), CCM must be initiated by the billing 
practitioner during a ``comprehensive'' E/M visit, AWV or IPPE. This 
face-to-face, initiating visit is not part of the CCM service and can 
be separately billed to the PFS, but is required before CCM services 
can be provided directly or under other arrangements. The billing 
practitioner must discuss CCM with the patient at this visit. While 
informed patient consent does not have to be obtained during this 
visit, the visit is an opportunity to obtain the required consent. The 
face-to-face visit included in transitional care management (TCM) 
services (CPT codes 99495 and 99496) qualifies as a ``comprehensive'' 
visit for CCM initiation. Levels 2 through 5 E/M visits (CPT codes 
99212 through 99215) also qualify; CMS does not require the practice to 
initiate CCM during a level 4 or 5 E/M visit. However, CPT codes that 
do not involve a face-to-face visit by the billing practitioner or are 
not separately payable by Medicare (such as CPT code 99211, 
anticoagulant management, online services, telephone and other E/M 
services) do not qualify as initiating visits. If the practitioner 
furnishes a ``comprehensive'' E/M, AWV, or IPPE and does not discuss 
CCM with the patient at that visit, that visit cannot count as the 
initiating visit for CCM.
    We continued to believe that we should require an initiating visit 
in advance of furnishing CCM services, separate from the services 
themselves, because a face-to-face visit establishes the beneficiary's 
relationship with the billing practitioner and most aspects of the CCM 
services are furnished incident to the billing practitioner's 
professional services. The initiating visit also ensures collection of 
comprehensive health information to inform the care plan. We continued 
to believe that the types of face-to-face services that qualify as an 
initiating visit for CCM are appropriate. We did not propose to change 
the kinds of visits that can qualify as initiating CCM visits. However, 
we proposed to require the initiating visit only for new patients or 
patients not seen within one year instead of for all beneficiaries 
receiving CCM services. We believed this would allow practitioners with 
existing relationships with patients who have been seen relatively 
recently to initiate CCM services without furnishing a potentially 
unnecessary E/M visit. We solicited public comment on whether a period 
of time shorter than one year would be more appropriate.
    Comment: The commenters were generally supportive of requiring the 
CCM initiating visit only for beneficiaries who are new patients or 
have not been seen in a year. A few commenters suggested a 6-month 
timeframe, or adopting one year and reconsidering as we gain more 
experience with CCM. Some commenters misinterpreted our proposal as 
requiring face-to-face visits every year to periodically reassess the 
beneficiary or the appropriateness of CCM services. Some recommended a 
similar coding structure for specialists managing a single condition, 
in place of prolonged services, or for BHI services.
    Response: Our intent was to revise the timeframe for the single CCM 
initiating visit that is required at the outset of services. We did not 
propose subsequent ``re-initiation'' of CCM services or face-to-face 
reassessment within a given timeframe. We discuss further below that we 
have some concerns about how to ensure that the billing practitioner 
remains involved in the beneficiary's care and continually reassesses 
the beneficiary's care, but at this time we do not believe we should 
require subsequent face-to-face visits within certain timeframes to 
address those concerns.
    We believe that the proposed one-year timeframe for the single, CCM 
initiating visit is appropriate for CY 2017, so we are finalizing as 
proposed. We will require the CCM initiating visit only for new 
patients or patients not seen within the year prior to commencement of 
CCM (instead of for all beneficiaries receiving CCM services). We will 
continue to consider in future years whether a different timeframe is 
warranted. The goal of our final policy is to allow practitioners with 
existing relationships with beneficiaries who have been seen relatively 
recently to initiate CCM services (for the first time) without 
furnishing a potentially unnecessary E/M visit. Regarding subsequent 
visits (after CCM services begin), practitioners are already permitted 
to furnish and separately bill subsequent E/M visits (or AWVs) for 
beneficiaries receiving CCM services. If a face-to-face reassessment is 
reasonable and necessary and furnished by the billing practitioner, 
then he or she may bill an appropriate code describing the face-to-face 
assessment of a beneficiary to whom they have previously furnished CCM 
services.
    We also proposed for CY 2017 to create a new add-on G-code that 
would improve payment for services that qualify as initiating visits 
for CCM services. The code would be billable for beneficiaries who 
require extensive face-to-face assessment and care planning by the 
billing practitioner (as opposed to clinical staff), through an add-on 
code to the initiating visit, G0506 (Comprehensive assessment of and 
care planning by the physician or other qualified health care 
professional for patients requiring chronic care management services 
(billed separately from monthly care management services) (Add-on code, 
list separately in addition to primary service)).
    We proposed that when the billing practitioner initiating CCM 
personally

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performs extensive assessment and care planning outside of the usual 
effort described by the billed E/M code (or AWV or IPPE code), the 
practitioner could bill G0506 in addition to the E/M code for the 
initiating visit (or in addition to the AWV or IPPE), and in addition 
to the CCM CPT code 99490 (or proposed 99487 and 99489) if all 
requirements to bill for CCM services are also met. We proposed 
valuation for G0506 in a separate section of our proposed rule.
    The code G0506 would account specifically for additional work of 
the billing practitioner in personally performing a face-to-face 
assessment of a beneficiary requiring CCM services, and personally 
performing CCM care planning (the care planning could be face-to-face 
and/or non-face-to-face) that is not already reflected in the 
initiating visit itself (nor in the monthly CCM service code). We 
believed G0506 might be particularly appropriate to bill when the 
initiating visit is a less complex visit (such as a level 2 or 3 E/M 
visit), although G0506 could be billed along with higher level visits 
if the billing practitioner's effort and time exceeded the usual effort 
described by the initiating visit code. It could also be appropriate to 
bill G0506 when the initiating visit addresses problems unrelated to 
CCM, and the billing practitioner does not consider the CCM-related 
work he or she performs in determining what level of initiating visit 
to bill. We believed that this proposal would more appropriately 
recognize the relative resource costs for the work of the billing 
practitioner in initiating CCM services, specifically for extensive 
work assessing the beneficiary and establishing the CCM care plan that 
is reasonable and necessary, and that is not accounted for in the 
billed initiating visit or in the unit of the CCM service itself that 
is billed for a given service period. In addition, we believed this 
proposal would help ensure that the billing practitioner personally 
performs and meaningfully contributes to the establishment of the CCM 
care plan when the patient's complexity warrants it.
    Comment: Several commenters were supportive of the add-on code 
(G0506) to the CCM initiating visit to describe physician assessment 
and care planning for patients requiring CCM services. Some commenters 
raised questions about whether G0506 should be a one-time service or 
could also be billed as an add-on code to subsequent reassessments by 
the billing practitioner (whether E/M visits or subsequent AWVs).
    Response: At this time, we do not believe we should permit billing 
of G0506 more than once by the billing practitioner for a given 
beneficiary. G0506 was proposed as an add-on code to the single 
initiating visit, to help ensure the billing practitioner's assessment 
and involvement at the outset of CCM services. At this time there are 
no requirements for the billing practitioner to ``re-initiate'' CCM 
services; therefore we do not believe we should create an add-on code 
for a CCM ``re-initiation'' service. We would have to define ``re-
initiation'' and develop rules regarding when subsequent E/M visits or 
AWVs are related to the performance of CCM. We do not believe 
beneficiaries would understand why they are incurring additional cost 
sharing for an add-on code to a ``re-initiation'' visit that has not 
been required or defined by CMS.
    As we stated in the CY 2017 proposed rule, we were very interested 
in coding that was presented to the CPT Editorial Panel, but not 
adopted, to create code(s) that would separately identify and account 
for monthly CCM work by the billing practitioner. Such coding may be a 
better means of separately identifying and valuing the subsequent work 
of the billing practitioner after CCM is initiated. We want to 
establish policies that help ensure that the billing practitioner is 
not merely handing the beneficiary off to a remote care manager under 
general supervision while no longer remaining involved in their care. 
We believe that the practitioner billing CCM services should be 
actively re-assessing the beneficiary's chronic conditions, reviewing 
whether treatment goals are being met, updating the care plan, 
performing any medical decision-making that is not within the scope of 
practice of clinical staff, performing any necessary face-to-face care, 
and performing other related work. However, it would be more 
straightforward to separately identify this CCM-related work under 
code(s) that in their own right describe it, instead of add-on codes to 
very broadly drawn E/M codes where it becomes difficult to assess the 
relationship between the two services. Also for beneficiaries receiving 
complex CCM, some of this work is explicitly included in the complex 
CCM service codes (i.e., medical decision-making of moderate to high 
complexity). Therefore, at this time, G0506 will only serve as an add-
on code to describe work performed by the billing practitioner once, in 
conjunction with the start or initiation of CCM services.
    We note that despite the role of the billing practitioner in the 
initiation and provision of CCM services provided by clinical staff, 
non-complex CCM (CPT code 99490) is described based on the time spent 
by clinical staff. Complex CCM (CPT codes 99487 and 99489) similarly 
counts only clinical staff time, although it also includes complex 
medical decision-making by the billing practitioner. This raises issues 
regarding appropriate valuation in the facility setting that we will 
continue to consider in future rulemaking. The facility PE RVU for CCM 
includes indirect PE (which is an allocation based on physician work), 
but no direct PE (which would be comprised of other labor, supplies and 
equipment). This is because historically, the PFS facility rate assumes 
that the billing practitioner is not bearing a significant resource 
cost in labor by other individuals, equipment or supplies. Medicare 
assumes that those costs are instead borne by the facility and 
adequately accounted for in a separate payment made to the facility. 
The PFS non-facility rate generally does include such costs, assuming 
that the billing practitioner bears the resource costs in clinical and 
other staff labor, supplies and equipment.
    For CCM, we have been considering whether this approach to 
valuation remains appropriate, because the service, in whole or in 
significant part, is provided by clinical staff under the direction of 
the billing practitioner. These individuals may provide the service or 
part thereof remotely, and are not necessarily employees or staff of 
the facility. Under this construct, there may be more direct practice 
expense borne by the billing practitioner that should be separately 
identified and valued over and above any institutional payment to the 
facility for its staff and infrastructure. We plan to explore these 
issues in future rulemaking and consider other approaches to valuation 
that would recognize the accurate relative resource costs to the 
billing practitioner for CCM and similar services furnished to 
beneficiaries who remain or reside in a facility setting during some or 
all of the service period.
    Consistent with general coding guidance, we proposed that the work 
that is reported under G0506 (including time) could not also be 
reported under or counted towards the reporting of any other billed 
code, including any of the monthly CCM services codes. The care plan 
that the practitioner must create to bill G0506 would be subject to the 
same requirements as the care plan included in the monthly CCM 
services, namely, it must be an electronic patient-centered care plan 
based on a physical, mental, cognitive, psychosocial, functional and 
environmental (re)assessment and an

[[Page 80247]]

inventory of resources and supports; a comprehensive care plan for all 
health issues. This would distinguish it from the more limited care 
planning included in the BHI codes G0502, G0503, G0504 or G0507 which 
focus on behavioral health issues, or the care planning included in 
G0505 which focuses on cognitive status. We sought public input on 
potential overlap among these codes and further clinical input as to 
how the assessments and care planning that is included in them would 
differ.
    We received a number of comments regarding the relationship between 
proposed G0506, G0505 (Cognition and functional assessment by the 
physician or other qualified health care professional in office or 
other outpatient), prolonged non-face-to-face services, and BHI. We 
address these comments in the sections of this final rule regarding 
G0505, prolonged non-face-to-face services and BHI services (sections 
II.E.5, II.E.2 and II.E.3). In brief, we are not allowing G0506 and 
G0505 to be billed the same day (by a single practitioner). G0506 will 
not be an add-on code for the BHI initiating visit or BHI services. 
G0506 will be a one-time service code for CCM initiation, and the 
billing practitioner must choose whether to report either G0506 or 
prolonged services in association with CCM initiation (if requirements 
to bill both are met).
    The CCM and BHI service codes differ substantially in potential 
diagnosis and comorbidity, the expected duration of the condition(s) 
being treated, the kind of care planning performed (comprehensive care 
planning versus care planning focused on behavioral/mental health 
issues), service elements and who performs them, and the interventions 
the beneficiary needs and receives apart from the CCM and BHI services 
themselves. The BHI codes include a more focused process than CCM for 
the clinical integration of primary care and behavioral health/
psychiatric care, and for continual reassessment and treatment 
progression to a target or goal outcome that is specific to mental and 
behavioral health or substance abuse issues. However there is no 
explicit BHI service element for managing care transitions or 
systematic assessment of receipt of preventive services; there is no 
requirement to perform comprehensive care planning for all health 
issues (not just behavioral health issues); and there are different 
emphases on medication management or medication reconciliation, if 
applicable. In deciding which code(s) to report for services furnished 
to a beneficiary who is eligible for both CCM and BHI services, 
practitioners should consider which service elements were furnished 
during the service period, who provided them, how much time was spent, 
and should select the code(s) that most accurately and specifically 
identifies the services furnished without duplicative time counting. 
Practitioners should generally select the more specific code(s) when an 
alternative code(s) potentially includes the services provided. We are 
not precluding use of the CCM codes to report, or count, behavioral 
health care management if it is provided as part of a broader CCM 
service by a practitioner who is comprehensively overseeing all of the 
beneficiary's health issues, even if there are no imminent non-
behavioral health needs. However, such behavioral care management 
activities could not also be counted towards reporting a BHI code(s). 
If a BHI service code more specifically describes the service furnished 
(service time and other relevant aspects of the service being equal), 
or if there is no focus on the health of the beneficiary outside of a 
narrower set of behavioral health issues, then it is more appropriate 
to report the BHI code(s) than the CCM code(s). Similarly, it may be 
more appropriate for certain specialists to bill BHI services than CCM 
services, since specialists are more likely to be managing the 
beneficiary's behavioral health needs in relation to a narrow subset of 
medical condition(s). CCM and BHI services can only be billed the same 
month for the same beneficiary if all the requirements to bill each 
service are separately met. We will monitor the claims data, and we 
welcome further stakeholder input to inform appropriate reporting 
rules.
b. 24/7 Access to Care, Continuity of Care, Care Plan and Managing 
Transitions
    We proposed several revisions to the scope of service elements of 
24/7 Access to Care, Continuity of Care, Care Plan and Managing 
Transitions. We continued to believe these elements are important 
aspects of CCM services, but that we should reduce the requirements for 
the use of specified electronic health information technology (IT) in 
their provision. In sum, we proposed to retain a core requirement to 
use a certified electronic health record (EHR), but allow fax to count 
for electronic transmission of clinical summaries and the care plan; no 
longer require access to the electronic care plan outside of normal 
business hours to those providing CCM services; and remove standards 
for clinical summaries in managing care transitions.
    We sought to improve alignment with CPT provisions by removing the 
requirement for the care plan to be available remotely to individuals 
providing CCM services after hours. Studies have shown that after-hours 
care is best implemented as part of a larger practice approach to 
access and continuity (see for example, the peer-review article 
available at http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3475839/). 
There is substantial local variation in how 24/7 access and continuity 
of care are achieved, depending on the contractual relationships among 
practitioners and providers in a particular geographic area and other 
factors. Care models include various contractual relationships between 
physician practices and after-hours clinics, urgent care centers and 
emergency departments; extended primary care office hours; physician 
call-sharing; telephone triage systems; and health information 
technology such as shared EHRs and systematic notification procedures 
(http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3475839/). Some or all of 
these may be used to provide access to urgent care on a 24/7 basis 
while maintaining information continuity between providers.
    We recognized that some models of care require more significant 
investment in practice infrastructure than others, for example 
resources in staffing or health information technology. In addition, we 
believed there is room to reduce the administrative complexity of our 
current payment rules for CCM services to accommodate a range of 
potential care models. In re-examining what should be included in the 
CCM scope of service elements for 24/7 Access to Care and Continuity of 
Care, we believed the CPT language adequately and more appropriately 
describes the services that should, at a minimum, be included in these 
service elements. Therefore, we proposed to adopt the CPT language for 
these two elements. For 24/7 Access to Care, the scope of service 
element would be to provide 24/7 access to physicians or other 
qualified health care professionals or clinical staff including 
providing patients/caregivers with a means to make contact with health 
care professionals in the practice to address urgent needs regardless 
of the time of day or day of week. We believed the CPT language more 
accurately reflects the potential role of clinical staff or call-
sharing services in addressing after-hours care needs than our current 
language does. In addition, the 24/7 access would be for ``urgent'' 
needs

[[Page 80248]]

rather than ``urgent chronic care needs,'' because we believed after-
hours services typically would and should address any urgent needs and 
not only those explicitly related to the beneficiary's chronic 
conditions.
    We recognized that health information systems that include remote 
access to the care plan or the full EHR after hours, or a feedback loop 
that communicates back to the primary care physician and others 
involved in the beneficiary's care regarding after-hours care or advice 
provided, are extremely helpful (http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3475839/#CR25). They help ensure that the beneficiary 
receives necessary follow up, particularly if he or she is referred to 
the emergency department, and follow up after an emergency department 
visit is required under the CCM element of Management of Care 
Transitions. Accordingly, we continued to support and encourage the use 
of interoperable EHRs or remote access to the care plan in providing 
the CCM service elements of 24/7 Access to Care, Continuity of Care, 
and Management of Care Transitions. However, adoption of such 
technology would be optimal not only for CCM services, but also for a 
number of other PFS services and procedures (including various other 
care management services), and we have not required adoption of any 
certified or non-certified health information technology as a condition 
of payment for any other PFS service. We noted that there are 
incentives under other Medicare programs to adopt such information 
technology, and were concerned that imposing too many EHR-related 
requirements at the service level as a condition of PFS payment could 
create disparities between these services and others under the fee 
schedule. Lastly, we recognized that not all after-hours care warrants 
follow-up or a feedback loop with the practitioner managing the 
beneficiary's care overall, and that under particular circumstances 
feedback loops can be achieved through oral, telephone or other less 
sophisticated communication methods. Therefore, we proposed to remove 
the requirement that the individuals providing CCM after hours must 
have access to the electronic care plan.
    This proposal reflected our understanding that flexibility in how 
practices can provide the requisite 24/7 access to care, as well as 
continuity of care and management of care transitions, for their CCM 
patients could facilitate appropriate access to these services for 
Medicare beneficiaries. This proposal was not intended to undermine the 
significance of standardized communication methods as part of effective 
care. Instead, we recognized that other CMS initiatives (such as MIPS 
and APMs under the Quality Payment Program) may be better mechanisms to 
incentivize increased interoperability of health information systems 
than conditions of payment assigned to particular services under the 
PFS. We also anticipated that improved accuracy of payment for care 
management services and reduced administrative burden associated with 
billing for them would contribute to practitioners' capacity to invest 
in the best tools for managing the care of Medicare beneficiaries.
    For Continuity of Care, we currently require the ability to obtain 
successive routine appointments ``with the practitioner or a designated 
member of the care team,'' while CPT only references successive routine 
appointments ``with a designated member of the care team.'' We do not 
believe there is any practical difference between these two phrases and 
therefore proposed to omit the words ``practitioner or'' from our 
requirement. The billing practitioner is a member of the CCM care team, 
so the CPT language already allows for successive routine appointments 
either with the billing practitioner or another appropriate member of 
the CCM care team.
    Based on review of extensive public comment and stakeholder 
feedback, we had also come to believe that we should not require 
individuals providing the beneficiary with the required 24/7 access to 
care for urgent needs to have access to the care plan as a condition of 
CCM payment. As discussed above, we believed that in general, provision 
of effective after-hours care of the beneficiary would require access 
to the care plan, if not the full EHR. However, we have heard from 
rural and other practices that remote access to the care plan is not 
always necessary or possible because urgent care needs after-hours are 
often referred to a practitioner or care team member who established 
the care plan or is familiar with the beneficiary. In some instances, 
the care plan does not need to be available to address urgent patient 
needs after business hours. In addition, we have not required the use 
of any certified or non-certified health information technology in the 
provision of any other PFS services (including various other care 
management services). We were concerned that imposing EHR-related 
requirements at the service level as a condition of PFS payment could 
distort the relative valuation of services priced under the fee 
schedule. Therefore, we proposed to change the CCM service element to 
require timely electronic sharing of care plan information within and 
outside the billing practice, but not necessarily on a 24/7 basis, and 
to allow transmission of the care plan by fax.
    We acknowledged that it is best for practitioners and providers to 
have access to care plan information any time they are providing 
services to beneficiaries who require CCM services. This proposal was 
not intended to undermine the significance of electronic communication 
methods other than fax transmission in providing effective, continuous 
care. On the contrary, we believed that fax transmission, while 
commonly used, is much less efficient and secure than other methods of 
communicating patient health information, and we encouraged 
practitioners to adopt and use electronic technologies other than fax 
for transmission and exchange of the CCM care plan. We continued to 
believe the best means of exchange of all relevant patient health 
information is through standardized electronic means. However, we 
recognized that other CMS initiatives (such as MIPS and APMs under the 
Quality Payment Program) may be better mechanisms to incentivize 
increased interoperability of health information systems than 
conditions of payment assigned to particular services under the PFS. We 
believed our proposal would still allow timely availability of health 
information within and outside the practice for purposes of providing 
CCM, and would simplify the rules governing provision of the service 
and improve access to the service. The proposed revisions would better 
align the service with appropriate CPT prefatory language, which may 
reduce unnecessary administrative complexity for practitioners in 
navigating the differences between CPT guidance and Medicare rules.
    The CCM scope of service element Management of Care Transitions 
includes a requirement for the creation and electronic transmission and 
exchange of continuity of care documents referred to as ``clinical 
summaries'' (see Table 11 of the CY 2017 PFS proposed rule). We 
patterned our requirements regarding clinical summaries after the EHR 
Incentive Program requirement that an eligible professional who 
transitions their patient to another setting of care or provider of 
care, or refers their patient to another provider of care, should 
provide a summary care record for each transition of care or referral. 
This clinical summary includes demographics, the medication list, 
medication allergy list, problem list, and a number of other data 
elements if the

[[Page 80249]]

practitioner knows them. As a condition of CCM payment, we required 
standardized content for clinical summaries (that they must be created/
formatted according to certified EHR technology). For the exchange/
transport function, we did not require the use of a specific tool or 
service to exchange/transmit clinical summaries, as long as they are 
transmitted electronically (this can include fax only when the 
receiving practitioner or provider can only receive by fax).
    Based on review of extensive public comment and stakeholder 
feedback, we had come to believe that we should not require the use of 
any specific electronic technology in managing a beneficiary's care 
transitions as a condition of payment for CCM services. Instead, we 
proposed more simply to require the billing practitioner to create and 
exchange/transmit continuity of care document(s) timely with other 
practitioners and providers. To avoid confusion with the requirements 
of the EHR Incentive Programs, and since we would no longer require 
standardized content for the CCM continuity of care document(s), we 
would refer to them as continuity of care documents instead of clinical 
summaries. We would no longer specify how the billing practitioner must 
transport or exchange these document(s), as long as it is done timely 
and consistent with the Care Transitions Management scope of service 
element. We welcomed public input on how we should refer to these 
document(s), noting that CPT does not provide model language specific 
to CCM services. The proposed term ``continuity of care document(s)'' 
draws on CPT prefatory language for TCM services, which CPT provides 
may include ``obtaining and reviewing the discharge information (for 
example, discharge summary, as available, or continuity of care 
document).''
    Again, this proposal was not intended to undermine the significance 
of a standardized, electronic format and means of exchange (other than 
fax) of all relevant patient health information, for achieving timely, 
seamless care across settings especially after discharge from a 
facility. On the contrary, we believed that fax transmission, while 
commonly used, is much less efficient and secure than other methods of 
communicating patient health information, and we encourage 
practitioners to adopt and use electronic technologies other than fax 
for transmission and exchange of continuity of care documents in 
providing CCM services. We continued to believe the best means of 
exchange of all relevant patient health information is through 
standardized electronic means. However, as we discussed above regarding 
the CCM care plan, we have not applied similar requirements to other 
PFS services specifically (including various other care management 
services) and had concerns about how doing so may create disparities 
between these services and others under the PFS. We also recognized 
that other CMS initiatives (such as MIPS and APMs under the Quality 
Payment Program) may be better mechanisms to incentivize increased 
interoperability of health information systems than conditions of 
payment assigned to particular services under the PFS.
    Comment: Most of the commenters supported our proposed revisions to 
the health IT use requirements for billing the CCM code. They shared 
CMS' goal of interoperability but believed the changes were necessary 
to improve CCM uptake. Some commenters favored hardship exceptions or 
rural or small practice exceptions instead of changes to the current 
requirements that would apply to all practitioners alike. Some 
commenters expressed particular concern about relaxing the current 
rules in instances where CCM outsourcing reduces clinical integration. 
These commenters noted that CCM is commonly outsourced to third party 
companies that provide remote care management services (including after 
hours) via telephone and online contact only, using staff who have no 
established relationship with the beneficiary or other members of the 
care team and have no interaction with the office staff and physicians 
other than electronic communication. These commenters were concerned 
that our proposed changes to the health IT requirements for CCM payment 
would result in little to no oversight or guidance of the third party, 
and recommended that CMS make the proposed changes cautiously. One of 
these commenters recommended in addition that CMS should seek to 
increase access to CCM services and reduce administrative burden by 
pursuing alignment between the provision of CCM and other programs and 
incentives, such as the Quality Payment Program. Other commenters 
recommended further reduction in payment rules, such as removing all 
requirements to use a certified EHR, or movement away from timed codes 
that require documentation in short time increments and disrupt 
workflow.
    Response: We continue to believe that other Medicare initiatives 
and programs (such as MIPS and APMs under the Quality Payment Program) 
are better suited to advance use of interoperable health IT systems 
than establishing code-level conditions of payment, unique to CCM or 
other primary care or cognitive services. We also believe that a 
hardship, rural or small practice exception would greatly increase 
rather than decrease administrative complexity for practitioners and 
CMS, and CCM uptake has been relatively high among solo practices. We 
believe that reducing code-level conditions of payment is necessary to 
improve beneficiary access to appropriate CCM services. Therefore, we 
are finalizing revisions to the CCM scope of service elements as 
proposed.
    However, we appreciate the commenters' feedback that relaxing the 
health IT use requirements may be of particular concern in situations 
where CCM is outsourced to a third party, reducing clinical 
integration. As we discuss in the section of this final rule on BHI 
services (section II.E.3.b), health IT holds significant promise for 
remote connectivity and interoperability that may assist and be useful 
(if not necessary) for reducing care fragmentation. However, we agree 
that remote provision of services by entities having only a loose 
association with the treating practitioner can detract from continuous, 
patient-centered care, whether or not those entities employ certified 
or other electronic technology. We will continue to consider the 
potential impacts of remote provision of CCM and similar types of 
services by third parties. We wish to emphasize for CCM, as we did for 
BHI services, that while the CCM codes do not explicitly count time 
spent by the billing practitioner, they are valued to include work 
performed by the billing practitioner, especially complex CCM. We 
emphasize that the practitioner billing for CCM must remain involved in 
ongoing oversight, management, collaboration and reassessment as 
appropriate to bill CCM services. If there is little oversight by the 
billing practitioner or a lack of clinical integration between a third 
party providing CCM and the billing practitioner, we do not believe 
that the CCM service elements are actually being furnished and 
therefore, in such cases, the practitioner should not bill for CCM.
    Finally, we note that activities undertaken as part of 
participation in MIPS or an APM under the Quality Payment Program may 
support the ability of a practitioner to meet our final requirements 
for the continuity of care document(s) and the electronic care plan.
    Comment: Several commenters recommended that we define the proposed 
term ``timely'' for the creation and transmission of care plan and care

[[Page 80250]]

transitions health information. Several commenters believed that 
``timely'' implies a time period of 30 to 90 days, or believed some 
third party vendors would interpret the term in this manner.
    Response: Our proposal of the term ``timely'' originated from the 
use of this term in the CPT prefatory language for Care Management 
services, which includes, for example, ``provide timely access and 
management for follow-up after an emergency department visit'' and 
``timely access to clinical information.'' We do not believe we should 
specify a timeframe, because it would vary for individual patients and 
CCM service elements, we are not aware of any clinical standards 
referencing specific times, and we are seeking to allow appropriate 
flexibility in how CCM is furnished. We note that dictionary meanings 
of the term ``timely'' include quickly; soon; promptly; occurring at a 
suitable time; done or occurring at a favorable or useful time; 
opportune. ``Timely'' does not necessarily imply speed, and means doing 
something at the most appropriate moment. Therefore we believe 
``timely'' is an appropriate term to use to govern how quickly the 
health information in question is transmitted or available. We note 
that even the current requirements for use of specific electronic 
technology do not necessarily impact how quickly the health information 
in question is used to inform care, and addition of the word ``timely'' 
implies more regarding actual use of the information. We are monitoring 
CCM uptake and diffusion through claims analysis and are pursuing 
claims-based outcomes analyses, to help inform whether the service is 
being provided as intended and improving health outcomes. We believe 
these evaluation activities will help us assess moving forward whether 
health information is being shared or made available timely enough 
under our revised CCM payment policies.
    As we stated in the CY 2017 proposed rule, the policy changes for 
CCM health IT use are not intended to undermine the importance of 
interoperability or electronic data exchange. These changes are driven 
by concerns that we have not applied similar requirements to other PFS 
services specifically, including various other care management 
services, and that such requirements create disparities between CCM 
services and other PFS services. We believe that other CMS initiatives 
may be better mechanisms to incentivize increased use and 
interoperability of health information systems than conditions of 
payment assigned to particular services under the PFS. We anticipate 
that these CCM policy changes will improve practitioners' capacity to 
invest in the best tools for managing the care of Medicare 
beneficiaries.
c. Beneficiary Receipt of Care Plan
    We proposed to simplify the current requirement to provide the 
beneficiary with a written or electronic copy of the care plan, by 
instead adopting the CPT language specifying more simply that a copy of 
the care plan must be given to the patient or caregiver. While we 
believe beneficiaries should and must be provided a copy of the care 
plan, and that practitioners may choose to provide the care plan in 
hard copy or electronic form in accordance with patient preferences, we 
do not believe it is necessary to specify the format of the care plan 
that must be provided as a condition of CCM payment. Additionally, we 
recognize that there may be times that sharing the care plan with the 
caregiver (in a manner consistent with applicable privacy and security 
rules and regulations) may be appropriate.
    Comment: The commenters who provided comments on this particular 
proposal were supportive of it. In particular, several commenters 
expressed appreciation for appropriate inclusion of caregivers.
    Response: We thank the commenters for their support and are 
finalizing as proposed.
d. Beneficiary Consent
    We continue to believe that obtaining advance beneficiary consent 
to receive CCM services is important to ensure the beneficiary is 
informed, educated about CCM services, and is aware of applicable cost 
sharing. We also believe that querying the beneficiary about whether 
another practitioner is already providing CCM services helps to reduce 
the potential for duplicate provision or billing of the services. 
However, we believe the consent process could be simplified, and that 
it should be left to the practitioner and the beneficiary to decide the 
best way to establish consent. Therefore, we proposed to continue to 
require billing practitioners to inform the beneficiary of the 
currently required information (that is, inform the beneficiary of the 
availability of CCM services; inform the beneficiary that only one 
practitioner can furnish and be paid for these services during a 
calendar month; and inform the beneficiary of the right to stop the CCM 
services at any time (effective at the end of the calendar month)). 
However, we proposed to specify that the practitioner could document in 
the beneficiary's medical record that this information was explained 
and note whether the beneficiary accepted or declined CCM services 
instead of obtaining a written agreement.
    We also proposed to remove the language requiring beneficiary 
authorization for the electronic communication of his or her medical 
information with other treating providers as a condition of payment for 
CCM services, because under federal regulations that implement the 
Health Insurance Portability and Accountability Act (HIPAA) Privacy 
Rule (45 CFR 164.506), a covered entity is permitted to use or disclose 
protected health information for purposes of treatment without patient 
authorization. Moreover, if such disclosure is electronic, the HIPAA 
Security Rule requires secure transmission (45 CFR 164.312(e)). In 
previous regulations we have reminded practitioners that for all 
electronic sharing of beneficiary information in the provision of CCM 
services, HIPAA Privacy and Security Rule standards apply in the usual 
manner (79 FR 67728).
    Comment: The commenters were largely supportive of our proposed 
policy changes. The commenters were supportive of verbal instead of 
written beneficiary consent if a clear requirement remains to 
transparently inform the beneficiary about the nature and benefit of 
the services, applicable cost sharing, and document that this 
information was conveyed; current written agreements qualify; and 
practitioners can elect to obtain written consent. Some commenters 
believed that obtaining written consent might be preferable as a means 
of resolving who is eligible for payment, if more than one practitioner 
bills. A few commenters suggested CMS require written educational 
materials about CCM, or conduct beneficiary outreach and education.
    Response: We appreciate the commenters' support and 
recommendations. We are finalizing changes to the beneficiary consent 
requirements as proposed and clarifying that a clear requirement 
remains to transparently inform the beneficiary about the nature and 
benefit of the services, applicable cost sharing, and to document that 
this information was conveyed. The final beneficiary consent 
requirements do not affect any written agreements that are already in 
place for CCM services, and we note that practitioners can still elect 
to obtain written consent rather than verbal consent.
e. Documentation
    We have heard from practitioners that the requirements to document 
certain

[[Page 80251]]

information in a certified EHR format are redundant because the CCM 
billing rules already require documentation of core clinical 
information in a certified EHR format. Specifically, we already require 
structured recording of demographics, problems, medications and 
medication allergies, and the creation of a clinical summary record, 
using a qualifying certified EHR; and that a full list of problems, 
medications and medication allergies in the EHR must inform the care 
plan, care coordination and ongoing clinical care. Therefore, we 
proposed to no longer specify the use of a qualifying certified EHR to 
document communication to and from home- and community-based providers 
regarding the patient's psychosocial needs and functional deficits and 
to document beneficiary consent. We would continue to require 
documentation in the medical record of beneficiary consent (discussed 
above) and of communication to and from home- and community-based 
providers regarding the patient's psychosocial needs and functional 
deficits.
    Comment: Many commenters were supportive of these proposals.
    Response: We thank the commenters for their support and are 
finalizing changes to the documentation requirements as proposed. We 
continue to encourage practitioners to utilize health IT solutions for 
obtaining and documenting health information from sources external to 
their practice, noting that the 2015 edition of ONC certification 
criteria (see 80 FR 62601) includes criteria which specifically relate 
to obtaining information from non-clinical sources and the capture of 
structured data relating to social, psychological, and behavioral 
attributes.
f. Summary of Final CCM Policies
    We are finalizing changes to the CCM scope of service elements 
discussed above that will apply for both complex and non-complex CCM 
services beginning in CY 2017. The final CY 2017 service elements for 
CCM are summarized in Table 11. We believe these changes will retain 
elements of the CCM service that are characteristic of the changes in 
medical practice toward advanced primary care, while eliminating 
redundancy, simplifying provision of the services, and improving access 
to the services. For payment of complex CCM services beginning in CY 
2017, we are adopting the CPT code descriptors for CPT codes 99487 and 
99489 as well as the service elements in Table 11. We are providing 
separate payment for complex CCM (CPT 99487, 99489) using the RUC-
recommended payment inputs for those services. We may reconsider the 
role of health information technology in CCM service provision in 
future years. We anticipate that improved accuracy of payment for CCM 
services, and reduced administrative burden associated with billing CCM 
services, will contribute to practitioners' capacity to invest in the 
best tools for managing the care of Medicare beneficiaries.

  Table 11--Summary of CY 2017 Chronic Care Management Service Elements
                        and Billing Requirements
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Initiating Visit--Initiation during an AWV, IPPE, or face-to-face E/M
 visit (Level 4 or 5 visit not required), for new patients or patients
 not seen within 1 year prior to the commencement of chronic care
 management (CCM) services............................................
Structured Recording of Patient Information Using Certified EHR
 Technology--Structured recording of demographics, problems,
 medications and medication allergies using certified EHR technology.
 A full list of problems, medications and medication allergies in the
 EHR must inform the care plan, care coordination and ongoing clinical
 care.................................................................
24/7 Access & Continuity of Care:
     Provide 24/7 access to physicians or other qualified
     health care professionals or clinical staff including providing
     patients/caregivers with a means to make contact with health care
     professionals in the practice to address urgent needs regardless
     of the time of day or day of week................................
     Continuity of care with a designated member of the care
     team with whom the beneficiary is able to schedule successive
     routine appointments.............................................
Comprehensive Care Management--Care management for chronic conditions
 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
 medications..........................................................
Comprehensive Care Plan:
     Creation, revision and/or monitoring (as per code
     descriptors) of an electronic patient-centered care plan based on
     a physical, mental, cognitive, psychosocial, functional and
     environmental (re)assessment and an inventory of resources and
     supports; a comprehensive care plan for all health issues........
     Must at least electronically capture care plan
     information, and make this information available timely within
     and outside the billing practice as appropriate. Share care plan
     information electronically (can include fax) and timely within
     and outside the billing practice to individuals involved in the
     beneficiary's care...............................................
     A copy of the plan of care must be given to the patient
     and/or caregiver.................................................
Management of Care Transitions:
     Management of care transitions between and among health
     care providers and settings, including referrals to other
     clinicians; follow-up after an emergency department visit; and
     follow-up after discharges from hospitals, skilled nursing
     facilities or other health care facilities.......................
     Create and exchange/transmit continuity of care
     document(s) timely with other practitioners and providers........
Home- and Community-Based Care Coordination:
     Coordination with home and community based clinical
     service providers................................................
     Communication to and from home- and community-based
     providers regarding the patient's psychosocial needs and
     functional deficits must be documented in the patient's medical
     record...........................................................
Enhanced Communication Opportunities--Enhanced opportunities for the
 beneficiary and any caregiver to communicate with the practitioner
 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; that only one practitioner can furnish and be paid for
     these services during a calendar month; and of their right to
     stop the CCM services at any time (effective at the end of the
     calendar month)..................................................
     Document in the beneficiary's medical record that the
     required information was explained and whether the beneficiary
     accepted or declined the services................................
Medical Decision-Making--Complex CCM services require and include
 medical decision-making of moderate to high complexity (by the
 physician or other billing practitioner).............................
------------------------------------------------------------------------


[[Page 80252]]

5. Assessment and Care Planning for Patients with Cognitive Impairment 
(GPPP6)
    For CY 2017 we proposed a G-code that would provide separate 
payment to recognize the work of a physician (or other appropriate 
billing practitioner) in assessing and creating a care plan for 
beneficiaries with cognitive impairment, such as from Alzheimer's 
disease or dementia, at any stage of impairment, G0505 (Cognition and 
functional assessment using standardized instruments with development 
of recorded care plan for the patient with cognitive impairment, 
history obtained from patient and/or caregiver, in office or other 
outpatient setting or home or domiciliary or rest home). We understand 
that a similar code was recently approved by the CPT Editorial Panel 
and is scheduled to be included in the CY 2018 CPT code set. We 
intended for G0505 to be a temporary code, perhaps for only one year, 
to be replaced by the CPT code in CT 2018. We will consider whether to 
adopt and establish relative value units for the new CPT code under our 
standard process, presumably for CY 2018.
    We reviewed the list of service elements that were considered by 
the CPT Editorial Panel, and proposed the following as required service 
elements of G0505:
     Cognition-focused evaluation including a pertinent history 
and examination.
     Medical decision making of moderate or high complexity 
(defined by the E/M guidelines).
     Functional assessment (for example, Basic and Instrumental 
Activities of Daily Living), including decision-making capacity.
     Use of standardized instruments to stage dementia.
     Medication reconciliation and review for high-risk 
medications, if applicable.
     Evaluation for neuropsychiatric and behavioral symptoms, 
including depression, including use of standardized instrument(s).
     Evaluation of safety (for example, home), including motor 
vehicle operation, if applicable.
     Identification of caregiver(s), caregiver knowledge, 
caregiver needs, social supports, and the willingness of caregiver to 
take on caregiving tasks.
     Advance care planning and addressing palliative care 
needs, if applicable and consistent with beneficiary preference.
     Creation of a care plan, including initial plans to 
address any neuropsychiatric symptoms and referral to community 
resources as needed (for example, adult day programs, support groups); 
care plan shared with the patient and/or caregiver with initial 
education and support.
    The proposed valuation of G0505 (discussed in section II.E.1) 
assumed that this code would include services that are personally 
performed by the physician (or other appropriate billing practitioner, 
such as a nurse practitioner or physician assistant) and would 
significantly overlap with services described by certain E/M visit 
codes, advance care planning services, and certain psychological or 
psychiatric service codes that are currently separately payable under 
the PFS. Accordingly, we proposed that G0505 must be furnished by the 
physician (or other appropriate billing practitioner) and could not be 
billed on the same date of service as CPT codes 90785 (Psytx complex 
interactive), 90791 (Psych diagnostic evaluation), 90792 (Psych diag 
eval w/med srvcs), 96103 (Psycho testing admin by comp), 96120 
(Neuropsych tst admin w/comp), 96127 (Brief emotional/behav assmt), 
99201-99215 (Office/outpatient visits new), 99324-99337 (Domicil/r-home 
visits new pat), 99341-99350 (Home visits new patient), 99366-99368 
(Team conf w/pat by hc prof), 99497 (Advncd care plan 30 min), 99498 
(Advncd care plan addl 30 min)), since these codes all reflect face-to-
face services furnished by the physician or other billing practitioner 
for related separately billable services that overlap substantially 
with G0505. In addition, we proposed to prohibit billing of G0505 with 
other care planning services, such as care plan oversight services (CPT 
code 99374), home health care and hospice supervision (G0181, G0182), 
or our proposed add-on code for comprehensive assessment and care 
planning by the billing practitioner for patients requiring CCM 
services (GPPP7). We solicited comment on whether there are 
circumstances where multiple care planning codes could be furnished 
without significant overlap. We proposed to specify that G0505 may 
serve as a companion or primary E/M code to the prolonged service codes 
(those that are currently separately paid, and those we proposed to 
separately pay beginning in 2017), but were interested in public input 
on whether there is any overlap among these services. We solicited 
comment on how to best delineate the post-service work for G0505 from 
the work necessary to provide the prolonged services code.
    We did not believe the services described by G0505 would 
significantly overlap with proposed or current medically necessary CCM 
services (CPT codes 99487, 99489, 99490); TCM services (CPT codes 
99495, 99496); or the proposed behavioral health integration service 
codes (HCPCS codes GPPP1, GPPP2, GPPP3, GPPPX). Therefore, we proposed 
that G0505 could be billed on the same date-of-service or within the 
same service period as these codes (CPT codes 99487, 99489, 99490, 
99495, 99496, and HCPCS codes GPPP1, GPPP2, GPPP3, and GPPPX). There 
may be overlap in the patient population eligible to receive these 
services and the population eligible to receive the services described 
by G0505, but we believed there would be sufficient differences in the 
nature and extent of the assessments, interventions and care planning, 
as well as the qualifications of individuals providing the services, to 
allow concurrent billing for services that are medically reasonable and 
necessary. We solicited public comment on potential overlap between 
G0505 and other codes currently paid under the PFS, as well as the 
other primary care/cognitive services addressed in this section of the 
final rule.
    Comment: Many commenters were supportive of the proposal, including 
the provisions regarding scope of service elements, conditions of 
payment, and overlap with other services under the PFS.
    Response: We thank commenters for their support of the proposed 
scope of service, conditions of payment, and overlap with other 
services under the PFS for G0505. We believe that by improving payment 
accuracy by paying separately for this service, practitioners will be 
able to accurately assess patients for cognitive impairment, 
particularly in early stages.
    Comment: We received numerous comments stating that assessment and 
staging for dementia is very sensitive and should only be conducted by 
neuropsychologists, who would be unable to bill G0505. Commenters were 
concerned that untrained professionals conducting assessments for 
dementia would lead to errors in diagnosis and inappropriate treatment. 
Commenters encouraged CMS to not finalize this code and maintain the 
current coding for psychological and neuropsychological assessment or 
suggested that CMS remove the bullet points associated with medication 
management or medical decision making so that G0505 could be billed by 
psychologists.
    Response: While we acknowledge and support the work of 
psychologists and neuropsychologists in the care of Medicare 
beneficiaries, we continue to

[[Page 80253]]

believe that this code describes a distinct PFS service that may be 
reasonable and necessary in the diagnosis and treatment of a 
beneficiary's illness. We remind interested stakeholders that we 
routinely examine the valuation and coding for existing services under 
the potentially misvalued code initiative, and that there is a the 
process for public nomination of particular codes. If stakeholders have 
information to suggest that the current coding for neuropsychological 
and psychological testing is inaccurate, we welcome nominations under 
the established process.
    Comment: A few commenters encouraged CMS to avoid adopting scope of 
service elements that are exhaustive as these may create barriers to 
utilization, while other commenters made the following recommendations 
regarding the scope of service provisions:
     Expand scope of service elements related to medication 
management.
     Include occupational therapy in the scope of service 
element pertaining to community resources.
     Rewrite ``Creation of a care plan, including initial plans 
to address any neuropsychiatric symptoms and referral to community 
resources as needed (for example, adult day programs, support groups); 
care plan shared with the patient and/or caregiver with initial 
education and support'' to include ``identification of caregiver(s), 
caregiver knowledge, caregiver needs, social supports, and the 
willingness and availability of caregiver to voluntarily take on 
caregiving tasks.''
     Make sure that non-paid or informal caregivers are 
included in care planning and provide resources and support for care 
givers so as to improve care givers ability to provide care for the 
beneficiary.
     Require the inclusion of caregiver names in care plan and 
patients medical record, require that caregivers be assessed for stress 
and depressive symptoms, as well as care giver skill and education 
needs.
     State that consultations with the caregiver are 
permissible under HIPAA and that such conversations may be necessary in 
the development of a care plan.
     Specify that any advance care planning is consistent with 
beneficiary preference and addresses any palliative care needs of the 
patient, and include establishment of durable power of attorney.
     Clarify that diagnosis of dementia is not part of the 
scope of service by deleting ``cognition focused evaluation including 
pertinent history'' from the scope of service.
     Clarify that ``functional assessment'' is separate from 
decision making assessments, and that this is a non-legal assessment of 
competency.
     Stipulate that other decision makers should be identified.
     Consider deleting ``use of standardized instruments to 
stage dementia'' because the care plan is the most important aspect of 
the service and many standardized instruments are not very effective at 
staging.
     Clarify that the care plan address both medical and non-
medical issues, and includes follow-up scheduling for monitoring and 
evaluation.
     Provide a copy of the written care plan to the patient.
     Refer to the care plan as a ``person-centered care plan.''
     Include evaluation of medical problems including review of 
lab or imaging tests, review of co-morbidities, especially those which 
are dependent on self-care, evaluation the risk of falls and 
recommendations for fall prevention, evaluation of possible elder 
abuse, and documentation of financial issues, as part of the scope of 
service.
    Response: We appreciate the information provided by commenters on 
the best practices associated with furnishing this service and would 
encourage stakeholders to adopt any or all of these scope of service 
provisions, such as the inclusion of caregivers in care planning. The 
scope of service for assessment and care planning service for patients 
with cognitive impairment does not prohibit stakeholders from adopting 
any additional scope of service provisions which may be beneficial for 
the treatment of the patient. However, we do not believe that the 
ability to fully furnish this service and establish an appropriate 
value for it is contingent on meeting such conditions. Therefore, we do 
not believe they should be added to the scope of service. We concur 
with commenters on the necessity of avoiding the imposition of overly 
burdensome restrictions within the scope of service.
    Comment: Some commenters requested that CMS clarify that not all 
elements in the scope of service need to be provided by the billing 
practitioner and many can be provided by others incident to the billing 
practitioner's services. One commenter stated that there are 
circumstances where the best practitioner to provide a specific service 
element does not work in the same practice as the billing practitioner, 
and therefore the billing practitioner should be able to contract out 
for provision of some aspects, provided that the billing practitioner 
remain in oversight. Other commenters stated that CMS should make G0505 
billable by other practitioners, such as occupational therapists, or 
community based entities.
    Response: G0505 is a service that includes central elements, which 
must be performed by the billing practitioner subject to established E/
M guidelines. Only those practitioners eligible to report E/M services 
should report this service. Outside of the specified elements, the 
regular incident-to rules apply consistent with other E/M services. We 
believe that physicians and eligible non-physician practitioners, such 
as a nurse practitioners and physician assistants should exclusively 
bill for this code.
    Comment: Many commenters suggested that CMS expand HCPCS code G0505 
or pay separately for similar services furnished to patients with other 
advanced or life threatening illnesses.
    Response: We appreciate the comments on other conditions that could 
benefit from assessment and care planning and will consider these for 
future rulemaking. We are finalizing the G0505 code to pay separately 
for the assessment and care plan creation for beneficiaries with 
cognitive impairment, such as from Alzheimer's disease or dementia, at 
any stage of impairment.
    Comment: Commenters provided many examples of how CMS could develop 
appropriate quality and outreach measures to ensure appropriate 
utilization of G0505. Commenters encouraged CMS to closely monitor use 
of G0505 for a few years following implementation, so as to ascertain 
whether patient eligibility is an issue in uptake for the code.
    Response: We appreciate the information on quality and outreach 
measures. CMS is engaged in the use of measures to improve quality and 
access to care. CMS intends to monitor utilization and will consider 
how conditions of payment align with best practices and quality 
measures.
    Comment: One commenter urged CMS to make the proposed coding and 
payment changes available to physicians in total cost of care models, 
such as ACOs and bundled payment programs.
    Response: Our proposal relates only to payment for services under 
the Medicare PFS. We note that the codes and payment amounts that we 
finalize for services will be available for billing and payment under 
the PFS for CY 2017. In general, we do not address in this final rule, 
and instead defer to the policies regarding billing and payment for 
these services that are applicable within individual Center for 
Medicare &

[[Page 80254]]

Medicaid Innovation models and other programs. However, as our policies 
regarding payment for new primary care codes are applicable beginning 
in CY 2017, we note that models may need to update their policies to 
prevent potential duplication of payment between the PFS and the 
models. For example, where CCM services have been excluded from 
separate payment under existing models, newly established care 
management services (including complex CCM, psychiatric CoCM, and BHI) 
may likewise be excluded.
    Comment: One commenter stated that many small practices do not have 
the infrastructure to support a multi-disciplinary team of 
practitioners and urged CMS to allow flexibility for solo and small 
group practices to share resources. The commenter also suggested that 
CMS offer a one-time incentive for practices to integrate service 
elements into workflow. Response: In general, the coding under the PFS 
is intended to describe services as they are furnished and are valued 
using typical resource costs. We appreciate the concern of commenters 
regarding access, and we are eager to hear from stakeholders regarding 
concerns related to access for these and other PFS services.
6. Improving Payment Accuracy for Care of People With Disabilities 
(GDDD1)
    We estimate that about 7 percent of all Medicare beneficiaries have 
a potentially disabling mobility-related diagnosis (the Medicare-only 
prevalence is 5.5 percent and the prevalence for Medicare-Medicaid dual 
eligible beneficiaries is 11 percent), using 2010 Medicare (and for 
dual eligible beneficiaries, Medicaid) claims data.
    When a beneficiary with a mobility-related disability goes to a 
physician or other practitioner's office for an E/M visit, the 
resources associated with providing the visit can exceed the resources 
required for the typical E/M visit. An E/M visit for a patient with a 
mobility-related disability can require more physician and clinical 
staff time to provide appropriate care because the patient may require 
skilled assistance throughout the visit to carefully move and adjust 
his/her body. Furthermore, an E/M visit for a patient with a mobility-
related disability commonly requires specialized equipment such as a 
wheel chair accessible scale, floor and overhead lifts, a movable exam 
table, padded leg supports, a stretcher and transfer board. The current 
E/M visit payment rates, based on an assumption of ``typical'' 
resources involved in furnishing an E/M visit to a ``typical'' patient, 
do not accurately reflect these additional resources associated with 
furnishing appropriate care to many beneficiaries with mobility-related 
disabilities.
    When furnishing E/M services to beneficiaries with mobility-related 
disabilities, practitioners face difficult choices in deciding whether 
to take the extra time necessary and invest in the required specialized 
equipment for these visits even though the payment rate for the service 
does not account for either expense; potentially providing less than 
optimal care for a beneficiary whose needs exceed the standard 
appointment block of time in the standard equipped exam room reflected 
in the current E/M visit payment rate; or declining to accept 
appointments altogether for beneficiaries who require additional time 
and specialized equipment.
    Each of these scenarios is potentially problematic. The first two 
scenarios suggest that the quality of care for this beneficiary 
population might be compromised by assumptions under the PFS regarding 
relative resource costs in furnishing services to this population. The 
third scenario reflects an obvious access problem for these 
beneficiaries. To improve payment accuracy and help ameliorate 
potential disparity in access and quality for beneficiaries with 
mobility-related disabilities, we proposed to create a new add-on G-
code, effective for CY 2017, to describe the additional services 
furnished in conjunction with E/M services to beneficiaries with 
disabilities that impair their mobility:
    G0501: Resource-intensive services for patients for whom the use of 
specialized mobility-assistive technology (such as adjustable height 
chairs or tables, patient lifts, and adjustable padded leg supports) is 
medically necessary and used during the provision of an office/
outpatient evaluation and management service visit (Add-on code, list 
separately in addition to primary procedure).
    Effective January 1, 2017, we proposed that this add-on code could 
be billed with new and established patient office/outpatient E/M codes 
(CPT codes 99201 through 99205, and 99212 through 99215), as well as 
transitional care management codes (CPT codes 99495 and 99496), when 
the additional resources described by the code are medically necessary 
and used in the provision of care. In addition to seeking comment on 
this proposal, we are also sought comment on other HCPCS codes that may 
be appropriate base codes for this proposed add-on code, including 
those describing preventive visits and services. We reminded potential 
commenters that the rationale for this proposal is based in large part 
on the broad use and lack of granularity in coding for E/M services 
relative to other PFS services in conjunction with the additional 
resources used.
    We received many thoughtful comments on this proposal and thank 
commenters for their input. Comments received are summarized below.
    Comment: Most commenters agreed with the proposed rule's statement 
of disability disparities and discussed a variety challenges that 
individuals with disabilities face in accessing the health care system. 
Several of these commenters cited evidence of existing challenges for 
individuals with mobility-related disabilities, including a lack of 
physically accessible equipment within physician offices, barriers to 
communication, and a lack of existing tools to recognize, track, and 
consistently meet specialized needs. Commenters applauded CMS for 
offering a concrete proposal with significant funding to meaningfully 
address this problem and noted that 26 years after passage of the 
Americans with Disabilities Act, it is alarming that physical and 
communication barriers in physicians' and other health care 
professionals' offices still exist across the country. However, some 
commenters suggested that the root cause and scope of these issues are 
not well characterized, and suggested that CMS work with stakeholders 
to conduct additional studies and gain information as to the underlying 
reasons for barriers to access to care and lower quality scores on 
certain measures.
    Generally, commenters noted that they appreciate CMS' efforts to 
address health disparities based on disability, and some then supported 
this proposal as a first step in providing medically necessary services 
to patients with disabilities, while others recommended that CMS not 
finalize the proposal and raised legal, access, and equity concerns.
    Response: We agree with commenters that individuals with 
disabilities face additional barriers to access health care, an issue 
that contributes to widespread disparities in outcomes. We also agree 
with commenters that the underlying reasons for these disparities are 
multifaceted and can include payment challenges, physical accessibility 
and communication barriers, a lack of awareness among health care 
providers in assessing and fully addressing the needs and preferences 
of people with disabilities, and others issues. As a result of all 
these factors, individuals with disabilities can face challenges in 
scheduling appointments, and in

[[Page 80255]]

finding and maintaining a primary care provider, an essential 
foundation for accessing the health system.
    Although there was near universal agreement among commenters 
regarding problems in health care disparities and barriers to access 
among individuals with disabilities, there was disagreement about 
whether establishing payment for code G0501 as proposed was a good 
solution to help solve these problems. While we believe that improving 
the payment accuracy of physicians' services is necessary and 
appropriate, and can help to address the underlying access issues for 
individuals with disabilities, we also acknowledge that implementation 
of new or revised payments can result in unanticipated, and potentially 
undesirable, consequences. Before implementing payment for code G0501, 
we plan to further analyze and address the concerns raised by 
commenters. As such, we are not finalizing payment for code G0501 at 
this time. We appreciate commenters' insights, and our commitment to 
promoting better primary care for people with disabilities remains 
strong. Over the next 6 months we will engage with interested 
beneficiaries, advocates, and practitioners to continue to explore 
improvements in payment accuracy for care of people with disabilities. 
We intend to discuss this issue again in future rulemaking.
    While we are not finalizing separate payment for code G0501 for CY 
2017, we are including the code in the CY 2017 code set as G0501. The 
HCPCS code G0501 will not be payable under the Medicare PFS for CY 
2017, though practitioners will be able to report the code, should they 
be inclined to do so.
a. Soliciting Comment on Other Coding Changes To Improve Payment 
Accuracy for Care of People With Disabilities
    When furnishing care to a beneficiary with a mobility-related 
disability, the current E/M visit payment rates may not fully reflect 
the associated resource costs that are being incurred by practitioners. 
We recognize that there are other populations for which payment 
adjustment may be appropriate. Our proposal regarding beneficiaries 
with mobility-related disabilities reflected the discrete nature of the 
additional resource costs for this population, the clear lack of 
differentiation in resource costs regarding particular kinds of 
frequently-furnished services, and the broad recognition of access 
problems. We recognize that some physician practices may frequently 
furnish services to particular populations for which the relative 
resource costs are similarly systemically undervalued and we sought 
comment regarding other circumstances where these dynamics can be 
discretely observed.
    Comment: Multiple commenters suggested additional coding changes to 
improve payment accuracy for services for people with disabilities. 
Several commenters requested that CMS broaden the scope of G0501 and 
the codes with which it may be billed, for example by allowing G0501 to 
be billed with preventive services, such as the Initial Preventive 
Physical Examination (IPPE) or ``Welcome to Medicare Visit'', the 
Annual Wellness Visit, or other preventive services including those 
that have been assigned a grade of A or B by the United States 
Preventive Services Task Force. One commenter suggested that CMS also 
establish payment for a lower-level, lower payment add-on code for use 
with patients with a mobility-related disability that may not require 
the use of specialized equipment. Commenters also suggested that CMS 
establish certain forms of physician payment incentives, which might 
more effectively address the accessibility needs of individuals with 
disabilities and ultimately reduce healthcare disparities. 
Specifically, one commenter suggested CMS incentivize physicians to 
establish record-keeping to inquire into patients' accessibility and 
accommodation needs, record the needs of their patients, and take 
action to meet those needs over time.
    Response: We thank commenters for their thoughtful responses. We 
reiterate our commitment to addressing disparities for individuals with 
disabilities and advancing health equity, and will continue to explore 
and revisit potential solutions for overcoming these significant 
challenges, including the appropriate changes in payment.
7. Regulation Text
    Our current regulations in 42 CFR 410.26(b) provide for an 
exception to assign general supervision to CCM services (and similarly, 
for the non-face-to-face portion of TCM services), because these are 
generally non-face-to-face care management/care coordination services 
that would commonly be provided by clinical staff when the billing 
practitioner (who is also the supervising practitioner) is not 
physically present; and the CPT codes are comprised solely (or in 
significant part) of non-face-to-face services provided by clinical 
staff. A number of codes that we proposed to establish for separate 
payment in CY 2017 under our initiative to improve payment accuracy for 
primary care and care management are similar to CCM services, in that a 
critical element of the services is non-face-to-face care management/
care coordination services provided by clinical staff or other 
qualified individuals when the billing practitioner may not be 
physically present. Accordingly, we proposed to amend 42 CFR 
410.26(a)(3) and 410.26(b) to better define general supervision and to 
assign general supervision not only to CCM services and the non-face-
to-face portion of TCM services, but also to proposed codes G0502, 
G0503, G0504, G0507, CPT code 99487, and CPT code 99489. Instead of 
adding each of these proposed codes assigned general supervision to the 
regulation text on an individual basis, we proposed to revise our 
regulation under 42 CFR 410.26(b)(1) to assign general supervision to 
the non-face-to-face portion of designated care management services, 
and we would designate the applicable services through notice and 
comment rulemaking.
    We did not receive any public comments on our proposed regulation 
text. However we received a number of comments regarding a related 
proposal to require behavioral health care managers to be located on 
site. Also for psychiatric CoCM services (G0502, G0503 and G0504), we 
are finalizing a requirement that the behavioral health care manager is 
available to perform his or her duties face-to-face and non-face-to-
face with the beneficiary. We address these issues at length in the BHI 
section of this final rule (section II.E.3). Since we are assigning 
general supervision to psychiatric CoCM behavioral health care manager 
services that may be provided face-to-face with the beneficiary, we are 
omitting the phrase ``non-face-to-face portion of'' in ``the non-face-
to-face portion of designated care management services.'' Accordingly, 
the final amended regulation text in 42 CFR 410.26(b) assigns general 
supervision to ``designated care management services'' that we will 
designate through notice and comment rulemaking. The services that we 
are newly designating (finalizing) for general supervision in this 
final rule are G0502, G0503, G0504, G0507, CPT code 99487 and CPT code 
99489. We had initially proposed adding a cross-reference to the 
existing definition of ``general supervision'' in current regulations 
at Sec.  410.32(b)(3)(i), but to better describe general supervision in 
the context of these services, we are specifying at Sec.  410.26(a)(3) 
that general supervision means the service is furnished under the 
physician's (or other practitioner's)

[[Page 80256]]

overall direction and control, but the physician's (or other 
practitioner's) presence is not required during the performance of the 
service. At Sec.  410.26(b)(5), we specify that, in general, services 
and supplies must be furnished under the direct supervision of the 
physician (or other practitioner). Designated care management services 
can be furnished under general supervision of the physician (or other 
practitioner) when these services or supplies are provided incident to 
the services of a physician (or other practitioner). The physician (or 
other practitioner) supervising the auxiliary personnel need not be the 
same physician (or other practitioner) who is treating the patient more 
broadly. However, only the supervising physician (or other 
practitioner) may bill Medicare for incident to services.
8. CCM Requirements for Rural Health Clinics (RHCs) and Federally 
Qualified Health Centers (FQHCs).
    RHCs and FQHCs have been authorized to bill for CCM services since 
January 1, 2016, and are paid based on the Medicare 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. The RHC and FQHC 
requirements for billing CCM services have generally followed the 
requirements for practitioners billing under the PFS, with some 
adaptations based on the RHC and FQHC payment methodologies.
    To assure that CCM requirements for RHCs and FQHCs are not more 
burdensome than those for practitioners billing under the PFS, we 
proposed revisions for CCM services furnished by RHCs and FQHCs similar 
to the revisions proposed under the section above entitled, ``Reducing 
Administrative Burden and Improving Payment Accuracy for Chronic Care 
Management (CCM) Services'' for RHCs and FQHCs. Specifically, we 
proposed to:
     Require that CCM be initiated during an AWV, IPPE, or 
comprehensive E/M visit only for new patients or patients not seen 
within one year. This would replace the requirement that CCM could only 
be initiated during an AWV, IPPE, or comprehensive E/M visit where CCM 
services were discussed.
     Require 24/7 access to a RHC or FQHC practitioner or 
auxiliary personnel with a means to make contact with a RHC or FQHC 
practitioner to address urgent health care needs regardless of the time 
of day or day of week. This would replace the requirement that CCM 
services be available 24/7 with health care practitioners in the RHC or 
FQHC who have access to the patient's electronic care plan to address 
his or her urgent chronic care needs, regardless of the time of day or 
day of the week.
     Require timely electronic sharing of care plan information 
within and outside the RHC or FQHC, but not necessarily on a 24/7 
basis, and expands the circumstances under which transmission of the 
care plan by fax is allowed. This would replace the requirement that 
the electronic care plan be available on a 24/7 basis to all 
practitioners within the RHC or FQHC whose time counts towards the time 
requirement for the practice to bill the CCM code, and removes the 
restriction on allowing the care plan to be faxed only when the 
receiving practitioner or provider can only receive clinical summaries 
by fax.
     Require that in managing care transitions, the RHC or FQHC 
creates, exchanges, and transmits continuity of care document(s) in a 
timely manner with other practitioners and providers. This would 
replace the requirements that clinical summaries must be created and 
formatted according to certified EHR technology, and the requirement 
for electronic exchange of clinical summaries by a means other than 
fax.
     Require that a copy of the care plan be given to the 
patient or caregiver. This would remove the description of the format 
(written or electronic) and allows the care plan to be provided to the 
caregiver when appropriate (and in a manner consistent with applicable 
privacy and security rules and regulations).
     Require that the RHC or FQHC practitioner documents in the 
beneficiary's medical record that all the elements of beneficiary 
consent (for example, that the beneficiary was informed of the 
availability of CCM services; only one practitioner can furnish and be 
paid for these services during a calendar month; the beneficiary may 
stop the CCM services at any time, effective at the end of the calendar 
month, etc.) were provided, and whether the beneficiary accepted or 
declined CCM services. This would replace the requirement that RHCs and 
FQHCs obtain a written agreement that these elements were discussed, 
and removes the requirement that the beneficiary provide authorization 
for the electronic communication of his or her medical information with 
other treating providers as a condition of payment for CCM services.
     Require that communication to and from home- and 
community-based providers regarding the patient's psychosocial needs 
and functional deficits be documented in the patient's medical record. 
This would replace the requirement to document this patient health 
information in a certified EHR format.
    We noted that we did not propose an additional payment adjustment 
for patients who require extensive assessment and care planning as part 
of the initiating visit, as payments for RHC and FQHC services are not 
adjusted for length or complexity of the visit.
    We stated that we believe these proposed changes would keep the CCM 
requirements for RHCs and FQHCs consistent with the CCM requirements 
for practitioners billing under the PFS, simplify the provision of CCM 
services by RHCs and FQHCs, and improve access to these services 
without compromising quality of care, beneficiary privacy, or advance 
notice and consent.
    We received 31 comments on the proposed revisions to the CCM 
requirements for RHCs and FQHCs. The following is a summary of the 
comments we received:
    Comment: Commenters stated that they support CMS's efforts to 
ensure that CCM requirements for RHCs and FQHCs are not more burdensome 
than those for practitioners billing under the Medicare PFS.
    Response: We appreciate the support of the commenters.
    Comment: One commenter sought clarification on the requirements for 
initiating CCM with patients that have been seen in the RHC within the 
past year. The commenter asked if CCM could be initiated if the patient 
had any type of visit within the past year, or if the visit within the 
past year had to be an AWV, IPPE, or comprehensive E/M visit.
    Response: To initiate CCM with a patient that has been seen in the 
RHC or FQHC within the past year, an AWV, IPPE, or comprehensive E/M 
visit must have taken place within the past year in the RHC or FQHC 
that is billing for the CCM service. No other type of visit would meet 
the requirement for initiating CCM services.
    Comment: A few commenters were concerned that RHCs and FQHCs were 
charging beneficiaries for coinsurance for non-face-to-face services, 
and recommended that the copayment be waived or that CMS pursue waivers 
of cost-sharing for care coordination codes. One of these commenters 
stated that patients are often unwilling to pay the patient share of 
the CCM services since rural providers often have already been

[[Page 80257]]

providing similar services without additional cost to the patients.
    Response: As previously stated, we do not have the authority to 
waive the copayment requirements for CCM services. While many 
practitioners, including those in rural areas, have always provided 
some care management services, we believe that payment for CCM services 
will enable many RHCs and FQHCs to furnish comprehensive and systematic 
care coordination services that were previously unavailable or only 
sporadically offered.
    Comment: A commenter asked for clarification on how claims for 
patients in RHCs and FQHCs with pre-existing care management plans 
should be handled, and suggested that CMS permit claims for services 
for these patients.
    Response: We are not entirely clear what this commenter is 
suggesting. RHCs and FQHCs that bill for CCM services must develop a 
comprehensive care plan that includes all the elements previously 
described and also listed in Table 11. When all the requirements for 
furnishing CCM services are met, including the development of the 
comprehensive care plan, the RHC or FQHC would submit a claim for CCM 
payment using CPT code 99490. Only the time spent furnishing CCM 
services after CCM is initiated with the patient is counted toward the 
minimum 20 minutes required for CCM billing. There is no additional 
payment for a pre-existing care plan, and if a comprehensive care plan 
that meets the CCM requirements was developed before the initiation of 
CCM services, the time spent developing the plan would not be counted 
toward the 20 minute minimum requirement.
    Comment: A few commenters requested clarification on whether RHCs 
and FQHCs could bill the new CCM codes for either complex CCM services 
(CPT 99487 and 99489) or the separately billable comprehensive CCM 
assessment and care planning (G0506).
    Response: As we noted in the proposed rule, we did not propose to 
adopt codes to provide for an additional payment for patients who 
require extensive assessment or care planning because payments for RHC 
and FQHC services are not adjusted for the length or complexity of the 
visit. Therefore, the codes identified by the commenters are not 
separately billable by an RHC or FQHC.
    Comment: A few commenters recommended that CMS allow RHCs and FQHCs 
to bill for the new CCM codes, and to allow safety net providers to 
bill for preventive services in addition to the all-inclusive rate for 
RHCs and the PPS rate for FQHCs. The commenters stated that the payment 
structure for RHCs and FQHCs are a disincentive to provide preventative 
services in addition to E/M services at the same visit.
    Response: RHCs and FQHCs are paid for CCM services when CPT code 
99490 is billed either alone or with other payable services on a RHC or 
FQHC claim. The RHC and FQHC payment structures and payment for 
preventive services is outside the scope of this final rule.
    Comment: Several commenters recommended that CMS provide separate 
payment for psychiatric collaborative care management services 
furnished in RHCs and FQHCs, including CPT codes G0502, G0503, G0504 
and G0507. The commenters stated that allowing RHCs and FQHCs to bill 
for these services will ensure that their patients who have been 
diagnosed with a mental health or substance use disorder have access to 
high-quality care tailored to their individual condition and 
circumstances.
    Response: To be eligible for CCM services, a Medicare beneficiary 
must have two or more chronic conditions that are expected to last at 
least 12 months (or until the death of the patient), and place the 
patient at significant risk of death, acute exacerbation/
decompensation, or functional decline. While CCM is typically 
associated with primary care conditions, patient eligibility is 
determined by the RHC or FQHC practitioner, and mental health 
conditions are not excluded. We invite comments on whether an 
additional code specifically for mental health conditions is necessary 
for RHCs and FQHCs that want to include beneficiaries with mental 
health conditions in their CCM services.
    After considering the comments, we are finalizing as proposed the 
revisions to the requirements for CCM services furnished by RHCs and 
FQHCs.

F. Improving Payment Accuracy for Services: Diabetes Self-Management 
Training (DSMT)

    Section 1861(s)(2)(S) of the Act specifies that medical and other 
health services include DSMT services as defined in section 1861(qq) of 
the Act. DSMT services are intended to educate beneficiaries in the 
successful self-management of diabetes. DSMT includes, as applicable, 
instructions in self-monitoring of blood glucose; education about diet 
and exercise; an insulin treatment plan developed specifically for the 
patient who is insulin-dependent; and motivation for patients to use 
the new skills for self-management (see 42 CFR 410.144(a)(5)). DSMT 
services are reported under HCPCS codes G0108 (Diabetes outpatient 
self-management training services, individual, per 30 minutes) and 
G0109 (Diabetes outpatient self- management training services, group 
session (2 or more), per 30 minutes). The benefit, as specified at 42 
CFR 410.141, consists of 1 hour of individual and 9 hours of group 
training unless special circumstances warrant more individual training 
or no group session is available within 2 months of the date the 
training is ordered.
    Section 1861(qq) of the Act specifies that DMST services are 
furnished by a certified provider, defined as a physician or other 
individual or entity that also provides, in addition to DSMT, other 
items or services for which payment may be made under Medicare. The 
physician, individual or entity that furnishes the training also must 
meet certain quality standards. The physician, individual or entity can 
meet standards established by us or standards originally established by 
the National Diabetes Advisory Board and subsequently revised by 
organizations who participated in their establishment, or can be 
recognized by an organization that represents individuals with diabetes 
as meeting standards for furnishing the services.
    We require that all those who furnish DSMT services be accredited 
as meeting quality standards by a CMS-approved national accreditation 
organization (NAO). In accordance with Sec.  410.144, a CMS-approved 
NAO may accredit an individual, physician or entity to meet one of 
three sets of DSMT quality standards: CMS quality standards; the 
National Standards for Diabetes Self-Management Education Programs 
(National Standards); or the standards of an NAO that represents 
individuals with diabetes that meet or exceed our quality standards. 
Currently, we recognize the American Diabetes Association and the 
American Association of Diabetes Educators as approved NAOs, both of 
whom follow National Standards. Medicare payment for outpatient DSMT 
services is made in accordance with 42 CFR 414.63.
    An article titled ``Use of Medicare's Diabetes Self-Management 
Training Benefit'' was published in Health Education Behavior on 
January 23, 2015. The article noted that only 5 percent of Medicare 
beneficiaries with newly diagnosed diabetes used DSMT services. The 
article recommended that future research identify barriers to DSMT 
access.
    In the CY 2017 PFS proposed rule (81 FR 45215), we identified 
issues that the

[[Page 80258]]

DSMT community had brought to our attention which may contribute to the 
low utilization of these services, and indicated that we plan to 
address and clarify those issues through Medicare program instructions 
as appropriate. We also solicited public comment as to other access 
barriers--including whether Medicare payment for these services is 
accurate--to help us identify and address them. We appreciate the many 
comments regarding many issues in response to our solicitation.
    Comment: Many commenters stated that the payment rates were too low 
but did not suggest specific changes in the inputs used to develop 
payment rates under the PFS for particular services (specifically, work 
RVUs and direct PE inputs). We also received additional comments 
identifying multiple other possible barriers to access. These 
commenters' recommendations primarily addressed issues related to 
regulatory and statutory DSMT requirements, such as: (a) Expanding of 
the definition of diabetes to include hemoglobin A1C as one of the 
criteria for diagnosing diabetes; (b) modifying the definition of 
certified provider to include the certified diabetes educator (CDE) to 
permit them to bill for DSMT; (c) allowing physicians and NPPs, other 
than the one treating the beneficiary's diabetes, as required by 
regulation, to order DSMT services; and, (d) eliminating the copays and 
deductible for DSMT services.
    Response: We appreciate the comments received and will consider 
changes in valuation of these services and other regulatory issues 
raised by commenters for future rulemaking. We also appreciate 
commenters' feedback on several subregulatory guidelines and other 
operational issues that we will consider addressing outside of 
rulemaking.

G. Target for Relative Value Adjustments for Misvalued Services

    Section 1848(c)(2)(O) of the Act establishes 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 as a result 
of adjustments to the relative values for misvalued codes is equal to 
or greater than the target for that 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 difference between the target for the year and 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 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. Under section 1848(c)(2)(O)(v) of the 
Act, the target that applies to calendar years (CYs) 2017 and 2018 is 
calculated as 0.5 percent of the estimated amount of expenditures under 
the PFS for the year.
    In CY 2016 PFS rulemaking, we proposed and finalized a methodology 
to implement this statutory provision.
    Because the annual target is calculated by measuring changes from 
one year to the next, for CY 2016, we considered how to account for 
changes in values that are best measured over 3 years, instead of 2 
years. As we described in the CY 2016 final rule with comment period 
(80 FR 70932), our general valuation process for potentially misvalued, 
new, and revised codes was to establish values on an interim final 
basis for a year in the PFS final rule with comment period. Then, 
during the 60-day period following the publication of the final rule 
with comment period, we would accept public comment about those 
valuations. In the final rule with comment period for the subsequent 
year, we would consider and respond to public comments received on the 
interim final values, and make any appropriate adjustments to values 
based on those comments. Under that process for revaluing new, revised, 
and misvalued codes, we believe the overall change in valuation for 
many codes would best be measured across values for 3 years: between 
the original value in the first year; the interim final value in the 
second year; and the finalized value in the third year. However, the 
target calculation for a year would only be comparing changes in RVUs 
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 
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. We noted that 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 generated 
challenges in calculating the target for CY 2016. 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 had then included 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 proposed and finalized the decision 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.
    For the CY 2017 final rule, we will be finalizing values (year 3) 
for codes that were interim final in CY 2016 (year 2). Unlike codes 
that were interim final for CY 2015, the codes that are interim final 
for CY 2016 were included as misvalued codes and will fall within the 
range of years for which the misvalued code target provision applies. 
Thus, overall changes in values for these codes would

[[Page 80259]]

be measured in the target across 3 full years: The original value in 
the first year (CY 2015); the interim final value in the second year 
(CY 2016); and the finalized value in the third year (CY 2017). The 
changes in valuation for these CY 2016 interim final codes were 
previously measured and counted towards the target during their initial 
change in valuation between years 1 and 2.
    As such, we proposed to include changes in values of the CY 2016 
interim final codes toward the CY 2017 misvalued code target. We 
believe that this is consistent with the approach that we finalized in 
the CY 2016 PFS final rule with comment period. The changes in values 
of CY 2015 interim final codes were not counted towards the misvalued 
code target in CY 2016 since the valuation change occurred over 
multiple years, including years not applicable to the misvalued code 
target provision. However, both of the changes in valuation for the CY 
2016 interim final codes, from year 1 to year 2 (CY 2015 to CY 2016) 
and from year 2 to year 3 (CY 2016 to CY 2017), have taken place during 
years that occur within the misvalued code target provision. We 
therefore believe that any adjustments made to these codes based on 
public comment should be considered towards the achievement of the 
target for CY 2017, just as any changes in valuation for these same CY 
2016 interim final codes previously counted towards the achievement of 
the target for CY 2016.
    We solicited comments regarding this proposal. We also reminded 
commenters that we revised our process for revaluing new, revised and 
misvalued codes so that we will be proposing and finalizing values for 
most of the misvalued codes during a single calendar year. After this 
year, there will be far fewer instances of interim final codes and 
changes that are best measured over 3 years.
    We refer readers to the regulatory impact analysis section of this 
final rule for the net reduction in expenditures relative to the 0.5 
percent target for CY 2017, and the resulting adjustment required to be 
made to the conversion factor. Additionally, we refer readers to the 
public use file that provides a comprehensive description of how the 
target is calculated, as well as the estimated impact by code family on 
the CMS Web site under the supporting data files for the CY 2017 PFS 
final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
    The following is summary of the comments we received regarding the 
target for relative value adjustments for misvalued services.
    Comment: Several commenters expressed support for the CMS estimate 
that there would be no target recapture amount by which to reduce 
payments made under the PFS in CY 2017.
    Response: We appreciate the comments. We remind stakeholders that 
the final determination of the target recapture amount is based on 
finalized RVUs for the relevant codes. We refer readers to the 
regulatory impact analysis section of this final rule for the net 
reduction in expenditures relative to the 0.5 percent target for CY 
2017, and the resulting adjustment that is required to be made to the 
conversion factor.
    Comment: One commenter urged CMS to broaden its approach to 
counting misvalued code payment adjustments in the final rule. The 
commenter stated that CMS was taking a narrow approach to the misvalued 
code target.
    Response: We finalized our methodology for calculating the 
estimated net reduction relative to the misvalued code target in the CY 
2016 final rule with comment period (80 FR 70921-70927). For CY 2017, 
we proposed a modification to that methodology that only addressed how 
changes to interim final codes would be addressed when both first and 
second year changes could be counted towards a misvalued code target 
since CY 2017 is the first year for that circumstance. We did not make 
a proposal on the more general issue of the methodology used to 
calculate the net reductions for the misvalued code target, which, as 
noted above, was finalized in the CY 2016 PFS final rule with comment 
period.
    We did not receive any public comments on our proposal to include 
changes in values of the CY 2016 interim final codes toward the CY 2017 
misvalued code target.
    After consideration of comments received, we are finalizing our 
proposal to count any adjustments to interim final codes towards the 
misvalued code target when both first and second year changes can be 
counted towards a misvalued codes target.

H. Phase-In of Significant RVU Reductions

    Section 1848(c)(7) of the Act 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. In the CY 2016 PFS rulemaking, we proposed and finalized a 
methodology to implement this statutory provision. To determine which 
services are described by new or revised codes for purposes of the 
phase-in provision, we apply the phase-in to all services that are 
described by the same, unrevised code in both the current and update 
year, and exclude codes that describe different services in the current 
and update year.
    Because the phase-in of significant reductions in RVUs falls within 
the budget neutrality requirements specified in section 
1848(c)(2)(B)(ii)(II) of the Act, we estimate the total RVUs for a 
service prior to the budget-neutrality redistributions that result from 
implementing phase-in values. In implementing the phase-in, we consider 
a 19 percent reduction as the maximum 1-year reduction for any service 
not described by a new or revised code. This approach limits the year 
one reduction for the service to the maximum allowed amount (that is, 
19 percent), and then phases in the remainder of the reduction.
    The statute provides 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 for a year is estimated to be equal to or greater 
than 20 percent. Since CY 2016 was the first year in which we applied 
the phase-in transition, CY 2017 will be the first year in which a 
single code could be subject to RVU reductions greater than 20 percent 
for 2 consecutive years.
    Under our finalized policy, the only codes that are not subject to 
the phase-in are those that are new or revised, which we defined as 
those services that are not described by the same, unrevised code in 
both the current and update year, or by the same codes that describe 
different services in the current and update year. Since CY 2016 was 
the first year for which the phase-in provision applied, we did not 
address how we would handle codes with values that had been partially 
phased in during the first year, but that have a remaining phase-in 
reduction of 20 percent or greater.
    The significant majority of codes with reductions in RVUs that are 
greater than 20 percent in year one would not be likely to meet the 20 
percent threshold in a consecutive year. However, in a few cases, 
significant changes (for example, in the input costs included in the 
valuation of a service) could produce reductions of 20 percent or 
greater in consecutive years.
    As stated in the CY 2017 PFS proposed rule, we believed that a 
consistent methodology regarding the phase-in transition should be 
applied to these cases. We proposed to reconsider

[[Page 80260]]

in each year, for all codes that are not new or revised codes and 
including codes that were assigned a phase-in value in the previous 
year, whether the total RVUs for the service would otherwise be 
decreased by an estimated 20 percent or more as compared to the total 
RVUs for the previous year. Under this proposed policy, the 19 percent 
reduction in total RVUs would continue to be the maximum one-year 
reduction for all codes (except those considered new and revised), 
including those codes with phase-in values in the previous year. In 
other words, for purposes of the 20 percent threshold, every service is 
evaluated anew each year, and any applicable phase-in is limited to a 
decrease of 19 percent. For example, if we were to adopt a 50 percent 
reduction in total RVUs for an individual service, the reduction in any 
particular year would be limited to a decrease of 19 percent in total 
RVUs. Because we do not set rates 2 years in advance, the phase-in 
transition would continue to apply until the year-to-year reduction for 
a given code does not meet the 20 percent threshold. We solicited 
comments regarding this proposal.
    The list of codes subject to the phase-in and the associated 
proposed RVUs that result from this methodology is available on the CMS 
Web site under downloads for the CY 2017 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    The following is summary of the comments we received regarding the 
phase-in of significant RVU reductions.
    Comment: Many commenters supported the proposal that a 19 percent 
reduction in total RVUs would continue to be the maximum one-year 
reduction for all codes that are not new or revised. These commenters 
urged CMS to finalize the proposal.
    Response: We appreciate the support from the commenters.
    Comment: Several commenters suggested that CMS should extend the 
threshold for triggering the phase-in provision, by using a lower 
single-year maximum reduction (such as 10 percent), at a rate different 
than what the statute stipulates. The commenters stated that a lower 
threshold would provide a greater safeguard against payment cuts and 
disruption of services.
    Response: Section 1848(c)(7) of the Act requires the phase-in if 
the total RVUs for a service for a year would otherwise be decreased by 
an estimated 20 percent or larger. We do not believe that we have the 
statutory authority to establish a different threshold value for when 
the phase-in applies.
    Comment: One commenter objected to CMS' decision to exclude from 
the phase-in codes with a reduction of 20 percent or more that fall 
within a family with significant coding revisions. The commenter 
requested that CMS reconsider this policy.
    Response: We understand the commenters' concerns. In the CY 2016 
final rule with comment period (80 FR 70927-70931), we finalized a 
policy to identify services that are not subject to the phase-in 
because they are new or revised codes. As we wrote at the time, we 
excluded 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. 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. We continue to believe that this is 
the most accurate methodology to use in identifying new and revised 
codes for the purposes of the phase-in transition. We also note that we 
did not make a proposal to change how we identify services to which the 
phase-in does not apply.
    Comment: A commenter requested that CMS apply the phase-in policy 
to services in the PFS with year-to-year reductions of 20 percent or 
more in payment amount due to the statutory cap that requires payment 
for the technical component (TC) of certain imaging services furnished 
in the office setting to be made the lesser of the PFS or OPPS rates. 
The commenter stated that this application would capture the spirit of 
the phase-in legislation in dampening the impact of significant payment 
reductions on a year to year basis.
    Response: Section 1848(c)(7) of the Act requires the phase-in of 
reductions of 20 percent or more in the total RVUs for individual 
services. The OPPS cap, required under section 1848(b)(4)(A) of the 
Act, specifies that if the PFS payment rate for the TC of certain 
imaging services exceeds the OPPS payment amount for the services, the 
OPPS payment amount must be substituted for the PFS TC payment amount. 
The OPPS cap refers to, and requires substitution of, payment rates for 
individual imaging services, and not a reduction in the total RVUs for 
those services. As such, services that are subject to the OPPS cap are 
not subject to the phase-in on that basis.
    Comment: One commenter opposed the phase-in proposal. The commenter 
stated that the proposal twisted a plain reading of the law to 
effectively extend the phase-in period well beyond the 2 years 
prescribed by the statute. The commenter questioned why Medicare 
beneficiaries should have to pay a higher fee for overvalued services 
when identified as such, and pointed out that in the budget-neutral 
environment of the fee schedule, the proposal would delay the benefit 
of these RVU reductions to the rest of the services listed in the PFS.
    Response: We appreciate the concerns raised by the commenter. As we 
have addressed over several rulemaking cycles, we are concerned about 
the impact of misvalued services in creating distortions in relativity 
across the fee schedule. However, we have already finalized through 
notice and comment rulemaking and continue to believe that limiting 
reductions to 19 percent as the maximum 1-year decrease for all codes 
(except those considered new and revised) is the best and most fair way 
to apply the phase-in. Additionally, because we do not set rates 2 
years in advance, we believe there are significant obstacles to 
implementing an alternative methodology. For example, codes may be 
reviewed multiple times in a short period of time, and may have further 
decreases in total RVUs for a subsequent year due to a variety of 
reasons in addition to any change inputs from the initial year phase-
in. These might include supply and equipment price updates in non-
reviewed years, significant changes in specialty mix of practitioners 
reporting the service, or changes in other PFS ratesetting policies 
which could lead to several consecutive years of RVU reductions. In any 
such cases, it would be impractical to identify with certainty what 
portion of reductions in code values are due to input changes 
established in a prior year versus input or policy changes from the 
current year. We also note that all of these circumstances are 
relatively rare since it is unusual for changes in code inputs to 
result in reductions of greater than 40 percent. Therefore, while we 
appreciate the importance of improving payment accuracy as soon as can 
be practicable for the reasons stated by the commenter, we also believe 
that, on balance, the best and most fair approach to implementing the 
required phase-in of RVU reductions over multiple years is to re-
examine eligible codes for the phase-in on an annual basis, in 
conjunction with our annual ratesetting.
    After consideration of comments received, we are finalizing the 
policy as proposed.

[[Page 80261]]

I. Geographic Practice Cost Indices (GPCIs)

1. Background
    Section 1848(e)(1)(A) of the Act requires us to develop separate 
Geographic Practice Cost Indices (GPCIs) to measure relative cost 
differences among localities compared to the national average for each 
of the three fee schedule components (that is, work, PE, and 
malpractice (MP)). The PFS localities are discussed in section II.E.3. 
of this final rule. Although the statute requires that the PE and MP 
GPCIs reflect the full relative cost differences, section 
1848(e)(1)(A)(iii) of the Act requires that the work GPCIs reflect only 
one-quarter of the relative cost differences compared to the national 
average. In addition, section 1848(e)(1)(G) of the Act sets a permanent 
1.5 work GPCI floor for services furnished in Alaska beginning January 
1, 2009, and section 1848(e)(1)(I) of the Act sets a permanent 1.0 PE 
GPCI floor for services furnished in frontier states (as defined in 
section 1848(e)(1)(I) of the Act) beginning January 1, 2011. 
Additionally, section 1848(e)(1)(E) of the Act provided for a 1.0 floor 
for the work GPCIs, which was set to expire on March 31, 2015. Section 
201 of the MACRA amended the statute to extend the 1.0 floor for the 
work GPCIs through CY 2017 (that is, for services furnished no later 
than December 31, 2017).
    Section 1848(e)(1)(C) of the Act requires us to review and, if 
necessary, adjust the GPCIs at least every 3 years. Section 
1848(e)(1)(C) of the Act requires that, if more than 1 year has elapsed 
since the date of the last previous GPCI adjustment, the adjustment to 
be applied in the first year of the next adjustment shall be half of 
the adjustment that otherwise would be made. Therefore, since the 
previous GPCI update was implemented in CY 2014 and CY 2015, we 
proposed to phase in 1/2 of the latest GPCI adjustment in CY 2017.
    We have completed a review of the GPCIs and proposed new GPCIs in 
this final rule. We also calculate a geographic adjustment factor (GAF) 
for each PFS locality. The GAFs are a weighted composite of each area's 
work, PE and malpractice expense GPCIs using the national GPCI cost 
share weights. While we do not actually use GAFs in computing the fee 
schedule payment for a specific service, they are useful in comparing 
overall areas costs and payments. The actual effect on payment for any 
actual service would deviate from the GAF to the extent that the 
proportions of work, PE and MP RVUs for the service differ from those 
of the GAF.
    As noted above, section 201 of the MACRA extended the 1.0 work GPCI 
floor for services furnished through December 31, 2017. Therefore, the 
proposed CY 2017 work GPCIs and summarized GAFs reflect the 1.0 work 
floor. Additionally, as required by sections 1848(e)(1)(G) and 
1848(e)(1)(I) of the Act, the 1.5 work GPCI floor for Alaska and the 
1.0 PE GPCI floor for frontier states are permanent, and therefore, 
applicable in CY 2017. See Addenda D and E to this final rule for the 
CY 2017 GPCIs and summarized GAFs available on the CMS Web site under 
the supporting documents section of the CY 2017 PFS final rule located 
at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
2. GPCI Update
    The proposed updated GPCI values were calculated by a contractor. 
There are three GPCIs (work, PE, and MP), and all GPCIs are calculated 
relative to the national average for each measure. Additionally, each 
of the three GPCIs relies on its own data source(s) and methodology for 
calculating its value as described below. Additional information on the 
CY 2017 GPCI update may be found in our contractor's draft report, 
``Draft Report on the CY 2017 Update of the Geographic Practice Cost 
Index for the Medicare Physician Fee Schedule,'' which is available on 
our Web site. It is located under the supporting documents section for 
the CY 2017 PFS final rule located at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
a. Work GPCIs
    The work GPCIs are designed to reflect the relative costs of 
physician labor by Medicare PFS locality. As required by statute, the 
work GPCI reflects one quarter of the relative wage differences for 
each locality compared to the national average.
    To calculate the work GPCIs, we use wage data for seven 
professional specialty occupation categories, adjusted to reflect one-
quarter of the relative cost differences for each locality compared to 
the national average, as a proxy for physicians' wages. Physicians' 
wages are not included in the occupation categories used in calculating 
the work GPCI because Medicare payments are a key determinant of 
physicians' earnings. Including physician wage data in calculating the 
work GPCIs would potentially introduce some circularity to the 
adjustment since Medicare payments typically contribute to or influence 
physician wages. That is, including physicians' wages in the physician 
work GPCIs would, in effect, make the indices, to some extent, 
dependent upon Medicare payments.
    The work GPCI updates in CYs 2001, 2003, 2005, and 2008 were based 
on professional earnings data from the 2000 Census. However, for the CY 
2011 GPCI update (75 FR 73252), the 2000 data were outdated and wage 
and earnings data were not available from the more recent Census 
because the ``long form'' was discontinued. Therefore, we used the 
median hourly earnings from the 2006 through 2008 Bureau of Labor 
Statistics (BLS) Occupational Employment Statistics (OES) wage data as 
a replacement for the 2000 Census data. The BLS OES data meet several 
criteria that we consider to be important for selecting a data source 
for purposes of calculating the GPCIs. For example, the BLS OES wage 
and employment data are derived from a large sample size of 
approximately 200,000 establishments of varying sizes nationwide from 
every metropolitan area and can be easily accessible to the public at 
no cost. Additionally, the BLS OES is updated regularly, and includes a 
comprehensive set of occupations and industries (for example, 800 
occupations in 450 industries). For the CY 2014 GPCI update, we used 
updated BLS OES data (2009 through 2011) as a replacement for the 2006 
through 2008 data to compute the work GPCIs.
    Because of its reliability, public availability, level of detail, 
and national scope, we believe the BLS OES data continue to be the most 
appropriate source of wage and employment data for use in calculating 
the work GPCIs (and as discussed in section II.E.2.b the employee wage 
component and purchased services component of the PE GPCI). Therefore, 
for the proposed CY 2017 GPCI update, we used updated BLS OES data 
(2011 through 2014) as a replacement for the 2009 through 2011 data to 
compute the work GPCIs.
b. Practice Expense GPCIs
    The PE GPCIs are designed to measure the relative cost difference 
in the mix of goods and services comprising practice expenses (not 
including malpractice expenses) among the PFS localities as compared to 
the national average of these costs. Whereas the physician work GPCIs 
(and as discussed later in this section, the MP GPCIs) are comprised of 
a single index, the PE GPCIs are comprised of four component indices 
(employee wages; purchased services; office rent; and equipment, 
supplies and

[[Page 80262]]

other miscellaneous expenses). The employee wage index component 
measures geographic variation in the cost of the kinds of skilled and 
unskilled labor that would be directly employed by a physician 
practice. Although the employee wage index adjusts for geographic 
variation in the cost of labor employed directly by physician 
practices, it does not account for geographic variation in the cost of 
services that typically would be purchased from other entities, such as 
law firms, accounting firms, information technology consultants, 
building service managers, or any other third-party vendor. The 
purchased services index component of the PE GPCI (which is a separate 
index from employee wages) measures geographic variation in the cost of 
contracted services that physician practices would typically buy. (For 
more information on the development of the purchased service index, we 
refer readers to the CY 2012 PFS final rule with comment period (76 FR 
73084 through 73085)). The office rent index component of the PE GPCI 
measures relative geographic variation in the cost of typical physician 
office rents. For the medical equipment, supplies, and miscellaneous 
expenses component, we believe there is a national market for these 
items such that there is not significant geographic variation in costs. 
Therefore, the equipment, supplies and other miscellaneous expense cost 
index component of the PE GPCI is given a value of 1.000 for each PFS 
locality.
    For the previous update to the GPCIs (implemented in CY 2014) we 
used 2009 through 2011 BLS OES data to calculate the employee wage and 
purchased services indices for the PE GPCI. As discussed in section 
II.E.2.a., because of its reliability, public availability, level of 
detail, and national scope, we continue to believe the BLS OES is the 
most appropriate data source for collecting wage and employment data. 
Therefore, in calculating the proposed CY 2017 GPCI update, we used 
updated BLS OES data (2011 through 2014) as a replacement for the 2009 
through 2011 data for purposes of calculating the employee wage 
component and purchased service index component of the PE GPCI.
c. Malpractice Expense (MP) GPCIs
    The MP GPCIs measure the relative cost differences among PFS 
localities for the purchase of professional liability insurance (PLI). 
The MP GPCIs are calculated based on insurer rate filings of premium 
data for $1 million to $3 million mature claims-made policies (policies 
for claims made rather than services furnished during the policy term). 
For the CY 2014 GPCI update (seventh update) we used 2011 and 2012 
malpractice premium data (78 FR 74382). The proposed CY 2017 MP GPCI 
update reflects 2014 and 2015 premium data. Additionally, the proposed 
CY 2017 MP GPCI update reflects several proposed technical refinements 
to the MP GPCI methodology as discussed later in section 5.
d. GPCI Cost Share Weights
    For CY 2017 GPCIs, we proposed to continue to use the current cost 
share weights for determining the PE GPCI values and locality GAFs. We 
refer readers to the CY 2014 PFS final rule with comment period (78 FR 
74382 through 74383), for further discussion regarding the 2006-based 
MEI cost share weights revised in CY 2014 that were also finalized for 
use in the CY 2014 (seventh) GPCI update.
    The GPCI cost share weights for CY 2017 are displayed in Table 12.

          Table 12--Cost Share Weights for CY 2017 GPCI Update
------------------------------------------------------------------------
                                                                Proposed
                                                     Current    CY 2017
                                                       cost       cost
                 Expense category                     share      share
                                                      weight     weight
                                                       (%)        (%)
------------------------------------------------------------------------
Work..............................................     50.866     50.866
Practice Expense..................................     44.839     44.839
  --Employee Compensation.........................     16.553     16.553
  --Office Rent...................................     10.223     10.223
  --Purchased Services............................      8.095      8.095
  --Equipment, Supplies, Other....................      9.968      9.968
Malpractice Insurance.............................      4.295      4.295
                                                   ---------------------
  Total...........................................    100.000    100.000
------------------------------------------------------------------------

e. PE GPCI Floor for Frontier States
    Section 10324(c) of the Affordable Care Act added a new 
subparagraph (I) under section 1848(e)(1) of the Act to establish a 1.0 
PE GPCI floor for physicians' services furnished in frontier states 
effective January 1, 2011. In accordance with section 1848(e)(1)(I) of 
the Act, beginning in CY 2011, we applied a 1.0 PE GPCI floor for 
physicians' services furnished in states determined to be frontier 
states. In general, a frontier state is one in which at least 50 
percent of the counties are ``frontier counties,'' which are those that 
have a population per square mile of less than 6. For more information 
on the criteria used to define a frontier state, we refer readers to 
the FY 2011 Inpatient Prospective Payment System (IPPS) final rule (75 
FR 50160 through 50161). There are no changes in the states identified 
as Frontier States for the CY 2017 final rule. The qualifying states 
are: Montana, Wyoming, North Dakota, South Dakota, and Nevada. In 
accordance with statute, we would apply a 1.0 PE GPCI floor for these 
states in CY 2017.
f. Proposed GPCI Update
    As explained above in the background section, the periodic review 
and adjustment of GPCIs is mandated by section 1848(e)(1)(C) of the 
Act. At each update, the proposed GPCIs are published in the PFS 
proposed rule to provide an opportunity for public comment and further 
revisions in response to comments prior to implementation. As discussed 
later in this section, we are finalizing the GPCIs as proposed (except 
where we correct technical errors). The final CY 2017 updated GPCIs for 
the first and second year of the 2-year transition, along with the 
GAFs, are displayed in Addenda D and E to this final rule available on 
our Web site under the supporting documents section of the CY 2017 PFS 
final rule Web page at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
3. Payment Locality Discussion
a. Background
    The current PFS locality structure was developed and implemented in 
1997. There are currently 89 total PFS localities; 34 localities are 
statewide areas (that is, only one locality for the entire state). 
There are 52 localities in the other 16 states, with 10 states having 2 
localities, 2 states having 3 localities, 1 state having 4 localities, 
and 3 states having 5 or more localities. The combined District of 
Columbia, Maryland, and Virginia suburbs; Puerto Rico; and the Virgin 
Islands are the remaining three localities of the total of 89 
localities. The development of the current locality structure is 
described in detail in the CY 1997 PFS final rule (61 FR 34615) and the 
subsequent final rule with comment period (61 FR 59494). We note that 
the localities generally represent a grouping of one or more 
constituent counties.
    Prior to 1992, Medicare payments for physicians' services were made 
under the reasonable charge system. Payments were based on the charging 
patterns of physicians. This resulted in large differences in payment 
for physicians' services among types of services, geographic payment 
areas, and physician specialties. Recognizing this, the Congress 
replaced the reasonable

[[Page 80263]]

charge system with the Medicare PFS in the Omnibus Budget 
Reconciliation Act (OBRA) of 1989, and the PFS went into effect January 
1, 1992. Payments under the PFS are based on the relative resources 
involved with furnishing services, and are adjusted to account for 
geographic variations in resource costs as measured by the GPCIs.
    Payment localities originally were established under the reasonable 
charge system by local Medicare carriers based on their knowledge of 
local physician charging patterns and economic conditions. These 
localities changed little between the inception of Medicare in 1967 and 
the beginning of the PFS in 1992. Shortly after the PFS took effect, we 
undertook a study in 1994 that culminated in a comprehensive locality 
revision that was implemented in 1997 (61 FR 59494).
    The revised locality structure reduced the number of localities 
from 210 to the current 89, and the number of statewide localities 
increased from 22 to 34. The revised localities were based on locality 
resource cost differences as reflected by the GPCIs. For a full 
discussion of the methodology, see the CY 1997 PFS final rule with 
comment period (61 FR 59494). The current 89 fee schedule areas are 
defined alternatively by state boundaries (for example, Wisconsin), 
metropolitan areas (for example, Metropolitan St. Louis, MO), portions 
of a metropolitan area (for example, Manhattan), or rest-of-state areas 
that exclude metropolitan areas (for example, Rest of Missouri). This 
locality configuration is used to calculate the GPCIs that are in turn 
used to calculate payments for physicians' services under the PFS.
    As stated in the CY 2011 PFS final rule with comment period (75 FR 
73261), changes to the PFS locality structure would generally result in 
changes that are budget neutral within a state. For many years, before 
making any locality changes, we have sought consensus from among the 
professionals whose payments would be affected. In recent years, we 
have also considered more comprehensive changes to locality 
configuration. In 2008, we issued a draft comprehensive report 
detailing four different locality configuration options (https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/downloads/ReviewOfAltGPCIs.pdf). We refer readers to 
the CY 2014 PFS final rule with comment period for further discussion 
regarding that report, as well as a discussion about the Institute of 
Medicine's empirical study of the Medicare GAFs established under 
sections 1848(e) (PFS GPCI) and 1886(d)(3)(E) (IPPS wage index) of the 
Act.
    The following is a summary of the comments we received regarding 
the proposed CY 2017 GPCI update.
    Comment: A few commenters including a major specialty society 
expressed support for using more current data in calculating all three 
GPCIs.
    Response: We thank the commenters for their support.
    Comment: One commenter expressed support for the elimination of all 
geographic adjustment factors under the PFS, except those designed to 
achieve a specific public policy goal, such as to encourage physicians 
to practice in underserved areas. Another commenter opposed any 
decrease in the GPCI.
    Response: As previously discussed, section 1848(e)(1)(A) of the Act 
requires us to develop separate GPCIs to measure resource cost 
differences among localities compared to the national average for each 
of the three GPCI components, and section 1848(e)(1)(C) of the Act 
requires us to review and, if necessary, adjust the GPCIs at least 
every 3 years; and based on new data, GPCI values may increase or 
decrease.
    Comment: A few commenters expressed concern regarding payment for 
rural localities and recommended that CMS monitor how the GPCI 
calculation changes affect the sustainability of health services in 
rural communities. One commenter requested that CMS consider the 
ongoing data issues regarding the GPCIs raised by stakeholders in the 
Midwest, and establish 1.0 work and PE GPCI values for Wisconsin and 
Iowa.
    Response: As discussed previously in this section, we are required 
to update the GPCIs at least every 3 years to reflect the relative cost 
differences of operating a medical practice in each locality compared 
to the national average costs. Additionally, as previously discussed in 
this section, sections 1848(e)(1)(G) and 1848(e)(1)(I) of the Act 
established the permanent 1.5 work GPCI floor for Alaska and the 
permanent 1.0 PE GPCI floor for frontier States. We do not otherwise 
have the authority to establish similar GPCI floors or other policies 
that do not take into consideration the differences in physicians' 
resource costs among localities.
    Comment: One commenter supported the continuation of the 1.0 PE 
GPCI floor for frontier states.
    Response: As previously discussed, beginning January 1, 2011 
section 1848(e)(1)(I) of the Act set a permanent 1.0 PE GPCI floor for 
services furnished in frontier states (as defined in section 
1848(e)(1)(I) of the Act).
    Comment: Several commenters stated their objection to the use of 
residential rents as a proxy for physician office space costs, and 
stated that CMS should collect commercial rent data and use it either 
as the basis for measuring geographic differences in physician office 
rents or, if this is not feasible, use it to validate the residential 
rents as a proxy. A few commenters requested that CMS provide a 
specific explanation on the barriers to gaining better commercial rent 
data.
    Response: Because Medicare is a national program, and section 
1848(e)(1)(A) of the Act requires us to establish GPCIs to measure 
relative cost differences among localities compared to the national 
average, we believe it is important to use the best data that is 
available on a nationwide basis, that is regularly updated, and retains 
consistency area-to-area, year-to-year. Since there is currently no 
national data source available for physician office or other comparable 
commercial rents, we continue to use county-level residential rent data 
from the American Community Survey (ACS) as a proxy for the relative 
cost differences in commercial office rents. The ACS is administered by 
the United States Census Bureau, which is a leading source of national, 
robust, quality, publicly available data. We agree that a commercial 
data source for office rent that provided for adequate representation 
of urban and rural areas nationally would be preferable to a 
residential rent proxy. We have previously discussed in the CY 2005, CY 
2008, and CY 2011 (69 FR 66262, 72 FR 66376, and 75 FR 73257, 
respectively) final rules that we recognize that apartment rents may 
not be a perfect proxy for physician office rent. We have also 
conducted exhaustive searches for reliable commercial rent data sources 
that are publicly available in the past and have not found any reliable 
data that meets our accuracy needs, and we continue to conduct such 
searches. With regards to suggestion that CMS should collect commercial 
rent data, we note that we discussed this issue in the CY 2012 PFS 
final rule with comment period (76 FR 73088) and stated with reference 
to surveying physicians directly to gather data to compute office rent, 
we note that the development and implementation of a survey could take 
several years. Additionally, we have historically not sought direct 
survey data from physicians related to the GPCI to avoid issues of 
circularity and self-reporting bias. In the CY 2011 PFS final rule with 
comment period (75 FR 73259), we

[[Page 80264]]

solicited public comments regarding the benefits of utilizing physician 
cost reports to potentially achieve greater precision in measuring the 
relative cost difference among Medicare localities. We also asked for 
comments regarding the administrative burden of requiring physicians to 
routinely complete these cost reports and whether this should be 
mandatory for physicians' practices. We did not receive any feedback 
related to that comment solicitation during the open public comment 
period for the CY 2011 final rule with comment period. We continue to 
have concerns that physician cost reports could be prohibitively 
expensive, and as well about the administrative burden this approach 
would place on physician's office staff. We reiterate that the GPCIs 
are not an absolute measure of practice costs, rather they are a 
measure of the relative cost differences for each of the three GPCI 
components. The U.S. Census Bureau is a federal agency that specializes 
in data collection, accuracy, and reliability, and we continue to 
believe that where such a publicly available resource exists that can 
provide useful data to assess geographic cost differences in office 
rent, even though it is a proxy for the exact data we seek, that we 
should utilize that available resource. Therefore, given its national 
representation, reliability, high response rate and frequent updates, 
we continue to believe the ACS residential rent data is the most 
appropriate data source available at this time for the purposes of 
calculating the rent index of the PE GPCI.
    Comment: One commenter stated that it objects to the 8 percent 
weight that the rent expense category has been given by CMS in 
calculating the PE GPCI, and stated that office rent should be given a 
much larger weight to more accurately reflect its impact on physician 
practice expenses, and CMS should commit resources to update this data 
since it is based on 10-year old data from the 2006 AMA Physician 
Practice Information Survey (AMA PPIS).
    Response: We would like to clarify that the office rent expense 
category has a cost share weight of 10.223 percent, not 8 percent as 
indicated by the commenter. The MEI cost share weights were derived 
from data collected by the AMA on the AMA PPIS. CMS has previously 
stated that we believe the AMA PPIS is a reliable data source, however 
the AMA PPIS is not an ongoing data source that is regularly published. 
We continued to use the AMA PPIS data source in the CY 2014 revisions 
to the MEI which have not been further updated since, and therefore, as 
discussed above, the 2006-based MEI cost share weights finalized for 
use in the CY 2014 (seventh) GPCI update, were proposed for the CY 2017 
(eighth) GPCI update. The AMA is no longer conducting the AMA PPIS 
survey, and CMS' Office of the Actuary continues to look into viable 
options for updating the MEI cost share weights going forward. In the 
CY 2014 PFS final rule with comment period (78 FR 74275), we stated 
that we continue to investigate possible data sources to use for the 
purpose of rebasing the MEI in the future.
    Comment: A few commenters expressed concern with the use of 
unrelated proxy data for physician wages in geographic adjustment. The 
commenters expressed concern about GPCI proxy inputs that result in 
downward payment adjustments, which they believe do not reflect the 
actual cost of physician practices. The commenters stated that better 
data exist for measuring the real physician compensation rates, such as 
recruitment compensation surveys and wages for physicians employed at 
federally qualified health centers. The commenters also stated that 
MedPAC studies have confirmed that the data sources currently relied 
upon for geographic adjustment bear no correlation to physician 
earnings. One commenter also stated that CMS has acknowledged that the 
proxies utilized for the purposes of geographic adjustment have never 
been validated and there never has been a new data source utilized in 
the twenty years since the fee schedule was implemented. The commenters 
urged CMS to undertake the necessary studies to identify reference 
occupations that will accurately reflect the higher input costs of 
rural physician earnings, and implement the resulting corrections to 
the geographic adjustment of the fee schedule as soon as possible.
    Response: We appreciate the comments regarding the professional 
occupations used to determine the relative cost differences in 
physician earnings for purposes of calculating the work GPCI. In 
consideration of the ongoing concerns regarding the reference 
occupations and other proxy data used to calculate the GPCIs, we also 
note that in the past we received comments suggesting the use of survey 
data to determine GPCI values, and stated that we would continue to 
consider the possibility of establishing a physician cost report and 
requiring a sufficiently large sample of physicians in each locality to 
report data on actual costs incurred. However we also stated that we 
believed that a physician cost report could take years to develop and 
implement, and could be prohibitively expensive (75 FR 73259). We 
solicited public comment regarding the potential benefits to be gained 
from establishing a physician cost report and whether this approach is 
appropriate to achieve potentially greater precision in measuring the 
relative cost differences in physicians' practices among PFS 
localities. We also solicited public comments on the potential 
administrative burden of requiring physicians to routinely complete and 
submit a cost report. We did not receive any feedback specifically 
related to that comment solicitation (76 FR 73088). As noted previously 
in this section, physicians' wages are not included in the occupation 
categories (reference occupations) used in calculating the work GPCI 
because Medicare payments are a key determinant of physicians' 
earnings. We have long maintained that including physician wage data in 
calculating the work GPCIs would potentially introduce some circularity 
to the adjustment since Medicare payments typically contribute to 
physician wages. In other words, including physicians' wages in the 
physician work GPCI would, in effect, make the indices, to some extent, 
dependent upon Medicare payments, which in turn are impacted by the 
indices. We reiterate that the work GPCI is not an absolute measure of 
physician earnings; rather it is a measure of the relative wage 
differences for each locality as compared to the national average; 
additionally, the work GPCI reflects only one quarter of those relative 
wage differences consistent with the statutory requirement as discussed 
previously in this section.
    Comment: We received a few comments on the PFS locality structure 
that were not within the scope of the CY 2017 proposed rule. For 
example, several commenters requested that Prince William and Loudoun 
counties in Virginia be changed from the Rest of Virginia locality into 
the DC + MD/VA Suburbs locality. Another commenter stated that it 
believes large cuts to rural and rest-of-State areas should be avoided 
or minimized, but locality boundaries with large payment differences 
should not be in the middle of urban areas, because they create payment 
cliffs where payment can change by up to eight percent if an office 
location is moved across a street or down a block. The commenter stated 
that CMS should act quickly to create locality definitions that are not 
constrained by county boundaries, and advocated implementing locality

[[Page 80265]]

definition changes based on Metropolitan Statistical Areas.
    Response: We appreciate the suggestions for revisions to the PFS 
locality structure. As discussed above, we did not propose changes to 
the PFS locality structure; we note that the update to the California 
Fee Schedule Areas discussed later in this section is the result of a 
statutory requirement. Additionally, we would like to note that, absent 
statutory provisions like those that pertain to California, changes to 
the locality configuration within a state would lead to significant 
redistributions in payments within that state. It has been our 
practice, and we have stated in previous rulemaking (72 FR 38139, and 
73 FR 38513), that we have not considered making changes to localities 
without the support of a State medical association(s) to demonstrate 
consensus for the change among the professionals whose payments would 
be affected (with some increasing and some decreasing). Also, we would 
like to clarify that, just as the localities under the Fee Schedule 
areas used in the PFS are comprised of one or more constituent 
counties, so are Metropolitan Statistical Areas. Therefore the concept 
of a payment cliff between neighboring counties as described by the 
commenter would not necessarily be mitigated by a change from PFS fee 
schedule areas to Metropolitan Statistical Areas.
    After consideration of the public comments received regarding the 
proposed CY 2017 GPCI data update, we are finalizing as proposed.
b. California Locality Update to the Fee Schedule Areas Used for 
Payment Under Section 220(h) of the Protecting Access to Medicare Act
(1) General Discussion and Legislative Change
    Section 220(h) of the PAMA added a new section 1848(e)(6) to the 
Act, that modifies the fee schedule areas used for payment purposes in 
California beginning in CY 2017.
    Currently, the fee schedule areas used for payment in California 
are based on the revised locality structure that was implemented in 
1997 as previously discussed. Beginning in CY 2017, section 
1848(e)(6)(A)(i) of the Act requires that the fee schedule areas used 
for payment in California must be Metropolitan Statistical Areas (MSAs) 
as defined by the Office of Management and Budget (OMB) as of December 
31 of the previous year; and section 1848(e)(6)(A)(ii) of the Act 
requires that all areas not located in an MSA must be treated as a 
single rest-of-state fee schedule area. The resulting modifications to 
California's locality structure would increase its number of localities 
from 9 under the current locality structure to 27 under the MSA-based 
locality structure.
    However, section 1848(e)(6)(D) of the Act defines transition areas 
as the fee schedule areas for 2013 that were the rest-of-state 
locality, and locality 3, which was comprised of Marin County, Napa 
County, and Solano County. Section 1848(e)(6)(B) of the Act specifies 
that the GPCI values used for payment in a transition area are to be 
phased in over 6 years, from 2017 through 2021, using a weighted sum of 
the GPCIs calculated under the new MSA-based locality structure and the 
GPCIs calculated under the current PFS locality structure. That is, the 
GPCI values applicable for these areas during this transition period 
are a blend of what the GPCI values would have been under the current 
locality structure, and what the GPCI values would be under the MSA-
based locality structure. For example, in the first year, CY 2017, the 
applicable GPCI values for counties that were previously in rest-of-
state or locality 3 and are now in MSAs are a blend of 1/6 of the GPCI 
value calculated for the year under the MSA-based locality structure, 
and 5/6 of the GPCI value calculated for the year under the current 
locality structure. The proportions shift by 1/6 in each subsequent 
year so that, by CY 2021, the applicable GPCI values for counties 
within transition areas are a blend of 5/6 of the GPCI value for the 
year under the MSA-based locality structure, and 1/6 of the GPCI value 
for the year under the current locality structure. Beginning in CY 
2022, the applicable GPCI values for counties in transition areas are 
the values calculated under the new MSA-based locality structure. For 
the sake of clarity, we reiterate that this incremental phase-in is 
only applicable to those counties that are in transition areas that are 
now in MSAs, which are only some of the counties in the 2013 California 
rest-of state locality and locality 3.
    Additionally, section 1848(e)(6)(C) of the Act establishes a hold 
harmless for transition areas beginning with CY 2017 whereby the 
applicable GPCI values for a year under the new MSA-based locality 
structure may not be less than what they would have been for the year 
under the current locality structure. There are a total of 58 counties 
in California, 50 of which are in transition areas as defined in 
section 1848(e)(6)(D) of the Act. Therefore, 50 counties in California 
are subject to the hold harmless provision. The other 8 counties, which 
are metropolitan counties that are not defined as transition areas, are 
not held harmless for the impact of the new MSA-based locality 
structure, and may therefore potentially experience slight decreases in 
their GPCI values as a result of the provisions in section 1848(e)(6) 
of the Act, insofar as the locality in which they are located now newly 
includes data from adjacent counties that decreases their GPCI values 
relative to those that would have applied had the new data not been 
incorporated. Therefore, the GPCIs for these eight counties under the 
MSA-based locality structure may be less than they would have been 
under the current GPCI structure. The eight counties that are not 
within transition areas are: Orange; Los Angeles; Alameda; Contra 
Costa; San Francisco; San Mateo; Santa Clara; and Ventura counties.
    We emphasize that while transition areas are held harmless from the 
impact of the GPCI changes using the new MSA-based locality structure, 
because we proposed other updates for CY 2017 as part of the eighth 
GPCI update, including the use of updated data, transition areas would 
still be subject to impacts resulting from those other updates. Table 
13 illustrates using GAFs, for CY 2017, the isolated impact of the MSA-
based locality changes and hold-harmless for transition areas required 
by section 1848(e)(6) of the Act, the impact of the use of updated data 
for GPCIs, and the combined impact of both of these changes.

[[Page 80266]]



    Table 13--Impact on California GAFs as a Result of Section 1848(e)(6) of the Act and Updated Data by Fee
                                                  Schedule Area
                                    [Sorted alphabetically by locality name]
----------------------------------------------------------------------------------------------------------------
                                                                                                       Combined
                                                      2017 GAF    % change                 % change    impact of
   Medicare fee schedule area    Transition   2016       w/o     due to new  2017 GAF  w/   due to     PAMA and
                                     area      GAF   1848(e)(6)   GPCI data   1848(e)(6)  1848(e)(6)   new GPCI
                                                                                                       data  (%)
----------------------------------------------------------------------------------------------------------------
Bakersfield....................           1   1.036       1.031       -0.48        1.031        0.00       -0.48
Chico..........................           1   1.036       1.031       -0.48        1.031        0.00       -0.48
El Centro......................           1   1.036       1.031       -0.48        1.031        0.00       -0.48
Fresno.........................           1   1.036       1.031       -0.48        1.031        0.00       -0.48
Hanford-Corcoran...............           1   1.036       1.031       -0.48        1.031        0.00       -0.48
Los Angeles-Long Beach-Anaheim            0   1.092       1.090       -0.18        1.091        0.09       -0.09
 (Los Angeles Cnty)............
Los Angeles-Long Beach-Anaheim            0   1.111       1.104       -0.63        1.101       -0.27       -0.90
 (Orange Cnty).................
Madera.........................           1   1.036       1.031       -0.48        1.031        0.00       -0.48
Merced.........................           1   1.036       1.031       -0.48        1.031        0.00       -0.48
Modesto........................           1   1.036       1.031       -0.48        1.031        0.00       -0.48
Napa...........................           1   1.137       1.128       -0.79        1.128        0.00       -0.79
Oxnard-Thousand Oaks-Ventura...           0   1.089       1.083       -0.55        1.083        0.00       -0.55
Redding........................           1   1.036       1.031       -0.48        1.031        0.00       -0.48
Rest of California.............           1   1.036       1.031       -0.48        1.031        0.00       -0.48
Riverside-San Bernardino-                 1   1.036       1.031       -0.48        1.032        0.10       -0.39
 Ontario.......................
Sacramento-Roseville-Arden-               1   1.036       1.031       -0.48        1.031        0.00       -0.48
 Arcade........................
Salinas........................           1   1.036       1.031       -0.48        1.033        0.19       -0.29
San Diego-Carlsbad.............           1   1.036       1.031       -0.48        1.035        0.39       -0.10
San Francisco-Oakland-Hayward             0   1.124       1.125        0.09        1.142        1.51        1.60
 (Alameda/Contra Costa Cnty)
San Francisco-Oakland-Hayward             1   1.137       1.128       -0.79        1.129        0.09       -0.70
 (Marin Cnty)..................
San Francisco-Oakland-Hayward             0   1.191       1.194        0.25        1.175       -1.59       -1.34
 (San Francisco Cnty)..........
San Francisco-Oakland-Hayward             0   1.182       1.187        0.42        1.171       -1.35       -0.93
 (San Mateo Cnty)..............
San Jose-Sunnyvale-Santa Clara            1   1.036       1.031       -0.48        1.053        2.13        1.64
 (San Benito Cnty).............
San Jose-Sunnyvale-Santa Clara            0   1.175       1.176        0.09        1.175       -0.09        0.00
 (Santa Clara Cnty)............
San Luis Obispo-Paso Robles-              1   1.036       1.031       -0.48        1.031        0.00       -0.48
 Arroyo Grande.................
Santa Cruz-Watsonville.........           1   1.036       1.031       -0.48        1.042        1.07        0.58
Santa Maria-Santa Barbara......           1   1.036       1.031       -0.48        1.036        0.48        0.00
Santa Rosa.....................           1   1.036       1.031       -0.48        1.037        0.58        0.10
Stockton-Lodi..................           1   1.036       1.031       -0.48        1.031        0.00       -0.48
Vallejo-Fairfield..............           1   1.137       1.128       -0.79        1.128        0.00       -0.79
Visalia-Porterville............           1   1.036       1.031       -0.48        1.031        0.00       -0.48
Yuba City......................           1   1.036       1.031       -0.48        1.031        0.00       -0.48
----------------------------------------------------------------------------------------------------------------
Note: the Los Angeles-Long Beach-Anaheim; San Francisco-Oakland-Hayward; and San Jose-Sunnyvale-Santa Clara
  Medicare localities are represented at a sub-locality level for the purpose of demonstrating the variation of
  the GAF within the locality. The variation in the Los-Angeles-Long Beach-Anaheim locality exists only in CY
  2017 and results from the two-year 50/50 phase in of the GPCI. The GAF variation in San Francisco-Oakland-
  Hayward and San Jose-Sunnyvale-Santa Clara results from the localities containing both transition area and non-
  transition area counties. For the remainder of Medicare localities, the GAF is consistent throughout the
  entire locality.

    Additionally, for the purposes of calculating budget neutrality and 
consistent with the PFS budget neutrality requirements as specified 
under section 1848(c)(2)(B)(ii)(II) of the Act, we proposed to start by 
calculating the national GPCIs as if the current localities are still 
applicable nationwide; then for the purposes of payment in California, 
we override the GPCI values with the values that are applicable for 
California consistent with the requirements of section 1848(e)(6) of 
the Act. This approach is consistent with the implementation of the 
GPCI floor provisions that have previously been implemented--that is, 
as an after-the-fact adjustment that is implemented for purposes of 
payment after both the GPCIs and PFS budget neutrality have already 
been calculated.

(2) Operational Considerations

    As discussed above, under section 1848(e)(6) of the Act, counties 
that were previously in the rest-of-state locality or locality 3 and 
are now in MSAs would have their GPCI values under the new MSA-based 
locality structure phased in gradually, in increments of one-sixth over 
6 years. Section 1848(e)(1)(C) of the Act requires that, if more than 1 
year has elapsed since the date of the last previous GPCI adjustment, 
the adjustment to be applied in the first year of the next adjustment 
shall be 1/2 of the adjustment that otherwise would be made. While 
section 1848(e)(6)(B) of the Act establishes a blended phase-in for the 
MSA-based GPCI values, it does not explicitly state whether or how that 
provision is to be reconciled with the requirement at section 
1848(e)(1)(C) of

[[Page 80267]]

the Act. We believe that since section 1848(e)(6)(A) of the Act 
requires that we must make the change to MSA-based fee schedule areas 
for California GPCIs notwithstanding the preceding provisions of 
section 1848(e) of the Act, and subject to the succeeding provisions of 
section 1848(e)(6) of the Act, that applying the two-year phase-in 
specified by the preceding provisions simultaneously with the six-year 
phase-in would undermine the incremental 6-year phase-in specified in 
section 1848(e)(6)(B) of the Act. Therefore, we proposed that the 
requirement at section 1848(e)(1)(C) of the Act to phase in 1/2 of the 
adjustment in year 1 of the GPCI update would not apply to counties 
that were previously in the rest-of-state or locality 3 and are now in 
MSAs, and therefore, are subject to the blended phase-in as described 
above. Since section 1848(e)(6)(B) of the Act provides for a gradual 
phase in of the GPCI values under the new MSA-based locality structure, 
specifically in one-sixth increments over 6 years, if we were to also 
apply the requirement to phase in 1/2 of the adjustment in year 1 of 
the GPCI update then the first year increment would effectively be one-
twelfth. We note that this issue is only of concern if more than 1 year 
has elapsed since the previous GPCI update, and would only be 
applicable through CY 2021 since, beginning in CY 2022, the GPCI values 
for such areas in an MSA would be fully based on the values calculated 
under the new MSA-based locality structure for California.
    As previously stated, the resulting modifications to California's 
locality structure increase its number of localities from 9 under the 
current locality structure to 27 under the MSA-based locality 
structure. However, both the current localities and the MSA-based 
localities are comprised of various component counties, and in some 
localities only some of the component counties are subject to the 
blended phase-in and hold harmless provisions required by section 
1848(e)(6)(B) and (C) of the Act. Therefore, the application of these 
provisions may produce differing GPCI values among counties within the 
same fee schedule area under the MSA-based locality structure. For 
example, the MSA-based San Jose-Sunnyvale-Santa Clara locality, is 
comprised of 2 constituent counties--San Benito County, and Santa Clara 
County. San Benito County is in a transition area (2013 rest-of-state), 
while Santa Clara County is not. Hence, although the counties are in 
the same MSA, the requirements of section 1848(e)(6)(B) and (C) of the 
Act may produce differing GPCI values for each county. To address this 
issue, we proposed to assign a unique locality number to the counties 
that would be impacted in the aforementioned manner. As a result, 
although the modifications to California's locality structure increase 
the number of localities from 9 under the current locality structure to 
27 under the MSA-based locality structure, for purposes of payment, the 
actual number of localities under the MSA-based locality structure 
would be 32 to account for instances where unique locality numbers are 
needed as described above. Additionally, while the fee schedule area 
names are consistent with the MSAs designated by OMB, we proposed to 
maintain 2-digit locality numbers to correspond to the existing fee 
schedule areas. Pursuant to the implementation of the new MSA-based 
locality structure for California, the total number of PFS localities 
would increase from 89 to 112. Table 14 displays the current fee 
schedule areas in California, and Table 15 displays the MSA-based fee 
schedule areas in California required by section 1848(e)(6) of the Act. 
Additional information on the California locality update may be found 
in our contractor's draft report, ``Draft Report on the CY 2017 Update 
of the Geographic Practice Cost Index for the Medicare Physician Fee 
Schedule,'' which is available on the CMS Web site. It is located under 
the supporting documents section of the CY 2017 PFS final rule located 
at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.

           Table 14--Current Fee Schedule Areas in California
                [Sorted alphabetically by locality name]
------------------------------------------------------------------------
   Locality number        Fee schedule area             Counties
------------------------------------------------------------------------
26..................  Anaheim/Santa Ana.......  Orange.
18..................  Los Angeles.............  Los Angeles.
03..................  Marin/Napa/Solano.......  Marin, Napa, And Solano.
07..................  Oakland/Berkley.........  Alameda and Contra
                                                 Costa.
05..................  San Francisco...........  San Francisco.
06..................  San Mateo...............  San Mateo.
09..................  Santa Clara.............  Santa Clara.
17..................  Ventura.................  Ventura.
99..................  Rest of State...........  All Other Counties.
------------------------------------------------------------------------


                              Table 15--MSA-Based Fee Schedule Areas in California
                                    [Sorted alphabetically by locality name]
----------------------------------------------------------------------------------------------------------------
                                        New
     Current  locality  number       locality      Fee schedule area          Counties          Transition area
                                      number          (MSA name)
----------------------------------------------------------------------------------------------------------------
99................................          54  Bakersfield, CA.......  Kern................  YES.
99................................          55  Chico, CA.............  Butte...............  YES.
99................................          71  El Centro, CA.........  Imperial............  YES.
99................................          56  Fresno, CA............  Fresno..............  YES.
99................................          57  Hanford-Corcoran, CA..  Kings...............  YES.
18................................          18  Los Angeles-Long Beach- Los Angeles.........  NO.
                                                 Anaheim, CA (Los
                                                 Angeles County).
26................................          26  Los Angeles-Long Beach- Orange..............  NO.
                                                 Anaheim, CA (Orange
                                                 County).
99................................          58  Madera, CA............  Madera..............  YES.
99................................          59  Merced, CA............  Merced..............  YES.
99................................          60  Modesto, CA...........  Stanislaus..........  YES.
3.................................          51  Napa, CA..............  Napa................  YES.
17................................          17  Oxnard-Thousand Oaks-   Ventura.............  NO.
                                                 Ventura, CA.
99................................          61  Redding, CA...........  Shasta..............  YES.
99................................          75  Rest of State.........  All Other Counties..  YES.
99................................          62  Riverside-San           Riverside, And San    YES.
                                                 Bernardino-Ontario,     Bernardino.
                                                 CA.
99................................          63  Sacramento--Roseville-  El Dorado, Placer,    YES.
                                                 -Arden-Arcade, CA.      Sacramento, And
                                                                         Yolo.
99................................          64  Salinas, CA...........  Monterey............  YES.
99................................          72  San Diego-Carlsbad, CA  San Diego...........  YES.

[[Page 80268]]

 
7.................................           7  San Francisco-Oakland-  Alameda, Contra       NO.
                                                 Hayward, CA (Alameda    Costa.
                                                 County/Contra Costa
                                                 County).
3.................................          52  San Francisco-Oakland-  Marin...............  YES.
                                                 Hayward, CA (Marin
                                                 County).
5.................................           5  San Francisco-Oakland-  San Francisco.......  NO.
                                                 Hayward, CA (San
                                                 Francisco County).
6.................................           6  San Francisco-Oakland-  San Mateo...........  NO.
                                                 Hayward, CA (San
                                                 Mateo County).
99................................          65  San Jose-Sunnyvale-     San Benito..........  YES.
                                                 Santa Clara, CA (San
                                                 Benito County).
9.................................           9  San Jose-Sunnyvale-     Santa Clara.........  NO.
                                                 Santa Clara, CA
                                                 (Santa Clara County).
99................................          73  San Luis Obispo-Paso    San Luis Obispo.....  YES.
                                                 Robles-Arroyo Grande,
                                                 CA.
99................................          66  Santa Cruz-             Santa Cruz..........  YES.
                                                 Watsonville, CA.
99................................          74  Santa Maria-Santa       Santa Barbara.......  YES.
                                                 Barbara, CA.
99................................          67  Santa Rosa, CA........  Sonoma..............  YES.
99................................          73  Stockton-Lodi, CA.....  San Joaquin.........  YES.
3.................................          53  Vallejo-Fairfield, CA.  Solano..............  YES.
99................................          69  Visalia-Porterville,    Tulare..............  YES.
                                                 CA.
99................................          70  Yuba City, CA.........  Sutter, and Yuba....  YES.
----------------------------------------------------------------------------------------------------------------

    We received few comments regarding the California locality update 
to the fee schedule areas used for payment under section 220(h) of 
PAMA.
    Comment: One commenter stated that it supports the proposed 
California payment locality implementation plan. The commenter stated 
that based on its analysis the calculations are accurate except for a 
few errors. Specifically, the commenter stated that the CY 2016 GAFs 
for 3 fee schedule areas [Los Angeles-Long Beach-Anaheim (Orange 
County), San Francisco-Oakland-Hayward (Alameda/Contra Costa County), 
and San Francisco-Oakland-Hayward (San Francisco County)] in Table 13 
of the proposed rule (81 FR 46221 through 46222) were incorrect. The 
commenter also requested that all of the 2016 GAFs in the table be 
reported to three decimal places to avoid confusion with rounding. 
Additionally, the commenter indicated that Sierra County in California 
was missing from the CY 2017 Proposed GPCI County Data File in the CY 
2017 Proposed Rule GPCI Public Use Files available on our Web site 
under the supporting documents section of the CY 2017 PFS proposed rule 
Web page at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
    Response: We thank the commenter for its support of our proposed 
California payment locality implementation plan. With regard to the 
errors noted by the commenter, we thank the commenter for bringing this 
issue to our attention. We agree that the CY 2016 GAFs for Los Angeles-
Long Beach-Anaheim (Orange County), San Francisco-Oakland-Hayward 
(Alameda/Contra Costa County), and San Francisco-Oakland-Hayward (San 
Francisco County) were incorrect in Table 13 of the proposed rule, and 
have been corrected in Table 13 in this final rule. We have also 
updated all of the 2016 GAFs in Table 13 to reflect 3 decimal places as 
to avoid confusion with rounding as requested. Additionally, we note 
that while the GAFs for these 3 fee schedule areas were incorrect in 
Table 13 of the proposed rule, the GAF values were correct in Addendum 
D to the proposed rule available on our Web site under the supporting 
documents section of the CY 2017 PFS Proposed Rule Web page at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html. Moreover, GAF values are an analysis 
tool, and are not used to determine service level payment. 
Additionally, we note Sierra County was omitted from the CY 2017 
Proposed GPCI County Data File because we removed counties with 0 total 
RVUs in 2014. However, for the final rule we have revised the file to 
include all counties, even those with 0 total RVUs in 2014. The updated 
file can be viewed in the CY 2017 Final GPCI County Data File in the CY 
2017 Final Rule GPCI Public use files available on our Web site.
    Comment: One commenter requested that CMS implement the California 
locality update requirement in a manner that does not require the 
Medicare Administrative Contractor (MAC) for California to make changes 
to the enrollment process for physician groups in California or changes 
in the way that physician groups submit claims to the MAC.
    Response: While we note that there are several internal 
administrative burdens that result from the implementation of the 
California locality update, we do not believe there should be related 
burden on practitioners, and California practitioners will continue to 
follow the existing process for submitting claims.
    After consideration of the public comments received regarding the 
proposed California payment locality implementation plan, we are 
finalizing as proposed.
4. Update to the Methodology for Calculating GPCIs in the U.S. 
Territories
    In calculating GPCIs within U.S. states, we use county-level wage 
data from the Bureau of Labor Statistics (BLS) Occupational Employment 
Statistics Survey (OES), county-level residential rent data from the 
American Community Survey (ACS), and malpractice insurance premium data 
from state departments of insurance. In calculating GPCIs for the U.S. 
territories, we currently use three distinct methodologies--one for 
Puerto Rico, another for the Virgin Islands, and a third for the 
Pacific Islands (Guam, American Samoa, and Northern Marianas Islands). 
These three methodologies were adopted at different times based 
primarily on the data that were available at the time they were 
adopted. At present, because Puerto Rico is the only territory where 
county-level BLS OES, county-level ACS, and malpractice premium data 
are available, it is the only territory for which we use territory-
specific data to calculate GPCIs. For the Virgin Islands, because 
county-level wage and rent data are not available, and insufficient 
malpractice premium data are available, CMS has set the work, PE, and 
MP GPCI values for the Virgin Islands payment locality at the national 
average of 1.0 even though, like Puerto Rico, the Virgin Islands is its

[[Page 80269]]

own locality and county-level BLS OES data are available for the Virgin 
Islands. For the U.S. territories in the Pacific Ocean, we currently 
crosswalk GPCIs from the Hawaii locality for each of the three GPCIs, 
and incorporate no local data from these territories into the GPCI 
calculations even though county-level BLS OES data does exist for Guam, 
but not for American Samoa or the Northern Mariana Islands.
    As noted above, currently Puerto Rico is the only territory for 
which we calculate GPCIs using the territory-specific information 
relative to data from the U.S. States. For several years stakeholders 
in Puerto Rico have raised concerns regarding the applicability of the 
proxy data in Puerto Rico relative to their applicability in the U.S. 
states. We believe that these concerns may be consistent across island 
territories, but lack of available, appropriate data has made it 
difficult to quantify such variation in costs. For example, some 
stakeholders previously indicated that shipping and transportation 
expenses increase the cost of acquiring medical equipment and supplies 
in islands and territories relative to the mainland. While we have 
previously attempted to locate data sources specific to geographic 
variation in such shipping costs, we found no comprehensive national 
data source for this information (we refer readers to 78 FR 74387 
through 74388 for the detailed discussion of this issue). Therefore, we 
have not been able to quantify variation in costs specific to island 
territories in the calculation of the GPCIs.
    For all the island territories other than Puerto Rico, the lack of 
comprehensive data about unique costs for island territories has had 
minimal impact on GPCIs because we have used either the Hawaii GPCIs 
(for the Pacific territories) or used the unadjusted national averages 
(for the Virgin Islands). In an effort to provide greater consistency 
in the calculation of GPCIs given the lack of comprehensive data 
regarding the validity of applying the proxy data used in the States in 
accurately accounting for variability of costs for these island 
territories, we proposed to treat the Caribbean Island territories (the 
Virgin Islands and Puerto Rico) in a consistent manner. We proposed to 
do so by assigning the national average of 1.0 to each GPCI index for 
both Puerto Rico and the Virgin Islands. We did not propose any changes 
to the GPCI methodology for the Pacific Island territories (Guam, 
American Samoa, and Northern Marianas Islands) where we already 
consistently assign the Hawaii GPCI values for each of the three GPCIs. 
Additional information on the Proposed Update to the Methodology for 
Calculating GPCIs in the U.S. Territories may be found in our 
contractor's draft report, ``Draft Report on the CY 2017 Update of the 
Geographic Practice Cost Index for the Medicare Physician Fee 
Schedule,'' which is available on our Web site. It is located under the 
supporting documents section of the CY 2017 PFS final rule located at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
    The following is a summary of the comments we received regarding 
the proposed update to the methodology for calculating GPCIs in the 
U.S. territories.
    Comment: Several commenters expressed support for CMS' proposal to 
assign the national average of 1.0 to each GPCI in Puerto Rico, stating 
that the physicians in Puerto Rico who treat patients enrolled in fee-
for-service Medicare will be reimbursed in a manner that more closely 
aligns with the manner in which physicians in the other U.S. 
territories are reimbursed, and better reflects the cost of practicing 
medicine in Puerto Rico. Other commenters supporting the proposal also 
suggested that there has been a need for revision of Medicare payment 
in Puerto Rico, and that the territories of the U.S. have not been 
treated similarly even though the territories are much alike. Another 
commenter stated that the existing fee schedule for Puerto Rico does 
not correlate with the cost of caring for patients, and that the 
proposed policy is long overdue. Some commenters also stated that 
increasing the GPCI's for Puerto Rico is an important and necessary 
first step in trying to salvage Puerto Rico's deteriorated health 
system.
    Response: We thank the commenters for their support.
    Comment: A few commenters requested that CMS consider raising the 
GPCI values in Puerto Rico to 1.25.
    Response: We proposed assigning the national average of 1.0 to each 
GPCI index for both Puerto Rico and the Virgin Islands, in an effort to 
provide greater consistency in the calculation of GPCIs among these 
island territories, given the lack of information on the validity of 
applying the proxy data used in the States to accurately account for 
variability of costs in these territories as compared to the national 
average costs. Ultimately we proposed to treat the Caribbean Island 
territories (the Virgin Islands and Puerto Rico) in a consistent manner 
by assigning the national average of 1.0 to each GPCI index. We do not 
believe that it would be appropriate to raise the value to 1.25 in the 
absence of data demonstrating that would be an accurate reflection of 
costs in those territories relative to national average costs.
    Comment: We received several comments that are outside of the scope 
of the Physician Fee Schedule, requesting that CMS explore every option 
to determine whether a one-time correction can be made to the Medicare 
Advantage (MA) regulatory cycle so that the per-person monthly payment 
to Puerto Rico MA Plans in CY 2017 will reflect the increase to the 
fee-for-service spending in the territory as a result of the proposed 
GPCI increase. Some commenters stated that it is imperative that CMS 
see that the increased physician fees reach the actual providers and 
are not diverted away from patient care by third parties such as 
Medicare Advantage Organizations. Some commenters requested that CMS 
clarify that the new GPCIs will be incorporated into the MA benchmarks 
in CY 2018.
    Response: We appreciate the concerns raised by the commenters. 
Consistent with the statute, we published the final CY 2017 Rate 
Announcement for Medicare Advantage on April 4, 2016. Medicare 
Advantage actuarial bids and benefit packages for 2017 have been 
approved by CMS and sponsors have begun marketing plan to 
beneficiaries. Thus, a change in to CY 2017 benchmark would be 
disruptive to beneficiaries. In future years, including CY 2018, we 
will follow our normal process for calculating rates. This process 
incorporates historical Fee for Service expenditures, which would 
include any updates to Fee for Service payment rates, such as an 
adjustment to the Puerto Rico GPCI. CMS will not be making any 
adjustments to CY 2017 Medicare Advantage rates as a result of this 
final rule. Finally, we note that according to the statute, we are 
prohibited from interfering or directing the contracting between 
Medicare Advantage Organizations (MAOs) and contracted providers. As 
such, we are not permitted to dictate to MAOs how any increase in 
payment rates can be spent, including on provider rates.
    Comment: One commenter suggested that if the MA benchmark cannot be 
adjusted for CY 2017 that CMS should postpone the applicability of the 
GPCI change in Puerto Rico until CY 2018 when such an effect is also 
reflected in the MA benchmarks.
    Response: We do not agree that the proposal to update to the 
methodology for calculating GPCIs in the U.S. territories, which will 
provide greater consistency in the calculation of GPCIs for these 
areas, should be delayed based on when the MA benchmarks will

[[Page 80270]]

reflect the increases as a result of this policy.
    After consideration of the public comments received regarding our 
proposal to treat the Caribbean Island territories (the Virgin Islands 
and Puerto Rico) in a consistent manner, by assigning the national 
average of 1.0 to each GPCI index for both Puerto Rico and the Virgin 
Islands, we are finalizing as proposed.
5. Refinement to the MP GPCI Methodology
    In the process of calculating MP GPCIs for the purposes of this 
final rule, we identified several technical refinements to the 
methodology that yield improvements over the current method. We also 
proposed refinements that conform to our proposed methodology for 
calculating the GPCIs for the U.S. Territories described above. 
Specifically, we proposed modifications to the methodology to account 
for missing data used in the calculation of the MP GPCI. Under the 
methodology used in the CY 2014 GPCI update (78 FR 74380 through 
74391), we first calculated the average premiums by insurer and 
specialty, then imputed premium values for specialties for which we did 
not have specific data, before adjusting the specialty-specific premium 
data by market share weights. We proposed to revise our methodology to 
instead calculate the average premiums for each specialty using issuer 
market share for only available companies. This proposed methodological 
improvement would reduce potential bias resulting from large amounts of 
imputation, an issue that is prevalent for insurers that only write 
policies for ancillary specialties for which premiums tend to be low. 
The current method would impute the low premiums for ancillary 
specialties across the remaining specialties, and generally greater 
imputation leads to less accuracy. Additional information on the MP 
GPCI methodology, and the proposed refinement to the MP GPCI 
methodology may be found in our contractor's draft report, ``Draft 
Report on the CY 2017 Update of the Geographic Practice Cost Index for 
the Medicare Physician Fee Schedule,'' which is available on our Web 
site. It is located under the supporting documents section of the CY 
2017 PFS final rule located at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
    We did not receive any comments regarding the proposed technical 
refinements to the MP GPCI methodology, and we are finalizing as 
proposed.

J. Payment Incentive for the Transition From Traditional X-Ray Imaging 
to Digital Radiography and Other Imaging Services

    Section 502(a)(1) of Division O, Title V of the Consolidated 
Appropriations Act, 2016 (Pub. L. 114-113) amended section 1848(b) of 
the Act by adding new paragraph (b)(9). Effective for services 
furnished on or after January 1, 2017, section 1848(b)(9)(A) of the Act 
reduces by 20 percent the payment amounts under the PFS for the 
technical component (TC) (including the TC portion of a global 
services) of imaging services that are X-rays taken using film. The 
reduction is made prior to any other adjustment under this section and 
without application of this new paragraph.
    Section 1848(b)(9) of the Act allows for the implementation of the 
payment reduction through appropriate mechanisms which may include use 
of modifiers. In accordance with section 1848(c)(2)(B)(v)(X), the 
adjustments under section 1848(b)(9)(A) of the Act are exempt from 
budget neutrality.
    To implement this provision, in the CY 2017 PFS proposed rule (81 
FR 46224), we proposed to establish a new modifier to be used on claims 
that include imaging services that are X-rays (including the imaging 
portion of a service) taken using film. Since the display of the 
proposed rule, modifier FX has been established for that purpose. 
Effective January 1, 2017, the modifier must be used on claims for X-
rays that are taken using film. The use of this modifier will result in 
a 20 percent reduction for the X-ray service, as specified under 
section 1848(b)(9)(A) of the Act.
    The proposed rule preamble stated that the applicable HCPCS codes 
describing imaging services that are X-ray services could be found on 
the PFS Web site. However, we did not intend this to indicate that we 
would be developing or displaying an exhaustive list of applicable 
codes. Instead, we intended to refer to the several lists of PFS 
imaging codes, including those that describe imaging services that are 
X-rays.
    Comment: Many commenters commented on the merits of the statutory 
provision. The commenters stated that the reduction of Medicare film-
based x-ray payments by 20 percent will have unintended consequences on 
patient care.
    Response: We believe our proposal would implement the required 
statutory provision and we do not believe that we have the authority to 
alter the application of the provision based on these comments.
    Comment: An overwhelming majority of the commenters requested CMS 
implement an alternative policy to improve quality of imaging services. 
The recommended policy would require registered radiologic technicians 
to perform all Medicare film or digital radiography procedures. Other 
commenters countered this recommended alternative by stating that it 
would exclude otherwise qualified professionals who have undergone 
education to acquire limited scope licenses or certification programs 
demonstrating As Low As Reasonably Achievable (ALARA) safety practices 
by either a third party, vendor training, or another didactic course 
deemed acceptable by any of the four accreditation organizations. One 
commenter also referenced 35 states that have an entry level 
certification for X-ray technicians and that throughout the US, there 
are x-ray technicians and limited scope X-ray machine operators that 
are also licensed and certified.
    Response: We appreciate commenters' interests in standards that 
might improve quality of care for Medicare beneficiaries, but we did 
not propose a policy regarding standards for radiologic technicians in 
the proposed rule. Also, as previously stated, we do not believe we 
have the authority to implement conditions of payment regarding 
radiologic technicians as an alternative to the adjustments required by 
the statutory provision.
    Comment: A commenter recommended that a financial incentive be 
provided for physicians to convert to digital machines as had been done 
in the case of electronic medical records.
    Response: The legislation does not authorize any financial 
incentive in the form of increased payment, but provides an incentive 
to use digital images to avoid the 20 percent reduction that applies to 
imaging services that are X-rays taken using film.
    Comment: One commenter requested that in the absence of a 
meaningful opportunity to comment on the list of codes for which the 
policy applies, the provision should be limited to traditional 
diagnostic X-ray procedures only. Two commenters presented separate 
lists of codes for which the payment reduction should apply. One 
commenter also provided codes that should be explicitly excluded from 
the payment reduction, for example, radiographic-fluoroscopic, vascular 
and mammography X-ray imaging services, radioscopic, radioscopic and 
radiography services provided in a

[[Page 80271]]

single examination. Other commenters also provided a list of procedures 
that should be excluded. The commenter also requested that we publish 
the list of applicable codes as soon as possible.
    Response: As previously stated, we did not publish an exhaustive 
list of applicable codes, and previously intended to point to existing 
lists of PFS imaging services. We believe that physicians and non-
physician practitioners are in the best position to determine whether a 
particular imaging service is an X-ray taken using film.
    Comment: One commenter suggested that if at least half of the 
number of discrete X-ray exposures required for the radiographic exam 
are captured using a DR detector, then the examination should be 
considered as digital and the payment differential should not be 
applied. Another commenter requested that we clarify that the law only 
applies (and requires use of a modifier) to sites that use X-ray as a 
single method for image capture. The commenter also seeks clarification 
that if a site uses both X-ray film and electronic capture of images 
and maintains digital archives, by a picture archiving communication 
system or other electronic method, that the site is not required to 
report the modifier.
    Response: At this time, in accordance with the statute, we are 
requiring the FX modifier to be used whenever an imaging service is an 
X-ray taken using film. As stated, the statute requires that if an 
imaging service is an X-ray taken using film, a reduction in payment is 
to occur. The statutory requirement applies at the service level, not 
based on where the service is furnished or the method used to store 
images. There is no provision for an exception to the payment reduction 
based on the availability of various technologies or the use of certain 
image archiving technology at a particular site.
    After consideration of the public comments we received, we are 
finalizing the establishment of new modifier ``FX'' to be reported on 
claims for imaging services that are X-rays that are taken using film.
    Beginning January 1, 2017, claims for imaging services that are X-
rays taken using film must include the modifier ``FX.''
    The use of this modifier will result in a 20 percent reduction for 
the X-ray service, as specified under section 1848(b)(9)(A) of the Act.

K. Procedures Subject to the Multiple Procedure Payment Reduction 
(MPPR) and the OPPS Cap

    Effective January 1, 2012, we implemented an MPPR of 25 percent on 
the professional component (PC) of advanced imaging services. The 
reduction applies when multiple imaging procedures are furnished by the 
same physician (or physician in the same group practice) to the same 
patient, in the same session, on the same day. Full payment is made for 
the PC of the highest priced procedure. Payment for the PC of 
subsequent services is reduced by 25 percent.
    Section 502(a)(2)(A) of Division O, Title V of the Consolidated 
Appropriations Act, 2016 (Pub. L. 114-113, enacted on December 18, 
2015) added a new section 1848(b)(10) of the Act which revises the 
payment reduction from 25 percent to 5 percent, effective January 1, 
2017. Section 502(a)(2)(B) added a new subclause at section 
1848(c)(2)(B)(v)(XI) which exempts the reduced expenditures 
attributable to the revised 5 percent MMPR on the PC of imaging from 
the PFS budget neutrality provision. We proposed to implement these 
provisions for services furnished on or after January 1, 2017. We refer 
readers to section VI.C of this final rule regarding the necessary 
adjustment to the proposed PFS conversion factor to account for the 
mandated exemption from PFS budget neutrality.
    We note that the lists of services for the upcoming calendar year 
that are subject to the MPPR on diagnostic cardiovascular services, 
diagnostic imaging services, diagnostic ophthalmology services, and 
therapy services; and the list of procedures that meet the definition 
of imaging under section 5102(b) of the Deficit Reduction Act (DRA), 
and therefore, are subject to the OPPS cap, are displayed in the public 
use files for the PFS proposed and final rules for each year. The 
public use files for CY 2017 are available on our Web site under 
downloads for the CY 2017 PFS final rule with comment period at http://www.cms.gov/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFSFederal-Regulation-Notices.html.
    Comment: Commenters supported the proposal to implement the 
statutory provision.
    Response: We our finalizing our CY 2017 proposal to revise the MPPR 
on the PC of diagnostic imaging services.

L. Valuation of Specific Codes

1. Background: Process for Valuing New, Revised, and Potentially 
Misvalued Codes
    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 make sure 
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 5-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 5-year review process, revisions in RVUs were proposed 
and finalized via rulemaking. In addition to the 5-year reviews, 
beginning with CY 2009, CMS and the RUC have identified a number of 
potentially misvalued codes each year using various identification 
screens, as discussed in section II.D.4 of this final rule. 
Historically, when we received RUC recommendations, our process had 
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 for a year. Then, during the 60-day period 
following the publication of the final rule, we accepted public comment 
about those valuations. For services furnished during the calendar year 
following the publication of interim final rates, we paid for services 
based upon the interim final values established in the final rule. In 
the final rule with comment period for the subsequent year, we 
considered and responded to public comments received on the interim 
final values, and typically made any appropriate adjustments and 
finalized those values.
    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. Beginning with the 
CY 2017 proposed rule, the new process is applicable to all codes, 
except for new codes that describe truly new services. For CY 2017, we 
proposed new values in the CY 2017 proposed rule for the vast majority 
of new, revised, and potentially misvalued codes for which we received 
complete RUC recommendations by February 10, 2016. To complete the 
transition to this new process, for codes where we established interim 
final values in the CY 2016 PFS final rule with comment period, we 
reviewed the comments received during the 60-day public comment period 
following release of the CY 2016 PFS final rule with comment period, 
and re-proposed

[[Page 80272]]

values for those codes in the CY 2017 proposed rule.
    We considered public comments received during the 60-day public 
comment period for the proposed rule before establishing final values 
in this final rule. As part of our established process we will adopt 
interim final values only 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 2017, we are 
not aware of any new codes that describe such wholly new services. 
Therefore, we are not establishing any code values on an interim final 
basis. However, we remind stakeholders that we continually review 
stakeholder information regarding the valuation of codes under the 
potentially misvalued code initiative and, under our existing process, 
could consider proposing any particular changes as early as CY 2018 
rulemaking.
2. Methodology for Proposing Work RVUs
    We conduct a review of each code identified in this section and 
review the current work RVU (if any), RUC-recommended work RVU, 
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 
inputs generally includes, but is not limited to, a review of 
information provided by the RUC, HCPAC (Health Care Professionals 
Advisory Committee), and other public commenters, medical literature, 
and comparative databases, as well as a comparison with other codes 
within the 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. 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, crosswalks to key 
reference or similar codes, and magnitude estimation (see the CY 2011 
PFS final rule with comment period for more information). 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 work that determines the appropriate work RVU 
for a service by gauging the total amount of work for that service 
relative to the work for a similar service across the PFS without 
explicitly valuing the components of that work. In addition to these 
methodologies, we have frequently utilized an incremental methodology 
in which we value a code based upon its incremental difference between 
another code or another family of codes. The statute specifically 
defines the work component as the resources in time and intensity 
required in furnishing the service. Also, the published literature on 
valuing work has recognized the key role of time in overall work. For 
particular codes, we refine the work RVUs in direct proportion to the 
changes in the best information regarding the time resources involved 
in furnishing particular services, either considering the total time or 
the intraservice time.
    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 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. Our longstanding 
adjustments have reflected a broad assumption 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 multiplied by 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, now addresses the 
overlap in time and work when a service is typically furnished on the 
same day as an E/M service.
    We note that many commenters and stakeholders have expressed 
concerns with our ongoing adjustment of work RVUs based on changes in 
the best information we have regarding the time resources involved in 
furnishing individual services. We are particularly concerned with the 
RUC's and various specialty societies' objections to our approach given 
the significance of their recommendations to our process for valuing 
services and since much of the information we have used to make the 
adjustments is derived from their survey process. As explained in the 
CY 2016 PFS final rule with comment period (80 FR 70933), we recognize 
that adjusting work RVUs for changes in time is not always a 
straightforward process, so we apply various methodologies to identify 
several potential work values for individual codes. However, we want to 
reiterate that we are statutorily obligated to consider both time and 
intensity in establishing work RVUs for PFS services.
    We have observed that for many codes reviewed by the RUC, final 
recommended work RVUs appear to be incongruous with recommended 
assumptions regarding the resource costs in time. This is the case for 
a significant portion of codes for which we have recently established 
or proposed work RVUs that are based on

[[Page 80273]]

refinements to the RUC-recommended values. When we have adjusted work 
RVUs to account for significant changes in time, we begin by looking at 
the change in the time in the context of the RUC-recommended work RVU. 
When the recommended work RVUs do not appear to account for significant 
changes in time, we employ the different approaches to identify 
potential values that reconcile the recommended work RVUs with the 
recommended time values. Many of these methodologies, such as survey 
data, building blocks, crosswalks to key reference or similar codes, 
and magnitude estimation have long been used in developing work RVUs 
under the PFS. In addition to these, we sometimes use the relationship 
between the old time values and the new time values for particular 
services to identify alternative work RVUs based on changes in time 
components.
    In so doing, rather than ignoring the RUC-recommended value, we are 
using the recommended values as a starting reference and then applying 
one of these several methodologies to account for the reductions in 
time that we believe have not otherwise been reflected in the RUC-
recommended value. When we believe that such changes in time have 
already been accounted for in the RUC recommendation, then we do not 
make such adjustments. Likewise, we do not arbitrarily apply time 
ratios to current work RVUs to calculate proposed work RVUs. We use the 
ratios to identify potential work RVUs and consider these work RVUs as 
potential options relative to the values developed through other 
options.
    We clarify that we are not implying that the decrease in time as 
reflected in survey values must equate to a one-to-one or linear 
decrease in newly valued work RVUs. Instead, we believe that, since the 
two components of work are time and intensity, absent an obvious or 
explicitly stated rationale for why the relative intensity of a given 
procedure has increased, significant decreases in time should be 
reflected in decreases to work RVUs. If the RUC recommendation has 
appeared to disregard or dismiss the changes in time, without a 
persuasive explanation of why such a change should not be accounted for 
in the overall work of the service, then we generally use one of the 
aforementioned referenced methodologies to identify potential work 
RVUs, including the methodologies intended to account for the changes 
in the resources involved in furnishing the procedure.
    Several commenters, including the RUC, in general have objected to 
our use of these methodologies and deemed our actions in adjusting the 
recommended work RVUs as inappropriate. We received several specific 
comments regarding this issue in response to the CY 2016 PFS final rule 
with comment period and those comments are summarized below.
    Comment: Several commenters, including the RUC, stated that our 
methodology for adjusting work RVUs appears to be contrary to the 
statute.
    Response: We disagree with these comments. Since section 
1848(c)(1)(A) of the Act explicitly identifies time as one of the two 
types of resources that encompass the work component of the PFS 
payment, we do not believe that our use of the aforementioned 
methodologies to adjust the work RVU to account for the changes in 
time, which is one of the resources involved, is inconsistent with the 
statutory requirements related to the maintenance of work RVUs, and we 
have regularly used these and other methodologies in developing values 
for PFS services. 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. In our review of RUC 
recommended values, we have observed that the RUC also uses a variety 
of methodologies to develop work RVUs for individual codes, and 
subsequently validates the results of these approaches through 
magnitude estimation or crosswalk to established values for other 
codes.
    Comment: Several commenters, including the RUC, stated that we 
could not take one element of the services that has changed such as 
intra-service time, and apply an overall ratio for reduction to the 
work RVU based on changes to time, as that renders the value no longer 
resource-based in comparison to the RUC-recommended values.
    Response: We disagree with the commenters and continue to believe 
that the use of time ratios is one of several reasonable methods for 
identifying potential work RVUs for particular PFS services, 
particularly when the alternative values do not account for information 
that suggests the amount of time involved in furnishing the service has 
changed significantly. We reiterate that, consistent with the statute, 
we are required to value the work RVU based on the relative resources 
involved in furnishing the service, which include time and intensity. 
When our review of recommended values determines that changes in the 
resource of time have been unaccounted for in a recommended RVU, then 
we believe we have the obligation to account for that change in 
establishing work RVUs since the statute explicitly identifies time as 
one of the two elements of the work RVUs. We recognize that it would 
not be appropriate to develop work RVUs solely based on time given that 
intensity is also an element of work, but in applying the time ratios 
we are using derived intensity measures based on current work RVUs for 
individual procedures. Were we to disregard intensity altogether, the 
work RVUs for all services would be developed based solely on time 
values and that is definitively not the case. Furthermore, we reiterate 
that we use time ratios to identify potential work RVUs, and then use 
other methods (including estimates of work from CMS medical personnel 
and crosswalks to key reference or similar codes) to validate these 
RVUs. We also disagree with several commenters' implications that a 
work RVU developed through such estimation methods is only resource-
based through the RUC process.
    Comment: Several commenters, including the RUC, stated that our 
inconsistent use of the time ratio methodology has rendered it 
ineffective for valuation purposes and that by choosing the starting 
base work value and/or physician time at random, we are essentially 
reverse engineering the work value we want under the guise of a 
standard algorithm.
    Response: We do not choose a starting base work value and/or 
physician time at random as suggested by the commenters. We use the RUC 
recommended values or the existing values as the base values; 
essentially, we are taking one of those values and applying adjustments 
to account for the change in time that based on our analysis of the RUC 
recommendation, we determine has not been properly accounted for to 
determine an appropriate work RVU. In circumstances where adjustments 
to time and the corresponding work RVU are relatively congruent or 
persuasively explained, our tendency has been to use those values as 
recommended. Where the RUC recommendations do not account for changes 
in time, we have made changes to RUC-recommended values to account for 
the changes in time.
    Comment: Commenters, including the RUC, also stated that the use of 
time ratio methodologies distills the valuation of the service into a 
basic formula with the only variable being either the new total 
physician time or the new intra-service physician time, and that these 
methodologies are based

[[Page 80274]]

on the incorrect assumption that the per minute physician work 
intensity established is permanent regardless of when the service was 
last valued. Other commenters have suggested that previous assumed 
times are inaccurate.
    Response: We agree with commenters that per minute intensity for a 
given service may change over time. If we believed that the per-minute 
intensity for a given service were immutable, then a reverse-building 
block approach to revaluation based on new time data could be 
appropriate. However, we have not applied such an approach specifically 
because we agree that the per-minute intensity of work is not 
necessarily static over time or even necessarily during the course of a 
procedure. Instead, we utilize time ratios to identify potential values 
that account for changes in time and compare these values to other PFS 
services for estimates of overall work. When the values we develop 
reflect a similar derived intensity, we agree that our values are the 
result of our assessment that the relative intensity of a given service 
has remained similar.
    Regarding the validity of comparing new times to the old times, we, 
too, hope that time estimates have improved over many years especially 
when many years have elapsed since the last time the service in 
question was valued. However, we also believe that our operating 
assumption regarding the validity of the pre-existing values as a point 
of comparison is critical to the integrity of the relative value system 
as currently constructed. Pre-existing times are a very important 
element in the allocation of indirect PE RVUs by specialty, and had the 
previously recommended times been overestimated, the specialties that 
furnish such services would be benefitting from these times in the 
allocation of indirect PE RVUs. As long time observers of the RUC 
process, we also recognize that the material the RUC uses to develop 
overall work recommendations includes the data from the surveys about 
time. We have previously stated concerns regarding the validity of much 
of the RUC survey data. However, we believe additional kinds of concern 
would be warranted if the RUC itself were operating under the 
assumption that its pre-existing data were typically inaccurate.
    We understand stakeholders' concerns regarding how best to consider 
changes in time in improving the accuracy of work RVUs and have 
considered all of the issues raised by commenters. In conjunction with 
our review of recommended code values for CY 2017, we conducted a 
preliminary analysis to identify general tendencies in the relationship 
between changes in time and changes in work RVUs for CY 2014 and CY 
2015. We looked at services for which there were no coding changes to 
simplify the analysis. The intent of this preliminary analysis was to 
examine commenters' beliefs that CMS is only considering time when 
making refinements to RUC recommended work values. For CY 2014, we 
found that in the aggregate, the average difference between the RUC 
recommended intraservice time and existing intraservice time was -17 
percent, but the average difference between the RUC recommended work 
RVU and existing work RVU was only -4 percent. However, the average 
difference between the CMS refined work RVU and existing work RVU was -
7 percent. For CY 2015, the average difference between the RUC 
recommended intraservice time and existing intraservice time was -17 
percent, but the average difference between the RUC recommended work 
RVU and existing work RVU was 1 percent, and the average difference 
between the CMS refined work RVU and existing work RVU was -6 percent. 
This preliminary analysis demonstrates that we are not making 
refinements solely in consideration of time, if that were the case, the 
changes in the work RVU values that we adopted would be comparable to 
the changes in the time that we adopted, but that is not the case.
    We believe that we should account for efficiencies in time when the 
recommended work RVU does not account for those efficiencies, otherwise 
relativity across the PFS can be significantly skewed over periods of 
time. For example, if when a code is first valued, a physician was 
previously able to do only 5 procedures per day, but due to new 
technologies, the same physician can now do 10 procedures per day, 
resource costs in time have empirically been lessened, and we believe 
that relative reduction in resources involved in furnishing that 
service should be accounted for in the assignment of work RVUs for that 
service, since the statute explicitly identifies time as one of the two 
components of work. Of course, if more resource intensive technology 
has allowed for the increased efficiency in furnishing the procedure, 
then the nonfacility PE RVUs for the service should also be adjusted to 
account for this change. Additionally, we believe it may be that the 
intensity per minute of the procedure may have changed with the greater 
efficiency in time. Again, that is why we do not generally reduce work 
RVUs in strict proportion to changes in time. We understand that 
intensity is not entirely linear, and that data related to time as 
obtained in the RUC survey instrument may improve over time, and that 
the number of survey respondents may improve over time. However, we 
also understand time as a tangible resource cost in furnishing PFS 
services, and a cost that by statute, is one of the two kinds of 
resources to be considered as part of the work RVU.
    Therefore, in the proposed rule, we stated that we were interested 
in receiving comments on whether, within the statutory confines, there 
are alternative suggestions as to how changes in time should be 
accounted for when it is evident that the survey data and/or the RUC 
recommendation regarding the overall work RVU does not reflect 
significant changes in the resource costs of time for codes describing 
PFS services. We solicited comment on potential alternatives, including 
the application of the reverse building block methodology, to making 
the adjustments that would recognize overall estimates of work in the 
context of changes in the resource of time for particular services.
    The following is a summary of the comments we received in response 
to our solicitation regarding potential alternatives, including the 
application of the reverse building block methodology, to making the 
adjustments that would recognize overall estimates of work in the 
context of changes in the resource of time for particular services.
    Comment: One commenter stated that it continues to support CMS in 
its efforts to adjust work RVUs commensurate with changes in intra-
service and total time, as well as post-operative visits despite RUC 
recommendations to the contrary. The commenter agreed with our changes 
and encouraged CMS to continue to identify and address such 
incongruities. The commenter stated that it is routine to encounter 
recommended decreases in physician time and/or post-procedure visits 
combined with RUC recommendations to maintain or increase the work 
RVUs. The commenter agreed that when physician time decreases, 
physician work should decrease comparatively, absent a compelling 
argument that the intensity of the service has increased sufficiently 
to offset the decrease in physician time. The commenter did not have 
alternative suggestions for how CMS should make these adjustments, and 
believes the approaches that CMS has taken are reasonable and 
defensible.
    Another commenter stated that it appreciates that CMS provided

[[Page 80275]]

information about how it reviews recommendations for work RVUs that 
come from the RUC. Additionally, one commenter stated appreciation for 
the consideration and effort that CMS gives in valuing the work RVUs 
for a service. The commenter stated that the accuracy of RVU estimates 
has improved as a result of CMS' various validation processes for 
collecting data and its consideration of feedback from the RUC and 
public commenters. The commenter stated that CMS should account for 
efficiencies in the resource costs of time when the recommended work 
RVU does not account for emerging efficiencies, such as advances in 
surgical techniques, and that by considering time in these situations, 
CMS will be able to effectively adjust both emerging technological 
trends and their impact on resource costs needed to deliver care to 
beneficiaries.
    Response: We appreciate the commenters' support for our ongoing 
adjustment of work RVUs based on changes in the best information we 
have regarding the time resources involved in furnishing individual 
services. We also agree that CMS should account for efficiencies in the 
resource costs of time, as indicated by one commenter, and will 
endeavor to do so when we consider the work RVU and how the effect of 
advancements such as emerging technology and improvements in surgical 
techniques impact the resource costs of time.
    Comment: A few commenters, including the RUC, stated that all 
adjustments to work RVUs should be solely based on the resources 
involved in performing each procedure or service. The commenters stated 
that all adjustments to work RVUs should either be work neutral to the 
family or result in budget neutral adjustment to the conversion factor, 
and that broadly redistributing work RVUs would distort the relative 
value system and create unintended consequences.
    Response: We agree that adjustments to work RVUs should be based on 
the resources involved with each procedure or service, and consistent 
with the statute, the work RVUs should reflect the relative resources 
costs of time and intensity. We also agree with the commenter regarding 
how changes in work RVUs affect PFS relativity. We have a long-standing 
practice of making an adjustment to the CF to account for increases or 
decreases in work RVUs across the PFS instead of scaling the work RVUs 
to maintain overall relativity. The practical effect of a positive 
adjustment to the CF is that the value of a single work RVU is greater 
than it previously had been. In other words, the relative value of the 
other work RVUs has increased, across the PFS, whenever we apply a 
positive budget neutrality adjustment to the CF to account for an 
overall decrease in work RVUs.
    Comment: A few commenters, including the RUC, stated that they 
appreciate CMS agreeing with the RUC's assertion that the usage of time 
ratios to reduce work RVUs is typically not appropriate, as often a 
change in physician time coincides with a change in the physician work 
intensity per minute. The commenters stated that CMS acknowledges that 
physician work intensity per minute is typically not linear and also 
that making reductions in RVUs in strict proportion to changes in time 
is inappropriate.
    Response: We do not agree with the commenters' characterization of 
our statements, and believe it misinterprets our view on this matter. 
We specifically stated in the CY 2017 proposed rule that we are not 
implying that the decrease in time as reflected in survey values must 
necessarily equate to a one-to-one or linear decrease in newly valued 
work RVUs, given that intensity for any given procedure may change over 
several years or within the intraservice period. Nevertheless, we 
believe that since the two components of work are time and intensity, 
that absent an obvious or explicitly stated rationale for why the 
relative intensity of a given procedure has specifically increased or 
that the reduction in time is disproportionally from less-intensive 
portions of the procedure, that significant decreases in time should 
generally be reflected in decreases to work RVUs.
    Comment: A few commenters, including the RUC, stated that they 
wanted to remind CMS of the Agency's and the RUC's longstanding 
position that treating all components of physician time as having 
identical intensity is incorrect, and inconsistently applying this 
treatment to only certain services under review creates inherent 
payment disparities in a payment system that is based on relative 
valuation. The commenters stated that when physician times are updated 
in the fee schedule, the ratio of intra-service time to total time, the 
number and level of bundled post-operative visits, the length of pre-
service, and the length of immediate post-service time may all 
potentially change for the same service. These changing components of 
physician time result in the physician work intensity per minute often 
changing when physician time also changes, and the commenters 
recommended that CMS always account for these nuanced variables. A few 
commenters also stated that the RUC recommendations now explicitly 
state when physician time has changed and address whether and to what 
magnitude these changes in time impact the work involved.
    Response: We appreciate the commenters' feedback. We understand 
that not all components of physician time have identical intensity and 
are mindful of this point when we are determining what the appropriate 
work RVU values should be. We also agree that the nuanced variables 
involved in the changing components of physician time must be accounted 
for, and it is our goal to do so when determining the appropriate 
valuation. We appreciate when the RUC recommendations provide as much 
detailed information regarding the recommended valuations as possible, 
including thorough discussions regarding physician time changes and how 
the RUC believes such changes should or should not impact the work 
involved, and we consider that information when conducting our review 
of each code.
    Comment: A few commenters stated that CMS places undue emphasis on 
time and not enough emphasis on intensity or whether a value is 
appropriately ranked in the Medicare fee schedule. The commenters 
stated that CMS ignores compelling evidence that work has changed if 
the time has not also changed, and that CMS uses codes as supporting 
references for new lower values that make no clinical sense. The 
commenters urged CMS to always consider all elements of relative work 
in every review, including time, relative intensity and relative work.
    Response: We disagree with commenters' statement that CMS ignores 
compelling evidence that work has changed if the time has not also 
changed. As previously stated, we are not making refinements solely in 
consideration of time, and if that were the case, changes in work RVU 
values that we adopted would consistently be comparable to the changes 
in the time that we adopted, and that is not the case. It is our 
practice to consider all elements of the relative work when we are 
reviewing and determining work RVU valuations. Additionally, our review 
of recommended work RVUs and time inputs generally includes review of 
various sources such as information provided by the RUC, other public 
commenters, medical literature, and comparative databases.
    Comment: A few commenters, including the RUC, stated that they do 
not agree with any suggested methodology to use a reverse building 
block methodology to systematically

[[Page 80276]]

reduce work RVUs for services. The commenters stated that any purely 
formulaic approach should never be used as the primary methodology to 
value services, and that it is highly inappropriate due to the fact 
that magnitude estimation was used to establish work RVUs for services.
    Response: We note that a formulaic approach is not being used as 
the primary methodology to value services. Instead, we use various 
methodologies to identify values to consider relative to other PFS 
services. We reiterate that we use the RUC-recommended values or the 
existing values as the base values. We then apply adjustments to the 
RUC-recommended values where, for example, the RUC's recommendations do 
not account for changes in time.
    Comment: Another commenter stated that the establishment of a time 
formula or use of reverse building block methodology as the primary 
method for valuation would completely disregard the possibility that 
physicians actually get better at what they do in favor of the 
erroneous conclusion that physicians only find new ways to cut corners. 
The commenter provided an example to demonstrate why time alone does 
not create value, and it is instead just one component of valuation. 
The commenter described an example of two watchmakers that make watches 
at different rates--one makes two watches per day, the other makes four 
watches per day. Each watch involves the same number of gears, 
sprockets, jewels, and escapements. One watchmaker is faster than the 
other: More focused, more experienced, more agile, and able to 
accomplish fastidious work more efficiently. At the end of one workday, 
the first watchmaker has two finished watches on the bench, while the 
other has four. The commenter questioned that if the watches are 
identical, why should the faster (better) watchmaker be paid half the 
price for each watch?
    Response: We understand some stakeholders' interest in the 
maintenance of work RVUs regardless of efficiencies gained. The work 
RVU is not a measure of our appreciation for the work ethic of the 
physician. Instead, the work RVU reflects the time and intensity of a 
particular service relative to others on the PFS. For this reason, we 
do not agree with the implication that we should ignore efficiencies in 
time, and instead believe that we are obligated to recognize when 
efficiencies change the relative resource costs involved in particular 
procedures. Of course, such efficiencies can occur as physicians become 
more proficient and can therefore complete a service or procedure in 
less time. We believe that time is a tangible resource, particularly 
the time of a physician or other practitioner paid on the PFS, and the 
statute specifically identifies it as such.
    Comment: A few commenters urged CMS to always enlist the assistance 
of medical officers familiar with procedures under review to examine 
CMS staff recommendations that reject the RUC recommendation. 
Similarly, a few commenters also urged CMS to work with the RUC to 
ensure that the robust discussions and key points that are discussed 
during RUC meetings are transferred to CMS in a way that is meaningful 
to staff to develop the proposed relative value recommendations.
    Response: We note that the values proposed by CMS are developed 
through consultation with, and input from CMS staff including medical 
officers, who often attend RUC meetings as observers, and therefore, 
have had the opportunity to listen to the discussions that take place 
and key points that are raised during the RUC meetings.
    Comment: One commenter stated that the recent rejections of RUC 
recommendations by CMS to instead reduce the work RVUs for almost every 
code, even if only by one or two percent, are illogical.
    Response: We do not agree with the suggestion that we reject the 
RUC-recommended values for most codes. Furthermore, given the numerical 
specificity of the RUC-recommended values and that so many PFS services 
reviewed under the misvalued code initiative are high-volume, we do not 
believe that relatively minor adjustments are unimportant or illogical 
because a minor adjustment to the work RVU of a high-volume code may 
have a significant dollar impact. However, we would be interested to 
know if stakeholders generally agree that the RUC-recommended values 
represent only rough estimates, and because of that belief, minor 
refinements would be considered illogical, as indicated by the 
commenter.
    Comment: A few commenters stated that they are concerned with the 
CMS trend to discredit intensity when assigning work RVUs to 
procedures. These commenters stated that intensity is a key factor when 
specialties are making work RVU recommendations and needs to remain an 
equal force along with time in the relative value system. One commenter 
stated that it is concerned that CMS is repeatedly ignoring intensity 
discussions and picking arbitrary crosswalks to justify lowering work 
RVU values. One commenter stated that by placing the same value on 
clearly different services that vary both in intensity and in types of 
patients treated, CMS ignores its statutory requirement to consider 
time and intensity in the valuation of services. One commenter stated 
that CMS does not mention how it considers, weights or measures 
intensity, and there is no validity to the assumption that reduced time 
equals less work. The commenter stated that it found no published 
evidence supporting this, and states that if the same amount of work is 
performed for a shorter period of time, it is logical that the 
intensity of work per unit of time increases. The commenter stated that 
CMS must be transparent and demonstrate why current intensity 
measurements are not appropriate, and if there is a more accurate way 
to measure intensity, this must be clearly elucidated with evidence for 
superiority of the alternative proposal.
    Response: We disagree that we discredit intensity when we establish 
work RVUs for procedures. We reiterate that we use RUC-recommended 
values or existing values, which we understand to incorporate an 
assessment of intensity, as the base values, and then subsequently 
apply adjustments as necessary. Additionally, as we have previously 
stated, we recognize that it would not be appropriate to develop work 
RVUs solely based on time given that intensity is also an element of 
work. Additionally, if we were to disregard intensity altogether, the 
work RVUs for all services would be developed solely based on time 
values, and that is absolutely not the case. We have previously stated 
that in cases where the RUC's recommendations do not account for 
changes in time, but do provide a persuasive explanation regarding why 
the time has drastically changed but the work RVU value has remained 
the same, our tendency has been to use those values as recommended. 
When the RUC's recommendations do not account for changes in time, and 
provide no explanation as to why this is appropriate, we have made 
changes to the RUC-recommended values to account for changes in time.
    We also disagree that we ignore the statutory requirement to 
consider time and intensity in the valuation of services. Based on the 
assessments of CMS medical officers and other reviewers, as well as 
upon consideration of the survey results, and the rationales in the 
recommendations, we make determinations about the overall work 
valuations. We acknowledge that the degree to which intensity varies 
among different procedures is a relatively subjective assessment, and 
we understand that sometimes stakeholders

[[Page 80277]]

may have a different perspective in cases where the intensities of 
procedures differ. We recognize that the IWPUT measure is a derived 
value with specific uses for quantifying intensity. However, the 
limited way in which that derived value is used under the RUC valuation 
process, we believe reflects a general consensus that there are not 
widely accepted metrics for intensity. As a part of recommendations for 
misvalued codes, we welcome any information from stakeholders for us to 
more objectively measure intensity.
    Comment: A few commenters stated that they are concerned with the 
current implied methodology that the 25th survey percentile is the 
ceiling for RUC recommendations, and stated that if codes are 
continually sent forth for re-survey and the 25th percentile is the 
ceiling, a built in reduction is applied to all surveyed codes just by 
the nature of surveying the codes, regardless of other factors.
    Response: We disagree with commenters' statement that the 25th 
survey percentile is the ceiling for RUC recommendations. We note that, 
as previously stated in the CY 2011 final rule with comment period (75 
FR 73328), we had concerns that surveys conducted on existing codes 
produced predictable results, and upon clinical review of a number of 
these situations, we were concerned over the validity of the survey 
results since the survey values often were very close to the current 
code values. Increasingly, the RUC is choosing to recommend the 25th 
percentile survey value, potentially responding to the same concern we 
have identified, rather than recommending the median survey value that 
had historically been the most commonly used. We reiterate that this 
does not designate the 25th percentile as the ceiling, rather suggests 
that in many instances the 25th percentile is the most appropriate 
since it is more frequently being identified through the RUC process as 
the recommended value.
    Comment: One commenter stated that the time data obtained through 
the RUC survey process based on subjective physician perceptions of 
time, may not be the most accurate data available on intraoperative 
time. The commenter stated that CMS should be open to reviewing 
additional sources of objective validated time data, and that such 
sources might include peer reviewed and published studies of 
comparative surgery times amongst different procedures in the same 
institution using standardized metrics. Another commenter stated that 
if CMS seeks specific information to substantiate time and intensity 
changes associated with services, they should specify these clearly so 
stakeholders can provide the necessary data detailing changes over 
time.
    Response: As previously discussed, our review of work RVUs and time 
inputs utilizes information from various resources. It 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 comparison with other codes with the 
PFS, consultation with other physicians and health care professionals 
within CMS and the federal government, as well as Medicare claims data. 
Additionally, 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. However, we 
continue to seek information regarding the best sources of objective, 
routinely-updated, auditable, and robust data regarding the resource 
costs of furnishing PFS services.
    We thank the commenters for their feedback. We did not receive any 
comments regarding specific potential alternatives to making the 
adjustments that would recognize overall estimates of work in the 
context of changes in the resource of time for particular services as 
requested. However, we appreciate the commenters' sharing their 
concerns and suggestions and will continue to consider them as we 
continue examining the valuation of services, and as we explore the 
best way to address these issues.
3. Requests for Refinement Panel
    Consistent with the policy finalized in the CY 2016 PFS final rule 
with comment period, we have retained the Refinement Panel process for 
use with codes with interim final values where additional input by the 
panel is likely to add value as a supplement to notice and comment 
rulemaking. Because there are no codes with interim final values in 
this final rule, the refinement panel is not necessary for CY 2017. We 
note that many commenters requested inclusion of codes with proposed 
values for a refinement panel. While these requests are not consistent 
with our established process, given the number of requests we received, 
we are addressing them here. Many commenters appear to believe that 
that the purpose of the refinement panel process was to serve as a kind 
of ``appeals'' or reconsideration process outside of notice and comment 
rulemaking and that we have effectively eliminated a useful appeals 
process. We understand that the refinement panel has been perceived as 
an appeals process by many stakeholders. However, as we have previously 
clarified, the purpose of the refinement panel process was to assist us 
in reviewing the public comments on CPT codes with interim final work 
RVUs and to consider more fully the interests of the specialty 
societies who provide input on RVU work time and intensity with the 
budgetary and redistributive effects that could occur if we accepted 
extensive increases in work RVUs across a broad range of services. From 
our perspective, the objective of the refinement panel has long been to 
provide a needed venue for stakeholders to present any new clinical 
information that was not available at the time of the RUC valuation for 
interim final values in order that we arrive at the most appropriate 
final valuation, especially since the initial values for such codes 
were generally established approximately 2 months prior to being used 
for Medicare payment. In recent years, we have continually observed 
that the material presented to the refinement panel largely raised and 
discussed issues and perspective already included as part of the RUC 
meetings and considered by us.
    We believe that our new process, in which we propose the vast 
majority of code values in the proposed rule for public comment on 
those proposed values prior to their taking effect, provides 
stakeholders and the public with several opportunities to present data 
or information that might affect code valuation. We believe that this 
is generally consistent with the purpose of the rulemaking process and 
reflects our efforts to increase transparency and accountability to the 
public. We also note that we continue to seek new information that is 
relevant to valuation of particular services, including those with 
values recently finalized, for use in future rulemaking. We believe 
that notice and comment rulemaking provides the most appropriate means 
for valuing services under the PFS. We note that in several instances 
in this final rule, thoughtful and informative comments have helped us 
to finalize values for CY 2017 that we believe are improved from those 
we had proposed. In many cases, these changes reflect the RUC-
recommended value. Therefore, we urge commenters to review this 
information and continue to consider how we might continue to improve 
the notice and comment rulemaking process rather than establish a 
process outside of notice and comment rulemaking.
    Table 27 contains a list of codes for which we proposed work RVUs; 
this includes all RUC recommendations received by February 10, 2016, 
and

[[Page 80278]]

codes for which we established interim final values in the CY 2016 PFS 
final rule with comment period. When the proposed work RVUs vary from 
those recommended by the RUC or for which we do not have RUC 
recommendations, we address those codes in the portions of this section 
that are dedicated to particular codes. The final work RVUs and work 
time and other payment information for all CY 2017 payable codes are 
available on the CMS Web site under downloads for the CY 2017 PFS final 
rule at http://www.cms.gov/physicianfeesched/downloads/.
4. Methodology for Proposing the Direct PE Inputs To Develop PE RVUs
a. Background
    On an annual basis, the RUC provides us 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 PFS, consultation with 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's recommendations appropriately estimate the 
direct PE inputs (clinical labor, disposable supplies, and medical 
equipment) required for the typical service, are 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 inputs 
includes many refinements that are common across codes, as well as 
refinements that are specific to particular services. Table 28 details 
our finalized refinements of the RUC's direct PE recommendations at the 
code-specific level. In this final 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 
proposed impact on direct costs for that service. We note 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 proposed 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 
proposed refinements listed in Table 28 result in changes under the 
$0.32 threshold and are unlikely to result in a change to the proposed 
RVUs.
    We also note that the final direct PE inputs for CY 2017 are 
displayed in the CY 2017 direct PE input database, available on the CMS 
Web site under the downloads for the CY 2017 final rule at www.cms.gov/PhysicianFeeSched/. The inputs displayed there have also been used in 
developing the final CY 2017 PE RVUs as displayed in Addendum B.
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. The direct PE input recommendations generally 
correspond to the work time values associated with services. We believe 
that inadvertent discrepancies between work time values and direct PE 
inputs should be refined or adjusted in the establishment of proposed 
direct PE inputs to resolve the discrepancies.
(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 over several years of rulemaking, 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 preservice 
or postservice 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 the clinical staff 
may be occupied with a preservice or postservice 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 since any items in the room in question would be available if the 
room is not being occupied by a particular patient. For additional 
information, we refer readers to our discussion of these issues 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, 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

[[Page 80279]]

than the time typically allotted for certain tasks. In those cases, we 
review 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 conform to the standard 
times for those tasks. In addition, in cases when a service is 
typically billed with an E/M service, we remove the preservice 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. This is because codes more recently 
reviewed would be more likely to have a greater number of clinical 
labor tasks as a result of the general tendency to increase the number 
of clinical labor tasks. To mitigate the potential negative impact of 
these additions, we review 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.
(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 or that cannot be allocated to 
individual services or patients. We have addressed these kinds of 
recommendations in previous rulemaking (78 FR 74242), and we do not use 
items included in these recommendations as direct PE inputs in the 
calculation of PE RVUs.
(5) 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, however, include 
supply or equipment items that are not currently in the direct PE input 
database. In these cases, the RUC has historically recommended that a 
new item be created and has facilitated our pricing of that item by 
working with the specialty societies to provide us copies of sales 
invoices. For CY 2017, we received invoices for several new supply and 
equipment items. Tables 30 and 31 detail the invoices received for new 
and existing items in the direct PE database. As discussed in section 
II.A. of this final 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 during the 60-day public comment period for this 
final rule. We expect that invoices received outside of the public 
comment period would be submitted by February 10th of the following 
year for consideration in future rulemaking, similar to our new process 
for consideration of RUC recommendations.
    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 30 and 31 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. A single invoice may not be reflective of 
typical costs and we 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 use 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.
(6) Service Period Clinical Labor Time in the Facility Setting
    Generally speaking, our proposed inputs did not include clinical 
labor minutes assigned to the service period 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. 
We address proposed code-specific refinements to clinical labor in the 
individual code sections.
(7) Procedures Subject to the Multiple Procedure Payment Reduction 
(MPPR) and the OPPS Cap
    We note that the public use files for the PFS proposed and final 
rules for each year display both the services subject to the MPPR lists 
on diagnostic cardiovascular services, diagnostic imaging services, 
diagnostic ophthalmology services and therapy services and the list of 
procedures that meet the definition of imaging under section 
1848(b)(4)(B) of the Act, and therefore, are subject to the OPPS cap 
for the upcoming calendar year. The public use files for CY 2017 are 
available on the CMS Web site under downloads for the CY 2017 PFS final 
rule at http://www.cms.gov/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFSFederal-Regulation-Notices.html.
4. Specialty-Mix Assumptions for Proposed Malpractice RVUs
    The final CY 2017 malpractice crosswalk table is displayed in the 
public use files for the PFS final rule. The public use files for CY 
2017 are available on the CMS Web site under downloads for the CY 2017 
PFS final rule at http://www.cms.gov/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFSFederal-Regulation-Notices.html. The table lists 
the CY 2017 HCPCS codes and their respective source codes used to set 
the final CY 2017 MP RVUs where the

[[Page 80280]]

source code for this calculation deviates from the source code for the 
utilization otherwise used for purposes of PFS ratesetting. The MP RVUs 
for all PFS services and the utilization crosswalk used to identify the 
source codes for all other codes are reflected in Addendum B on the CMS 
Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/.
5. Valuation of Specific Codes
(1) Anesthesia Services Furnished in Conjunction With Lower 
Gastrointestinal (GI) Procedures (CPT Codes 00740 and 00810)
    CPT codes 00740 and 00810 are used to report anesthesia furnished 
in conjunction with lower gastrointestinal (GI) procedures. In the CY 
2016 PFS proposed rule (80 FR 41686), we discussed that in reviewing 
Medicare claims data, a separate anesthesia service is typically 
reported more than 50 percent of the time that various colonoscopy 
procedures are reported. We discussed that given the significant change 
in the relative frequency with which anesthesia codes are reported with 
colonoscopy services, we believed the relative values of the anesthesia 
services should be reexamined. We proposed to identify CPT codes 00740 
and 00810 as potentially misvalued and sought public comment regarding 
valuation for these services.
    The RUC recommended maintaining the base unit value of 5 as an 
interim base value for both CPT code 00740 and 00810 on an interim 
basis, due to their concerns about the specialty societies' surveys. 
The RUC suggested that the typical patient vignettes used in the 
surveys for both CPT codes 00740 and 00810 were not representative of 
current typical practice and recommended that the codes be resurveyed 
with updated vignettes. We stated in the CY 2017 proposed rule that we 
believed it premature to propose any changes to the valuation of CPT 
codes 00740 and 00810, continued to believe that these services are 
potentially misvalued, and sought additional input from stakeholders 
for consideration during future rulemaking.
    Comment: Commenters were supportive of CMS' proposal to maintain 
the current values for CPT codes 00740 and 00810 for CY 2017. One 
commenter requested that CMS ensure that reimbursement for anesthesia 
services remains adequate to compensate providers for the cost of 
furnishing these services. Commenters also stated that due to greater 
complexity of furnishing anesthesia services compared to moderate 
sedation, payment for anesthesia services should not be lower than the 
values established for moderate sedation.
    One commenter stated that CMS' perception that these codes are 
misvalued is related to the distinction between screening, diagnostic, 
and therapeutic endoscopies. The commenter further stated that there 
are no differences in the clinical risk and anesthesia preparation 
regardless of the indication for these procedures and suggested that 
the current base unit value of 5 units for CPT codes 00740 and 00810 is 
appropriate and should be maintained. Another commenter stated that the 
frequency of use of separate anesthesia services concurrent with 
colonoscopy procedures is not due to any potential misvaluation, but 
rather due to changes in Medicare coverage and payment policies that 
encourage Medicare beneficiaries to undergo screening colonoscopies.
    Response: We appreciate the information provided by commenters. We 
continue to encourage feedback from interested parties and specialty 
societies, all of which we will take under consideration for future 
rulemaking.
(2) Soft Tissue Localization (CPT Codes 10035 and 10036)
    In the CY 2016 PFS final rule with comment period, we established 
the RUC-recommended work value as interim final for CPT codes 10035 and 
10036. We also made standard refinements to remove duplicative clinical 
labor and utilize standard equipment time formulas for the PACS 
workstation proxy (ED050).
    Comment on the CY 2016 PFS final rule with comment period: A 
commenter stated that the clinical labor task ``Review/read X-ray, lab, 
and pathology reports'' occurs during the preservice period, and it is 
a separate activity than ``Review examination with interpreting MD'', 
which occurs during the service period.
    Response in the CY 2017 PFS proposed rule: We continued to believe 
that the clinical labor was duplicative with the clinical labor for 
``Review examination with interpreting MD'' because we believed that 
the two descriptors detailed the same clinical labor activity taking 
place, rather than two separate and distinct tasks.
    In the CY 2017 proposed rule, we proposed to maintain our previous 
refinement to 0 minutes for this clinical labor task for CPT codes 
10035 and 10036. We also proposed to maintain the interim final work 
RVUs for CPT codes 10035 and 10036.
    We did not receive any comments in response to our proposed 
valuation on CPT codes 10035 and 10036 and we are finalizing the 
clinical labor task and work RVUs as proposed.
(3) Removal of Nail Plate (CPT Code 11730)
    We identified CPT code 11730 through a screen of high expenditures 
by specialty. The HCPAC recommended a work RVU of 1.10. We believed the 
recommendation for this service overestimates the work involved in 
performing this procedure, specifically given the decrease in physician 
intraservice and total time concurrently recommended by the HCPAC. We 
believed that a work RVU of 1.05, which corresponds to the 25th 
percentile of the survey results, more accurately represents the time 
and intensity of furnishing the service. To further support the 
validity of the use of the 25th percentile of the survey, we identified 
two crosswalk codes, CPT code 20606 (Arthrocentesis, aspiration and/or 
injection, intermediate joint or bursa), with a work RVU of 1.00, and 
CPT code 50389 (Removal of nephrostomy tube, requiring fluoroscopic 
guidance), with a work RVU of 1.10, both of which have identical 
intraservice times, similar total times and similar intensity. We noted 
that our proposed work RVU of 1.05 for CPT code 11730 falls halfway 
between the work RVUs for these two crosswalk codes. CPT code 11730 may 
be reported with add-on CPT code 11732 to report performance of the 
same procedure for each additional nail plate procedure.
    Since CPT code 11732 was not reviewed by the HCPAC for CY 2017, we 
proposed a new work value to maintain the consistency of this add-on 
code with the base code, CPT code 11730. We proposed to remove 2 
minutes from the physician intraservice time to maintain consistency 
with the HCPAC-recommended reduction of 2 minutes from the physician 
intraservice time period for the base code. We are using a crosswalk 
from the value for CPT code 77001 (Fluoroscopic guidance for central 
venous access device placement, replacement (catheter only or 
complete), or removal (includes fluoroscopic guidance for vascular 
access and catheter manipulation, any necessary contrast injections 
through access site or catheter with related venography radiologic 
supervision and interpretation, and radiographic documentation of final 
catheter position) (List separately in addition to code for primary 
procedure)), which has similar physician intraservice and total time 
values; therefore, we proposed a

[[Page 80281]]

work RVU of 0.38 for CPT code 11732. As further support for this 
proposal, we noted that this proposed RVU reduction is similar to the 
value obtained by subtracting the incremental difference in the current 
and recommended work RVUs for the base code from the current value of 
CPT code 11732.
    We proposed to use the HCPAC-recommended direct PE inputs for CPT 
code 11730. We proposed to apply some of the HCPAC-recommended 
refinements for CPT code 11730 to CPT code 11732, including the removal 
of the penrose drain (0.25 in x 4 in), lidocaine 1%-2% inj (Xylocaine), 
applicator (cotton-tipped, sterile) and silver sulfadiazene cream 
(Silvadene), as well as the reduction of the swab-pad, alcohol from 2 
to 1. In addition, we proposed not to include the recommended supply 
items ``needle, 30g, and syringe, 10-12ml'' since other similar items 
are present, and we believe inclusion of these additional supply items 
would be duplicative. For clinical labor, we proposed to assign 8 
minutes to ``Assist physician in performing procedure'' to maintain a 
reduction that is proportionate to that recommended for CPT code 11730. 
For the supply item ``ethyl chloride spray,'' we believed that the 
listed input price of $4.40 per ounce overestimates the cost of this 
supply item, and we solicited comment on the accuracy of this supply 
item price. Finally, we proposed to add two equipment items as was done 
in the base code, basic instrument pack and mayo stand, and proposed to 
adjust the times for all pieces of equipment to eight minutes to 
reflect the clinical service period time.
    Comment: A commenter states that the work for CPT code 11730 has 
not changed since the previous recommendation, thus maintenance of a 
work RVU of 1.10 is proper.
    Response: We continue to believe that the HCPAC-recommended 
reduction in intraservice and total time supports a reduction in our 
estimation of the physician work value of furnishing this service.
    Comment: The HCPAC stated that it did not support the proposed 
decrease in the work RVU for CPT code 11732.
    Response: We welcome any additional input as to the appropriate 
valuation of CPT code 11732. At this time, we continue to believe that 
a work RVU of 0.38 is appropriate, considering its relationship to CPT 
code 11730. We proposed values for CPT code 11732 based on its being an 
add-on code for CPT code 11730. We remind commenters and stakeholders 
that they may nominate this code family as potentially misvalued if 
they believe that both codes should be evaluated through the standard 
process, which would involve use of physician survey data and input 
from the HCPAC for both codes. We are finalizing work RVUs of 1.05 for 
CPT code 11730 and 0.38 for CPT code 11732, as well as the proposed PE 
refinements.
(4) Bone Biopsy Excisional (CPT Code 20245)
    In CY 2014, CPT code 20245 was identified by the RUC's 10-Day 
Global Post-Operative Visits Screen.
    For CY 2017, the RUC recommended a work RVU of 6.50 for CPT code 
20245, including a change in global period from 10 to 0 days. We 
disagreed with this value given the significant reductions in the 
intraservice time, total time, and the change in the office visits 
assuming the change in global period. The intraservice and total times 
were decreased by approximately 33 and 53 percent respectively; while 
the elimination of three post-operative visits (one CPT code 99214 and 
two CPT code 99213 visits) alone would reduce the overall work RVU by 
at least 38 percent under the reverse building block methodology. We 
also note that the RUC-recommended work RVU of 6.50 only represents a 
27 percent reduction relative to the previous work RVU of 8.95. To 
develop a work RVU for this service, we used a crosswalk from CPT code 
19298 (Placement of radiotherapy after loading brachytherapy catheters 
(multiple tube and button type) into the breast for interstitial 
radioelement application following (at the time of or subsequent to) 
partial mastectomy, includes imaging guidance), since we believe the 
codes share similar intensity and total time and the same intraservice 
time of 60 minutes. Therefore, for CY 2017, we proposed a work RVU of 
6.00 for CPT code 20245.
    Comments: Several commenters, including the RUC, stated their 
objection to the proposed crosswalk, indicating that it underestimated 
the total time by 10 minutes and the physician work involved in 
furnishing the service. Commenters recommended CMS accept the RUC-
recommended work RVU of 6.50.
    The RUC also noted the current time of CPT code 20245 was based on 
a survey of 35 individuals more than 15 years ago and due to the 
previous flawed survey, the resulting IWPUT was almost zero. Given 
these discrepancies, the surveyed time of 60 minutes better reflects an 
appropriate level of intensity and complexity (IWPUT= 0.071) for this 
service relative to other 0-day global procedures.
    Another commenter stated concern that the values proposed by CMS 
have been arrived at using methodologies that are not consistent with 
the RUC-recommended values, and therefore, are not appropriately 
relative to other similar services.
    Response: Thank you for your comments. We present the information 
in Table 16 to illustrate the differences between the CMS crosswalked 
code and the additional RUC comparator codes.

                                     Table 16--Crosswalk for CPT Code 20245
----------------------------------------------------------------------------------------------------------------
                                                                   Intra-service
            CPT code                        Descriptor                 time         Total time       Work RVU
----------------------------------------------------------------------------------------------------------------
20245...........................  Bone Biopsy Excisional........              60             160          * 6.50
19298...........................  Place Breast Rad Tube/Cath....              60             169            6.00
36247...........................  Ins Cath ABDL/-Ext Art 3RD....              60             131            6.29
43262...........................  Endocholangiopancreatograp....              60             138            6.60
----------------------------------------------------------------------------------------------------------------
* RUC recommended value.

    Although the total times for CPT codes 19298 and 20245 are not 
identical, we continue to believe it is a more accurate comparison than 
the additional codes submitted by the RUC, which have 22-29 minutes 
less total time.
    We note that according to the most recent survey, respondents 
lowered the work RVU of the 25th percentile, which we typically accept, 
from 6.06 RVUs to 4.94 RVUs when the code was revalued with a 0-day 
global period.
    For CY 2017, we are finalizing the work RVU of 6.00 for CPT code 
20245.

[[Page 80282]]

(5) Insertion of Spinal Stability Distractive Device (CPT Codes 22867, 
22868, 22869, and 22870)
    For CY 2016, the CPT Editorial Panel converted two Category III 
codes to Category I codes describing the insertion of an interlaminar/
interspinous process stability device (CPT codes 22867 and 22869) and 
developed two corresponding add-on codes (CPT codes 22868 and 22870). 
The RUC recommended a work RVU of 15.00 for CPT code 22867, 4.00 for 
CPT code 22868, 7.39 for CPT code 22869, and 2.34 for CPT code 22870.
    We believe that the RUC recommendations for CPT codes 22867 and 
22869 overestimate the work involved in furnishing these services. We 
believe that a crosswalk to CPT code 36832 (Revision, open, 
arteriovenous fistula; without thrombectomy, autogenous or 
nonautogenous dialysis graft (separate procedure)), which has a work 
RVU of 13.50 is a more accurate comparison. CPT code 36832 is similar 
in total time, work intensity, and number of visits to CPT code 22867. 
This crosswalk is supported by the ratio between total time and work in 
the key reference service, CPT code 63047 (Laminectomy, facetectomy and 
foraminotomy (unilateral or bilateral with decompression of spinal 
cord, cauda equina and/or nerve root[s], [eg, spinal or lateral recess 
stenosis]), single vertebral segment; lumbar). Therefore, we proposed a 
work RVU of 13.50 for CPT code 22867. For CPT code 22869, we believed 
that CPT code 29881 (Arthroscopy, knee, surgical; with meniscectomy 
(medial OR lateral, including any meniscal shaving) including 
debridement/shaving of articular cartilage (chondroplasty), same or 
separate compartment(s), when performed) is an appropriate crosswalk 
based on clinical similarity, as well as intensity and total time. CPT 
code 29881 has a work RVU of 7.03; therefore, we proposed a work RVU of 
7.03 for CPT code 22869. We proposed the RUC-recommended work RVU for 
CPT codes 22868 and 22870 without refinement.
    Comment: Several commenters disagreed with our proposed valuation 
of the work RVU for CPT codes 22867 and 22869. They stated that the RUC 
crosswalk for each of these codes, respectively, is either identical to 
or a better match than the proposed CMS crosswalk.
    Response: We recognize that the RUC crosswalk of CPT code 29915 for 
CPT code 22867 has a total time that is more similar to the new code 
than the crosswalk we proposed (CPT code 36832). We consider multiple 
factors when identifying appropriate crosswalk codes. We note that 
RUC's crosswalk, CPT code 29915, had very low service utilization, 355 
in 2015, and was last reviewed by CMS and the RUC in April 2010. CPT 
code 36832, in contrast, had service utilization of 21,529 in 2015, and 
was most recently reviewed in October 2013. We considered the 
combination of these factors in choosing a crosswalk and determining a 
proposed work RVU. Commenters did not present any additional clinical 
information or data about this code that would lead us to reconsider 
our proposed valuation; therefore, we are finalizing the work RVU of 
13.50 for CPT code 22867.
    With regard to CPT code 22869, we disagree that the RUC crosswalk 
to CPT code 29880 is a closer comparison than CPT code 29881. The 
intraservice time for the newly created CPT code 22869 (43 minutes) is 
between that of the RUC recommended crosswalk CPT code 29880 (45 
minutes) and the CMS crosswalk CPTcode 29881 (40 minutes). Total time 
for CPT code 29881, however, is identical to total time for CPT code 
22869 (194 minutes), whereas the RUC recommended crosswalk CPT code 
29880 has a higher total time (199 minutes). We continue to believe, 
therefore, that our crosswalk is appropriate and we are finalizing the 
proposed work RVU of 7.03 for CPT code 22869.
(6) Biomechanical Device Insertion (CPT Codes 22853, 22854, and 22859)
    For CY 2016, the CPT Editorial Panel established three new Category 
I add-on codes and deleted one code to provide a more detailed 
description of the placement and attachment of biomechanical spinal 
devices. For CPT code 22853, the RUC recommended a work RVU of 4.88. 
For CPT codes 22854 and 22859, the RUC-recommended work RVUs are 5.50 
and 6.00, respectively.
    In reviewing the code descriptors, descriptions of work and 
vignettes associated with CPT codes 22854 and 22859, we concluded that 
the two procedures, in addition to having identical work time, contain 
many clinical similarities and do not have quantifiable differences in 
overall intensity. Therefore, we proposed the RUC-recommended work RVU 
of 5.50 for both CPT code 22854 and CPT code 22859. We believe that the 
RUC-recommended work RVU of 4.88 for CPT code 22853 overestimates the 
work in the procedure relative to the other codes in the family. We 
proposed a work RVU of 4.25 for CPT code 22853 based a crosswalk from 
CPT code 37237 (Transcatheter placement of an intravascular stent(s) 
(except lower extremity artery(s) for occlusive disease, cervical 
carotid, extracranial vertebral or intrathoracic carotid, intracranial, 
or coronary), open or percutaneous, including radiological supervision 
and interpretation and including all angioplasty within the same 
vessel, when performed; each additional artery (List separately in 
addition to code for primary procedure)), which is similar in time and 
intensity to the work described by CPT code 22853.
    Comment: Several commenters disagreed with our proposed valuation 
of the work RVU of 4.25 for CPT code 22853 rather than the RUC-
recommended work RVU of 4.88. They requested clarification regarding 
our crosswalk for this new code to CPT code 37237 instead of the RUC-
recommended crosswalk of CPT code 57267.
    Response: We take many factors into consideration when valuing a 
work RVU for a new code. We note that CPT code 57267 and CPT code 37237 
have identical intraservice times and very similar total work times. We 
note that CPT code 37237 was most recently valued in April 2013, 
whereas the RUC crosswalk CPT code 57267 was last reviewed in 2004. We 
continue to believe that CPT code 37237 is an appropriate crosswalk for 
valuing the new CPT code 22859. Therefore, we are finalizing our 
proposed work RVU of 4.25 for CPT code 22853.
    Comment: We received several comments objecting to our proposed 
work RVU of 5.50 for CPT code 22859, which is identical to the work RVU 
proposed by the RUC and accepted by CMS for CPT code 22854. Commenters 
provided detailed descriptions of the two procedures in an effort to 
demonstrate the higher intensity required by CPT code 22859 compared 
with CPT code 22854, thereby justifying the RUC-recommended work RVU of 
6.00 for CPT code 22859. Several commenters expressed confusion about 
the descriptors for all three of the new CPT codes (CPT codes 22853, 
22854, and 22859), in general, and stated their concern that the code 
descriptors do not clearly differentiate the work involved in 
furnishing the services.
    Response: While we are somewhat persuaded by commenters' detailed 
descriptions of the two procedures and the higher intensity of work 
involved in furnishing CPT code 22859 compared with CPT code 22854, we 
are concerned about a substantive disagreement between the RUC and 
survey respondents about the intensities of work involved in furnishing 
the services described by these new codes. The RUC and the survey 
respondents valued the

[[Page 80283]]

relative intensities of the two codes in the reverse order. The survey 
results indicated a work RVU of 8.16 (with 25th percentile of 7.0) for 
CPT code 22854 and a work RVU of 8.0 (with 25th percentile of 6.0) for 
CPT code 22859. The RUC reviewed the survey results and agreed that 
respondents overvalued the work involved in performing CPT code 22854. 
The RUC-recommended work RVU for CPT code 22854, which we are accepting 
as recommended, was established through a crosswalk to CPT code 37234. 
We agree that this is an appropriate crosswalk and valuation of this 
service. For CPT code 22859, the RUC also believed that the survey 
recommended work RVU of 8.0 was overvalued. The RUC recommended the 
25th percentile of survey results, with a work RVU of 6.0. We find it 
difficult to reconcile the conflicting valuations by the survey and the 
RUC of the absolute and relative intensity of these new codes.
    In addition to the survey results and RUC recommendations, we 
reviewed the descriptors of these codes and agree with commenters who 
found them vague and unclear. We share the concern of stakeholders who 
indicated that the lack of differentiation in the codes may lead to 
inconsistent use and reporting.
    Given the disagreement between the RUC and survey respondents 
regarding the order and level of intensity of these services, along 
with confusion about the code descriptors, we find that valuing the 
services of 22854 and 22859 differently from each another is difficult 
to justify. Therefore, we are finalizing our proposed work RVU of 5.50 
for CPT code 22859.
(7) Repair Flexor Tendon (CPT Codes 26356, 26357, and 26358)
    In the CY 2016 PFS final rule with comment period, we established 
an interim final work RVU of 9.56 for CPT code 26356 after considering 
both its similarity in time to CPT code 25607 (Open treatment of distal 
radial extra-articular fracture) and the recommended reduction in time 
relative to the current times assumed for this procedure. We 
established an interim final work RVU of 10.53 for CPT code 26357 based 
on a direct crosswalk from CPT code 27654 (Repair, secondary, Achilles 
tendon, with or without graft), as we believed that this work RVU 
better reflected the changes in time for this procedure. For the last 
code in the family, we established an interim final work RVU of 12.13 
for CPT code 26358, based on the RUC-recommended increment of 1.60 work 
RVUs relative to CPT code 26357.
    Comment on the CY 2016 PFS final rule with comment period: We 
received several comments regarding the interim final work values for 
this family of codes. One commenter stated that it was inappropriate to 
use time ratios to evaluate CPT code 26356 as it was last valued in 
1995, noting that there was an anomalous relationship between the 
current work RVU and the imputed time components in the RUC database. 
This commenter also pointed out that when the previous time was 
developed, fabrication of a splint was considered to be part of the 
intraservice work, while in the current survey instrument, the 
fabrication of the splint is considered to be part of the postservice 
work since it is a dressing. This commenter urged CMS to adopt the RUC 
recommendations. A different commenter agreed that the CMS crosswalk to 
CPT code 25607 was an appropriate crosswalk for CPT code 26356 and 
supported the CMS work RVU of 9.56.
    Response in the CY 2017 PFS proposed rule: We appreciate the 
support from the commenter. We continue to believe that our crosswalk 
for this code is an appropriate choice, due to our estimate of overall 
work between CPT code 26356 and CPT code 25607. We appreciate the 
commenters' concerns regarding the time ratio methodologies and have 
responded to these concerns about our methodology in section II.L of 
this final rule. Although we note the commenter's statement about how 
the service period in which fabrication of a splint takes place may 
have evolved over time, we do not agree that this task would be 
responsible for a decrease in intraservice survey time, as the 
postservice survey time for CPT code 26356 remained unchanged at 30 
minutes. If the decrease in intraservice time had been due to the shift 
of splinting from the intraservice period to the postservice period, 
then we would have expected to see an increase in the postservice 
period minutes. However, they remained exactly the same in the 
physician survey for CPT 26356. As we wrote earlier in this section, we 
believe in the validity of using pre-existing time values as a point of 
comparison, and we believe that we should account for efficiencies in 
time when the recommended work RVU does not account for those 
efficiencies. After consideration of comments received, we proposed to 
maintain CPT code 26356 at its current work RVU of 9.56 for CY 2017.
    Comment on the CY 2016 PFS final rule with comment period: Several 
commenters disagreed with the work RVU for CPT code 26357. One 
commenter stated that the CMS crosswalk to CPT code 27654 had less 
total time and resulted in an inappropriately lower derived intensity. 
This commenter urged CMS to adopt the RUC-recommended work value. 
Another commenter stated that a better crosswalk for CPT code 26357 
would be CPT code 25608 (Open treatment of distal radial intra-
articular fracture or epiphyseal separation), the next code in the same 
upper extremity family that CMS used for the initial crosswalk. This 
commenter stated that the CMS crosswalk for CPT code 26357 created a 
rank order anomaly in terms of intensity within this family, and that 
the commenter's suggested crosswalk would create two pairs of matched 
codes, survey CPT codes 26356/26357 with crosswalk CPT codes 25607/
25608.
    Response in the CY 2017 PFS proposed rule: We appreciate the 
suggested crosswalk from the commenters, and we agree that the choice 
of the initial CMS crosswalk creates a rank order anomaly within the 
family in terms of intensity. As a result, after consideration of 
comments received, we proposed to instead value CPT code 26357 at the 
25th percentile survey work RVU of 11.00 for CY 2017. This valuation 
corrects the anomalous intensity within the Repair Flexor Tendon family 
of codes, and preserves the RUC-recommended increment between CPT codes 
26356 and 26357.
    Comment on the CY 2016 PFS final rule with comment period: The 
commenters agreed that the RUC-recommended increment of 1.60 was 
appropriate for the work RVU of CPT code 26358 when added to the work 
RVU of CPT code 26357. However, commenters stated that this increment 
of 1.60 should be added to the RUC-recommended work value for CPT code 
26357, and not the CMS refined value from the CY 2016 PFS final rule 
with comment period.
    Response in the CY 2017 PFS proposed rule: We also continue to 
believe that the increment of 1.60 is appropriate for the work RVU of 
CPT code 26358. After consideration of comments received, we therefore 
proposed to set the work RVU for this code at 12.60 for CY 2017, based 
on the increment of 1.60 from CPT code 26357's proposed work RVU of 
11.00.
    In the CY 2017 proposed rule, we proposed to maintain the current 
direct PE inputs for all three codes.
    The following is a summary of the comments we received regarding 
our proposed valuation of the Repair Flexor Tendon codes:

[[Page 80284]]

    Comment: One commenter expressed support for the proposed work RVU 
for the flexor tendon codes.
    Response: We appreciate the support from the commenters.
    After consideration of comments received, we are finalizing our 
proposed valuation of the Repair Flexor Tendon codes.
(8) Closed Treatment of Pelvic Ring Fracture (CPT Codes 27197 and 
27198)
    For CY 2017, the CPT Editorial Panel deleted CPT codes 27193 and 
27194 and replaced them with new CPT codes 27197 and 27198. The RUC 
recommended a work RVU of 5.50 for CPT code 27193, and a work RVU of 
9.00 for CPT code 27198. We proposed to change the global period for 
these services from 90 days to 0 days because these codes typically 
represent emergent procedures with which injuries beyond pelvic ring 
fractures are likely to occur; we believe it is typical that multiple 
practitioners would be involved in providing post-operative care and it 
is likely that a practitioner furnishing a different procedure is more 
likely to be providing the majority of post-operative care. If other 
practitioners are typically furnishing care in the post-surgery period, 
we believe that the six post-service visits included in CPT code 27197, 
and the seven post-service visits included in CPT code 27198, would 
likely not occur. This is similar to our CY 2016 review and valuation 
of CPT codes 21811 (Open treatment of rib fracture(s) with internal 
fixation, includes thoracoscopic visualization when performed, 
unilateral; 1-3 ribs), 21812 (Open treatment of rib fracture(s) with 
internal fixation, includes thoracoscopic visualization when performed, 
unilateral; 4-6 ribs), and 21813 (Open treatment of rib fracture(s) 
with internal fixation, includes thoracoscopic visualization when 
performed, unilateral; 7 or more ribs). In our valuation of those 
codes, we determined that a 0-day, rather than a 90-day global period 
was preferable, in part because those codes describe rib fractures that 
would typically occur along with other injuries, and the patient would 
likely already be receiving post-operative care because of the other 
injuries. We believe that the same rationale applies here. To establish 
a work RVU for CPT code 27197, we proposed crosswalking this code to 
CPT code 65800 (Paracentesis of anterior chamber of eye (separate 
procedure); with removal of aqueous), due to its identical intraservice 
time and similar total time, after removing the work associated with 
postoperative visits, and its similar level of intensity. Therefore, we 
proposed a work RVU of 1.53 for CPT code 27197. For CPT code 27198, we 
proposed crosswalking this code to CPT code 93452 (Left heart 
catheterization including intraprocedural injection(s) for left 
ventriculography, imaging supervision and interpretation, when 
performed) which has an identical intraservice time and similar total 
time, after removing the work associated with post-operative visits 
from CPT code 27198. We proposed a work RVU of 4.75 for CPT code 27198.
    Comment: Some commenters stated that the new coding for these 
services was designed, in part, to address the appropriateness of a 90-
day global period by differentiating between higher energy and lower 
energy fractures. According to these commenters, the CPT Editorial 
Panel redefined these codes as treating injuries from higher energy and 
more unstable posterior pelvic ring injuries, and added a parenthetical 
directing physicians to use E/M billing for closed treatment of 
isolated lower energy fractures. These commenters say that the new 
coding clarifies when to use E/M coding for these services and when to 
bill these two codes. They state that these codes should thus remain 
valued with 90-day global periods while less complicated fractures will 
be billed with E/M coding.
    Response: We took into consideration many factors when determining 
the appropriate global period of this service. While we understand that 
the new coding was partly designed to address the appropriateness of a 
90-day global period, we continue to believe that a 0-day, rather than 
a 90-day, global period is more appropriate for this code, since we 
believe that the patient would likely already be receiving post-
operative care because of other injuries. We also believe that the 
practitioner who performs the original procedure may not typically be 
performing the follow-up care, and shifting to a 0-day global period 
will allow the appropriate practitioner to report the follow up care, 
when appropriate.
    Comment: A commenter stated that assigning a 0-day global period to 
this code will cause these codes to be different from all other closed 
fracture codes, which the commenter believes will lead to confusion for 
physicians and rank order anomalies.
    Response: The commenter did not present sufficient information to 
explain why the variation in global periods for these kinds of services 
would uniquely cause rank order anomalies. We agree that it is 
preferable that codes for similar procedures have similar global 
periods; however, other factors specific to each code are taken into 
consideration when determining the appropriate global period. In the 
case of CPT codes 27197 and 27198, we continue to believe that the 
emergent nature inherent with the injuries considered typical would 
mean that other physicians would typically perform follow-up care. For 
detailed guidance on billing global surgical procedures, we direct 
readers to the Medicare Claims Processing Manual, Pub. 100-04; billing 
requirements and adjudication of claims requirements for global 
surgeries are under chapter 12, sections 40.2 and 40.4. We also note 
that if this procedure is billed concurrently with another procedure 
that is valued with a 10-day or 90-day global period, that the follow 
up visits associated with the latter procedure would occur as part of 
that package, while follow-up visits for these two codes would be 
reported using E/M coding.
    Comment: A commenter states that, for procedures valued as part of 
a 90-day global period, the physician who is performing the primary 
portion of the treatment is obligated to follow the patient throughout 
the entire global period and furnish follow-up care.
    Response: We understand the commenter's perspective that the 
treating physician is obligated to provide follow-up care within the 
global period; however, we do not believe that this necessitates the 
valuation of every surgical procedure with a 10-day or 90-day global 
period. While the treating physician would ideally provide follow-up 
care for these codes were they to be assigned 90-day global periods, we 
continue to believe that this would be an atypical situation for these 
types of treatments and for these types of injuries. We note that the 
assignment of a global period occurs in the process of evaluation of 
codes and we take into consideration factors specific to each 
procedure. There may be many instances when codes with similar 
procedures have different global periods. We are finalizing as proposed 
the work RVUs of 1.53 for CPT code 27197 and 4.75 for CPT code 27198, 
as well as an assignment of 0-day global periods.
(9) Bunionectomy (CPT Codes 28289, 28291, 28292, 28295, 28296, 28297, 
28298, and 28299)
    The RUC identified CPT code 28293 as a 90-day global service with 
more than 6 office visits and CPT codes 28290-28299 as part of the 
family of services. In October 2015, the CPT Editorial Panel created 
two new CPT codes (28291, 28295), deleted CPT codes 28290, 28293, and 
28294 and revised CPT codes 28289, 28292, 28296,

[[Page 80285]]

28297, 28298 and 28299 based on the rationale that more accurate 
descriptions of the services needed to be developed.
    For CPT codes 28289, 28292, 28296, 28297, 28298, and 28299, the RUC 
recommended and we proposed work RVUs of 6.90, 7.44, 8.25, 9.29, 7.75, 
and 9.29 respectively. For CPT code 28291, the RUC recommended a work 
RVU of 8.01 based on the 25th percentile of the survey. We believed the 
recommendation for this service overestimates the overall work involved 
in performing this procedure given the decrease in intraservice time, 
total time, and post-operative visits when compared to deleted 
predecessor CPT code 28293. Due to similarity in intraservice and total 
times, we believed a direct crosswalk of the work RVUs for CPT code 
65780 (Ocular surface reconstruction; amniotic membrane 
transplantation, multiple layers) to CPT code 28291 more accurately 
reflects the time and intensity of furnishing the service. Therefore, 
for CY 2017, we proposed a work RVU of 7.81 for CPT code 28291.
    For CPT code 28295, the RUC recommended a work RVU of 8.57 based on 
the 25th percentile of the survey. We believed the recommendation for 
this service overestimates the work involved in performing this 
procedure given the similarity in the intensity of the services and 
identical intraservice and total times as CPT code 28296. Therefore, we 
proposed a direct RVU crosswalk from CPT code 28296 to CPT code 28295. 
For CY 2017, we proposed a work RVU of 8.25 for CPT code 28295.
    Comments: A few commenters, including the RUC, objected to the 
proposed work RVUs for CPT codes 28291 and 28295. Commenters noted that 
deleted CPT code 28293 was marked by the RUC as ``not to use for 
validation of physician work''. The RUC noted the previous time was 
based on Harvard time and when reviewed in 1995, the RUC maintained the 
physician work and Harvard time because there was no compelling 
evidence to revise the value at that time.
    The RUC acknowledged that the deleted CPT code 28293 had 30 minutes 
more intra-service time and a higher work RVU of 11.48 compared to the 
recommended work RVU of 8.01 for CPT code 28291. However, the RUC 
stated the differences in the physician work, time, intensity and the 
actual new service as described in CPT code 28291 were appropriately 
accounted for in its recommendation.
    The RUC also stated disagreement with the proposed crosswalk of 
work RVUs from CPT code 28291 to CPT code 65780. The RUC stated it 
compared the family and relative ranking and believed CPT code 28291 
was more complex and intense than CPT code 28298. The relative 
difference in work and complexity was reviewed and correctly ranked by 
the survey respondents at the 25th percentile, which corresponds with 
the RUC-recommended value.
    One commenter stated that CPT code 28293 was deleted and a new CPT 
code was established because the two procedures were no longer 
synonymous. Also, the slight decrease in the intraoperative intensity 
with the new value is barely measurable, and therefore, the commenter 
does not agree with CMS that a work RVU of 7.81 is a more accurate 
valuation.
    One commenter stated that CPT code 28295 is more intense than CPT 
code 28296 because CPT code 28295 requires separate areas of 
dissection. With CPT code 28296, the osteotomy and soft tissue 
procedure are performed at the same anatomic location. The commenter 
stated this nuance in complexity is the rationale for separate codes 
and is similar to the rationale for separate cervical versus lumbar 
spine codes or artery versus vein codes for vascular work.
    Response: We appreciate additional information offered by the 
commenters. After consideration of comments received, we agreed with 
the additional information provided by commenters and are finalizing 
the RUC-recommend work RVUs of 6.90, 8.01, 7.44, 8.57, 8.25, 9.29, 7.75 
and 9.29 for CPT codes 28289, 28291, 28292, 28295, 28296, 28297, 28298 
and 28299; respectively.
(10) Endotracheal Intubation (CPT Code 31500)
    In the CY 2016 PFS final rule with comment period (80 FR 70914), we 
identified CPT code 31500 as potentially misvalued. The specialty 
societies surveyed this code, and after reviewing the survey responses 
(which included increases in time) the RUC recommended a work RVU of 
3.00 for CPT code 31500. After reviewing the RUC's recommendation, we 
proposed a work RVU of 2.66, based on a direct crosswalk to CPT code 
65855 (Trabeculoplasty by laser surgery), which has similar intensity 
and service times.
    Comment: Commenters requested that CMS finalize the RUC-recommended 
work RVU of 3.00 instead of CMS' proposed 2.66 work RVUs. The RUC 
stated that the surveyed median intraservice time is 10 minutes, 
representing a doubling of the current intraservice time of 5 minutes. 
Commenters also disagreed with CMS' proposed crosswalk from CPT code 
65855. The RUC stated that given the emergent nature of the services 
reported with CPT code 31500, there are few relevant physician work and 
time-based comparisons within the resource-based relative value scale 
(RBRVS).
    Response: We appreciate commenters' feedback on our proposal. As 
pointed out by the commenters, the survey data shows increased 
intraservice and total times for these services. We agree with 
commenters that due to the emergent nature of these services, there are 
few relevant physician work and time-based comparisons for this 
service. Therefore, due to the emergent nature of these services and 
service time increases, for CY 2017, we are finalizing a work RVU of 
3.00 for CPT code 31500.
(11) Flexible Laryngoscopy (CPT Codes 31572, 31573, 31574, 31575, 
31576, 31577, 31578, and 31579)
    After we identified CPT codes 31575 and 31579 as potentially 
misvalued (80 FR 70912-70914), the RUC referred the entire flexible 
laryngoscopy family of codes back to the CPT Editorial Panel for 
revision and the addition of several codes representing new technology 
within this family of services. At the May 2015 CPT meeting, the CPT 
Editorial Panel added three new codes to describe laryngoscopy with 
ablation or destruction of lesion and therapeutic injection. Based on 
the survey results, the time resources involved in furnishing the 
procedures described by this code family experienced a significant 
reduction in the intraservice period, yet the recommended work RVUs 
were not similarly reduced. Therefore, in reviewing the recommended 
values for this family of codes we looked for a rationale for increased 
intensity and absent such rationale, proposed to adjust the recommend 
work RVUs to account for significant changes in time.
    For CPT code 31575, we disagreed with the RUC-recommended work RVU 
of 1.00, and we instead proposed a work RVU of 0.94. We looked at the 
total time ratio for CPT code 31575, which is decreasing from 28 
minutes to 24 minutes, and applied this ratio of 0.86 times the current 
work RVU of 1.10 to derive our proposed work RVU of 0.94. We supported 
this value for CPT code 31575 through a crosswalk to CPT code 64405 
(Injection, anesthetic agent; greater occipital nerve), which shares 5 
minutes of intraservice time and also has a work RVU of 0.94.
    We agreed with the RUC that CPT code 31575 serves as the base code 
for the rest of the Flexible Laryngoscopy family. As a result, we 
proposed to

[[Page 80286]]

maintain the same RUC-recommended increments for the rest of the codes 
in this family, measuring the increments from CPT code 31575's refined 
work RVU of 0.94 instead of the RUC-recommended work RVU of 1.00. This 
meant that each of the work RVUs for the codes in the rest of the 
family decreased by 0.06 when compared to the RUC-recommended value. We 
therefore proposed a work RVU of 1.89 for CPT code 31576, a work RVU of 
2.19 for CPT code 31577, a work RVU of 2.43 for CPT code 31578, a work 
RVU of 3.01 for CPT code 31572, a work RVU of 2.43 for CPT code 31573, 
a work RVU of 2.43 for CPT code 31574, and a work RVU of 1.88 for CPT 
code 31579.
    Regarding the direct PE inputs, we proposed to use refined clinical 
labor time for ``Obtain vital signs'' for CPT codes 31577 and 31579 
from 3 minutes to 2 minutes. We believe that this extra clinical labor 
time is duplicative, as these codes are typically performed with a same 
day E/M service. Each procedure is only allotted a maximum of 5 minutes 
for obtaining vital signs, and since 3 minutes are already included in 
the E/M code, we proposed to reduce the time to 2 minutes for these 
services. Similarly, we proposed to remove the 3 minutes of clinical 
labor time for ``Clean room/equipment by physician staff'' from CPT 
codes 31575, 31577, and 31579. These procedures are typically reported 
with a same day E/M service, making the clinical labor minutes for 
cleaning the room in these procedure codes duplicative of the time 
already included in the E/M codes.
    For CPT code 31572, we proposed to remove the ``laser tip, diffuser 
fiber'' supply (SF030) and replace it with the ``laser tip, bare 
(single use)'' supply (SF029) already present in our direct PE 
database. We believe that the invoice for SF030 submitted with the RUC 
recommendation is not current enough to establish a new price for this 
supply; as a result, we substituted the SF029 supply for this input. We 
welcomed the submission of new invoices to accurately price the 
diffuser fiber with laser tip.
    We also proposed to make significant changes to the prices of 
several of the supplies and equipment related to Flexible Laryngoscopy, 
as well as to the prices of scopes more broadly. We proposed to set the 
price of the disposable biopsy forceps supply (SD318) at $26.84, based 
on the submission of an invoice with a price of $536.81 for a unit size 
of 20. In our search for additional information regarding scope inputs, 
we obtained a quote from a vendor listing the current price for several 
equipment items related to the use of scopes. Since we believe that the 
prices in vendor quotes would typically be equal to or higher than 
prices actually paid by practitioners, we are updating the prices in 
our direct PE database to reflect this new information. As part of this 
process, we proposed to increase the price of the ``light source, 
xenon'' (EQ167) from $6,723.33 to $7,000 to reflect current pricing 
information. We also proposed to adjust the price of the ``fiberscope, 
flexible, rhinolaryngoscopy'' (ES020) from $6,301.93 to $4,250.00.
    In accordance with the wider proposal that we made involving the 
use of scope equipment, we proposed to separate the scopes used in 
these procedures from the scope video systems. In the course of 
researching different kinds of scopes, we obtained vendor pricing for 
two different types of scopes used in these procedures. We proposed to 
price the ``rhinolaryngoscope, flexible, video, non-channeled'' (ES063) 
at $8,000 and the ``rhinolaryngoscope, flexible, video, channeled'' 
(ES064) at $9,000 in accordance with our vendor quotes. We proposed to 
use the non-channeled scope for CPT codes 31575, 31579, and 31574 and 
the channeled scope for CPT codes 31576, 31577, 31578, 31572, and 31573 
in accordance with the RUC-recommended video systems that stipulated 
channeled versus non-channeled scope procedures.
    We believe that the ``Video-flexible laryngoscope system'' listed 
in the recommendations is not a new form of equipment, but rather 
constitutes a version of the existing ``video system, endoscopy'' 
equipment (ES031). We did not add a new equipment item to our direct PE 
database; instead, we proposed to use the submitted invoices to update 
the price of the ES031 endoscopy video system. As the equipment code 
for ES031 indicates, we proposed to define the endoscopy video system 
as containing a processor, digital capture, monitor, printer, and cart. 
We proposed to price ES031 at $15,045.00; this reflected a price of 
$2,000.00 for the monitor, $9,000.00 for the processor, $1,750.00 for 
the cart, and $2,295.00 for the printer. These prices were obtained 
from our vendor invoice, with the exception of the printer, which is a 
crosswalk to the ``video printer, color (Sony medical grade)'' 
equipment (ED036).
    We did not agree that there is a need for multiple different video 
systems for this collection of Flexible Laryngoscopy codes based on our 
understanding of the clinical differences among the codes. In keeping 
with this understanding, we proposed to use the same existing ``video 
system, endoscopy'' equipment (ES031) for the remaining codes in the 
family that included RUC recommendations for new equipment items named 
``Video-flexible channeled laryngoscope system'' and ``Video-flexible 
laryngoscope stroboscopy system.'' For CPT codes 31576, 31577, 31578, 
31572, and 31573, we proposed to replace the Video-flexible channeled 
laryngoscope system with the existing endoscopy video system (ES031) 
along with a channeled flexible video rhinolaryngoscope (ES064). For 
CPT code 31579, we proposed to rename the RUC-recommended ``Video-
flexible laryngoscope stroboscopy system'' to the shortened 
``stroboscopy system'' (ES065) and assign it a price of $19,100.00. 
This reflected the price of the StrobeLED Stroboscopy system included 
on the submitted invoice. We proposed to treat the stroboscopy system 
as a scope accessory, which was included along with the ``video system, 
endoscopy'' equipment (ES031) and the ``rhinolaryngoscope, flexible, 
video, non-channeled'' (ES063) for CPT code 31579. When the price of 
the scope, the scope video system, and the stroboscopy system were 
summed together, the total proposed equipment price was $42,145.00.
    We proposed to refine the recommended equipment times for several 
equipment items to conform to changes in clinical labor time. These 
are: The fiberoptic headlight (EQ170), the suction and pressure cabinet 
(EQ234), the reclining exam chair with headrest (EF008), and the basic 
instrument pack (EQ137). We proposed to use the standard equipment time 
formula for scope accessories for the endoscopy video system (ES031) 
and the stroboscopy scope accessory system (ES065). We also proposed to 
refine the equipment time for the channeled and non-channeled flexible 
video rhinolaryngoscopes to use the standard equipment time formula for 
scopes. For this latter pair of two new equipment items, this proposal 
resulted in small increases to their respective equipment times.
    The following is a summary of the comments we received regarding 
our proposed valuation of the Flexible Laryngoscopy codes:
    Comment: Several commenters disagreed with the proposed work RVU 
for CPT code 31575. Commenters stated that the use of a work/time ratio 
was inconsistent with the methodology of magnitude estimation, and that 
reducing work RVUs by mathematical formula can arbitrarily manipulate 
intensities without allowing input from survey

[[Page 80287]]

recommendations provided by experts who perform the service. Commenters 
indicated their disapproval for a reverse building block methodology 
that assumes that if times for individual services change, work values 
must also change.
    Response: We continue to believe that the use of these 
methodologies, including the use of time ratios, is an appropriate 
process for code valuation when recommended work RVUs do not appear to 
account for significant changes in time. As we stated earlier in our 
discussion on this topic in this final rule, we use time ratios to 
identify potential work RVUs and consider these work RVUs as potential 
options relative to the values developed through other methodologies 
for code valuation. We continue to believe that the decrease in total 
time for CPT code 31575 from 28 minutes to 24 minutes was not accounted 
for in the recommended work RVU, and as a result we proposed a work RVU 
of 0.94, supported by a crosswalk to CPT code 64405. We continue to 
believe that this valuation for CPT code 31575 more accurately captures 
the reduction in physician work caused by the decrease in the time 
required to perform the procedure, noting again that the statute 
specifically defines the work component as the resources in time and 
intensity required in furnishing the service. We believe that our 
crosswalk to CPT code 64405, which has very similar time and intensity 
values to CPT code 31575 at the same work RVU of 0.94, supports our 
valuation for this service.
    Comment: Several commenters objected to the application of the work 
RVU increment to the rest of the codes in this family, measuring the 
increments from CPT code 31575's refined work RVU of 0.94 instead of 
the RUC-recommended work RVU of 1.00. Commenters stated that these 
codes were reviewed individually, not incrementally, and the use of an 
increment to reduce the work RVU of each code in the family by 0.06 was 
inappropriate. Commenters disagreed with the notion that when a base 
code's value is modified or reduced all other codes in the family 
should be reduced accordingly.
    Response: We review codes individually for valuation. When we apply 
an increment from a base code to the rest of a code family, we do so 
only after reviewing each code individually and determining that the 
RUC-recommended relativity between the codes in the family is correct. 
For this particular family of codes, we stated our belief that the 
relativity between the codes in the family was accurate, and that the 
increment between the codes should be maintained after adjusting the 
work RVU for the base code (CPT code 31575) to account for its 
significant decrease in time. As we detailed in our discussion of code 
valuation methodologies earlier in this final rule, we use a variety of 
different methods, such as survey data, building blocks, crosswalks to 
key reference or similar codes, time ratios, and increments between 
codes within the same family. In our review of RUC-recommended values, 
we have observed that the RUC also uses a variety of methodologies to 
develop work RVUs for individual codes, and subsequently validates the 
results of these approaches through magnitude estimation or crosswalk 
to established values for other codes. We continue to believe that the 
use of an incremental methodology is the most accurate way to value 
this particular code family because it maintains the appropriate 
relativity among the Flexible Laryngoscopy codes.
    Comment: One commenter disagreed with our refinement to remove the 
clinical labor time for ``Clean room/equipment by physician staff'' 
from the three codes in this family performed with a same day E/M 
service. The commenter stated that the clinical staff have to clean the 
equipment for procedure not used during the E/M service. According to 
the commenter, they clean that equipment separately and are assisting 
the physician during the entire procedure.
    Response: In response to the commenter, we investigated this issue 
and determined that in the past we have sometimes provided 1 minute of 
clinical labor time for cleaning additional equipment beyond what would 
be cleaned during the E/M visit. As a result, we are restoring 1 minute 
of clinical labor time for ``Clean room/equipment by physician staff'' 
for CPT codes 31575, 31577, and 31579.
    Comment: One commenter stated that there was a lack of clarity 
regarding the removal of the laser tip, diffuser fiber supply (SF030) 
from CPT code 31572. The commenter stated that the commenter supplied 
an invoice for the fibers, believed the invoice price was accurate, and 
believed the invoice should be utilized to set the price for this item.
    Response: We continue to believe that the invoice for SF030 
submitted with the RUC recommendation, which dates from 2009, is not 
current enough to establish a new price for this supply. We are 
continuing to maintain the laser tip, bare (single use) supply (SF029) 
in its place for CPT code 31572. As we discuss in the PE section of 
this final rule (II.A), we have concerns that the pricing for the laser 
tip, diffuser fiber supply has become outdated, and we are requesting 
the submission of additional current pricing information. We are 
maintaining the current pricing for this supply at $850 pending the 
submission of additional data.
    We note as well that there were many comments addressing our 
proposal to reclassify scope equipment, as well as the proper pricing 
of the scope equipment utilized in this family of codes. These comments 
are summarized with responses in the PE section of this final rule 
(II.A).
    After consideration of comments received, we are finalizing the 
work RVUs of the codes in the Flexible Laryngoscopy family at the 
proposed values. We are also finalizing the proposed direct PE inputs, 
with the exception of the refinement to the ``Clean room/equipment by 
physician staff'' clinical labor detailed above.
(12) Laryngoplasty (CPT Codes 31580, 31584, 31587, 31551-31554, 31591, 
and 31592)
    CPT code 31588 (Laryngoplasty, not otherwise specified (e.g., for 
burns, reconstruction after partial laryngectomy)) was identified as 
potentially misvalued based on the RUC's 90-Day Global Post-Operative 
Visits screen. When this code family was reviewed by the RUC, it was 
determined that some codes in the family required revision to reflect 
the typical patient before a survey could be conducted and the code 
family was referred to the CPT Editorial Panel for revision. At its 
October 2015 meeting, the CPT Editorial Panel approved the creation of 
six new codes, revision of three codes, and deletion of three codes. 
For CPT codes 31580, 31587, 31551, 31552, 31553, 31554, and 31592, CMS 
proposed the RUC-recommended work RVUs.
    For CPT code 31584, the RUC recommended a work RVU of 20.00. We 
believed that the 25th percentile of the survey, which is a work RVU of 
17.58, better represents the time and intensity involved with 
furnishing this service based on a comparison with and assessment of 
the overall intensity of other codes with similar instraservice and 
total time. This value is also supported by a crosswalk code of CPT 
code 42844 (Radical resection of tonsil, tonsillar pillars, and/or 
retromolar trigone; closure with local flap (e.g., tongue, buccal)), 
which has identical intraservice time and identical total time. 
Therefore, we proposed a work RVU of 17.58 for CPT code 31584.

[[Page 80288]]

    Comment: Several commenters requested that we provide an 
explanation for our proposed work RVU of 17.58 for the revised CPT code 
31584 instead of the RUC-recommended work RVU of 20.00. They stated 
that the modified code now represents the combination of two previously 
separate CPT codes (the existing CPT code 31584 combined with CPT code 
31600) and that the work RVU should better reflect the sum of the total 
time for these combined procedures. Commenters further noted that the 
proposed work RVU of 17.58 is lower, even, than the existing work RVU 
for CPT code 31584. A commenter requested that CMS consider two 
additional codes for comparison: CPT code 37660 and CPT code 43280.
    Response: We take multiple factors into account when valuing a 
service that replaces two previously separate codes. We consider the 
efficiencies of combining two services, as reflected in the adjustment 
upwards of the intra-service and total time for this code. We also 
review the code description and identify a value that is consistent 
with other, similar, 90-day global codes. Our valuation is above the 
median work RVU for a group of 28 codes with similar intraservice and 
total time. Commenters have not provided any additional information 
that would suggest this code should be valued differently from other 
90-day global codes with similar time and intensity.
    We reviewed the two additional codes that commenters recommended as 
comparisons. We note that CPT code 43280 (work RVU of 18.1) was most 
recently valued in 1997 and that for low-volume code CPT code 37660, 
physician intensity is considerably higher than that for CPT code 
31584, suggesting a poor reference for comparing the work involved in 
furnishing the service. For these reasons, we do not believe this code 
is an appropriate comparison for CPT code 31584 and we are finalizing 
our work RVU of 17.58 for CPT code 31584.
    For CPT code 31591, the RUC recommended a work RVU of 15.60. We 
believed that the 25th percentile of the survey, which is a work RVU of 
13.56, better represents the time and intensity involved with 
furnishing this service based on a comparison of the overall intensity 
of other codes with similar instraservice and total time. The 25th 
percentile of the survey is additionally bracketed by two crosswalk 
codes that we estimate have slightly lower and slighter higher overall 
intensities, CPT code 36819 (Arteriovenous anastomosis, open; by upper 
arm basilic vein transposition), which has a work RVU of 13.29, and CPT 
code 49654 (Laparoscopy, surgical, repair, incisional hernia (includes 
mesh insertion, when performed); reducible), which has a work RVU of 
13.76; both of these codes have identical intraservice time and similar 
total time. Therefore, we proposed a work RVU of 13.56 for CPT code 
31591.
    Comment: Several commenters disagreed with our proposed work RVU of 
13.56 for CPT code 31591, stating that the RUC-recommended work RVU of 
15.60 better reflects the work required to perform the procedure.
    Response: In developing our proposed valuation, we looked at other 
90-day global codes with identical intraservice time and similar total 
time (between 275 and 335), and we note that the median work RVU of the 
resulting values (reflecting 33 codes) is 13.76. We chose the 25th 
percentile of the survey because of its closeness to the median work 
RVU of comparable services. We recognize that the RUC's crosswalk to 
CPT code 58544, with a work RVU of 15.60, has a lower total time than 
the codes we used as comparisons, but we note that this code has very 
low utilization, with 103 procedures billed in 2015. We continue to 
believe that two codes bracketing the 25th percentile of the work RVU 
for CPT code 31591 (CPT codes 36819 and 49654), as noted in the CY2017 
PFS proposed rule, provide a better reference for valuing the new code, 
and that a work RVU of 13.56 adequately represents the time and 
intensity involved with furnishing the service. Therefore, we are 
finalizing our proposed work RVU of 13.56 for CPT code 31591.
    Additionally, the RUC forwarded invoices provided by a medical 
specialty society for the video-flexible laryngoscope system used in 
these services. We discussed our proposed changes to the items included 
in equipment item ES031 (video system, endoscopy) in the CY 2017 
proposed rule (81 FR 46247). Consistent with those proposed changes, we 
proposed to add a Nasolaryngoscope, non-channeled, to the list of 
equipment items used for CPT codes 31580, 31584, 31587, 31551-31554, 
31591, and 31592, along with the modified equipment item ES031.
    Comment: We received several comments, including from the RUC, 
about our proposal to implement a separate pricing approach for 
equipment inputs for this family of codes. Commenters requested a delay 
in implementing our approach until the RUC convened a PE subcommittee 
and provided CMS with specific recommendations for these codes.
    Response: We appreciate the commenters' interests in making certain 
that there is appropriate opportunity for stakeholders to provide 
feedback and recommendations on the reclassification and pricing of 
scopes. Because these codes are currently under review, however, we 
believe that they should be valued according to a scheme that 
accurately describes the scope equipment typically used in the 
services. We continue to believe that our proposed classification 
system for scopes is the more proper methodology to use for valuation 
of these codes for the CY 2017. Please refer to II.A of the final rule 
for additional discussion on the new pricing process.
(13) Closure of Left Atrial Appendage With Endocardial Implant (CPT 
Code 33340)
    The CPT Editorial Panel deleted category III CPT code 0281T 
(Percutaneous transcatheter closure of the left atrial appendage with 
implant, including fluoroscopy, transseptal puncture, catheter 
placement(s), left atrial angiography, left atrial appendage 
angiography, radiological supervision and interpretation) and created 
new CPT code 33340 to describe percutaneous transcatheter closure of 
the left atrial appendage with implant. The RUC recommended a work RVU 
of 14.00. We proposed a work RVU of 13.00 for CPT code 33340, which is 
the minimum survey result. Based on our clinical judgment and that the 
key reference codes discussed in the RUC recommendations have higher 
intraservice and total service times than the median survey results for 
CPT code 33340, we stated in the CY 2017 proposed rule that we believe 
a work RVU of 13.00 would more accurately represent the work value for 
this service.
    Comment: We received several comments, including from the RUC. 
Commenters noted inaccuracies in CMS' description of the RUC 
recommendations including descriptions of the relationship between the 
RUC-recommended work RVU, survey results, and service times for the two 
key reference codes. Commenters requested that CMS finalize the RUC-
recommended work RVU of 14.00.
    Response: We appreciate the commenters' feedback and acknowledge 
that we inadvertently mischaracterized the RUC's recommendations 
related to this service. We agree that the survey results showed a 25th 
percentile survey result of 19.88 and that during the RUC meeting, this 
code was referred to the facilitation committee whereby the RUC 
identified two comparable codes with

[[Page 80289]]

14.00 work RVUs, which the RUC factored into its analysis and 
recommended valuation for this service. After consideration of the 
comments, we are finalizing the RUC-recommended work RVU of 14.00 for 
CPT code 33340.
(14) Valvuloplasty (CPT Codes 33390 and 33391)
    The CPT Editorial Panel created new codes to describe valvuloplasty 
procedures and deleted existing CPT code 33400 (Valvuloplasty, aortic 
valve; open, with cardiopulmonary bypass). New CPT code 33390 
represents a simple valvuloplasty procedure and new CPT code 33391 
describes a more complex valvuloplasty procedure. We proposed to use 
the RUC-recommended values for CPT code 33390. For CPT code 33391, the 
RUC recommended a work RVU of 44.00, the 25th percentile survey result. 
The RUC estimated that approximately 70 percent of the services 
previously reported using CPT code 33400 would be reported using CPT 
code 33391, with 30 percent reported using new CPT code 33390. 
Therefore, the typical service previously reported with CPT code 33400 
ought to now be reported with CPT code 33391. Compared to deleted CPT 
code 33400, the survey results for CPT code 33391 showed similar median 
intraservice times and decreased total times. Therefore, we proposed a 
work RVU of 41.50 for CPT code 33391, which is the current value of CPT 
code 33400. Given that the typical service should remain consistent 
between the two codes, we stated that we believe the work RVUs should 
remain consistent as well.
    Comment: Commenters disagreed with CMS' proposed valuation of CPT 
code 33391, citing increased intensity and complexity of the 
procedures. Commenters noted that more complex patients are undergoing 
valvuloplasty (for instance, adult cardiac patients) when historically 
these patients would have received aortic valve replacements.
    Response: As discussed in the CY 2017 proposed rule, the deleted 
CPT code 33400 is being replaced with two CPT codes that identify 
simple and complex procedures. The RUC's utilization crosswalk suggests 
that approximately 70 percent of the services that would previously 
have been reported using the combined code (CPT code 33400) would now 
be reported with CPT code 33391, the complex procedure. Based on the 
RUC's utilization crosswalk, the complex procedure would be the typical 
procedure reported under the combined code (CPT code 33400). The survey 
data for the complex procedure (CPT code 33391) showed similar median 
intraservice times and decreased total times compared to CPT code 
33400. Therefore, for CY 2017, we are finalizing a work RVU of 35.00 
for CPT code 33390 and a work RVU of 41.50 for CPT code 33391.
(15) Mechanochemical Vein Ablation (MOCA) (CPT Codes 36473 and 36474)
    At the October 2015 CPT meeting, the CPT Editorial Panel 
established two Category I codes for reporting venous mechanochemical 
ablation, CPT codes 36473 and 36474. We proposed the RUC-recommended 
work RVU of 3.50 for CPT code 36473. For CPT code 36474, we proposed a 
work RVU of 1.75 and stated that we believed the RUC-recommended work 
RVU of 2.25 does not accurately reflect the typical work involved in 
furnishing this procedure. The specialty society survey showed that 
this add-on code has half the work of the base code (CPT code 36473). 
This value is supported by the ratio between work and time in the key 
reference service (CPT code 36476: Endovenous ablation therapy of 
incompetent vein, extremity, inclusive of all imaging guidance and 
monitoring, percutaneous, radiofrequency; second and subsequent veins 
treated in a single extremity, each through separate access sites (List 
separately in addition to code for primary procedure)).
    The RUC-recommended direct PE inputs for CPT codes 36473 and 36474 
included inputs for an ultrasound room (EL015). Based on the clinical 
nature of these procedures, we stated in our proposal that we do not 
believe that an ultrasound room would typically be used to furnish 
these procedures. We proposed to remove inputs for the ultrasound room 
and subsequently include a portable ultrasound (EQ250), power table 
(EF031), and light (EF014). The RUC also recommended that the 
ultrasound machine be allocated clinical staff time based on the PACS 
workstation formula. We stated that we did not believe that an 
ultrasound machine would be used like a PACS workstation, as images are 
generated and reviewed in real time. Therefore, we proposed to remove 
all direct PE inputs associated with the PACS workstation.
    Comment: We received several comments, including from the RUC. 
Commenters disagreed with CMS' proposed work RVU of 1.75 for CPT code 
36474 and requested that CMS finalize the RUC's recommendation of 2.25 
work RVUs. The RUC disagreed with CMS' rationale for the proposed work 
RVU for CPT code 36474. The RUC stated that the ratio between CMS' 
proposed physician time and physician work for the survey code is 
0.058, whereas that same ratio for the key reference code used by the 
RUC is 0.0883, and that the divergent ratios between the two services 
are not comparable.
    Response: The commenters recommended that we accept the RUC-
recommended ratio of 36 percent between the RUC-recommended work RVUs 
for CPT codes 36473 and 36474. We disagree. The RUC survey reported 79 
minutes of total time for CPT code 36473 and 30 minutes of total time 
for CPT code 36474, a decrease of greater than 50 percent between the 
base code and the add-on code. As discussed in the proposed rule, our 
proposed work RVU of 1.75 for CPT code 36474 is supported by the ratio 
between work and time in the key reference service. The RUC 
recommendations made reference to two identical sets of services that 
use differing mechanisms for ablating the vein (radiofrequency 
procedures reported with CPT codes 36475 and 36476 (work RVUs of 5.30 
and 2.65); laser procedures reported with CPT codes 36478 and 36479 
(work RVUs of 5.30 and 2.65)). Both key reference code sets have a work 
RVU ratio of 50 percent (5.30 versus 2.65) between the base codes and 
the add-on codes. Therefore, for CY 2017, we are finalizing a work RVU 
of 3.50 for CPT code 36473 and a work RVU of 1.75 for CPT code 36474.
    Comment: Commenters requested that CMS restore the direct PE inputs 
for the ultrasound room, which includes the PACS workstation. 
Commenters stated that the PACS workstation is needed for these 
procedures to store and make images available for future use.
    Response: Commenters suggested that the ultrasound room was 
necessary for this procedure since the ultrasound room includes a PACS 
workstation that would allow for storage of the images and subsequent 
future use. As we discussed in the proposed rule, during the typical 
procedure, the images would be used in real time rather than being 
stored for subsequent interpretation. Further, the ultrasound room 
would not be typically used during these procedures. Our proposal 
included a portable ultrasound that allows for use of the images during 
the course of the procedure.
    Comment: One commenter requested that CMS include an additional 
direct PE input for a ClariVein catheter for both CPT codes 36473 and 
36474, and included invoices related to this item. The commenter 
suggested that an additional catheter is necessary to prevent 
contamination during treatment of subsequent vessels if the catheter

[[Page 80290]]

used in an initial vessel were reused in a subsequent vessel.
    Response: The invoice data submitted by the commenter appears to be 
applicable to the ClariVein catheters in some instances and in others 
to the ClariVein kits. Our review of the ClariVein kits indicated that 
the ClariVein catheters are part of the ClariVein kits. Because we lack 
clear product data regarding the cost of the ClariVein kits versus the 
ClariVein catheters and whether the catheters are included in the price 
of the kits, for CY 2017, we are finalizing our proposed direct PE 
inputs for the ClariVein kits for CPT codes 36473 and 36474 without 
modification. We welcome additional feedback from stakeholders 
regarding the product data and costs for the ClariVein catheters and 
ClariVein kits for consideration in future rulemaking.
(16) Dialysis Circuit (CPT Codes 36901, 36902, 36903, 36904, 36905, 
36906, 36907, 36908, 36909)
    In January 2015, a CPT/RUC workgroup identified the following CPT 
codes as being frequently reported together in various combinations: 
35475 (Transluminal balloon angioplasty, percutaneous; brachiocephalic 
trunk or branches, each vessel), 35476 (Transluminal balloon 
angioplasty, percutaneous; venous), 36147 (Introduction of needle and/
or catheter, arteriovenous shunt created for dialysis (graft/fistula); 
initial access with complete radiological evaluation of dialysis 
access, including fluoroscopy, image documentation and report), 36148 
(Introduction of needle and/or catheter, arteriovenous shunt created 
for dialysis (graft/fistula); additional access for therapeutic 
intervention), 37236 (Transcatheter placement of an intravascular 
stent(s) (except lower extremity artery(s) for occlusive disease, 
cervical carotid, extracranial vertebral or intrathoracic carotid, 
intracranial, or coronary), open or percutaneous, including 
radiological supervision and interpretation and including all 
angioplasty within the same vessel, when performed; initial artery), 
37238 (Transcatheter placement of an intravascular stent(s), open or 
percutaneous, including radiological supervision and interpretation and 
including angioplasty within the same vessel, when performed; initial 
vein), 75791 (Angiography, arteriovenous shunt (eg, dialysis patient 
fistula/graft), complete evaluation of dialysis access, including 
fluoroscopy, image documentation and report (includes injections of 
contrast and all necessary imaging from the arterial anastomosis and 
adjacent artery through entire venous outflow including the inferior or 
superior vena cava), radiological supervision and interpretation), 
75962 (Transluminal balloon angioplasty, peripheral artery other than 
renal, or other visceral artery, iliac or lower extremity, radiological 
supervision and interpretation), and 75968 (Transluminal balloon 
angioplasty, each additional visceral artery, radiological supervision 
and interpretation). These codes are frequently reported together for 
both dialysis circuit services and transluminal angioplasty services. 
At the October 2015 CPT Editorial Panel meeting, the panel approved the 
creation of nine new codes and deletion of four existing codes used to 
describe bundled dialysis circuit intervention services, and the 
creation of four new codes and deletion of 13 existing codes used to 
describe bundled percutaneous transluminal angioplasty services (see 
discussion of the latter code family in the next section). The Dialysis 
Circuit family of codes overlaps with the Open and Percutaneous 
Transluminal Angioplasty family of codes (CPT codes 37246-37249), as 
they are both being constructed from the same set of frequently 
reported together codes. We reviewed these two families of codes 
concurrently to maintain relativity between these clinically similar 
procedures based upon the same collection of deleted codes.
    For CPT code 36901, we proposed a work RVU of 2.82 instead of the 
RUC-recommended work RVU of 3.36. When we compared CPT code 36901 
against other codes in the RUC database, we found that the RUC-
recommended work RVU of 3.36 would be the highest value in the database 
among the 32 0-day global codes with 25 minutes of intraservice time. 
Generally speaking, we are particularly skeptical of RUC-recommended 
values for newly ``bundled'' codes that appear not to recognize the 
full resource overlap between predecessor codes. Since the recommended 
values would establish a new highest value when compared to other 
services with similar time, we believed it likely that the recommended 
value for the new code does not reflect the efficiencies in time. Of 
course, were there compelling evidence for this valuation accompanying 
the recommendation, we would consider such information. We also noted 
that the reference code selected by the survey participants, CPT code 
36200 (Introduction of catheter, aorta), has a higher intraservice time 
and total time, but a lower work RVU of 3.02 We believe that there are 
more accurate CPT codes that can serve as a reference for CPT code 
36901. As a result, we proposed to crosswalk CPT code 36901 to CPT code 
44388 (Colonoscopy through stoma; diagnostic). CPT code 44388 has a 
work RVU of 2.82, and we believe it is a more accurate crosswalk for 
valuation due to its similar overall intensity and shared intraservice 
time of 25 minutes with 36901 and similar total time of 65 minutes.
    We proposed a work RVU of 4.24 for CPT code 36902 instead of the 
RUC-recommended work RVU of 4.83. The RUC-recommended work RVU is based 
upon a direct crosswalk to CPT code 43253 (Esophagogastroduodenoscopy, 
flexible, transoral), which shares the same 40 minutes of intraservice 
time with CPT code 36902. However, CPT code 43253 has significantly 
longer total time than CPT code 36902, 104 minutes against 86 minutes, 
which we believe reduces its utility for comparison. We instead 
proposed to crosswalk the work RVU for CPT code 36902 from CPT code 
44408 (Colonoscopy through stoma), which has a work RVU of 4.24. In 
addition to our assessment that the two codes share similar 
intensities, CPT code 44408 also shares 40 minutes of intraservice time 
with CPT code 36902 but has only 95 minutes of total time and matches 
the duration of the procedure under review more closely than the RUC-
recommended crosswalk to CPT code 43253. We also note that the RUC-
recommended work increment between CPT codes 36901 and 36902 was 1.47, 
and by proposing a work RVU of 4.24 for CPT code 36902, we would 
maintain a very similar increment of 1.42. As a result, we proposed a 
work RVU of 4.24 for CPT code 36902, based on this direct crosswalk to 
CPT code 44408. For CPT code 36903, we proposed a work RVU of 5.85 
instead of the RUC-recommended work RVU of 6.39. The RUC-recommended 
value is based on a direct crosswalk to CPT code 52282 
(Cystourethroscopy, with insertion of permanent urethral stent). Like 
the previous pair of RUC-recommended crosswalk codes, CPT code 52282 
shares the same intraservice time of 50 minutes with CPT code 36903, 
but has substantially longer total time (120 minutes against 96 
minutes) which we believe limits its utility as a crosswalk. We 
proposed a work RVU of 5.85 based on maintaining the RUC-recommended 
work RVU increment of 3.03 as compared to CPT code 36901 (proposed at a 
work RVU of 2.82), the base code for this family of related procedures. 
We also point to CPT code 44403 (Colonoscopy through stoma; with 
endoscopic mucosal resection) as a reference point for this value. CPT 
code

[[Page 80291]]

44403 has a work RVU of 5.60, but also lower intraservice time (45 
minutes as compared to 50 minutes) and total time (92 minutes as 
compared to 96 minutes) in relation to CPT code 36903, suggesting that 
a work RVU a bit higher than 5.60 would be an accurate valuation. 
Therefore, we proposed a work RVU of 5.85 for CPT code 36903, based on 
an increment of 3.03 from the work RVU of CPT code 36901.
    We proposed a work RVU of 6.73 instead of the RUC-recommended work 
RVU of 7.50 for CPT code 36904. Our proposed value comes from a direct 
crosswalk from CPT code 43264 (Endoscopic retrograde 
cholangiopancreatography), which shares the same intraservice time of 
60 minutes with CPT code 36904 and has a higher total time. We also 
looked to the intraservice time ratio between CPT codes 36901 and 
36904; this works out to 60 minutes divided by 25 minutes, for a ratio 
of 2.4, and a suggested work RVU of 6.77 (derived from 2.4 times CPT 
code 36901's work RVU of 2.82). This indicates that our proposed work 
RVU of 6.73 maintains relativity within the Dialysis Circuit family. As 
a result, we proposed a work RVU of 6.73 for CPT code 36904, based on a 
direct crosswalk to CPT code 43264.
    We proposed a work RVU of 8.46 instead of the RUC-recommended work 
RVU of 9.00 for CPT code 36905. We looked at the intraservice time 
ratio between CPT codes 36901 and 36905 as one potential method for 
valuation, which is a 1:3 ratio (25 minutes against 75 minutes) for 
this case. This means that one potential value for CPT code 36905 would 
be triple the work RVU of CPT code 36901, or 2.82 times 3, which 
results in a work RVU of 8.46. We also investigated preserving the RUC-
recommended work RVU increment between CPT code 36901 and 36905, which 
was an increase of 5.64. When this increment is added to the work RVU 
of 2.82 for CPT code 36901, it also resulted in a work RVU of 8.46 for 
CPT code 36905. Therefore, we proposed a work RVU of 8.46 for CPT code 
36905, based on both the intraservice time ratio with CPT code 36901 
and the RUC-recommended work increment with the same code.
    For CPT code 36906, we proposed a work RVU of 9.88 instead of the 
RUC-recommended work RVU of 10.42. We based the proposed value upon the 
RUC-recommended work RVU increment between CPT codes 36901 and 36906, 
which is 7.06. When added to the work RVU of 2.82 for CPT code 36901, 
the work RVU for CPT code 36906 would be 9.88. We are supporting this 
value through the use of two crosswalks that both share the same 90 
minutes of intraservice time with 36906. These are CPT code 31546 
(Laryngoscopy, direct, with submucosal removal of non-neoplastic 
lesion(s) of vocal cord) at a work RVU of 9.73 and CPT code 61623 
(Endovascular temporary balloon arterial occlusion, head or neck) at a 
work RVU of 9.95.
    The final three codes in the Dialysis Circuit family are all add-on 
codes, which make comparisons difficult to the global 0-day codes that 
make up the rest of the family. We proposed a work RVU of 2.48 instead 
of the RUC-recommended work RVU of 3.00 for CPT code 36907. Due to the 
difficulty of comparing CPT code 36907 with the non-add-on codes in the 
rest of the Dialysis Circuit family, we looked instead to compare the 
value to the add-on codes in the Open and Percutaneous Transluminal 
Angioplasty family of codes (CPT codes 37246-37249). As we stated 
previously, both of these groups of new codes are being constructed 
from the same set of frequently reported together codes. We reviewed 
these two families of codes together to maintain relativity across the 
two families, and so that we could compare codes that shared the same 
global period.
    We proposed the RUC-recommended work RVUs for all four codes in the 
Open and Percutaneous Transluminal Angioplasty family of codes. As a 
result, we compared CPT code 36907 with the RUC-recommended work RVU of 
2.97 for CPT code 37249, which is also an add-on code. These procedures 
should be clinically very similar, since both of them are performing 
percutaneous transluminal angioplasty on a central vein, and both of 
them are add-on procedures. We looked at the intraservice time ratio 
between these two codes, which was a comparison between 25 minutes for 
CPT code 36907 against 30 minutes for CPT code 37249. This produces a 
ratio of 0.83, and a proposed work RVU of 2.48 for CPT code 36907 when 
multiplied with the RUC-recommended work RVU of 2.97 for CPT code 
37249. We noted as well that the intensity was markedly higher for CPT 
code 36907 as compared to CPT code 37249 when using the RUC-recommended 
work values, which did not make sense since CPT code 36907 would 
typically be a clinically less intense procedure. Using the 
intraservice time ratio results in the two codes having exactly the 
same intensity. As a result, we therefore proposed a work RVU of 2.48 
for CPT code 36907, based on this intraservice time ratio with the RUC-
recommended work RVU of CPT code 37249.
    For CPT code 36908, we disagree with the RUC-recommended work RVU 
of 4.25, and we instead proposed a work RVU of 3.73. We did not 
consider the RUC work value of 4.25 to be accurate for CPT code 36908, 
as this was higher than our proposed work value for CPT code 36902 
(4.24), and we did not believe that an add-on code should typically 
have a higher work value than a similar non-add-on code with the same 
intraservice time. We identified two appropriate crosswalks for valuing 
CPT code 36908: CPT code 93462 (Left heart catheterization by 
transseptal puncture through intact septum or by transapical puncture) 
and CPT code 37222 (Revascularization, endovascular, open or 
percutaneous, iliac artery). Both of these codes share the same 
intraservice time as CPT code 36908, and both of them also have the 
same work RVU of 3.73, which results in these codes also sharing the 
same intensity since they are all add-on codes. We therefore proposed a 
work value of 3.73 for CPT code 36908, based on a direct crosswalk to 
CPT codes 93462 and 37222.
    Finally, we proposed a work RVU of 3.48 for CPT code 36909 instead 
of the RUC-recommended work RVU of 4.12. The RUC-recommended value 
comes from a direct crosswalk from CPT code 38746 (Thoracic 
lymphadenectomy by thoracotomy). We compared the RUC-recommended work 
RVU for this procedure to other add-on codes with 30 minutes of 
intraservice time and found that the recommended work RVU of 4.12 would 
overestimate the overall intensity of this service relative to those 
with similar times. In reviewing the range of these codes, we believed 
that a more appropriate crosswalk is to CPT code 61797 (Stereotactic 
radiosurgery (particle beam, gamma ray, or linear accelerator)) at a 
work RVU of 3.48. We believed that this value is more accurate when 
compared to other add-on procedures with 30 minutes of intraservice 
time across the PFS. As a result, we proposed a work RVU of 3.48 for 
CPT code 36909 based on a direct crosswalk from CPT code 61797.
    We proposed to use the RUC-recommended direct PE inputs for these 
nine codes with several refinements. We did not propose to include the 
recommended additional preservice clinical labor for CPT codes 36904, 
36905, and 36906. The preservice work description is identical for all 
six of the global 0-day codes in this family; there is no justification 
given in the RUC recommendations as to why the second three codes need 
additional clinical labor time beyond the minimal preservice clinical 
labor assigned to the

[[Page 80292]]

first three codes. We do not believe that the additional staff time 
would be typical. Patient care already would have been coordinated 
ahead of time in the typical case, and the need for unscheduled 
dialysis or other unusual circumstances would be discussed prior to the 
day of the procedure. We therefore proposed to refine the preservice 
clinical labor for CPT codes 36904, 36905, and 36906 to match the 
preservice clinical labor of CPT codes 36901, 36902, and 36903.
    We proposed to refine the L037D clinical labor for ``Prepare and 
position patient/monitor patient/set up IV'' from 5 minutes to 3 
minutes for CPT codes 36901-36906. The RUC recommendation included a 
written justification for additional clinical labor time beyond the 
standard 2 minutes for this activity, stating that the extra time is 
needed to prepare the patient's arm for the procedure. We agreed that 
extra time may be needed for this activity as compared to the default 
standard of 2 minutes; however, we proposed to assign 1 extra minute 
for preparing the patient's arm, resulting in a total of 3 minutes for 
this task. We did not believe that 3 extra minutes would be typically 
needed for arm positioning.
    We proposed to remove the ``kit, for percutaneous thrombolytic 
device (Trerotola)'' supply (SA015) from CPT codes 36904, 36905, and 
36906. We believed that this thrombolytic device kit and the 
``catheter, thrombectomy-Fogarty'' (SD032) provide essentially the same 
supply, and the use of only one of them would be typical in these 
procedures. We believed that each of these supplies can be used 
individually for thrombectomy procedures. We proposed to remove the 
SA015 supply and retain the SD032 supply, and we solicited additional 
comment and information regarding the use of these two supplies.
    We also proposed to remove the recommended supply item ``covered 
stent (VIABAHN, Gore)'' (SD254) and replace it with the ``stent, 
vascular, deployment system, Cordis SMART'' (SA103) for CPT codes 36903 
and 36906. The Cordis SMART vascular stent was previously used in the 
past for CPT code 37238, which is the deleted code for transcatheter 
placement of an intravascular stent that CPT codes 36903 and 36906 are 
replacing. We did not have a stated rationale as to the need for this 
supply substitution, and therefore, we did not believe it would be 
appropriate to replace the current items with a significantly higher-
priced item without additional information.
    We also proposed to refine the quantity of the ``Hemostatic patch'' 
(SG095) from 2 to 1 for CPT codes 36904, 36905, and 36906. This supply 
was not included in any of the deleted base codes out of which the new 
codes are being constructed, and while we agreed that the use of a 
single hemostatic patch has become common clinical practice, we did not 
agree that CPT codes 36904-36906 would typically require a second 
patch. As a result, we proposed to refine the SG095 supply quantity 
from 2 to 1 for CPT codes 36904-36906, which also matches the supply 
quantity for CPT codes 36901-36903.
    Included in the RUC recommendation for the Dialysis Circuit family 
of codes were a series of invoices for a ``ChloraPrep applicator (26 
ml)'' supply. We solicited comments regarding whether the Betadine 
solution has been replaced by a Chloraprep solution in the typical case 
for these procedures. We also solicited comments regarding whether the 
``ChloraPrep applicator (26 ml)'' detailed on the submitted invoices is 
the same supply as the SH098 ``chlorhexidine 4.0% (Hibiclens)'' 
applicator currently in the direct PE database.
    Finally, we also solicited comments about the use of guidewires for 
these procedures. We requested feedback about which guidewires would be 
typically used for these procedures, and which guidewires are no longer 
clinically necessary.
    The following is a summary of the comments we received regarding 
our proposed valuation of the Dialysis Circuit codes. Due to the large 
number of comments we received for this code family, we will first 
summarize the comments related to general code valuation, followed by 
the comments related to specific work RVUs, and finally the comments 
related to direct PE inputs.
    Comment: Several commenters stated that the cumulative impact of 
reimbursement reductions for the Dialysis Circuit family of codes in 
physician work and practice expense would be quite dramatic. The 
commenters compared the total RVU of the old codes against the total 
RVU of the newly created codes and found a decrease of roughly 20-30 
percent. Commenters expressed concern that if the proposed rates were 
to be implemented, many outpatient access centers that focus on 
providing care for ESRD patients might no longer be able to operate.
    Response: We share the concern of the commenters in maintaining 
access to care for Medicare beneficiaries. We believe that improved 
payment accuracy under the PFS generally facilitates access to 
reasonable and necessary physicians' services.
    We note that a change in overall RVUs for particular services, 
regardless of the magnitude of the change, may reflect improved 
accuracy. For example, comparing the summed total RVU of CPT codes 
36147, 36148, 36870, and 37238 against the total RVU of CPT code 36906 
is an accurate method to describe the services taking place under the 
coding schema effective for 2016 and 2017, respectively. Through the 
bundling of these frequently reported services, it is reasonable to 
expect that the new coding system will achieve savings via elimination 
of duplicative assumption of the resources involved in furnishing 
particular servicers. For example, a practitioner would not be carrying 
out the full preservice work four separate times for CPT codes 36147, 
36148, 36870, and 37238, but preservice times were assigned to each of 
the codes under the old coding. We believe the new coding assigns a 
more accurate preservice time and thus reflects efficiencies in 
resource costs that existed regardless of how the services were 
previously reported.
    Comment: Several commenters objected to the crosswalk codes used by 
CMS for proposed work valuation. Commenters stated that comparing the 
Dialysis Circuit codes to colonoscopy or endoscopic retrograde 
cholangiopancreatography (ERCP) codes was inappropriate, as it 
undervalued the technical skill and judgment necessary to furnish the 
services. In other words, the crosswalks chosen by CMS were invalid due 
to the differences in the procedures in question, with the Dialysis 
Circuit codes being more intensive procedures than the CMS crosswalks.
    Response: We disagree with the commenters that the choice of 
crosswalk codes is inappropriate for work valuation. We believe that, 
generally speaking, codes with similar intensity and time values are 
broadly comparable across the PFS, as the fee schedule is based upon a 
relative value system. For the Dialysis Circuit codes in particular, we 
provided a specific rationale for each crosswalk detailing why we 
believed it to be an appropriate selection. Regarding the statement 
from the commenters that colonoscopy codes, such as CPT code 44388, are 
inappropriate for use as crosswalks in this family of codes, we note 
that the RUC-recommended work RVU for CPT code 36901 was based upon a 
direct crosswalk to the work RVU of a colonoscopy code (CPT code 
45378). We continue to believe that the crosswalks for this family of 
codes are appropriate

[[Page 80293]]

choices, since they share highly similar intensity and time values with 
the reviewed codes.
    Comment: Some commenters disagreed with the use of time ratios for 
work valuation. These commenters stated that the use of direct 
crosswalks based only on intraservice time comparison or ratios of 
intraservice time inappropriately discounted the variation in technical 
skill, judgment, and risk inherent to these procedures.
    Response: We continue to believe that the use of these 
methodologies, including the use of time ratios, is an appropriate 
process for identifying potential values for particular codes, 
especially when the recommended work RVUs do not appear to account for 
significant changes in time. As we stated earlier in our discussion on 
this topic in this final rule, we use time ratios to identify potential 
work RVUs and consider these work RVUs as potential options relative to 
the values developed through other methodologies for code valuation. We 
continue to believe our valuation for the Dialysis Circuit codes 
accurately captures the reduction in physician work caused by the 
efficiencies gained in both time and intensity through the bundling 
together of frequently reported services.
    Comment: One commenter disagreed with the use of CMS comparisons 
between the RUC-recommended work RVUs for the Dialysis Circuit codes 
and the work RVU for other codes with similar time values in the rest 
of the fee schedule, particularly for CPT code 36901. The commenter 
stated that whether or not CPT code 36901 had the highest work RVU 
among other 0-day global codes with 25 minutes of intra-service time 
was irrelevant. The commenter pointed out that some code must be the 
highest value because the RBRVS represents a range of services of 
varying intensity. The commenter stated that CMS' reasoning undervalued 
the importance of work intensity in favor of the more easily 
quantifiable time variable, which was clinically inaccurate and 
contradictory to the principles of the relative value system.
    Response: We disagree with the commenter about the invalidity of 
comparing newly created codes to existing codes with similar time 
values on the PFS. While it is true that there must be a highest value 
for any particular subset of codes, we believe the best approach in 
establishing work RVUs for codes is to compare the service to other 
services with similar times and identify codes with similar overall 
intensities. As we wrote in the proposed rule with regards to CPT code 
36901, we have reservations with RUC-recommended values for newly 
``bundled'' codes that appear not to recognize the full resource 
overlap between predecessor codes. Since the recommended values would 
establish a new highest value when compared to other services with 
similar time, we believe it likely that the recommended value for the 
new code does not reflect the efficiencies gained through bundling. We 
believe that these comparisons to other codes with similar time values 
and intensities are an important tool in helping to maintain relativity 
across the fee schedule.
    Comment: A commenter disagreed with the CMS valuation for these 
codes based on a clinical rationale pertaining to how the services are 
defined. The commenter stated that the dialysis access circuit is 
defined as originating in the artery adjacent to the arterial 
anastomosis and including all venous outflow (whether single or 
multiple veins) to the axillary-subclavian vein junction. While several 
different arteries and veins may be included in this definition, from a 
functional perspective it is a single ``vessel''. The commenter stated 
that because of this greater propensity for multiple lesions in these 
procedures, it is appropriate to define the access vessel as CPT has 
done and allow reporting of only a single angioplasty or stent in that 
entire conduit. However, the commenter reported that the survey built 
on the ``typical patient'' (51 percent of the cases) was unable to 
recognize the additional work of additional angioplasty or stent for 
the Dialysis Circuit family of codes, even though multiple or arterial 
lesions occur with significant frequency. Because the coding structure 
of the Dialysis Circuit family does not include a code for ``additional 
vessels'', the valuation of the codes needs to incorporate the resource 
cost of patient cases where multiple or arterial lesions occur. The 
commenter contended that this problem with the survey methodology 
affected the work intensity of these codes, and justifies a higher 
intensity for these procedures.
    Response: We share the commenter's concerns with the survey data 
collected by the RUC. This is why we have long employed different 
approaches to identify potential values for work RVUs, such as time 
ratios, building blocks, and crosswalks to key reference or similar 
codes, in addition to the recommended survey data. We also note that 
our methodology generally values services based on assumptions 
regarding the typical case, not occasional complications that may 
require additional work when they occur. For the particular case of the 
Dialysis Circuit family of codes, we do not agree with the commenter 
that the single ``vessel'' classification of these procedures supports 
a higher intensity compared to other related codes. These codes have 
been defined by CPT in a similar fashion to the lower extremity 
revascularization codes, in which the code is only billed a single time 
regardless of the number of lesions or number of stents placed. Due to 
the similarity with these existing codes located elsewhere in the PFS, 
we do not believe that it would be appropriate to value the Dialysis 
Circuit codes differently.
    Comment: Several commenters suggested that there was compelling 
evidence for the higher RUC-recommended work RVUs because the vignette 
developed by the CPT Editorial Panel does not accurately reflect the 
typical ESRD patient. Commenters stated that the vignette for the 
Dialysis Circuit codes significantly underestimated the age of the 
typical patient, and may have led survey respondents to report less 
time. According to commenters, the frail and elderly ESRD patients that 
constitute the typical patients for these procedures are much sicker 
than the typical patient in other codes on the PFS, and this serves to 
justify valuing these codes at a higher intensity.
    Response: We appreciate the submission of additional information 
regarding the patient population for these codes. We recognize that 
some services may require additional work due to an unusually difficult 
patient population. However, we do not agree at this time that the 
Dialysis Circuit family of codes has a uniquely different patient 
population that justifies an increase in valuation over other 
comparable codes on the PFS. We note that for CPT code 36901, the RUC 
recommended a work RVU of 3.36 based on a direct crosswalk to CPT code 
45378, a flexible colonoscopy code. Our proposed work RVU of 2.82 for 
the same code was based on a direct crosswalk to CPT code 44388, which 
is another colonoscopy code. The patient population for these two 
crosswalk codes is similar, and both codes share similar time and 
intensity. We believe that our crosswalk code is a more appropriate 
choice given the time values and the efficiencies gained from bundling. 
However, based on this recommended crosswalk code, we believe that the 
RUC considers the patient population for CPT code 45378 to be 
appropriate for comparison to CPT code 36901, and that the reviewed 
code does not possess an unusually resource-intensive patient 
population. This same

[[Page 80294]]

pattern holds true for the other codes in the Dialysis Circuit family, 
which were valued using similar comparisons to established codes with 
typical patient populations.
    Comment: One commenter suggested that the difficulties posed by the 
patient population for the Dialysis Circuit codes were not sufficiently 
reflected in the RUC recommendations. The commenter stated that the 
patients receiving dialysis circuit services are extremely sick, and 
every step in the process of caring for those patients is more complex 
than those involved in caring for the average Medicare patient. The 
commenter stated that CMS underestimated the amount of time required to 
perform specific tasks and assumes that those tasks can be performed by 
individuals with lower levels of training and credentials than are used 
in typical practice. The commenter requested a series of direct PE 
refinements to this family of codes, many of which went above the 
original RUC recommendations, including clinical labor times 
significantly above the usual standards and using clinical labor 
staffing types outside the normal range. The commenter stated an 
intention to present data to support the recommendations at a later 
date.
    Response: We appreciate the additional information provided by the 
commenter about this family of codes. We emphasize that we do not 
believe that the RUC need be the exclusive source of information used 
in valuation of PFS services, and we are supportive of the submission 
of additional data that can aid in the process of determining the 
resources that are typically used to furnish these services. Because we 
did not receive data from the commenter to support these increases 
above the RUC recommendations, we are not incorporating these changes 
into the Dialysis Circuit codes at this time. However, we urge 
interested stakeholders to consider submitting robust data regarding 
costs for these and other services.
    We are also seeking information on how to reconcile situations 
where we have multiple sets of recommendations from the RUC and from 
other PFS stakeholders, both for this specific case and for the 
situation more broadly, given the need to maintain relativity among PFS 
services.
    The following comments address the proposed work valuation of 
individual codes in the family.
    Comment: A commenter contended that the proposed work RVU of 2.82 
undervalues CPT code 36901. The commenter stated that compelling 
evidence regarding CPT's inaccurate description of the typical ESRD 
patient as 45 years old led to lower survey times and hence the ``new 
highest value'' problem mentioned by CMS. The commenter recommended 
that CMS should finalize the RUC work RVU of 3.36, or barring that, 
should finalize a work RVU of 3.02 based on a direct crosswalk to CPT 
code 36200. The commenter stated that this code is very similar 
clinically in work and intensity to CPT code 36901.
    Response: We summarized and responded to the general issues 
surrounding patient populations above. We disagree with the commenter 
that CPT code 36200 is a more appropriate choice for a crosswalk code 
for CPT code 36901. CPT code 36200 has 5 additional minutes of 
intraservice time (30 minutes as compared to 25 minutes) and 25 
additional minutes of total time (91 minutes as compared to 66 
minutes). In addition to this substantial difference in time values, 
the intensity of CPT code 36200 is also significantly lower than CPT 
code 36901. If we were to adopt the recommended crosswalk to a work RVU 
of 3.02, the intensity of CPT code 36901 would be 50 percent higher 
than the intensity CPT code 36200. Since we are statutorily obligated 
to base our valuation on time and intensity, we believe that this makes 
CPT code 36200 an inferior choice for a crosswalk code when compared to 
our choice of CPT code 44388, which shares very similar time and 
intensity with CPT code 36901.
    Comment: A commenter stated that CPT code 36902 should have a 
higher increment in work RVU from CPT code 36901 because it included 
work unable to be accounted for in a survey on the typical patient. The 
commenter indicated that according to published literature, more than 
one stenosis is present requiring angioplasty in 20-30 percent of 
dialysis access cases. A higher increment in work RVU from CPT code 
36901 to 36902 would reflect the work of additional angioplasty on 
separate stenoses and arterial angioplasty that occurs in some cases, 
but cannot be reflected in a ``typical'' 51 percent case vignette. The 
commenter requested that CMS adopt the RUC-recommended work RVU for CPT 
code 36902.
    Response: We generally establish RVUs for services based on the 
typical case. If a particular patient case requires treatment outside 
the defined dialysis circuit code descriptor, then additional catheter 
placement and imaging may be reported, assuming that all of the proper 
requirements for separate billing are met. We do not believe that it 
would be appropriate to increase the work RVU for CPT code 36902 based 
on these non-typical situations.
    Comment: A commenter stated that the CMS proposed work RVU of 5.85 
undervalues the work involved in the services described by CPT code 
36903, based on the belief that the CPT patient vignette does not 
reflect the typical patient and that ``additional vessel'' angioplasty 
or stenting work is included in CPT code 36903 but was not able to be 
captured in a survey utilizing the ``typical'' patient.
    Response: We addressed these issues in previous comment responses. 
We continue to believe that the proposed work RVU for CPT code 36903 is 
accurate.
    Comment: A commenter disagreed with the proposed work RVUs for CPT 
codes 36904 and 36905. The commenter suggested that CMS should use time 
ratios from the base code in the family, CPT code 36901, starting from 
a work RVU of 3.02 instead of the proposed work RVU of 2.82. The 
commenter suggested that this would produce work RVUs for CPT codes 
36904 and 36905 almost identical to the RUC-recommended values, which 
the commenter urged CMS to adopt.
    Response: We agree with the commenter that the use of time ratios 
is one potential method to use in the process of determining code 
valuation. However, since we stated previously that we believe our 
proposed work RVU of 2.82 is more accurate for CPT code 36901 than the 
commenter's suggestion of 3.02, we do not believe that applying the 
same time ratios provides a rationale for adopting the RUC-recommended 
work RVUs for CPT codes 36904 and 36905.
    Comment: A commenter disagreed with CMS' proposed work RVU of 9.88 
for CPT code 36906 based upon the RUC-recommended increment of 7.06 
from CPT code 36901. The commenter stated that the RUC value was well 
supported as the 25th percentile survey result and the survey times for 
the code were adversely impacted by CPT errors in the code descriptor 
and RUC survey limitations.
    Response: We do not agree that the RUC's work valuation for CPT 
code 36906 maintains relativity within the fee schedule. We believe 
that the increment between CPT code 36901 and 36906 maintains 
relativity within the Dialysis Circuit family of codes, which is why we 
proposed to use it for valuation. However, we believe that the 
recommended work RVU for CPT code 36906 insufficiently accounted for 
the efficiencies in resource use achieved through bundling together its 
predecessor codes. We continue to

[[Page 80295]]

believe that the proposed work RVU of 9.88, bracketed between 
crosswalks to CPT codes 31546 and 61623, provides the most accurate 
valuation for this service.
    Comment: A commenter disagreed with the proposed work RVU of 2.48 
for CPT code 36907, and stated that the work RVU should be identical to 
CPT code 37249 at a value of 2.97. The commenter stated these two 
services are clinically identical, and the CMS contention that CPT code 
36907 would typically be a clinically less intense procedure is not 
correct. According to the commenter, the intensity involved in both of 
these add-on codes is the work and risk of crossing the central venous 
stenosis and performing intervention within the thorax where 
complications could be severe. The commenter stated that there is no 
difference in this work intensity based upon the direction of 
approach--from the dialysis access or from a native (femoral) vein. 
Both require advancing a long wire from the access site through the 
stenosis, superior and inferior vena cava, and right atrium, which is 
needed no matter which direction one is approaching the lesion. As a 
result, the commenter suggested that CPT code 36907 should have the 
same work RVU as CPT code 37249.
    Response: While we agree with the commenter that these two services 
are clinically similar procedures, we do not agree with the commenter 
that the work between the two is identical. In particular, we believe 
that the difference in the intraservice time (25 minutes for CPT code 
36907 against 30 minutes for CPT code 37249) should be accounted for in 
the work valuation, as the former code takes 20 percent less time to 
perform. We note as well that under our proposed valuation, these two 
codes have exactly the same intensity, with the difference in the work 
value occurring solely as a result of the decreased time required to 
perform CPT code 36907. Since time is one of the resources we are 
obligated to use for code valuation, we believe that the proposed 
values for these two codes are more accurate than setting both of them 
to the same work RVU.
    Comment: One commenter supported the proposed work RVUs of 3.73 for 
CPT code 36908 and 3.48 for CPT code 36909.
    Response: We appreciate the support from the commenter.
    The following comments address the proposed direct PE inputs for 
the Dialysis Circuit family of codes.
    Comment: Several commenters urged CMS to accept the recommended 
additional preservice clinical labor for CPT codes 36904, 36905, and 
36906. Commenters stated that the patient presentation and the 
requisite preservice clinical labor is inherently different for CPT 
codes 36904-36906 when compared with CPT codes 36901-36903. Commenters 
indicated that the latter group are elective procedures, which are 
scheduled and planned well in advance of the procedure and performed on 
days that do not conflict with the patient's dialysis schedule. In 
contrast, the former group are urgent procedures typically done when a 
patient presents to their dialysis treatment with a thrombosed access. 
According to the commenters, the urgent nature of these procedures, the 
need for additional preoperative testing because of missed dialysis, 
and the need for arranging unscheduled dialysis treatment requires 
additional preservice time for the procedural staff.
    Response: We disagree with the commenters. We continue to note that 
the preservice work description is identical for all six of the 0-day 
global codes in this family. Generally speaking, we also typically 
provide less preservice clinical labor time for emergent procedures, 
not more preservice clinical labor time, as there is no time for these 
tasks to be performed. We continue to believe that all six of these 
codes are most accurately valued by sharing the same preservice 
clinical labor times.
    Comment: Several commenters stated that the recommended 5 minutes 
of clinical labor for ``Prepare and position patient/monitor patient/
set up IV'' were reasonable because these cases are done on the upper 
extremity using portable c-arm fluoroscopy. According to commenters, 
the additional time includes prepping and positioning the arm, applying 
appropriate shielding to the patient's torso, positioning the c-arm 
unit, and then positioning other radiation shielding devices. 
Commenters stated that each of these activities requires more time in 
the arm, which typically must be extended to the side to be accessible 
for access and imaging; this is different from procedures done in the 
long plane of the body including the torso and legs. The commenters 
stated that 5 minutes is a more accurate reflection of the required 
clinical labor time than the proposed 3 minutes.
    Response: We continue to believe that additional time may be needed 
for this activity as compared to the default standard of 2 minutes. 
However, we maintain that the commenter's request for 3 additional 
minutes (for a total of 5 minutes) would not typically be required for 
arm positioning, as this additional clinical labor time is generally 
not included in similar procedures. We do not agree that the additional 
tasks described by the commenters would require the requested 5 minutes 
of clinical labor time, and we are maintaining our proposed value of 3 
minutes.
    Comment: Several commenters opposed the CMS proposal to remove the 
``kit, for percutaneous thrombolytic device (Trerotola)'' supply 
(SA015) from the RUC recommended supplies for CPT code 36904, 36905, 
and 36906, under the belief that only one device would typically be 
used in these procedures. Commenters indicated that this understanding 
was incorrect. According to the commenters, a mechanical thrombectomy 
device and a Fogarty thrombectomy balloon serve different purposes and 
both are necessary to perform a dialysis access thrombectomy. 
Commenters provided lengthy clinical rationales to support their point 
of view, which can be summarized as follows: ``The Fogarty balloon is 
small and highly compliant allowing it to be pulled through the artery 
and into the access without damaging the vessels. The thrombectomy 
device cannot be used safely for this function. This device is larger 
so risks pushing the fibrin plug into the artery if passed across the 
arterial anastomosis from the access--risking distal arterial 
embolization. The device is also much more rigid being made from metal 
and with irregular shape that risks damaging the endothelium of the 
artery causing arterial injury.'' As a result, commenters requested 
that the listed devices ``catheter, thrombectomy-Fogarty'' (SD032) and 
``kit, for percutaneous thrombolytic device (Trerotola)'' supply 
(SA015) both remain in the supply list for these codes.
    Response: We appreciated the detailed presentation of additional 
clinical information regarding the use of the percutaneous thrombolytic 
device kit from the commenters. After review of the comments and the 
contents of the kit, we believe that its inclusion in these three 
procedures is appropriate. According to the device literature, the kit 
contains a rotor for macerating the clot, a catheter for removing the 
clot, and a sheath for introducing the device. We will therefore 
restore the SA015 supply to CPT codes 36904, 36905, and 36906. However, 
we are removing the Fogarty catheter (SD032) and 1 of the 2 vascular 
sheaths (SD136), as these are contained within the kit. The literature 
for the percutaneous thrombolytic device kit clearly stipulates that 
there is no need for additional catheters to remove the clot, which 
makes the

[[Page 80296]]

Fogarty catheter a duplicative supply which can be removed.
    Comment: Several commenters disagreed with the CMS proposal to 
remove the recommended supply item ``covered stent (VIABAHN, Gore)'' 
(SD254) and replace it with the ``stent, vascular, deployment system, 
Cordis SMART'' (SA103) for CPT codes 36903 and 36906. Commenters stated 
that covered stents are the only stent devices that are FDA approved 
and supported by evidence from randomized controlled trials for use in 
dialysis access procedures. They are typically used in recurrent or 
elastic stenosis in dialysis access and have become the standard of 
care for these interventions. One commenter stated that Braid Forbes 
Health Research analyzed stent use in CPT code 37238 using CMS OPPS 
claims data, and found that the covered stent (VIABAHN, Gore), was used 
67.5 percent of the time and the SA103, stent, vascular, deployment 
system, Cordis SMART, was used 32.5 percent of the time. Commenters 
stressed that bare metal stents, such as the Cordis SMART, are not 
indicated for use in the Dialysis Circuit procedures.
    Response: We appreciate the submission of this additional clinical 
information regarding the use of stents for these procedures. After 
consideration of the comments, we are restoring the covered stent 
(VIABAHN, Gore) (SD254) to CPT codes 36903 and 36906 as originally 
recommended. Because we are including the SD254 covered stent, we are 
not adding the stent, vascular, deployment system, Cordis SMART (SA103) 
supply to these procedures.
    Comment: Several commenters disagreed with the CMS proposal to 
reduce the quantity of the Hemostatic patch (SG095) from 2 to 1 for CPT 
codes 36904, 36905, and 36906. Commenters stated that two hemostatic 
patches are necessary in these procedures because they require two 
separate cannulations and sheaths. At the end of the case, both sheath 
sites are removed and covered with a hemostatic patch which aids in 
preventing bleeding and maintaining sterility. The commenters stressed 
that because there are two access sites, two hemostatic patches are 
required, one to cover each site.
    Response: We appreciate the additional clinical information 
submitted by the commenters. In response to this information, we are 
finalizing inclusion of the second Hemostatic patch (SG095) to CPT 
codes 36904, 36905, and 36906, as recommended by the RUC.
    Comment: In response to the CMS solicitation of feedback regarding 
the Chloraprep applicator (26 ml) supply, commenters indicated that 
Chloraprep solution has replaced Betadine solution when performing 
sterile preparation of the dialysis access circuit due to its greater 
efficacy as preoperative skin prep. Commenters indicated that this 
supply was most accurately represented by the submitted invoice. 
Another commenter stated that studies have shown that preparation of 
central venous sites with a 2% aqueous chlorhexidine gluconate (in 70% 
alcohol) is superior for skin site preparation to either 10% povidone-
iodine or 70% alcohol alone, and that in 2002, the CDC recommended that 
2% chlorhexidine be used for skin antisepsis prior to catheter 
insertion. One commenter recommended that CMS replace the Betadine 
povidone soln (SJ041) with two units of swab, patient prep, 3.0 ml 
(Chloraprep) supply (SJ088) in the inputs for CPT codes 36901-36906.
    Response: We appreciate the submission of additional clinical 
information regarding the Chloraprep supply from the commenters. We 
agree with the recommended supply substitution, and we are therefore 
removing 60 ml of the Betadine solution (SJ041) and replacing it with 
two units of the swab, patient prep, 3.0 ml (Chloraprep) supply (SJ088) 
for CPT codes 36901-36906. We will add the Chloraprep applicator (26 
ml) supply to the direct PE input database at a price of $8.48 based on 
an average of the three submitted invoices; it is not currently 
assigned to any codes. We also agree that it is a distinct supply from 
the ``chlorhexidine 4.0% (Hibiclens)'' (SH098) supply already located 
in the direct PE database.
    Comment: Several commenters provided additional information 
regarding the use of guidewires in these procedures. Commenters stated 
that the three wires used in the Dialysis Circuit codes are the minimum 
required for these interventions and frequently additional wires would 
be needed in more complicated cases or in cases in which more than one 
access must be used. Commenters stated that the guidewires submitted 
are the bare minimum needed for the typical case.
    Response: We appreciate the additional information from the 
commenters regarding the use of guidewires. We proposed to use the RUC-
recommended quantities for these supplies, and we are not finalizing 
any changes.
    Comment: One commenter stated that vascular procedures involving 
fluoroscopy or radiography require the use of a radio-opaque ruler 
(SD249) to accurately size or locate tributaries and lesions beneath 
the skin. The commenter indicated that some of the base procedure codes 
(CPT codes 36903 and 36906) include this supply, while it is missing 
from CPT codes 36902 and 36905 and should be included.
    Response: Based upon recommendations from the RUC and specialties, 
we believe that the use of this supply is typical in stent procedures 
such as CPT codes 36903 and 36906. It was included in CPT code 37238, 
which is a predecessor code for these two procedures. However, the 
radio-opaque ruler does not appear to be typical in the other dialysis 
codes and we do not believe that it would be typically required in the 
non-stent procedures, as it was not included in any of the other 
predecessor codes.
    Comment: One commenter requested that CMS include additional 
miscellaneous supplies that were missing or underrepresented in the 
cost inputs. These supplies were not included in the RUC 
recommendations for these codes. The commenter also requested 
increasing the quantity of each category of gloves to 3 and the 
quantity of gowns to 3 for each of the base codes (CPT codes 36901-
36906) to more accurately reflect the typical use of these items in the 
dialysis circuit procedures.
    Response: We believe the supplies as recommended are typical for 
these procedures. We also believe the proposed number of gloves and 
gowns would be sufficient for the typical case; we currently do not 
have any data to suggest that there is a need for additional gloves or 
gowns in these procedures. The remainder of the additional 
miscellaneous items appear to be new supplies with no included 
invoices. Many of these new items may have analogous supplies already 
present in our direct PE database. For the others, we will consider 
pricing them if invoices are submitted as part of our normal process 
for updating supply and equipment costs.
    After consideration of comments received, we are finalizing the 
work RVUs for the Dialysis Circuit codes as proposed. We are also 
finalizing the proposed direct PE inputs, with the refinements detailed 
above.
(17) Open and Percutaneous Transluminal Angioplasty (CPT Codes 37246, 
37247, 37248, and 37249)
    In January 2015, a CPT/RUC workgroup identified the following CPT 
codes as being frequently reported together in various combinations: 
35475 (Transluminal balloon angioplasty, percutaneous; brachiocephalic 
trunk or

[[Page 80297]]

branches, each vessel), 35476 (Transluminal balloon angioplasty, 
percutaneous; venous), 36147 (Introduction of needle and/or catheter, 
arteriovenous shunt created for dialysis (graft/fistula); initial 
access with complete radiological evaluation of dialysis access, 
including fluoroscopy, image documentation and report), 36148 
(Introduction of needle and/or catheter, arteriovenous shunt created 
for dialysis (graft/fistula); additional access for therapeutic 
intervention), 37236 (Transcatheter placement of an intravascular 
stent(s) (except lower extremity artery(s) for occlusive disease, 
cervical carotid, extracranial vertebral or intrathoracic carotid, 
intracranial, or coronary), open or percutaneous, including 
radiological supervision and interpretation and including all 
angioplasty within the same vessel, when performed; initial artery), 
37238 (Transcatheter placement of an intravascular stent(s), open or 
percutaneous, including radiological supervision and interpretation and 
including angioplasty within the same vessel, when performed; initial 
vein), 75791 (Angiography, arteriovenous shunt (eg, dialysis patient 
fistula/graft), complete evaluation of dialysis access, including 
fluoroscopy, image documentation and report (includes injections of 
contrast and all necessary imaging from the arterial anastomosis and 
adjacent artery through entire venous outflow including the inferior or 
superior vena cava), radiological supervision and interpretation), 
75962 (Transluminal balloon angioplasty, peripheral artery other than 
renal, or other visceral artery, iliac or lower extremity, radiological 
supervision and interpretation), and 75968 (Transluminal balloon 
angioplasty, each additional visceral artery, radiological supervision 
and interpretation).
    At the October 2015 CPT Editorial Panel meeting, the panel approved 
the creation of four new codes and deletion of 13 existing codes used 
to describe bundled percutaneous transluminal angioplasty services. The 
Open and Percutaneous Transluminal Angioplasty family of codes overlaps 
with the Dialysis Circuit family of codes (CPT codes 36901-36909), as 
they are both being constructed from the same set of frequently 
reported together codes. We reviewed these two families of codes 
concurrently to maintain relativity between these clinically similar 
procedures based upon the same collection of deleted codes. After 
consideration of these materials, we proposed to accept the RUC-
recommended work RVU for CPT codes 37246, 37247, 37248, and 37249.
    For the clinical labor direct PE inputs, we proposed to use the 
RUC-recommend inputs with several refinements. Our proposed inputs 
refined the recommended clinical labor time for ``Prepare and position 
patient/monitor patient/set up IV'' from 5 minutes to 3 minutes for CPT 
codes 37246 and 37248. The RUC recommendation included a written 
justification for additional clinical labor time beyond the standard 2 
minutes for this activity, stating that the extra time was needed to 
move leads out of X-ray field, check that X-ray is not obstructed and 
that there is no risk of collision of X-ray equipment with patient. As 
we wrote for the same clinical labor activity in the Dialysis Circuit 
family, we agreed that extra time might be needed for this activity as 
compared to the default standard of 2 minutes; however, we assigned 1 
extra minute for the additional positioning tasks, resulting in a total 
of 3 minutes for this task. We did not believe that 3 extra minutes 
would be typically needed for preparation of the X-ray. The equipment 
times for the angiography room (EL011) and the PACS workstation (ED050) 
were also refined to reflect this change in clinical labor.
    We proposed to remove the ``drape, sterile, femoral'' supply 
(SB009) and replace it with a ``drape, sterile, fenestrated 16in x 
29in'' supply (SB011) for CPT codes 37246 and 37248. The two base codes 
out of which these new codes are being constructed, CPT codes 35471 and 
35476, both made use of the SB011 fenestrated sterile drape supply, and 
there was no rationale provided for the switch to the SB009 femoral 
sterile drape in the two new codes. We solicited comment on the use of 
sterile drapes for these procedures, and what rationale there was to 
support the use of the SB009 femoral sterile drape as typical for these 
new procedures.
    The following is a summary of the comments we received regarding 
our proposed valuation of the Open and Percutaneous Transluminal 
Angioplasty codes.
    Comment: One commenter disagreed with the CMS proposed value of 3 
minutes for the ``Prepare and position patient/monitor patient/set up 
IV'' clinical labor task. The commenter stated that the recommended 5 
minutes of time was needed to move leads out of X-ray field, check that 
X-ray is not obstructed and that there is no risk of collision of X-ray 
equipment with patient. The commenter also indicated that the patient's 
arm needs to be positioned on an arm board, and requested time for this 
activity.
    Recommended: We continue to believe that additional time may be 
needed for this activity as compared to the default standard of 2 
minutes. However, we maintain that the commenter's request for 3 
additional minutes (for a total of 5 minutes) would not typically be 
required for preparing the X-ray and conducting arm positioning. We do 
not agree that the additional tasks described by the commenters would 
require the requested 5 minutes of clinical labor time, and we are 
maintaining our proposed value of 3 minutes.
    Comment: Several commenters objected to the proposed replacement of 
the ``drape, sterile, femoral'' supply (SB009) with the ``drape, 
sterile, fenestrated 16in x 29in'' supply (SB011) for CPT codes 37246 
and 37248. Commenters stated that the vast majority of these new 
procedures will be performed from a femoral or jugular approach and 
will utilize a standard femoral drape. According to the commenters, the 
fenestrated drape provides a limited sterile field (16x29in) which does 
not allow room for sterile manipulation of wires and catheters as they 
extend away from the entry into the vascular system. With the creation 
of the new dialysis access circuit CPT code family, commenters 
indicated that the use of extremity access and fenestrated drapes would 
become much less typical for the new angioplasty code set.
    Response: We appreciate the presentation of additional clinical 
information from the commenters regarding the sterile drape most 
appropriate for these procedures. As a result, we are finalizing 
inclusion of the sterile femoral drape supply (SB009) to CPT codes 
37246 and 37248. We will therefore not be adding the fenestrated drape 
supply (SB011) to these procedures.
    After consideration of comments received, we are finalizing the 
proposed work RVUs for the four codes in the family. We are also 
finalizing the proposed direct PE inputs, with the refinement to the 
sterile femoral drape detailed above.
(18) Esophagogastric Fundoplasty Trans-Oral Approach (CPT Code 43210)
    For CY 2016, the CPT Editorial Panel established CPT code 43210 to 
describe trans-oral esophagogastric fundoplasty. The RUC recommended a 
work RVU of 9.00 and for CY 2016, we established an interim final work 
RVU of 7.75 for CPT code 43210. We noted that a work RVU of 7.75, which 
corresponds to the 25th

[[Page 80298]]

percentile of the survey, more accurately reflected the resources used 
in furnishing this service.
    Comment on the CY 2016 PFS final rule with comment period: 
Commenters urged CMS to accept the RUC-recommended work RVU of 9.00 for 
CPT code 43210. The commenters believed that the RUC-recommended value 
compared well with the key reference service, CPT code 43276 
(Endoscopic retrograde cholangiopancreatography (ERCP); with removal 
and exchange of stent(s), biliary or pancreatic duct, including pre- 
and post-dilation and guide wire passage, when performed, including 
sphincterotomy, when performed, each stent exchanged), which has a work 
RVU of 8.94 and an intraservice time of 60 minutes. Commenters believed 
that due to similar intraservice times and intensities, that CPT code 
43210 should be valued nearly identically to CPT code 43276. Some 
commenters also stated that to maintain relativity within the upper GI 
code families, CPT code 43210 should not have a lower work RVU than CPT 
code 43276 since the majority of survey participants indicated that CPT 
code 43210 is more complex than CPT code 43276. Additionally, one 
commenter noted that an esophagogastroduodenoscopy (EGD) is used twice 
during this service, before and after fundoplication. The commenter 
stated that because this is a multi-stage procedure, other EGD codes 
are not comparable. The commenter also pointed out that this technology 
has a small number of users and urged CMS to accept the RUC-recommended 
work RVU of 9.00 until there is additional utilization, and to consider 
reviewing this code again in subsequent years.
    Response in the CY 2017 PFS proposed rule: We referred this code to 
the CY 2016 multi-specialty refinement panel for further review, which 
recommended we accept the RUC-recommended value of 9.00 work RVUs. 
There are four ERCP codes with 60 minutes of intraservice time, three 
of which have work RVUs of less than 7.00 and only one of the four 
codes has a work RVU higher than 7.75 RVUs (8.94). Based on our 
estimate of overall work for this service, we continue to believe that 
the 25th percentile of the survey more accurately reflects the relative 
resource costs associated with this service. Therefore, for CY 2017, we 
proposed a work RVU of 7.75 for CPT code 43210.
    The following is a summary of the comments we received regarding 
our proposed valuation of CPT code 43210:
    Comment: Commenters indicated that the survey results were limited 
since this is a new technology. Commenters requested that CMS finalize 
the RUC-recommended work RVU of 9.00, with the understanding that the 
service will be reviewed again in the near future with more robust 
survey data as the technology continues to be adopted. Commenters 
disagreed with CMS' comparison to other EGD codes for purposes of 
establishing the work RVU, due to differences in the inherent clinical 
procedural steps involved with this code, including that EGD is used 
more than once (pre- and post-fundoplication) to ensure successful 
completion of the procedure.
    Response: While it may be true that multiple EGDs may be performed 
during this procedure, the surveyees are familiar with the service and 
we assume included this information in their proposed time and work 
recommendations. However, the values recommended by the survey and the 
RUC are not consistent with other codes with similar times and 
intensities. We noted in the CY 2016 interim final rule that CPT code 
43240 (Drainage of cyst of the esophagus, stomach, and/or upper small 
bowel using an endoscope) has 10 minutes more intraservice time and a 
work RVU of 7.25. Therefore, we are finalizing for CY 2017 a work RVU 
of 7.75 for CPT code 43210.
(19) Esophageal Sphincter Augmentation (CPT Codes 43284 and 43285)
    In October 2015, the CPT Editorial Panel created two new codes to 
describe laparoscopic implantation and removal of a magnetic bead 
sphincter augmentation device used for treatment of gastroesophageal 
reflux disease (GERD). The RUC noted that the specialty societies 
conducted a targeted survey of the 145 physicians who have been trained 
to furnish these services and who are the only physicians who have 
performed these procedures. They noted that only 18 non-conflicted 
survey responses were received despite efforts to follow up and that 
nine physicians had no experience in the past 12 months with the 
procedure. The RUC agreed with the specialty society that the expertise 
of those responding was sufficient to consider the survey; however, 
neither the RUC nor the specialty society used the survey results as 
the primary basis for their recommended value.
    For CPT code 43284, the RUC recommended a work RVU of 10.13. We 
compared this code to CPT code 43180 (Esophagoscopy, rigid, transoral 
with diverticulectomy of hypopharynx or cervical esophagus (e.g., 
Zenker's diverticulum), with cricopharyngeal myotomy, includes use of 
telescope or operating microscope and repair, when performed), which 
has a work RVU of 9.03 and has identical intraservice time and similar 
total time. We stated in the proposed rule that we believe the overall 
intensity of these procedures is similar; therefore, we proposed a work 
RVU of 9.03 for CPT code 43284.
    For CPT code 43285, the RUC recommended a work RVU of 10.47. We 
used the increment between the RUC-recommended work RVU for this code 
and CPT code 43284 (0.34 RVUs) to develop our proposed work RVU of 9.37 
for CPT code 43285.
    Comment: We received many comments on our proposal from various 
stakeholders including practitioners, manufacturers, the RUC, and 
medical specialty societies representing various surgical specialties. 
For CPT code 43284, commenters indicated that CMS' proposed crosswalk 
from CPT code 43180 was inadequate with regard to time and complexity 
of the services. Commenters stated that CPT code 43180 has 10 minutes 
less immediate post-service time and one less post-operative visit. 
Some commenters stated that it appears that the difference between the 
specialty society median survey total time for 43284 and the total time 
for CMS' proposed crosswalk from CPT code 43180 was too great to 
discount. Commenters also disagreed that CPT code 43284 and CMS' 
proposed crosswalk from CPT code 43180 had similar complexity 
considering that one of the procedures was performed on a natural 
orifice with endoscopy versus a procedure with a surgical incision. 
Commenters indicated that management of surgical patients with 
incisions necessitates a more thorough evaluation of the body than an 
endoscopic procedure.
    For CPT code 43285, commenters noted that although CPT code 47562 
(the RUC-recommended crosswalk) requires more intraservice time than 
the aggregate survey median time for CPT code 43285, the median 
intraservice time may be understated because of the number of people 
without experience, and suggested that the total time for CPT codes 
43285 and 47562 is nearly identical and both require similar work and 
intensity. Commenters stated that only 18 non-conflicted survey 
responses were received despite the efforts of the specialty societies, 
and that nine physicians had no experience with the procedure in the 
past 12 months. Commenters also noted that the RUC recommendations used 
the specialty society survey times, but provided a crosswalk for work 
RVU valuation.

[[Page 80299]]

    Many commenters expressed additional concerns about the specialty 
society survey data, indicating that the survey median and 25th 
percentile work RVUs were inconsistent with the total physician work 
for services reported with CPT codes 43284 and 43285. Commenters stated 
that to accept the results of the survey is to essentially state that 
the opinions of inexperienced surgeons is adequate to determine the 
value of a surgical procedure and lacked input from surgeons 
experienced in performing the procedure. Commenters suggested that CMS 
maintain carrier pricing for services reported with CPT codes 43284 and 
43285 while the specialty societies conduct new surveys that include 
data from surgeons experienced with the procedures. Some commenters 
suggested that the work of CPT codes 43284 and/or 43285 is more similar 
to fundoplication procedures reported with CPT code 43280 (a work RVU 
of 18.10). Other commenters suggested valuations for these procedures 
ranging from 14 to 17 work RVUs, stating that the services reported 
with CPT codes 43284 and 43285 were slightly less complicated than 
fundoplication procedures, but more complex than the valuations 
reflected in the survey results, RUC recommendations, and CMS proposed 
values.
    Response: We appreciate the feedback received from stakeholders 
regarding valuation of these services. After considering the comments 
received, for CY 2017, we are finalizing the RUC-recommended values for 
CPT codes 43284 (a work RVU of 10.13) and 43285 (a work RVU of 10.47). 
We recognize commenters' concerns regarding the specialty society 
survey data and believe these codes may be potentially misvalued. We 
look forward to receiving feedback from interested parties and 
specialty societies regarding accurate valuation of these services for 
consideration during future rulemaking.
(20) Percutaneous Biliary Procedures Bundling (CPT Codes 47531, 47532, 
47533, 47534, 47535, 47536, 47537, 47538, 47539, 47540, 47541, 47542, 
47543, and 47544)
    This group of fourteen codes was reviewed by the RUC at the April 
2015 meeting. We established interim final values for this group of 
codes during the CY 2016 PFS rulemaking cycle, and subsequently 
received updated RUC recommendations from the October 2015 meeting for 
the CY 2017 PFS rulemaking cycle. Our proposals for these codes 
incorporated both the updated RUC recommendations, as well as public 
comments received as part of the interim final status of these 
procedures.
    We received several comments regarding the CMS refinements to the 
work values for this family of codes in the CY 2016 final rule with 
comment period. The relevance of many of these comments has been 
diminished by the new series of RUC recommendations for work values 
that we received as a result of the October 2015 meeting. Given that we 
proposed the updated RUC-recommended work RVUs for CPT codes 47531, 
47532, 47533, 47534, 47535, 47536, 47537, 47538, 47539, 47540, 47542, 
47543, and 47544, we solicited additional comments relative to these 
proposed values. We agreed that the second round of physician surveys 
conducted for the October 2015 RUC meeting more accurately captured the 
work and time required to perform these procedures. The one exception 
was CPT code 47541; the survey times for this procedure were identical 
as conducted for the April and October 2015 RUC meetings, yet the RUC 
recommendation increased from a work RVU of 5.61 in April to a work RVU 
of 7.00 in October. Given that the time values for the procedure 
remained unchanged between the two surveys, we do not understand why 
the work RVU would have increased by nearly 1.50 in the intervening 
months. Since this code also has an identical intraservice time (60 
minutes) and total time (121 minutes) as CPT code 47533, we do not 
agree that it should be valued at a substantially higher rate compared 
to a medically similar procedure within the same code family. We 
therefore proposed to crosswalk the work value of CPT code 47541 to the 
work value of CPT code 47533, and we proposed a work RVU of 5.63 for 
both procedures.
    We also note that many of the codes in the Percutaneous Biliary 
Procedures family were previously included in Appendix G, and were 
valued under the assumption that moderate sedation was typically 
performed on the patient. As part of the changes for services 
previously valued with moderate sedation as inherent, we are removing a 
portion of the work RVU and preservice work time from CPT codes 47532, 
47533, 47534, 47535, 47536, 47538, 47539, 47540, and 47541. For 
example, we proposed a work value for CPT code 47541 with a 0.25 
reduction from 5.63 to 5.38, and a 10 minute reduction in its 
preservice work time from 33 minutes to 23 minutes, to reflect the work 
that will now be reported separately using the new moderate sedation 
codes. CPT codes 47542, 47533, and 47544 also were valued with moderate 
sedation; however, as add-on codes, they are not subject to alterations 
in their work RVUs or work times since the moderate sedation code with 
work RVUs and work time (99152) will only be billed once for each base-
code and not additionally with the add-on codes. These changes are 
reflected in Appendix B and the work time file posted to the web; see 
section II.D for more details.
    For the direct PE inputs, we did not propose to include the 
recommended L051A clinical labor for ``Sedate/apply anesthesia'' and 
the L037D for ``Assist Physician in Performing Procedure'' for CPT 
codes 47531 and 47537. As we wrote in the CY 2016 final rule with 
comment period (80 FR 71053), we believe that this clinical labor 
describes activities associated with moderate sedation, and moderate 
sedation is not typical for these procedures. We also proposed to 
refine the L037D clinical labor for ``Clean room/equipment by physician 
staff'' from 6 minutes to 3 minutes for all of the codes in this 
family. Three minutes is the standard for this clinical labor activity, 
and we continued to maintain that the need for additional clinical 
labor time for this cleaning activity would not be typical for these 
procedures.
    Comment on the CY 2016 PFS final rule with comment period: One 
commenter disagreed with our refinement to replace supply item 
``catheter, balloon, PTA'' (SD152) with supply item ``catheter, balloon 
ureteral (Dowd)'' (SD150). The commenter stated that a Dowd catheter is 
designed and FDA approved for use in the prostatic urethra by 
retrograde placement through the penile urethra, and it is not designed 
for use in an antegrade ureteral dilation procedure. The commenter 
stated that this replacement is inappropriate. The updated RUC 
recommendations for this family of codes also restored the balloon PTA 
catheter.
    Response in the CY 2017 PFS proposed rule: We proposed again to 
replace the recommended supply item ``catheter, balloon, PTA'' (SD152) 
with supply item ``catheter, balloon ureteral (Dowd)'' (SD150). We 
believed that the use of this ureteral balloon catheter, which is 
specifically designed for catheter and image guidance procedures, would 
be more typical than the use of a PTA balloon catheter. While we 
recognize that the Dowd catheter is not FDA approved, it is our 
understanding that the PTA balloon catheter has also not been FDA 
approved for use in these procedures. We were uncertain if the 
commenter was requesting that we should no longer include catheters 
that lack FDA approval in the direct PE database; this

[[Page 80300]]

would preclude the use of most of the catheters in our direct PE 
database. We solicited additional comment on the use of FDA approved 
catheters; in the meantime, we continued our long-standing practice of 
using the catheters in the direct PE database without explicit regard 
to FDA approval in particular procedures.
    We also proposed to remove the recommended supply item ``stone 
basket'' (SD315) from CPT code 47543 and add it to CPT code 47544. 
Based on the code descriptors, we believed that the stone basket was 
intended to be included in CPT code 47544 and was erroneously listed 
under CPT code 47543. We solicited comments from the public to help 
clarify this issue.
    We noted again that many of the codes in the Percutaneous Biliary 
Procedures family were previously included in Appendix G, and as part 
of the change in moderate sedation reporting, we removed some of the 
recommended direct PE inputs related to moderate sedation from CPT 
codes 47532, 47533, 47534, 47535, 47536, 47538, 47539, 47540, and 
47541. We removed the L051A clinical labor time for ``Sedate/apply 
anesthesia'', ``Assist Physician in Performing Procedure (CS)'', and 
``Monitor pt. following moderate sedation''. We also removed the 
conscious sedation pack (SA044) supply, and some or all of the 
equipment time for the stretcher (EF018), the mobile instrument table 
(EF027), the 3-channel ECG (EQ011), and the IV infusion pump (EQ032). 
These changes are reflected in the public use files posted to the web; 
see section II.D for more details.
    The following is a summary of the comments we received regarding 
our proposed valuation of the Percutaneous Biliary Procedures codes.
    Comment: Several commenters disagreed with the proposed work RVU of 
5.45 for CPT code 47541. Commenters stated that although CPT codes 
47541 and 47533 share similar time values, the patient population for 
CPT code 47541 is more complex with post-surgical anatomy and atypical 
problems. Therefore, the commenters stated that the direct crosswalk 
creates a sharp rank order anomaly within the family, and requested 
that CMS adopt the RUC-recommended work RVU.
    Response: We agree with the commenters that the proposed work RVU 
for CPT code 47541 has the potential to create an anomalous 
relationship between the services in this family of codes. After 
considering the comments, we are finalizing a work RVU of 6.75 for CPT 
code 47541, which is the RUC-recommended work RVU of 7.00 after 
removing 0.25 RVUs to account for the fact that moderate sedation will 
now be billed separately for this service.
    Comment: One commenter requested 2 minutes for the clinical labor 
task ``Sedate/apply anesthesia'' and 15 minutes for the clinical labor 
task ``Assist Physician in Performing Procedure'' for CPT codes 47531 
and 47537. The commenter agreed with CMS that moderate sedation was not 
typical for either procedure, but stated that the 2 minutes was for the 
RN to administer the pre-procedure prophylactic antibiotics and the 15 
minutes for assisting the physician was unrelated to moderate sedation.
    Response: We disagree with the commenter that the clinical labor 
time for these tasks would be typical for CPT codes 47531 and 47537. 
For the 2 minutes of apply anesthesia time, we do not agree that this 
clinical labor time should be assigned when the clinical staff is 
performing an entirely different activity. We have not assigned 
clinical labor time in this way in the past, and the request for 2 
minutes related to administering pre-procedure prophylactic antibiotics 
was never discussed in the recommendations for these procedures.
    For the 15 minutes of assist physician time, the commenter did not 
provide a justification for why an additional staff member would be 
needed or what the staff member would be doing. CPT codes 47531 and 
47537 already contain two clinical staff members, one technician to 
assist the physician and another technician to acquire images, plus a 
circulator. The other codes in the Percutaneous Biliary Procedures 
family previously had a third RN clinical staff member to administer 
the sedation to the patient, before moderate sedation was split off 
into its own separate procedure codes. However, CPT codes 47531 and 
47537 do not typically require sedation, and we do not agree that this 
additional clinical staff member would be required to perform the 
procedures.
    Comment: Several commenters again objected to the proposed 
replacement of the recommended supply item ``catheter, balloon, PTA'' 
(SD152) with supply item ``catheter, balloon ureteral (Dowd)'' (SD150). 
Commenters stated that this would not reflect the practice patterns of 
the Interventional Radiology community, as it is atypical and even 
quite rare to use ureteral balloon dilatation catheters in the biliary 
tree. The commenters provided information regarding the size of uretal 
balloon catheters, indicating that the maximum diameter is 8mm (Bard) 
or 7mm (Cook Medical). According to commenters, these sizes are 
frequently inadequate to treat the wide variety of pathologies in the 
biliary tree where often balloon sizes up to 12 mm are required. As a 
result, the commenters stated that the change of the balloon catheter 
supply item does not accurately represents the actual supplies utilized 
in real practice, nor does the Dowd ureteral balloon catheter satisfy 
the clinical need performed during the procedure.
    Response: We appreciate the additional clinical information 
supplied by the commenters regarding the current use of balloon 
catheters. However, although commenters stated that Bard catheters and 
Cook Medical catheters are frequently too small to treat some of the 
wide variety of pathologies that occur in the biliary tree, commenters 
did not indicate what size balloon catheter would be typically used for 
these particular procedures in the Percutaneous Biliary Procedures, or 
provide a specific rationale for why the catheter we proposed (the Dowd 
ureteral balloon catheter) would not be appropriate for these 
procedures. We note again that we are required to assess resources 
based on the typical case, and the commenters did not provide data to 
indicate that the proposed Dowd catheter would be inadequate in the 
typical case for these procedures in question, only that it may be 
insufficient for certain pathologies in the biliary tree. We continue 
to believe that the Dowd ureteral balloon catheter, which is 
specifically designed for catheter and image guidance procedures, would 
be more typical than the use of a PTA balloon catheter.
    Comment: One commenter indicated that the stone basket supply 
(SD315) had indeed been incorrectly assigned to CPT code 47543, and 
thanked CMS for moving it to CPT code 47544 where it was intended.
    Response: We appreciate the response from the commenter.
    After consideration of comments received, we are finalizing our 
proposed work RVUs for the Percutaneous Biliary Procedures family of 
codes, with the one change to a work RVU of 6.75 for CPT code 47541. We 
are finalizing our proposed direct PE inputs without refinement.
(21) Percutaneous Image Guided Sclerotherapy (CPT Code 49185)
    For CY 2016, we established an interim final work RVU of 2.35 for 
CPT code 49185 based on a crosswalk from CPT code 62305 (Myelography 
via lumbar injection, including radiological supervision and 
interpretation; 2 or more regions (e.g., lumbar/thoracic,

[[Page 80301]]

cervical/thoracic, lumbar/cervical, lumbar/thoracic/cervical)); which 
we believed accurately reflected the time and intensity involved in 
furnishing services reported with CPT code 49185. We also requested 
stakeholder input on the price of sclerosing solution (supply item 
SH062) as the volume of the solution in this procedure (300 mL) is much 
higher than other CPT codes utilizing sclerosing solution (between 1 
and 10 mL).
    Comment on the CY 2016 PFS final rule with comment period: In 
response to the CY 2016 PFS final rule with comment period (80 FR 
71054), commenters disagreed with CMS' crosswalk from CPT code 62305. 
Commenters suggested that the RUC's recommended crosswalk from CPT code 
31622 (Bronchoscopy, rigid or flexible, including fluoroscopic 
guidance, when performed; diagnostic, with cell washing, when performed 
(separate procedure)) was a more appropriate comparison due to the 
similarity of the services. Commenters requested that CPT code 49185 be 
referred to the refinement panel. The requests did not meet the 
requirements related to new clinical information for referral to the 
refinement panel. We continue to believe that for CPT code 49185 a 
crosswalk from the value of CPT code 62305 is accurate due to 
similarities in overall work.
    Commenters also stated that the procedure reported with CPT code 
49185 required a separate clinical labor staff type. The commenter 
noted that, due to the inclusion of this additional individual, the 
L037D clinical labor and additional gloves were appropriate to include 
in the procedure. The commenter did not provide any evidence for this 
claim.
    Response in the CY 2017 PFS proposed rule: We continue to believe 
that this additional use of clinical staff would not be typical for CPT 
code 49185. This procedure does not involve moderate sedation, and 
therefore, we do not believe that there would be a typical need for a 
third staff member. Additionally, we did not receive any information 
regarding the sclerosing solution (supply item SH062) that supports 
maintaining an input of 300 mL, which far exceeds the volume associated 
with other CPT codes.
    Therefore, for CY 2017, we proposed a work RVU of 2.35 for CPT code 
49185. We sought stakeholder feedback regarding why a different work 
RVU or crosswalk would more accurately reflect the resources involved 
in furnishing this service. We also proposed to maintain our direct PE 
refinements from the CY 2016 PFS final rule with comment period, but 
proposed to refine the direct practice expense inputs for the 
sclerosing solution (supply item SH062) from 300 mL to 10 mL, which is 
the highest level associated with other CPT codes utilizing sclerosing 
solution.
    The following is a summary of the comments we received regarding 
our proposed valuation of CPT code 49185.
    Comment: Commenters requested that CMS use the RUC-recommended 
crosswalk from CPT code 31622 instead of the CMS-proposed crosswalk 
from CPT code 62305. Commenters stated that CMS' crosswalk undervalues 
the services, the RUC-recommended crosswalk has analougous clinical 
activities during the procedure, as well as a similar risk, and the 
intensity of work involved for services reported with CMS' comparison 
code is less than during sclerotherapy. Commenters suggested that the 
sclerotherapy procedure includes inherent risks and challenges that are 
not adequately accounted for in CMS' proposed crosswalk.
    Response: We disagree with commenters that the RUC's recommended 
crosswalk from CPT code 31622 has analogous clinical activities 
compared to CMS' proposed crosswalk from CPT code 62305. CMS' crosswalk 
code refers to a procedure with injection, drainage, and aspiration, 
which has more clinical similarity to CPT code 49185 than the RUC's 
recommended crosswalk from 31622, which is used to report a broncoscopy 
procedure. We continue to believe that a work RVU of 2.35 is an 
appropriate valuation for services reported using CPT code 49185 and we 
maintain that CPT code 62305 is an accurate crosswalk, since CPT codes 
49185 and 62305 have similar service times. Therefore, for CY 2017, we 
are finalizing a work RVU of 2.35 for CPT code 49185.
    Comment: Commenters disagreed with CMS' proposal to include a 
direct PE input of 10 mL of sclerosing solution (supply item SH062) and 
requested that CMS accept the RUC's recommendation to include 300 ml of 
sclerosing solution as part of the direct PE inputs for this procedure. 
One commenter indicated that other services that utilize sclerosing 
solution are used to describe injection of sclerosant into vascular 
structures which tend to be relatively small in size, and therefore, 
use a much smaller volume. Another commenter stated that for this 
procedure, the sclerosing solution is injected and drained three 
separate times, equating to 100 mL per injection, and that use of 
lesser volumes of sclerosant or less than three administrations of the 
sclerosant during the procedure would allow for more frequent 
recurrence necessitating additional procedures.
    Response: We appreciate the commenters' feedback regarding the 
direct PE inputs for CPT code 49185. We inadvertently included the RUC-
recommended quantity of 300 mL for the sclerosing solution (supply item 
SH062) in developing the proposed rates for this code. For CY 2017, we 
are finalizing the RUC-recommended direct PE inputs, including 300 mL 
of sclerosing solution. We welcome stakeholder feedback regarding the 
appropriate PE inputs for this procedure for consideration for CY 2018, 
including volume and pricing of the sclerosing agent.
(22) Genitourinary Procedures (CPT Codes 50606, 50705, and 50706)
    In the CY 2016 PFS final rule with comment period, we established 
as interim final the RUC-recommended work RVUs for all three codes. We 
did not receive any comments on the work values for these codes, and we 
proposed to maintain all three at their current work RVUs.
    The RUC recommended the inclusion of ``room, angiography'' (EL011) 
for this family of codes. As we discussed in the CY 2016 PFS final rule 
with comment period, we did not believe that an angiography room would 
be used in the typical case for these procedures, and we therefore 
replaced the recommended equipment item ``room, angiography'' with 
equipment item ``room, radiographic-fluoroscopic'' (EL014) for all 
three codes on an interim final basis. We also stated our belief that 
since the predecessor procedure codes generally did not include an 
angiography room and we did not have a reason to believe that the 
procedure would have shifted to an angiography room in the course of 
this coding change, we did not believe that the use of an angiography 
room would be typical for these procedures.
    Comment on the CY 2016 PFS final rule with comment period: Several 
commenters disagreed with the CMS substitution of the fluoroscopic room 
in place of the angiography room. The commenters stated that all three 
of these procedures were previously reported using CPT code 53899 
(Unlisted procedure, urinary system) which does not have any PE inputs, 
and the RUC recommendations included as a reference CPT code 50387 
(Removal and replacement of externally accessible transnephric ureteral 
stent), which includes an angiography room. The commenters suggested 
that CPT code 50387 was an example of a predecessor code that included 
the use of an angiography room, along with other

[[Page 80302]]

codes that are being bundled together to create the new Genitourinary 
codes.
    Response in the CY 2017 PFS proposed rule: We did not agree with 
the commenters' implication that because CPT code 50387 was an 
appropriate reference code for use in valuation, that it necessarily 
would have previously been used to describe services that are now 
reported under CPT codes 50606, 50705, or 50706. Our perspective was 
consistent with the RUC-recommended utilization crosswalk for the three 
new codes, which did not suggest that the services were previously 
reported using 50706. We did not believe that use of one particular 
code for reference in developing values for another necessarily meant 
that the all of the same equipment would be used for both services.
    We did not believe that these codes described the same clinical 
work either. CPT code 50387 is for the ``Removal and replacement of 
externally accessible transnephric ureteral stent'' while CPT code 
50606 describes an ``Endoluminal biopsy of ureter and/or renal 
pelvis'', CPT code 50705 refers to ``Ureteral embolization or 
occlusion'', and CPT code 50706 details ``Balloon dilation, ureteral 
stricture.'' Additionally, the codes do not have the same global 
periods, which makes comparisons between CPT code 50387 and CPT codes 
506060, 50705, and 50706 even more difficult. We noted that while the 
commenter stated that CPT code 50387 was provided as a reference for 
these procedures, 50387 is not listed as a reference for any of these 
three codes, or mentioned at all in the codes' respective summary of 
recommendations. However, we acknowledged that among the procedures 
that are provided as references, many of them included the use of an 
angiography room, such as CPT code 36227 (Selective catheter placement, 
external carotid artery) and CPT code 37233 (Revascularization, 
endovascular, open or percutaneous, tibial/peroneal artery, unilateral, 
each additional vessel). Therefore, we agreed that the use of the 
angiography room in these procedures, or at least some of its component 
parts, might be warranted.
    Comment on the CY 2016 PFS final rule with comment period: A 
commenter stated that the substitution of the fluoroscopic room for the 
angiography room was clinically unjustified. The commenter stated that 
the angiography room was needed for these procedures to carry out 3-
axis rotational imaging (so as to avoid rolling the patient), ensure 
sterility, and avoid unacceptable radiation exposure to physicians, 
their staff, and their patients. The commenter indicated that the only 
piece of equipment listed in the angiography room that would not be 
typically utilized for these procedures is the Provis Injector. All of 
the other items were used for these Genitourinary procedures. The 
commenter urged CMS to restore the angiography room to these 
procedures.
    Response in the CY 2017 PFS proposed rule: We agreed that it is 
important to provide equipment that is medically reasonable and 
necessary. Our concern with the use of the angiography room for these 
codes was that we did not believe all of the equipment would be 
typically necessary to furnish the procedure. For example, the 
commenter agreed that the Provis Injector would not be required for 
these Genitourinary codes. Therefore, we proposed to remove the 
angiography room from these three procedures and add in its place the 
component parts that make up the room. Table 17 detailed these 
components:

              Table 17--Angiography Room (EL011) Components
------------------------------------------------------------------------
                                Component
-------------------------------------------------------------------------
100 KW at 100 kV (DIN6822) generator
C-arm single plane system, ceiling mounted, integrated multispace
T motorized rotation, multiple operating modes
Real-time digital imaging
40 cm image intensifier at 40/28/20/14cm
30 x 38 image intensifier dynamic flat panel detector
Floor-mounted patient table with floating tabletop designed for
 angiographic exams and interventions (with peistepping for image
 intensifiers 13in+)
18 in TFT monitor
Network interface (DICOM)
Careposition: radiation free positioning of collimators
Carewatch: acquisition and monitoring of configurable dose area product
Carefilter: Cu-prefiltration
DICOM HIS/RIS
Control room interface
Injector, Provis
Shields, lower body and mavig
Leonardo software
Fujitsu-Siemens high performance computers
Color monitors
Singo modules for dynamic replay and full format images
Prepared for internal networking and Siemens remote servicing, both
 hardware and software
------------------------------------------------------------------------

    We included all of the above components except the Provis Injector, 
as commenters indicated that its use would not be typical for these 
procedures. We welcomed additional comments regarding if these or other 
components were typically used in these Genitourinary procedures. We 
lacked pricing information for these components; we therefore proposed 
to include each of these components in the direct PE input database at 
a price of $0.00 and we solicited invoices from the public for their 
costs to be able to price these items for use in developing final PE 
RVUs for CY 2017.
    We also noted that we believed that this issue illustrated a 
potentially broad problem with our use of equipment ``rooms'' in the 
direct PE input database. For most services, we only include equipment 
items that are used and unavailable for other uses due to their use 
during the services described by a particular code. However, for items 
included in equipment ``rooms,'' we allocate costs regardless of 
whether the individual items that comprise the room are actually used 
in the particular service.
    To maintain relativity among different kinds of procedures, we were 
interested in obtaining more information specifying the exact resources 
used in furnishing services described by different codes. We hoped to 
address this subject in greater detail in future rulemaking.
    The following is a summary of the comments we received regarding 
our proposed valuation of the Genitourinary codes:
    Comment: Many commenters objected to the removal of the angiography 
room from these codes and its replacement with the component parts of 
the room. Commenters stated that it was misguided to unbundle the 
components of the angiography room when one equipment item within the 
room is not utilized. They indicated that there are numerous cases 
where an equipment room is used despite the fact that not every item in 
the room is needed for a service, because in practice the rooms are 
configured for the most typical type of procedure performed within the 
room and it would not be efficient or realistic to remove items from a 
room when a less typical service is needed. For the specific case of 
the Provis Injector equipment, commenters stated it could not be used 
elsewhere and there was no way to create a separate angiography room 
for nonvascular procedures that did not require the injector.
    Commenters did not generally agree with the CMS proposal to price 
all of the components of the angiography room at $0.00 pending invoices 
from the public regarding their individual cost. Commenters stated that 
the resource cost of the angiography room components was clearly not 
$0.00, since the equipment in total costs over $1.3 million. Commenters 
stated that it was

[[Page 80303]]

not realistic to submit 21 separate invoices during the 60 day comment 
period, and furthermore that the components of the angiography room are 
typically not sold separately.
    Response: We appreciate the feedback from commenters regarding the 
difficulties involved in pricing the components for the angiography 
room. We have longstanding issues with the equipment rooms as they are 
currently constituted, due to our belief that all of the components of 
the room may not typically be used in performing the procedure in 
question. We continue to believe that these three codes do not make use 
of all of the components of the angiography room, and we believe that 
this code family serves as a clear example of the problems in 
relativity associated with the use of ``rooms'' as equipment items for 
a limited set of services under the PFS. However, we agree with the 
commenters that it is not likely that the components of the angiography 
room do not have a price. Therefore, while we continue to seek invoices 
for more detailed pricing information, we are restoring the angiography 
room (EL011) equipment to these three codes, with an equipment time of 
47 minutes for CPT code 50606, 62 minutes for CPT code 50705, and 62 
minutes for CPT code 50706, in each case consistent with the equipment 
time in CY 2016. We intend to continue to consider the use of equipment 
``rooms'' more broadly for future rulemaking.
    After consideration of comments received, we are finalizing our 
work values for the three Genitourinary codes as proposed. We are 
finalizing the proposed direct PE inputs as well, with the changes to 
the angiography room as detailed above.
(23) Electromyography Studies (CPT Code 51784)
    We identified CPT code 51784 as potentially misvalued through a 
screen of high expenditure services by specialty. This family also 
includes CPT code 51785 (Needle electromyography studies (EMG) of anal 
or urethral sphincter, any technique) but was not included in this 
survey. Both services have 0-day global periods. The RUC recommended a 
work RVU of 0.75 for CPT code 51784. We believe that this service is 
more accurately valued without a global period, since that is more 
consistent with other diagnostic services, and specifically, with all 
the other diagnostic electromyography services. We proposed to 
eliminate the global period and proposed the RUC-recommended work RVU 
of 0.75 for CY 2017. We also proposed to change the global period for 
CPT code 51785 from 0-day to no global period, to be consistent with 
the global period for CPT code 51784. Additionally, we proposed to add 
CPT code 51785 to the list of potentially misvalued codes to update the 
value of the service considering the change in global period, and to 
maintain consistency with CPT code 51784.
    Comment: A commenter supported CMS' proposal to accept the RUC-
recommended work value. The commenter requested that CMS indicate any 
global period changes and requests for codes as part of the family when 
CMS initially nominates a code or reviews the RUC level of interest 
(LOI) prior to distribution.
    Another commenter, while supporting our acceptance of the RUC-
recommended work RVU for CPT code 51784, did not support adding CPT 
code 51785 to the potentially misvalued code list as that code was 
addressed recently when the new CPT codes were created for urodynamic 
testing procedures.
    Response: We appreciate commenters' perspectives. We note that CPT 
code 51785 has not been valued since January 2003, at the same RUC 
meeting wherein CPT code 51784 was valued. We encourage stakeholders to 
submit the entire code family when submitting codes for inclusion on 
the list of potentially misvalued codes.
    Comment: One commenter stated that there is no difference in the 
work value of CPT code 51784 whether it has a 0-day global period 
versus an XXX global period, and should not be considered as 
potentially misvalued.
    Response: We note that CPT code 51784 was identified as potentially 
misvalued through a screen of high expenditure services by specialty. 
In the standard process of code valuation, CMS decided to change the 
global period to XXX, indicating no global period, so that the code is 
more closely aligned with other similar services.
    Comment: One commenter did not agree that CMS should accept the 
RUC-recommended work values, stating that the RUC-recommended work RVU 
underestimates the work involved in furnishing this service.
    Response: We remind commenters and stakeholders that disagree with 
CMS values, including those based on RUC recommendations, that in 
addition to submitting comments on our proposed rules, they may also 
nominate codes as potentially misvalued through the public nomination 
process. After consideration of comments, we are finalizing the work 
and global period changes as proposed.
(24) Cystourethroscopy (CPT Code 52000)
    In the CY 2016 PFS final rule with comment period, CMS identified 
CPT code 52000 through the screen for high expenditure services. We 
stated in the CY 2017 proposed rule that the RUC-recommended work RVU 
of 1.75 for CPT code 52000 is higher than the work RVUs for all 0-day 
global codes with 10 minutes of intraservice time and we did not 
believe that the overall intensity of this service was greater than all 
of the other codes. Instead, we proposed that this code compares 
favorably to CPT code 58100 (Endometrial sampling (biopsy) with or 
without endocervical sampling (biopsy), without cervical dilation, any 
method (separate procedure)), which has a work RVU of 1.53, and has 
identical intraservice time and similar total time. Therefore, we 
proposed a work RVU of 1.53 for CPT code 52000, using a direct 
crosswalk to CPT code 58100.
    Comment: Commenters requested that CMS finalize the RUC-recommended 
work RVU of 1.75 for this procedure. Commenters stated that the RUC-
recommended crosswalk codes were a more accurate comparison of 
physician work, time, and intensity for procedures reported with CPT 
code 52000.
    Response: The RUC-recommended work RVU of 1.75 is higher than the 
work RVUs associated with all other codes with 0-day global periods and 
10 minutes of intraservice time, and we continue to believe that the 
work and intensity of this service is similar to other CPT codes with 
10 minutes of intraservice time. Therefore, we are finalizing a work 
RVU of 1.53 for CPT code 52000.
(25) Biopsy of Prostate (CPT Code 55700)
    In the CY 2016 PFS final rule with comment period, CMS identified 
CPT code 55700 as potentially misvalued based on the high expenditure 
by specialty screen.
    The RUC subsequently reviewed this code for physician work and 
practice expense and recommended a work RVU of 2.50 based on the 25th 
percentile of the survey. We believed the RUC-recommended work RVU 
overestimates the work involved in furnishing this service given the 
reduction in total service time; specifically, the reduction in 
preservice and postservice times. The RUC recommendation also appears 
overvalued when compared to similar 0-day global services with 15 
minutes of intraservice time and comparable total times. To develop a 
proposed work RVU, we crosswalked the work RVUs

[[Page 80304]]

for this code from CPT code 69801 (Labyrinthotomy, with perfusion of 
vestibuloactive drug(s), transcanal), noting similar levels of 
intensity, similar total times, and identical intraservice times. 
Therefore, we proposed a work RVU of 2.06 for CPT code 55700.
    Comments: A few commenters, including the RUC, noted the RUC 
compared CPT code 55700 to other 0-day global services with 15 minutes 
of intraservice time and stated that the RUC-recommended value was 
appropriate. The RUC noted that the overall work of the surveyed code 
was similar to services: CPT code 93503 (Insertion and placement of 
flow directed catheter (eg, Swan-Ganz) for monitoring purposes) (work 
RVU = 2.91, intraservice time of 15 minutes) and CPT code 36556 
(Insertion of non-tunneled centrally inserted central venous catheter; 
age 5 years or older) (work RVU = 2.50, intraservice time of 15 
minutes). The RUC determined that these services required the same 
intra-service time, comparable physician work and intensity and 
recommended CMS accept the RUC-recommended work RVU of 2.50. 
Additionally, the RUC continued to urge specialty societies to submit 
invoices for new equipment.
    Response: We appreciate additional information offered by the 
commenters. After consideration of comments received, we agree with the 
additional information provided by commenters and are finalizing the 
RUC-recommended work RVU of 2.50.
(26) Laparoscopic Radical Prostatectomy (CPT Code 55866)
    In the CY 2016 PFS final rule with comment period, we established 
an interim final work RVU of 21.36 for CPT code 55866 based on a direct 
crosswalk to CPT code 55840 (Prostatectomy, retropubic radical, with or 
without nerve sparing). We stated that we believed these codes were 
medically similar procedures with nearly identical time values, and we 
did not believe that the difference in intensity between CPT code 55840 
and CPT code 55866 was significant enough to warrant the RUC-
recommended difference of 5.50 work RVUs. We also compared CPT code 
55866 to the work RVU of 25.18 for CPT code 55845, and stated our 
belief that, in general, a laparoscopic procedure would not require 
greater resources than an open procedure.
    Comment on the CY 2016 PFS final rule with comment period: Several 
commenters disagreed with the statement that a laparoscopic procedure, 
such as CPT code 55866, would generally require fewer resources than an 
open procedure, such as CPT code 55840. Commenters stated that 
developing the skill necessary to perform a minimally invasive 
laparoscopic surgery requires a greater degree of experience and 
specialized training than that required to perform an open 
prostatectomy. Commenters indicated that this level of practitioner 
skill should be reflected in the work RVU for the procedure, as 
intensity is based in part upon skill, mental effort, and psychological 
stress.
    Response in the CY 2017 PFS proposed rule: We agreed with the 
commenters that skill and technique, as well as mental effort and 
psychological stress on the part of the practitioner contribute to the 
overall intensity of the furnishing a given service, and therefore, are 
one of the two components in determining code-level work RVUs. However, 
we did not believe that relative increases in requisite skill or 
technique can be considered alone. Although the development of new 
technology (such as robotic assistance) may create a greater burden of 
knowledge on the part of the practitioner, it can also make procedures 
faster, safer, and easier to perform. This means that there may be 
reductions in time for such a procedure (which is the other component 
of the work RVU), but also that the mental effort and psychological 
stress for a given procedure may be mitigated by the improvements in 
safety. Therefore, we did not agree that a newer procedure that 
includes additional technology and requires greater training would 
inherently be valued at a higher rate than an older and potentially 
more invasive procedure.
    Comment on the CY 2016 PFS final rule with comment period: A 
commenter stated that CPT code 55866 describes two very different 
procedures in one code. The descriptor for the code states ``includes 
robotic assistance when performed'', and the procedure is performed 
differently depending on whether or not the robotic assistance is 
included. The commenter indicated that the vast majority of radical 
prostatectomies are performed with the robot, and although the outcomes 
are the same in both cases, the procedures are completely different.
    Response in the CY 2017 PFS proposed rule: We agreed with the 
commenter that the descriptor includes the possibility for confusion, 
especially on the part of the survey respondents. Valuing this code 
based on the typical case is difficult when the procedure differs 
depending on the inclusion or exclusion of robotic assistance. We 
suggested that valuation might be improved if the CPT Editorial Panel 
were to consider further revisions to this code to describe the two 
cases of laparoscopic radical prostatectomy: With and without robotic 
assistance.
    Comment on the CY 2016 PFS final rule with comment period: One 
commenter stated that the application of the phase-in transition for 
facility-only codes like CPT code 55866 would have a particularly 
egregious impact in the second year of the transition. The commenter 
urged CMS to ensure that its implementation of the phase-in transition 
does not undermine the protections created by the statute.
    Response in the CY 2017 PFS proposed rule: Please see sections II.G 
and II.H for a discussion of the phase-in transition and its 
implementation in its second year.
    Comment on the CY 2016 PFS final rule with comment period: Several 
commenters requested that CMS refer CPT code 55866 to the refinement 
panel for review. At the refinement panel, the presenters brought up 
new evidence in the form of a study published in 2016 describing 
discharge data for radical laparoscopic prostatectomies. The presenters 
stated that there were many more people included in this study as 
opposed to the 30 respondents in the survey data, and that on average 
the robotic procedure took 90 minutes longer than the open procedure. 
The additional time needed to perform the procedure, as indicated by 
this new study's results, was presented as a new rationale as to why 
CMS should accept the RUC-recommended work RVU.
    Response in the CY 2017 PFS proposed rule: CPT code 55866 was 
referred to the CY 2016 Multi-Specialty Refinement Panel per the 
request of commenters. The outcome of the refinement panel was a median 
work RVU of 26.80, the same value as the RUC recommended in the 
previous rulemaking cycle. After consideration of the comments and the 
results of the refinement panel, we proposed for CY 2017 to maintain 
the interim final work RVU of 21.36 for CPT code 55866. We were 
interested in the results of the study mentioned at the refinement 
panel, and we stated that we would consider incorporating this data 
into the valuation of this code, including, if appropriate, adjustments 
to the work times used in PFS ratesetting. We also solicited that the 
study be submitted through the public comment process so that we could 
allow it proper consideration along with other information submitted by 
the public, rather than using the results of a single study to propose 
valuations. We were also curious about the time values

[[Page 80305]]

regarding the duration of CPT code 55866. One of the members of the 
refinement panel stated that on average the robotic procedure took 90 
minutes longer than the open procedure. This was not what was indicated 
by the survey data from the RUC recommendations, which had the two 
procedures valued at virtually identical times (same intraservice time, 
6 minutes difference total time). We therefore solicited comment on 
whether the times included in this study were more accurate than the 
time reflected in the RUC surveys.
    The following is a summary of the comments we received regarding 
our proposed valuation of CPT code 55866:
    Comment: One commenter agreed that the code descriptor for CPT code 
55866 might have caused confusion by the RUC survey respondents. The 
commenter stated that they were encouraged by the CMS comments that the 
valuation might be improved if the CPT Editorial Panel were to consider 
further revisions to this code to describe a laparoscopic radical 
prostatectomy with and without robotic assistance. The commenter 
requested a strong statement from CMS urging the CPT Editorial Panel to 
create two unique codes: One for laparoscopic radical prostatectomy and 
one for robotic radical prostatectomy.
    Response: We believe that there are potential problems with CPT 
code 55866 as it is currently described and with the corresponding RUC 
recommendation. Commenters presented data suggesting that there are 
significant differences between the robotic and non-robotic versions of 
the procedure in the length of time required to perform the operation. 
However, the same data also suggests that the non-robotic version of 
the laparoscopic radical prostatectomy has become comparatively rare. 
Given the information presented by commenters, we believe that 
valuation might be improved with further revisions to this code. 
However, we note that we do not direct the work of the CPT Editorial 
Panel, and we also note the comparative rarity of the non-robotic 
version of the procedure.
    Comment: Several commenters referenced a study entitled ``Robot-
assisted versus Open Radical Prostatectomy: A Contemporary Analysis of 
an All-payer Discharge Database'' by J.L. Leow, S.L. Chang, and 
colleagues. This study was published in February 2016, and it detailed 
how university investigators analyzed more than 600,000 men undergoing 
radical prostatectomy in the United States from 2003-2013, which showed 
that the robotic approach took on average 90 minutes longer than an 
open radical prostatectomy. Commenters noted how this contrasted to the 
RUC survey data that had only 32 respondents and recommended an 
intraservice time equal to an open radical prostatectomy (180 minutes). 
The commenters presented the study data in favor of demonstrating how 
the robotic approach to radical prostatectomy detailed in CPT code 
55866 takes significantly more time to perform than the open approach 
detailed in the CMS crosswalk code 55840. Commenters recommended that 
CMS adopt the RUC-recommended work RVU of 26.80 based on this new 
clinical evidence contained in the study.
    Response: We appreciate the submission of this additional clinical 
information from the commenters. We have had longstanding interest in 
using robust data sources regarding the resource costs of PFS services, 
and we believe that the use of such additional outside data sources can 
improve the accuracy of the valuation of services. However, we do note 
that the cited study was not specifically designed to measure 
intraoperative times and did not use the same ``skin to skin'' 
definition of intraservice time typically used in the development of 
times included in PFS ratesetting.
    In this case of the particular comment, we note the potential 
logical dissonance of the commenter urging us to adopt the RUC-
recommended work value derived from the RUC survey by citing 
alternative data that calls into question the accuracy of the time data 
from the same RUC survey. In other words, we are troubled with the idea 
that we should consider survey data as valid for work while rejecting 
its validity for time, given that time is one of the two elements of 
overall work.
    Despite these concerns, we agree that the study presents additional 
data indicating that there is a significant difference between the open 
and robotic-assisted forms of laparoscopic radical prostatectomy, and 
that the robotic form described by CPT code 55866 likely takes a longer 
time to perform. Based on this presentation of additional clinical 
evidence, we agree with the commenters that the recommended work RVU of 
26.80 is a more appropriate value for this procedure.
    After consideration of comments received, we are finalizing a work 
RVU of 26.80 for CPT code 55866.
(27) Hysteroscopy (CPT Codes 58555, 58558, 58559, 58560, 58561, 58562, 
and 58563)
    During CY 2016 PFS rulemaking, we identified CPT code 58558 as a 
potentially misvalued code via the high expenditure specialty screen. 
CPT codes 58559-58563 were also included in the RUC's January 2016 
review of this family of codes.
    For CPT code 58555, the RUC recommended a work RVU of 3.07. We 
proposed that the 25th percentile survey result, a work RVU of 2.65, 
accurately reflects the resources involved in furnishing this service. 
We stated that this value is bracketed by two crosswalk codes, CPT code 
43191 (Esophagoscopy, rigid, transoral; diagnostic, including 
collection of specimen(s) by brushing or washing when performed 
(separate procedure)), which has a work RVU of 2.49, and CPT code 31295 
(Nasal/sinus endoscopy, surgical; with dilation of maxillary sinus 
ostium (for example, balloon dilation), transnasal or via canine 
fossa), which has a work RVU of 2.70. CPT codes 43191 and 31295 have 
identical intraservice times and similar total times when compared with 
CPT code 58555.
    For CPT code 58558, the RUC recommended a work RVU of 4.37. 
However, we believed that a direct crosswalk from CPT code 36221 (Non-
selective catheter placement, thoracic aorta, with angiography of the 
extracranial carotid, vertebral, and/or intracranial vessels, 
unilateral or bilateral, and all associated radiological supervision 
and interpretation, includes angiography of the cervicocerebral arch, 
when performed), which has a work RVU of 4.17, and identical 
intraservice time, and similar total time, more accurately reflects the 
time and intensity of furnishing this service. Our proposed work RVU 
was additionally supported by using an increment between this code and 
the base code for this family, CPT code 58555. The increment between 
the RUC-recommended values for these two codes is 1.3. That increment 
added to the proposed work RVU of 2.65 for the base code, CPT code 
58555, results in a work RVU of 3.95. Therefore, we proposed a work RVU 
of 4.17 RVUs for CPT code 58558.
    For CPT code 58559, the RUC recommended a work RVU of 5.54. 
However, we believed that a direct crosswalk from CPT code 52315 
(Cystourethroscopy, with removal of foreign body, calculus, or ureteral 
stent from urethra or bladder (separate procedure); complicated), which 
has a work RVU of 5.20, a similar intraservice

[[Page 80306]]

time, and similar total time as compared with CPT code 58559 more 
accurately reflects the time and intensity of furnishing this service. 
This proposed value was additionally supported by using an increment 
between CPT code 58559 and the base code for this family, CPT code 
58555. The increment between the RUC recommended values for the two 
codes is 2.47. That increment added to the proposed value for the base 
code, CPT code 58555, would result in a work RVU of 5.12. Therefore, we 
proposed a work RVU of 5.20 for CPT code 58559.
    For CPT code 58560, the RUC recommended a work RVU of 6.15. We 
stated in the proposed rule that we believe that a direct crosswalk 
from CPT code 52351 (Cystourethroscopy, with ureteroscopy and/or 
pyeloscopy; diagnostic), which has a work RVU of 5.75 and which has 
more intraservice time and very similar total time, more accurately 
reflects the time and intensity of furnishing this service. Our 
proposal further supported this value by using an increment between CPT 
code 58560 and the base code for this family, CPT code 58555. We stated 
that the increment between the RUC recommended values for the two codes 
is 3.08. That increment added to the proposed value for the base code, 
CPT code 58555, would result in a work RVU of 5.73. Therefore, we 
proposed a work RVU of 5.75 for CPT code 58560.
    For CPT code 58561, the RUC recommended a work RVU of 7.00. We 
stated in the proposed rule that we believe that a direct crosswalk 
from CPT code 35475 (Transluminal balloon angioplasty, percutaneous; 
brachiocephalic trunk or branches, each vessel), which has a work RVU 
of 6.60 and which has similar intraservice and total times, more 
accurately reflected the time and intensity of furnishing this service. 
We also noted that our proposal was further supported by using an 
increment between CPT code 58561 and the base code for this family, CPT 
code 58555. The increment between the RUC recommended values for the 
two codes is 3.93. That increment added to the proposed value for the 
base code, CPT code 58555, would result in a work RVU of 6.58. 
Therefore, we proposed a work RVU of 6.60 for CPT code 58561.
    For CPT code 58562, the RUC recommended a work RVU of 4.17. 
However, we believed that a direct crosswalk of the work RVUs for CPT 
code 15277 (Application of skin substitute graft to face, scalp, 
eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, and/or 
multiple digits, total wound surface area greater than or equal to 100 
sq cm; first 100 sq cm wound surface area, or 1% of body area of 
infants and children), which has a work RVU of 4.00 and which has 
identical intraservice time and similar total time, more accurately 
reflects the time and intensity of furnishing this service. The RUC 
also used this code as one of its supporting codes for its 
recommendation. This value is additionally supported by using an 
increment between CPT code 58562 and the base code for this family, CPT 
code 58555. The increment between the RUC recommended values for the 
two codes is 1.10. That increment added to the proposed value for the 
base code, CPT code 58555, results in a work RVU of 3.75. Therefore, we 
proposed a work RVU of 4.00 for CPT code 58562.
    For CPT code 58563, the RUC recommended a work RVU of 4.62. 
However, we believed that a direct crosswalk of the work RVUs for CPT 
code 33962 (Extracorporeal membrane oxygenation (ECMO)/extracorporeal 
life support (ECLS) provided by physician; reposition peripheral 
(arterial and/or venous) cannula(e), open, 6 years and older (includes 
fluoroscopic guidance, when performed)), which has a work RVU of 4.47 
and that has identical intraservice time and similar total time, more 
accurately reflects the resources involved in furnishing this service. 
This value is additionally supported by using an increment between CPT 
code 58563 and the base code for this family, CPT code 58555. The 
increment between the RUC recommended values for the two codes is 1.55. 
That increment added to the proposed value for the base code, CPT code 
58555), results in a work RVU of 4.20. We note that CPT code 58563 has 
the same instraservice time and the same total time as CPT code 58558; 
however, we agreed that the intensity would be slightly higher for this 
service. Therefore, we proposed a work RVU of 4.47 for CPT code 58562.
    The RUC submitted invoices for two new equipment items used in 
furnishing CPT code 58558, the hysteroscopic fluid management system 
and the hysteroscopic resection system. We proposed to use these 
invoice prices for the hysteroscopic fluid management system, which 
totaled $14,698.38. The hysteroscopic resection system included the 
price of the hysteroscope, as well as other items necessary for tissue 
removal. However, we generally price endoscopes separately and not as a 
part of a system. To maintain consistency, we proposed not to include 
the hysteroscope from the Resection System. Instead, we proposed to 
update the equipment item ``endoscope, rigid, hysteroscopy'' (ES009) 
with the invoice price, $6,207.50. We did not propose to include the 
sterilization tray from the hysteroscopic resection system because we 
believe this tray has generally been characterized as an indirect 
practice expense. For the hysteroscopic resection system, we proposed 
to include the hysteroscopic tissue remover ($18,375), the sheath 
($1,097.25), and the calibration device ($300), and created a new 
equipment item code, priced at $19,857.50 in the proposed direct PE 
input database. We did not propose to include the calibration device 
since the submitted price was not documented with a paid invoice.
    Comment: Commenters, including the RUC, disagreed with CMS' 
proposed refinements to the work RVUs for these procedures, and 
requested that CMS finalize the RUC-recommended work values for these 
codes. Commenters suggested that these procedures are more complex in 
cases where it is more difficult to find and feed the scopes through 
the cervix. Commenters suggested that it appeared as though CMS used a 
time to work ratio to value these services, stating further that, for 
example, CPT code 58555 requires a forced dilation of a natural 
orifice, very small in size and can be difficult to identify in a post-
menopausal patient or a patient with prior cervical surgery. Commenters 
suggested that the CMS crosswalk codes are for a natural orifice that 
might not require any dilation or only a 10% dilation, and the orifice 
is consistently the same with little variation among patients.
    Response: While we appreciate the commenters' feedback, we do not 
consider forced or difficult dilation as described by the commenter to 
be typical based on the RUC's clinical vignette and that the difficulty 
of forced dilation at the time of surgery can often be offset by 
preoperative cervical ripening. Therefore, we are finalizing the 
following work RVUs for each code in this family.
     CPT code 58555, 2.65 work RVUs;
     CPT code 58558, 4.17 work RVUs;
     CPT code 58559, 5.20 work RVUs;
     CPT code 58560, 5.75 work RVUs;
     CPT code 58561, 6.60 work RVUs;
     CPT code 58562, 4.00 work RVUs; and
     CPT code 58563, 4.47 work RVUs.
    Comment: Regarding the direct PE inputs for CPT code 58558, one 
commenter requested that CMS add a procedure kit and update the prices 
for these supplies to reflect the cost of providing this procedure in 
the physician office setting. The commenter also submitted invoices 
related to other direct PE inputs for this code, including invoices for 
the incisor blade and the procedure kit, which the commenter

[[Page 80307]]

indicated includes inflow tubing, outflow tubing, and the non-sterile 
components of jumper cables and a tissue trap.
    Response: We appreciate the feedback we received regarding the 
direct PE inputs for CPT code 58558. We agree with the addition of the 
hysteroscopic procedure kit and are creating a new supply item 
``hysteroscopic fluid management tubing set'' using a single invoice 
price of $320. Additionally, we note that we inadvertently did not 
remove the existing direct PE inputs related to suction, which we 
proposed to replace with the hysteroscopic fluid management system. 
Therefore, we are removing direct PE inputs for the following items:
     Supply item SD009: Canister, suction;
     Supply item SD031: Catheter, suction; and
     Equipment item EQ235: Suction machine (Gomco).
    The commenter also included an additional invoice for the incision 
instrument. Based on this new information, we are renaming this new 
supply item, ``hysteroscopic tissue removal device,'' with a final 
price of $629.00, which is the simple average of the two invoice prices 
we have received for this supply item ($599 and $659 respectively). 
Additionally, we note that our proposed summary price for the 
hysteroscopic resection system was added incorrectly. The correct price 
is $19,772.25. We are also modifying the equipment title to ensure 
clarity of items included in the hysteroscopic resection system 
(control unit, footpiece, handpiece, sheath and calibration device).
(28) Intracranial Endovascular Intervention (CPT Codes 61645, 61650, 
and 61651)
    For CY 2016, we established an interim final work RVU of 15.00 for 
CPT code 61645, 10.00 for CPT code 61650 and 4.25 for CPT code 61651. 
The RUC-recommended values for CPT codes 61645, 61650 and 61651 were 
17.00, 12.00 and 5.50, respectively. We valued CPT code 61645 by 
applying the ratio between the RUC-recommended reference code, CPT code 
37231 (revascularization, endovascular, open or percutaneous, tibial, 
peroneal artery, unilateral, initial vessel; with transluminal stent 
placement(s) and atherectomy, includes angioplasty within the same 
vessel, when performed), to the work and time for CPT code 61645. We 
valued CPT code 61650 based on a crosswalk to CPT code 37221 
(revascularization, endovascular, open or percutaneous, iliac artery, 
unilateral, initial vessel; with transluminal stent placement(s), 
includes angioplasty within the same vessel, when performed), due to 
similar intensity and intraservice time. We valued CPT code 61651 based 
on a crosswalk to CPT code 37223 (revascularization, endovascular, open 
or percutaneous, iliac artery, each additional ipsilateral iliac 
vessel; with transluminal stent placement(s), includes angioplasty 
within the same vessel, when performed (list separately in addition to 
the code for primary procedure)), due to similar intraservice time and 
intensity.
    Both CPT codes 61645 and 61650 included postservice work time 
associated with a level 3 inpatient hospital visit. In the CY 2016 PFS 
final rule with comment period, we stated that we believe that for the 
typical patient, these services would be considered hospital outpatient 
services, not inpatient services. As a result, the intraservice time of 
the hospital observation care service was valued in the immediate 
postservice time. We refined the work time for CPT code 61645 by 
removing 55 minutes of work time associated with CPT code 99233, and 
added 30 minutes of time to the immediate postservice time. Therefore, 
the total time for CPT code 61645 was reduced to 241 minutes and the 
immediate postservice time increased to 83 minutes. We also removed the 
inpatient visit from CPT code 61650, which reduced the total time to 
206 minutes and increased the postservice time to 75 minutes.
    Comment on the CY 2016 PFS final rule with comment period: 
Commenters disagreed with our categorization of these codes as 
typically outpatient. Commenters stated that according to Medicare 
claims data, the predecessor codes were performed primarily on an 
inpatient basis. Additionally, commenters pointed out that the new 
codes would typically be performed on acute stroke patients. Commenters 
also said as the new codes are inpatient-only, the CMS reductions in 
work and time based on the assumption of outpatient status are flawed 
and suggested we accept the RUC-recommended values. Commenters also 
requested that these codes be referred to the refinement panel.
    Response in the CY 2017 PFS proposed rule: For CY 2016, we valued 
CPT codes 61645, 61650, and 61651 based on comparisons to CPT codes 
37231, 37221, and 37223, respectively. We continue to believe that 
these crosswalks are appropriate comparisons based on intensity and 
intraservice time, and because no persuasive information was presented 
at the refinement panel that indicated that these comparisons are not 
accurate. Therefore, for CY 2017, we proposed work RVUs of 15.00 for 
CPT code 61645, 10.00 for CPT code 61650, and 4.25 for CPT code 61651. 
We also proposed time inputs based on our refinements of the RUC 
recommendations, including removing the time associated with a hospital 
inpatient visit (CPT code 99233) from the intraservice work time, and 
adding 30 minutes to the immediate postservice time for both CPT codes 
61645 and 61650.
    We do not believe that 0-day global codes should include post-
operative visits; rather, if global codes require post-operative 
visits, they are more appropriately assigned 10- or 90-day global 
periods based on our current criteria. Our policy has been to remove 
the visit from the post-operative period and the associated minutes 
from the total time while adding 30 minutes to the immediate 
postservice period without necessarily making an adjustment to the work 
RVU (see the CY 2010 PFS proposed rule, 74 FR 33557; also see the CY 
2011 PFS proposed rule, 75 FR 40072). We solicited comment on the 
inclusion of post-operative visits in valuation of codes with 0-day 
global periods. Both CPT codes 61645 and 61650 are assigned 0-day 
global periods, and the refinements we proposed reflected changes to 
more appropriately value these codes with 0-day global periods.
    The following is a summary of the comments we received regarding 
our proposed valuations for the intracranial endovascular intervention 
family:
    Comment: Commenters, including the RUC, requested that CMS finalize 
the RUC-recommended work RVUs for CPT codes 61645, 61650 and 61651. The 
RUC suggested that evaluating the actual physician work performed in 
the inpatient setting is more accurate than applying a crosswalk to a 
CPT code that is performed predominantly in the outpatient setting. As 
examples, the RUC noted that CPT code 61645 would not be performed in 
the outpatient setting, and CPT codes 61650 and 61651 would be 
performed in the intensive care unit. For CPT codes 61645 and 61650, 
commenters also expressed concern about CMS' proposed refinements to 
remove the time associated with a postservice visit from each code and 
subsequently adding 30 minutes to the immediate postservice period for 
each of these codes. The RUC suggested that these CMS refinements 
artificially reduced the total work time for CPT codes 61645 and 61650.

[[Page 80308]]

    Response: We continue to believe that our crosswalks for each of 
these codes accurately reflect the physician work involved in these 
procedures due to similarities in intensity and intraservice time. For 
example, our proposed work RVU of 15.00 for CPT code 61645 would be the 
highest work value among comparable codes with similar intraservice 
times. We note that we identified three CPT codes with similar 
intraservice times (CPT codes 33955, 33956, and 33988) that had higher 
work RVUs than our proposed work RVU of 15.00, but these three CPT 
codes are used to report extracorporeal membrane oxygenation or 
extracorporeal life support services (ECMO/ECLS) procedures, which we 
do not believe are comparable to the CPT codes in this family.
    Regarding physician time for CPT codes 61645 and 61650, as we 
discussed in the proposed rule, we do not believe that 0-day global 
codes should include post-operative visits; rather, if global codes 
require post-operative visits, they are more appropriately assigned 10- 
or 90-day global periods based on our current criteria. Our policy has 
been to remove the visit from the post-operative period and the 
associated minutes from the total time while adding 30 minutes to the 
immediate postservice period without necessarily making an adjustment 
to the work RVU (see the CY 2010 PFS proposed rule, 74 FR 33557; also 
see the CY 2011 PFS proposed rule, 75 FR 40072).
    Therefore, for CY 2017, we are finalizing a work RVU of 15.00 for 
CPT code 61645, a work RVU of 10.00 for CPT code 61650, and a work RVU 
of 4.25 for CPT code 61651.
(29) Epidural Injections (CPT Codes 62320, 62321, 62322, 62323, 62324, 
62325, 62326, and 62327)
    We proposed the RUC-recommended work RVU for all eight of the codes 
in this family.
    We proposed to remove the 10-12mL syringes (SC051) and the RK 
epidural needle (SC038) from all eight of the codes in this family. We 
stated that these supplies were duplicative, as they are included in 
the epidural tray (SA064). As an alternative, we raised the possibility 
of removing the epidural tray and replacing it with the individual 
supply components used in each procedure; we solicited public comment 
on either the inclusion of the epidural tray or its individual 
components for this family of codes.
    The following is a summary of the comments we received regarding 
our proposed valuation of the Epidural Injection codes:
    Comment: A few commenters expressed their support for the proposed 
work values.
    Response: We appreciate the support from the commenters.
    Comment: Several commenters disagreed with the proposed removal of 
the 10-12mL syringes (SC051) and the RK epidural needle (SC038) due to 
the CMS belief that they are duplicative of the supplies in the 
epidural tray (SA064). Commenters stated that although there are three 
syringes listed in the epidural tray, none of the syringes in the tray 
are the 10-12mL syringe. In addition, none of the needles currently 
listed in the epidural tray (SA064) are an epidural needle. As a 
result, commenters indicated that there was no reason to replace the 
epidural tray with its individual components.
    Response: We appreciate this clarification from the commenters 
regarding the components that make up the epidural tray. Taking this 
information into account, we are restoring the 10-12mL syringes (SC051) 
and the RK epidural needle (SC038) to all eight of the codes in this 
family.
    After consideration of comments received, we are finalizing the 
proposed work RVUs for the Epidural Injection codes. We are also 
finalizing the proposed direct PE inputs, with the addition of the 10-
12mL syringes and the RK epidural needle detailed above.
(30) Endoscopic Decompression of Spinal Cord (CPT Code 62380)
    For CY 2016, the CPT Editorial Panel created CPT code 62380 to 
describe the endoscopic decompression of neural elements. The RUC 
recommended a work RVU of 10.47 based on a crosswalk to CPT code 47562 
(Laparoscopy, surgical; cholecystectomy) with a higher intraservice 
time than reflected in the survey data. Since we believe CPT codes 
62380 and 47562 are similar in intensity, we believe using the same 
work RVU as the crosswalk code overestimates the work involved in 
furnishing CPT code 62380. Reference CPT code 49507 (Repair initial 
inguinal hernia, age 5 years or older; incarcerated or strangulated) 
has a work RVU of 9.09 and has similar intensity and an identical 
intraservice time compared to CPT code 62380. Therefore, we proposed a 
work RVU of 9.09 for CPT code 62380.
    Comment: Some commenters reiterated that the RUC-recommended direct 
crosswalk to CPT code 47562 is appropriate since this code has a 
similar physician time, and the IWPUT of the RUC-recommended work RVU 
is 0.085, a comparable valuation when compared with other spinal 
decompression procedures. The RUC agreed that the intensity of CPT code 
62380 was greater, which offsets the 10 minute difference in 
intraservice time between the two codes. The RUC indicated that the 
difference in intensity between these procedures is based on CPT code 
62380 involving decompression about neural elements and the spinal 
cord, where the opportunity for complications and for loss of function 
is high. One commenter indicated that CMS' proposed work RVU would fall 
below the minimum survey results.
    A few commenters expressed concerns about the structure of the CPT 
code descriptors and RUC-recommended valuations. Commenters suggested 
that the CPT Editorial Panel and the RUC did not take certain 
indications into account such as differences between the physician work 
required for endoscopic tubular microdiscectomy compared to lumbar 
spinal stenosis decompression and posterior cervical posterior 
laminoforaminotomy. Commenters indicated that the specialty society 
survey data was inadequate due to the inexperience of the survey 
respondents, with others suggesting that the survey times were not 
reflective of some practitioners' experience or patient complexity.
    The commenters indicated that the current RUC recommendations for 
full endoscopic tubular endoscopic surgery are based on limited 
experience among survey respondents with lumbar microdiscectomy, and 
insufficient experience with lumbar spinal stenosis decompression and 
posterior cervical foraminotomy without fusion and are invalid for 
these indications. Commenters requested that the current CPT codes and 
valuations for full endoscopic lumbar spinal stenosis decompression and 
posterior cervical foraminotomy without fusion remain unchanged until 
further RUC survey data are examined. Some commenters suggested 
alternative crosswalks including CPT code 61548 (Hypophysectomy or 
excision of pituitary tumor, transnasal or transseptal approach, 
nonstereotactic) with a work RVU of 23.37, CPT code 63030 (Laminotomy 
(hemilaminectomy), with decompression of nerve root(s), including 
partial facetectomy, foraminotomy and/or excision of herniated 
intervertebral disc; 1 interspace, lumbar) with a work RVU of 13.18, 
and CPT code 63056 (Transpedicular approach with decompression of 
spinal cord, equina and/or nerve root(s) (e.g., herniated 
intervertebral disc), single segment;

[[Page 80309]]

lumbar (including transfacet, or lateral extraforaminal approach) 
(e.g., far lateral herniated intervertebral disc)) with a work RVU of 
21.86.
    Response: As discussed above, commenters raised multiple concerns 
about the accuracy of the survey results, the RUC's recommended 
valuation of this service, and our subsequent proposed refinements. 
Therefore, at this time, we are finalizing contractor pricing for CPT 
code 62380. We note that the summary of recommendations (SOR) included 
with the RUC recommendations indicated that the expert panel reviewing 
the survey data for this procedure believed the survey median and 25th 
percentile work RVU were inconsistent with the physician work as it 
related to other major open spine procedures. Subsequently, the RUC 
recommended a work RVU of 10.47 based on a crosswalk from CPT code 
47562 (Laparoscopy, surgical; cholecystectomy). The RUC noted that 
procedures reported with CPT code 62380 have ten minutes less 
intraoperative time compared to the RUC's recommended crosswalk from 
CPT code 62380, but suggested that the physician work of endoscopic 
decompression in the small disc interspace near the spinal nerve roots 
of the cauda equina is more complex and will require more post-
discharge office work for required imaging to confirm stabilization and 
for physical therapy orders and monitoring.
    We note that based on the RUC's utilization crosswalk, services 
that will be reported in CY 2017 with CPT code 62380 are currently 
reported using either CPT code 22899 (Unlisted procedure, spine) or CPT 
code 0275T (Percutaneous laminotomy/laminectomy (interlaminar approach) 
for decompression of neural elements, (with or without ligamentous 
resection, discectomy, facetectomy and/or foraminotomy), any method, 
under indirect guidance (e.g., fluoroscopic, CT), with or without the 
use of an endoscope, single or multiple levels, unilateral or 
bilateral; lumbar)), which are both contractor priced for CY 2016. We 
welcome feedback from interested parties and specialty societies 
regarding valuation of this service for consideration in future 
rulemaking.
(31) Paravertebral Block Injection (CPT Codes 64461, 64462, and 64463)
    In CY 2015, the CPT Editorial Panel created three new codes to 
describe paravertebral block injections at single or multiple levels, 
as well as for continuous infusion for the administration of local 
anesthetic for post-operative pain control and thoracic and abdominal 
wall analgesia. For the CY 2016 PFS final rule with comment period, we 
established the RUC-recommended work RVUs of 1.75 and 1.10 as interim 
final for CPT codes 64461 and 64462, respectively. For CPT code 64463, 
we utilized a direct crosswalk from three other injection codes (CPT 
codes 64416 (Injection, anesthetic agent; brachial plexus, continuous 
infusion by catheter (including catheter placement), 64446 (Injection, 
anesthetic agent; sciatic nerve, continuous infusion by catheter 
(including catheter placement), and 64449 (Injection, anesthetic agent; 
lumbar plexus, posterior approach, continuous infusion by catheter 
(including catheter placement)), which all had a work RVU of 1.81, as 
we believed this crosswalk more accurately reflected the work involved 
in furnishing this service.
    Comment on the CY 2016 PFS final rule with comment period: We 
received comments from the RUC stating CPT code 64463 was more 
comparable to CPT code 64483 (Injection(s), anesthetic agent and/or 
steroid, transforaminal epidural, with imaging guidance (fluoroscopy or 
CT); lumbar or sacral, single), which has a work RVU of 1.90 and 
requires the same physician work and time to perform. The RUC 
recommended we accept a work RVU of 1.90, which is the 25th percentile 
of the survey. Another commenter stated that our interim final work RVU 
for CPT code 64463 was inappropriate since imaging guidance is not part 
of our comparison codes. The commenter advocated for us to accept the 
survey respondent's selection of CPT code 64483 as the most appropriate 
comparison code and assign a work RVU of 1.90.
    Response in the CY 2017 PFS proposed rule: After reviewing and 
considering the comments, we stated we continued to believe that CPT 
codes 64416, 64446, and 64449, all of which have 20 minutes of 
intraservice time, are better crosswalks to CPT code 64463, which also 
has 20 minutes of intraservice time and a similar total time. In 
contrast, the crosswalk code recommended by commenters, CPT 64483, only 
has 15 minutes of intraservice time. Therefore, for CY 2017 we proposed 
a work RVU of 1.81 for CPT code 64463.
    The following is a summary of the comments we received regarding 
our proposed valuations for the Paravertebral Block Injection family:
    Comment: One commenter stated that CMS based its decision on an 
inappropriate comparison of CPT code 64463 with codes that describe 
continuous peripheral nerve blocks that do not include imaging 
guidance. The commenter stated that the imaging component included in 
CPT code 64463 was justification for at least the 0.09 difference 
between the RUC recommendation and the CMS proposed value. The 
commenter offered CPT code 47000 (Biopsy of liver, needle; 
percutaneous), which has identical intraservice time and a work RVU of 
1.90 as a comparator code.
    Response: We appreciate the additional information offered by the 
commenters and we agree with the commenter's statement that the image 
guidance component of this service was justification for the 0.09 
difference between the RUC recommendation and the CMS proposed value. 
After review and consideration of the comments, we are finalizing the 
RUC-recommended work RVUs of 1.75, 1.10 and 1.90 for CPTs code 64461, 
64462 and 64463, respectively for CY 2017.
(32) Implantation of Neuroelectrodes (CPT Codes 64553 and 64555)
    The RUC identified CPT codes 64553 and 64555 as a site of service 
anomaly during the CY 2016 PFS rulemaking cycle. In the Medicare claims 
data, these services were typically reported in the nonfacility 
setting, yet the survey data were predicated on a facility-based 
procedure. We agreed with the RUC that these two codes should be 
referred to the CPT Editorial Panel to better define the services, in 
particular to investigate the possibility of establishing one code to 
describe temporary or testing implantation and another code to describe 
permanent implantation. We maintained the CY 2015 work RVUs and direct 
PE inputs for these two codes on an interim basis until receiving 
updated recommendations from the CPT Editorial Panel and the RUC.
    Comment on the CY 2016 PFS final rule with comment period: A 
commenter requested that CMS allow practitioners to bill the MACs 
separately for a percutaneous electrode kit (SA022) for CPT code 64555. 
The commenter stated that without allowing for a separate payment for 
the percutaneous electrode kit, the payment for the procedure would be 
insufficient to cover the physician's costs.
    Response in the CY 2017 PFS proposed rule: We agreed that CPT codes 
64553 and 64555 as currently constructed were potentially misvalued 
codes, which is why we maintained the CY 2015 work RVUs and direct PE 
inputs on an interim basis. We believe that the disposable supplies 
furnished incident to the procedure are paid through the nonfacility PE 
RVUs. The

[[Page 80310]]

percutaneous electrode kit (SA022) was not previously included in the 
direct PE inputs for either of these two services, and since we 
proposed to maintain current direct PE inputs pending additional 
recommendations, we do not agree that disposable supplies should be 
separately payable. We proposed to maintain the interim final work RVUs 
and direct PE inputs for these two codes, and we looked forward to 
reviewing recommendations regarding these procedures again for future 
rulemaking.
    Additionally, we were alerted to a discrepancy regarding the times 
for these codes in the CY 2016 work time file. Our proposed CY 2017 
work time file addressed this discrepancy by reflecting the RUC 
recommended times of 155 minutes for CPT code 64553 and 140 minutes for 
CPT code 64555.
    The following is a summary of the comments we received regarding 
our proposed valuation of the Implantation of Neuroelectrodes codes:
    Comment: One commenter responded to the CMS request for information 
about whether there was a need for separate codes for temporary/testing 
and permanent placement for neuroelectrodes. The commenter stated that 
it did not support the creation of new separate codes at this time. The 
commenter stressed that the current codes account for the work of both 
temporary/testing and permanent placement, making the creation of new 
codes unwarranted.
    Response: We appreciate the submission of this information from the 
commenter. We did not receive any comments addressing the proposed 
valuation of these codes.
    After consideration of comments, we are finalizing the proposed 
work RVUs and proposed direct PE inputs for CPT codes 64553 and 64555.
(33) Ocular Reconstruction Transplant (CPT Code 65780)
    In CY 2015, the RUC identified CPT code 65780 as potentially 
misvalued through a misvalued code screen for 90-day global services 
that included more than 6 office visits. The RUC recommended a direct 
work RVU crosswalk from CPT code 27829 (Open treatment of distal 
tibiofibular joint (syndesmosis) disruption, includes internal 
fixation, when performed). After examining comparable codes, we 
determined the RUC-recommended work RVU of 8.80 for CPT code 65780 
would likely overstate the work involved in the procedure given the 
change in intraservice and total times compared to the previous values. 
We believed that the ratio of the total times (230/316) applied to the 
work RVU (10.73) more accurately reflected the work involved in this 
procedure. Therefore, we established an interim final work RVU of 7.81 
for CPT code 65780.
    Comment on the CY 2016 PFS final rule with comment period: The RUC 
and other commenters disagreed with our interim final values based on 
objections to our use of time ratios in developing work RVUs for PFS 
services.
    Response in the CY 2017 PFS proposed rule: We stated that we 
appreciate the commenters' concerns and responded to these concerns 
about our methodology in section II.L of the CY 2017 proposed rule. 
After review of the comments, we continued to consider the work RVU of 
7.81 to accurately represent the work involved in CPT code 65780. We 
believed this service was similar in overall intensity to CPT code 
27766 (Open treatment of medial malleolus fracture, includes internal 
fixation, when performed) that has a work RVU of 7.89 and a total time 
that more closely approximates that of CPT code 65780.
    In the CY 2017 proposed rule, we proposed a work RVU of 7.81 for 
CPT code 65780.
    We did not receive any comments in response to our proposed 
valuation on CPT code 65780; therefore, we are finalizing a work RVU of 
7.81 as proposed.
(34) Trabeculoplasty by Laser Surgery (CPT Code 65855)
    In CY 2015, the RUC identified CPT code 65855 as potentially 
misvalued through the review of 10-day global services with more than 
1.5 postoperative visits. The RUC noted that the code was changed from 
a 90-day to a 10-day global period when it was last valued in 2000. 
However, the descriptor was not updated to reflect that change. CPT 
code 65855 describes multiple laser applications to the trabecular 
meshwork through a contact lens to reduce intraocular pressure. The 
current practice is to perform only one treatment session during a 10-
day period and then wait for the effect on the intraocular pressure. 
The descriptor for CPT code 65855 has been revised and removes the 
language ``1 or more sessions'' to clarify this change in practice.
    The RUC recommended a work RVU of 3.00 for CPT code 65855. While 
the RUC-recommended value represents a reduction from the CY 2015 work 
RVU of 3.99, we stated that significant reductions in the intraservice 
time, the total time, and the change in the office visits represent a 
more significant change in the work resources involved in furnishing 
the typical service. The intraservice and total times were decreased by 
approximately 33 percent while the elimination of two postoperative 
visits (CPT code 99212) alone would reduce the overall work RVU by at 
least 24 percent under the reverse building block method. However, the 
RUC-recommended work RVU only represents a 25 percent reduction 
relative to the previous value. To identify potential work RVUs for 
this service, we calculated an intraservice time ratio between the CY 
2015 intraservice time, 15 minutes, and the RUC-recommended 
intraservice time, 10 minutes, and applied this ratio to the current 
work RVU of 3.99 to arrive at a work RVU of 2.66 for CPT code 65855, 
which we established as interim final for CY 2016.
    Comment on the CY 2016 PFS final rule with comment period: A few 
commenters, including the RUC, provided explanations as to how the RUC 
recommendation had already accounted for the reduction in physician 
intraservice time and post-operative visits. Some commenters disagreed 
with CMS' interim final values based on objections to CMS' use of time 
ratios in developing work RVUs for PFS services.
    Response in the CY 2017 PFS proposed rule: We stated that we 
appreciated the commenters' concerns regarding the time ratio 
methodologies and responded to those concerns about our methodology in 
section II.H.2 of the CY 2017 proposed rule. After considering the 
explanations provided by commenters through public comments describing 
the RUC's methodologies in more detail, we agreed that the proposed 
value did not accurately reflect the physician work involved in 
furnishing the service.
    In the CY 2017 proposed rule, we proposed the RUC-recommended work 
RVU value of 3.00 for CPT code 65855.
    We did not receive any comments in response to our proposed 
valuation on CPT code 65855; therefore, we are finalizing a work RVU of 
3.00 as proposed.
    Comment: A few commenters stated their support of CMS' decision to 
propose the RUC-recommended value for CY 2017 and strongly urged us to 
finalize the proposal.
    Response: Thank you for your comments. For CY 2017 we are 
finalizing the RUC-recommended work RVU of 3.00 for CPT code 65855.

[[Page 80311]]

(35) Glaucoma Surgery (CPT Codes 66170 and 66172)
    The RUC identified CPT codes 66170 and 66172 as potentially 
misvalued through a screen for 90-day global codes that included more 
than six office visits. We believed the RUC-recommended work RVU of 
13.94 for CPT code 66170 did not accurately account for the reductions 
in time. Specifically, the survey results indicated reductions of 25 
percent in intraservice time and 28 percent in total time. These 
reductions suggested that the RUC-recommended work RVU for CPT code 
66170 overstated the work involved in furnishing the service, since the 
recommended value only represented a reduction of approximately seven 
percent. We believed that applying the intraservice time ratio, the 
ratio between the CY 2015 intraservice time, 60 minutes, and the RUC-
recommended intraservice time, 45 minutes, applied to the current work 
RVU, 15.02, resulted in a more appropriate work RVU of 11.27. 
Therefore, for CY 2016, we established an interim final work RVU of 
11.27 for CPT code 66170.
    For CPT code 66172, the RUC recommended a work RVU of 14.81. After 
comparing the RUC-recommended work RVU for this code to the work RVU 
for similar codes (for example, CPT code 44900 (Incision and drainage 
of appendiceal abscess, open) and CPT code 52647 (Laser coagulation of 
prostate, including control of postoperative bleeding, complete 
(vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or 
dilation, and internal urethrotomy are included if performed))), we 
believed the RUC-recommended work RVU of 14.81 overstated the work 
involved in this procedure. For the same reasons and following the same 
valuation methodology utilized above, we applied the intraservice time 
ratio between the CY 2015 intraservice time and the survey intraservice 
time, 60/90, to the CY 2015 work RVU of 18.86. This resulted in a work 
RVU of 12.57 for CPT code 66172. Therefore, for CY 2016, we established 
an interim final work RVU of 12.57 for CPT code 66172.
    Comment on the CY 2016 PFS final rule with comment period: Several 
commenters, including the RUC, objected with our interim final values 
based on objections to our use of time ratios in developing work RVUs 
for PFS services. Commenters also requested CMS refer CPT codes 66170 
and 66172 to the refinement panel.
    Response in the CY 2017 PFS proposed rule: We acknowledged 
commenters' concerns regarding the time ratio methodologies and 
responded to those concerns in section II.H.2 of the CY 2017 proposed 
rule (81 FR 46162). CPT codes 66170 and 66172 were referred to the CY 
2016 multi-specialty refinement panel per commenters' request. The 
outcome of the refinement panel was a median of 13.94 RVUs for CPT code 
66170 and 14.84 RVUs for CPT code 66172. Due to the new information 
presented to the refinement panel regarding the level of intensity 
required to perform millimeter incisions in the eye, we agreed with the 
assessment of the refinement panel and proposed a work RVU of 13.94 for 
CPT code 66170 and 14.84 for CPT code 66172 for CY 2017.
    The following is a summary of the comments we received regarding 
our proposed valuations for the Glaucoma Surgery family:
    Comments: Several commenters stated their support of CMS' decision 
to propose the values recommended by the refinement panel for CPT codes 
66170 and 66172. Some commenters, including the RUC, also brought to 
our attention discrepancies between our proposal for these codes in the 
CY 2017 proposed rule and the work RVUs posted in Addendum B on the CMS 
Web site.
    Response: For CY 2017, we are finalizing a work RVU of 13.94 for 
CPT code 66170 and a work RVU of 14.84 for CPT code 66172. We 
appreciate commenters bringing this issue regarding conflicting 
information in the CY 2017 PFS proposed rule preamble text and the 
public use files published on the CMS Web site. We have corrected this 
discrepancy in this final rule and the associated public use files.
(36) Retinal Detachment Repair (CPT Codes 67101, 67105, 67107, 67108, 
67110, and 67113)
    For CY 2015, the CPT Editorial Panel made several changes to CPT 
codes 67101 and 67105. These changes include revising the code 
descriptors to exclude ``diathermy'' and ``with or without drainage of 
subretinal fluid'' and removing the reference to ``1 or more 
sessions.'' The recommended global period also changed from 90 days to 
10 days. For CPT code 67101, we proposed the RUC recommended work RVU 
of 3.50, which was based on the 25th percentile of the survey. For CPT 
code 67105, the RUC recommended a work RVU of 3.84 based on the 25th 
percentile of the survey. The RUC also stated that CPT code 67105 was a 
more intense procedure, and therefore, it should have a higher work RVU 
than CPT code 67101. Currently, CPT code 67101 has a higher work RVU 
than CPT code 67105 and according to the surveys, the intraservice and 
total times remain higher for CPT code 67101. We do not understand why 
the RUC believes that CPT code 67105 is more work than CPT code 67101. 
Therefore, we did not propose the RUC-recommended work RVU of 3.50 for 
CPT code 67105. We did not find evidence that CPT code 67105 is more 
intense than CPT code 67101 and accordingly, proposed a lower work RVU 
for CPT code 67105. To value CPT code 67105, we used the RVU ratio 
between CPT codes 67101 and 67105. We divided the current work RVU of 
8.53 for CPT code 67105, by the current work RVU of 8.80 for CPT code 
67101 and multiplied the quotient by the RUC-recommended work RVU of 
3.50 for CPT code 67101 to arrive at a work RVU of 3.39. Therefore, for 
CY 2017, we proposed a work RVU of 3.39 for CPT code 67105.
    CPT codes 67107, 67108, 67110, and 67113 were identified through 
the Relative Assessment Workgroup process under the 90-day global post-
operative visit screen in CY 2015. The RUC recommended a work RVU of 
16.00 for CPT code 67107, which corresponded to the 25th percentile of 
the survey. While the RUC recommendation represented a five percent 
reduction from the current work RVU of 16.71, we believed the RUC 
recommendation still overvalued the service given the 15 percent 
reduction in intraservice time and 25 percent reduction in total time.
    We used the intraservice time ratio between the existing and new 
time values to identify an interim final work RVU of 14.06. We believed 
this value accurately reflected the work involved in this service and 
was comparable to other codes that have the same global period and 
similar intraservice time and total time. For CY 2016, we established 
an interim final work RVU of 14.06 for CPT code 67107. For CPT code 
67108, the RUC recommended a work RVU of 17.13 based on the 25th 
percentile of the survey, which reflected a 25 percent reduction from 
the current work RVU. The survey results reflected a 53 percent 
reduction in intraservice time and a 42 percent reduction in total 
time. We believed the RUC-recommended work RVU overestimated the work, 
given the significant reductions in intraservice time and total time 
and does not maintain relativity among the codes in this family. To 
determine the appropriate value for this code and maintain relativity 
within the family, we preserved the 1.13 work RVU increment recommended 
by the RUC between this code and CPT code 67107

[[Page 80312]]

and applied that increment to the interim final work RVU of 14.06 for 
CPT code 67107. Therefore, we established an interim final work RVU of 
15.19 for CPT code 67108. For CPT code 67110, the RUC recommended 
maintaining the current work RVU of 10.25. To maintain appropriate 
relativity with the work RVUs established for the other services within 
this family, we used the RUC-recommended 5.75 work RVU differential 
between CPT code 67107 and CPT code 67110 to establish the CY 2016 
interim final work RVU of 8.31 for CPT code 67110. For CPT code 67113, 
the RUC recommended and we established an interim final work RVU of 
19.00 based on the 25th percentile of the survey.
    Comment on the CY 2016 PFS final rule with comment period: We 
received several comments disagreeing with our interim final values 
based on objections to our use of time ratios in developing work RVUs 
for PFS services. Some commenters also stated that by using some RUC-
recommended increments and rejecting others, we have not only 
established inconsistencies within the family of codes, but potentially 
opened up anomalies across a wide range of services. The RUC also 
expressed disagreement with using the recommended work RVU increments 
without using the recommended work RVU. Some commenters also stated the 
new IWPUT values for these three services are inappropriately low and 
pointed to the derived per minute intensity of 0.064 for CPT code 67110 
as particularly problematic.
    Response in the CY 2017 PFS proposed rule: We disagreed with the 
statement about inconsistencies as the codes in this family are valued 
relative to one another based on the times and level of physician work 
required for each code.
    We also stated that generally we do not agree that a low IWPUT 
itself indicates overall misvaluation as the validity of the IWPUT as a 
measure of intensity depends on the accuracy of the assumptions 
regarding the number, level, and work RVUs attributable to visits for 
services in the post-operative global period for individual services.
    We provided an example where a service with an unrealistic number 
or level of postoperative visits may have a very low derived intensity 
for the intra-service time. CPT codes 67107, 67108, and 67110 were 
referred to the CY 2016 multispecialty refinement panel per commenters' 
request. The outcome of the refinement panel was a median work RVU of 
16.00, 17.13, and 10.25, respectively. After consideration of the 
comments and the results of the refinement panel, we proposed a work 
RVU of 16.00, 17.13, and 10.25 for CPT codes 67107, 67108, and 66110, 
respectively, for CY 2017.
    The following is a summary of the comments we received regarding 
our proposed valuations for the Retinal Detachment Repair family:
    Comments: A few commenters, including the RUC, noted that CPT codes 
67101 and 67105 were last valued by the Harvard study. The RUC stated 
that during the Harvard studies, CPT code 67101 was valued higher due 
to greater total time. However, now photocoagulation is reported at 
vastly higher levels than the cryotherapy procedure, as it is 
considered to be a more effective treatment. A few commenters stated 
that given the changing nature of the service since the last valuation, 
the intensity of CPT code 67105 is now greater and urged CMS to accept 
the RUC-recommended values.
    For CPT codes 67107, 67108, 67110, and 67113, several commenters 
supported CMS' decision to propose the values recommended by the 
refinement panel and urged CMS to finalize these proposed values. A few 
commenters, including the RUC, brought to our attention discrepancies 
between our proposal for these codes and the work RVUs posted in 
Addendum B on the CMS Web site.
    Response: We note that, according to the surveys, the intraservice 
and total times were significantly higher for CPT code 67101 and note 
the specialty societies recommended a higher work RVU for CPT code 
67101 prior to the RUC meeting. Although commenters state that 
photocoagulation (CPT code 67105) is typically billed more frequently 
than diathermy (CPT code 67101), we do not believe the utilization rate 
of a service in and of itself is reason enough to warrant an increase 
in RVUs. Therefore, for CY 2017, we are finalizing a work RVU of 3.50 
and 3.39 for CPT codes 67101 and 67105, respectively.
    We appreciate commenters bringing to our attention the issue 
regarding conflicting information in the CY 2017 PFS proposed rule 
preamble text and the public use files published on the CMS Web site. 
We have corrected this discrepancy in this final rule and the public 
use files.
    For CY 2017, we are finalizing a work RVU of 16.00, 17.13, 10.25 
and 19.00 for CPT codes 67107, 67108, 66110 and 67113, respectively, in 
agreement with the refinement panel recommendations.
(37) Fetal MRI (74712 and 74713)
    For CY 2016, we established the RUC-recommended work RVU of 3.00 as 
interim final for CPT code 74712. We established an interim final work 
RVU of 1.78 for CPT code 74713 based on a refinement of the RUC-
recommended work RVU of 1.85 using the ratio of work to time for both 
codes. This proposed value also corresponds to the 25th percentile 
survey result.
    Comment on the CY 2016 PFS final rule with comment period: 
Commenters stated that the work RVU of 1.78 for CPT code 74713 did not 
reflect the higher intensity inherent in the procedure's typical 
patient. The commenter explained that the typical patient is pregnant 
with twins and has a higher likelihood of complications related to 
congenital anomalies, as well as of ischemic brain injury with twin 
gestations. The commenter further stated that twin gestations are more 
difficult to image. Commenters requested that CPT code 74713 be 
referred to the multispecialty refinement panel.
    Response in the CY 2017 PFS proposed rule: CPT code 74713 was 
referred to the CY 2016 multispecialty refinement panel. After 
considering the comments and the results of the refinement panel, we 
agreed with commenters that an RVU of 1.78 underestimated the work for 
CPT code 74713.
    In the CY 2017 proposed rule, we proposed a work RVU of 1.85 for 
the service for CY 2017.
    We did not receive any comments in response to our proposed 
valuation on CPT code 74713; therefore, we are finalizing the proposed 
work RVU.
(38) Abdominal Aortic Ultrasound Screening (CPT Code 76706)
    For CY 2017, the CPT Editorial Panel created a new code, CPT code 
76706, to describe abdominal aortic ultrasound screening, currently 
described by HCPCS code G0389. The specialties that surveyed CPT code 
76706 for the RUC were vascular surgery and radiology, and the direct 
PE inputs recommended by the RUC included an ultrasound room. Based on 
an analysis of Medicare claims data, the dominant specialties 
furnishing the service are family practice and internal medicine. We 
believe that these specialties may more typically use a portable 
ultrasound device rather than an ultrasound room. Therefore, we 
proposed to accept the RUC-recommended work RVU of 0.55, and the RUC-
recommended PE inputs for this service, but we solicited comment 
regarding whether or not it would be more accurate to substitute a 
portable ultrasound device or possibly a hand-held device for an 
ultrasound room for CPT code 76706. We note that while the phase-in of 
significant

[[Page 80313]]

reductions in RVUs ordinarily would not apply to new codes, we believe 
that it would be appropriate to consider this change from a G-code to a 
CPT code to be fundamentally similar to an editorial coding change 
since the service is not described differently, and therefore, we 
proposed to apply the phase-in to this service by comparing the 
previous value of the G-code to the value for the new CPT code.
    Comment: One commenter stated that this service should be furnished 
by a physician or surgeon that specializes in vascular disease. The 
commenter noted that CMS should assign inputs based on which 
specialties would more appropriately furnish a given service. Another 
commenter disagreed with our statement in the CY 2017 proposed rule 
that the dominant specialties furnishing this service are family 
practice and internal medicine. The commenter stated that these 
specialties are more likely to make use of a portable ultrasound device 
rather than an ultrasound room. One commenter says that this service is 
underutilized, and CMS should implement policies which support 
screening.
    Response: We appreciate the commenters' perspectives. We note that, 
in evaluating codes in the Medicare Physician Fee Schedule (MPFS), we 
price codes based on the typical service. Our review of the Medicare 
claims data indicates that the combined utilization for the technical 
component of this service and the service billed globally is typically 
billed under the PFS by family practice and internal medicine, which is 
why we solicited comment on whether the PE inputs for this service 
should be revised.
    Comment: A commenter supported our decision to apply the phase-in 
to this code.
    Response: We thank the commenter for the support.
    Comment: A commenter agreed with CMS that family practice 
physicians typically use a portable ultrasound device rather than an 
ultrasound room. The commenter stated that CMS should continue to 
include an ultrasound room as a direct PE input, unless other 
specialties furnishing the service indicate that they do not typically 
make use of an ultrasound room.
    One commenter states that abdominal aortic aneurysm screenings are 
performed on nonportable machines in either ambulatory or hospital 
settings, and therefore, an ultrasound room is appropriate.
    Response: We thank the commenters, and we will take this 
information regarding the appropriate PE inputs for this service into 
consideration for future rulemaking. While the specialty mix of the 
practitioners furnishing services can be helpful in identifying typical 
PE inputs, we continue to seek definitive information regarding the 
most appropriate PE inputs for this code. For CY 2017, we are 
finalizing the RUC-recommended work and PE inputs, as proposed.
(39) Fluoroscopic Guidance (CPT Codes 77001, 77002, and 77003)
    In the CY 2015 PFS final rule with comment period, CMS indicated 
that while CPT codes 77002 and 77003 had been previously classified as 
stand-alone codes without global periods, we believe their vignettes 
and CPT Manual parentheticals are consistent with an add-on code as has 
been established for CPT code 77001. Therefore, the global periods for 
CPT codes 77002 and 77003 now reflect an add-on code global period with 
modifications to the vignettes and parentheticals.
    For CPT code 77001, we proposed the RUC-recommended work RVU of 
0.38. We stated that the RUC-recommended work RVUs for CPT codes 77002 
and 77003 did not appear to account for the significant decrease in 
total times for these codes relative to the current total times. We 
noted that these three codes describe remarkably similar services and 
have identical intraservice and total times. Based on the identical 
times and notable similarity for all three of these codes, we proposed 
a work RVU of 0.38 for all three codes.
    The following is a summary of the comments we received regarding 
our proposed valuation of the Fluoroscopic Guidance codes:
    Comment: A few commenters disagreed with the change in the global 
period for CPT codes 77002 and 77003 to reflect their status as add-on 
codes. The commenters stated that this would imply that the imaging-
related preservice and postservice activities inherent to these image 
guidance codes are captured by the base codes with which they are 
reported, which simply is not the case. The commenters provided an 
example of how reporting of radiation specific information, such as 
fluoroscopy time, is not included in the postservice activities of the 
base codes.
    Response: CPT codes 77002 and 77003 were surveyed under the 
assumption that they would be classified as add-on codes, and the RUC 
recommendations for both work RVUs and direct PE inputs reflect this 
status. We do not believe that it would be appropriate to assign these 
codes a different global period after they were surveyed and valued 
with the understanding that they would be classified as add-on codes.
    Comment: Many commenters disagreed with the proposed work RVU of 
0.38 for CPT codes 77002 and 77003. Commenters stated that these two 
codes should not share the same work RVU as CPT code 77001, on the 
basis that the physician work, intensity and complexity of codes 77002 
and 77003 are greater than the first code in the family. Commenters 
stated that the intensity and complexity increases in parts of the body 
where there are additional anatomy considerations, such as superficial 
and deep structures to consider with CPT code 77002, as well as 
additional neuro and spinal structures to consider when performing CPT 
code 77003. One commenter suggested that there was clinical data 
indicating that CPT codes 77002 and 77003 take longer to perform than 
CPT code 77001, in contradiction of the RUC survey data that assigned 
all three codes identical time values. The commenter stated that this 
was likely due to the greater complexity and procedural variability of 
the latter two codes. Another commenter recognized that these codes 
describe similar services but stressed that they do not describe 
identical services, which was especially important for CPT code 77003 
as it pertains to spinal procedure and carries more risk than the other 
two codes.
    Response: We recognize the concerns raised by the commenters in 
assigning the same work RVU of 0.38 to the three codes in the 
Fluoroscopic Guidance family. We note that even in cases where we 
assign the same work RVU, we do not believe that the services are 
identical, only that they share the same overall resources in work as 
measured in RVUs. We also appreciate the reference to additional 
clinical data from one commenter suggesting that CPT codes 77002 and 
77003 take longer to perform than CPT code 77001. We have longstanding 
concerns about using survey data alone for code valuation, and we are 
always interested in investigating additional sources of information to 
assist in this process. We encourage future commenters to submit this 
data as part of their public comment so that it can be used by CMS as 
part of the code valuation process. Based on the submission of this 
additional data, we believe that the CPT codes 77002 and 77003 are more 
accurately valued at a higher RVU than CPT code 77001.
    After consideration of comments received, we are finalizing the 
RUC-recommended work RVUs for all three codes in the family, which is 
an increase from the proposed work RVU of 0.38 to a work RVU 0.54 for 
CPT code

[[Page 80314]]

77002 and to 0.60 for CPT code 77003. We are finalizing the proposed 
work RVU of 0.38 for CPT code 77001 without change.
(40) Mammography--Computer Aided Detection Bundling (CPT Codes 77065, 
77066 and 77067)
    Section 104 of the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106-554) 
required us to create separate codes with higher payment amounts for 
digital mammography compared to film mammography, which was the 
technology considered to be typical at the time. In addition, the 
statute required additional payment to be made when computer-aided 
detection (CAD) was used.
    In CY 2002, we began valuing digital mammography services using 
three G-codes, G0202, G0204, and G0206 to describe screening 
mammography, unilateral diagnostic mammography, and bilateral 
diagnostic mammography, respectively. CMS implemented the requirements 
of BIPA section 104(d)(1), which applied to tests furnished in 2001, by 
using the work RVUs of the parallel CPT codes, but establishing a fixed 
PE RVU rather than using PE RVUs developed under the standard PE 
methodology. The fixed amount of PE RVUs for these codes has generally 
remained unchanged since implementation of the G-codes that 
specifically described digital imaging.
    Most mammography services under Medicare have since been billed 
with these G-codes when digital mammography was used, and with CPT 
codes 77055, 77056, and 77057 when film mammography was used. The use 
of CAD has been reported with CPT codes 77051 and 77052. For CY 2017, 
the CPT Editorial Panel deleted CPT codes 77051, 77052, 77055, 77056, 
77057 and created three new CPT codes, 77065, 77066, and 77067, to 
describe mammography services bundled with CAD. For CY 2017, the RUC 
recommended work RVUs of 0.81 for CPT code 77065, 1.00 for CPT code 
77066, and 0.76 for CPT code 77067, as well as new PE inputs for use in 
developing resource-based PE RVUs based on our standard methodologies. 
The RUC recommended these inputs and only one medical specialty society 
provided us with a set of single invoices to price the equipment used 
in furnishing these services.
    We reviewed these coding changes and proposed changes to valuation 
for these codes for CY 2017. The revised CPT coding mitigates the need 
for both separate G-codes and the CAD add-on codes. Based upon these 
coding changes and the RUC-recommended input values, overall Medicare 
payment for mammography services would be drastically reduced. This is 
particularly true for the technical component of these services, which 
could possibly be reduced up to 50 percent relative to the PE RVUs 
currently used for payment for these services.
    Based on our initial review of the recommended inputs for the new 
codes, we believed that these changes would likely result in values 
more closely related to the relative resources involved in furnishing 
these services. However, we recognized that these services, 
particularly the preventive screenings, are of particular importance to 
the Medicare program and the health of Medicare beneficiaries. We were 
concerned that making drastic changes in coding and payment for these 
services could be disruptive in ways that could adversely impact 
beneficiary access to necessary services. We also recognized that 
unlike almost any other high-volume PFS service, the RVUs used for 
payment for many years have not been developed through the generally 
applicable PFS methodologies, and instead reflect the statutory 
directive under section 104 of the BIPA. Similarly, we recognized that 
the changes in both coding and valuation are significant changes for 
those who provide these services. Therefore, instead of proposing to 
simultaneously adopt the revised CPT coding and drastic reductions in 
overall payment rates, we believed it was advisable to propose to adopt 
the new coding, including the elimination of separate billing for CAD, 
for CY 2017 without proposing immediate implementation of the 
recommended resource inputs. We anticipated that we would consider the 
recommended inputs, including the pricing of the required equipment, as 
carefully as possible prior to proposing revised PE values through 
subsequent rulemaking.
    Therefore, for CPT codes 77065, 77066, and 77067, we proposed to 
accept the RUC-recommended work RVUs, but to crosswalk the PE RVUs for 
the technical component of the current corresponding G-codes, as we 
sought further pricing information for these equipment items.
    Since the publication of the proposed rule, we have determined that 
for several reasons related to claims processing systems, Medicare 
claims systems will be unable to process claims using CPT codes 77065, 
77066, and 77067 for CY 2017. However, given the parallel structure of 
these new CPT codes, 77065, 77066, and 77067 to existing G-codes G0206, 
G0204, and G0202, we anticipate that the claims systems will be fully 
capable of processing the appropriate payment policies and prices 
discussed below for CPT codes 77065, 77066, and 77067 by using the 
existing G-codes. Therefore, for CY 2017, we will operationalize the 
new coding rules, including adoption of the new code descriptors for 
CPT codes 77065, 77066, and 77067 through use of the three current G-
codes. For the purposes of discussion below, we discuss policies and 
payment rates for these three codes using the CPT numbers. Therefore, 
in the preamble discussion below, references to the G-codes refer to 
the descriptors, policies, and rates for CY 2016 and references to the 
new CPT codes refer to the 2017 descriptors, policies and rates that 
will be implemented through revisions to the current G-codes. We 
anticipate being able to adopt the CPT coding for CY 2018.
    In addition to soliciting comment on this proposal, we also 
solicited input on rates for these services in the commercial market to 
help us understand the potential impacts of any future proposed 
revisions to PFS payment rates.
    Finally, we noted that by proposing to adopt the new coding for CY 
2017, any subsequent significant reduction in RVUs (greater than 20 
percent) for the codes would be subject to the statutory phase-in under 
section 1848(c)(7).
    To help us examine the resource inputs for these services, we 
solicited public comment on the list of items recommended as equipment 
inputs for mammography services. We also invited commenters to provide 
any invoices that would help with future pricing of these items.

     Table 18--Recommended Equipment Items for Mammography Services
------------------------------------------------------------------------
      #         Item description    Quantity            Purpose
------------------------------------------------------------------------
1............  2D Selenia                   1  Mammography unit and in-
                Dimensions                      room console itself.
                Mammography
                System.

[[Page 80315]]

 
2............  Mammo                        1  Required for MQSA. The
                Accreditation                   phantom is currently
                Phantom.                        valued into the existing
                                                mammography room.
3............  Phantom Case......           1  Protects expensive
                                                required phantom from
                                                damage.
4............  Paddle Storage               3  It requires 3 racks to
                Rack.                           hold and prevent damage
                                                to all of the paddles
                                                that are part of the
                                                typical standard
                                                mammography system.
5............  Needle                       1  Needed for a full
                Localization Kit.               functioning mammography
                                                room. Allows for the
                                                performance of needle
                                                localizations. Input is
                                                not separately in the PE
                                                for the mammography
                                                guided procedure codes,
                                                19281-19282, as a fully
                                                functioning mammography
                                                room is needed for those
                                                procedures.
6............  Advanced Workflow            1  Workflow system
                Manager System.                 connecting mammography
                                                room and workstations.
7............  Cenova 2D Tower              1  CAD server, and also used
                System.                         for post-processing.
8............  Image Checker CAD            1  License required for
                (9.4) License for               using CAD. This is a one-
                One FFDM.                       time fee.
9............  Film Digitizing              1  Digitizes analog films to
                System (.                       digital for comparison
                                                purposes.
10...........  Mammography Chair.           1  A special chair needed
                                                for patients who cannot
                                                stand to safely have
                                                their mammogram
                                                performed.
11...........  Laser Imager                 1  Prints high resolution
                Printer.                        copies of the mammograms
                                                to send to surgeons and
                                                oncologists, and to use
                                                in the OR.
12...........  Barcode Scanner...           1  Allows selection of
                                                individual patient file
                                                for interpretation.
13...........  MRS V7 SQL                   1  MQSA requires that the
                Reporting System.               facility develop and
                                                maintain a database that
                                                tracks recall rates from
                                                screening, true and
                                                false positive and true
                                                and false negative
                                                rates, sensitivity,
                                                specificity, and cancer
                                                detection rate. A
                                                reporting system is
                                                required to build the
                                                required database and
                                                produce the federally
                                                required quality audit.
                                                Components below needed
                                                for the reporting
                                                system. The reporting
                                                system is currently
                                                valued into the existing
                                                mammography room.
14...........  Worksheet Printing           1  Database reports are
                Module.                         required for federal
                                                tracking purposes. This
                                                is used to generate
                                                reports for MQSA.
15...........  Site License......           1  License for site to use
                                                the reporting system.
                                                This is a one-time fee.
16...........  Additional                   3  Licenses for radiologists
                Concurrent User                 to use the reporting
                License.                        system. A minimum of
                                                three additional
                                                licenses is typical.
17...........  Densitometer......           1  Required for MQSA.
------------------------------------------------------------------------

    We also received specialty society recommendations for a new 
Equipment Item, a physician PACS mammography workstation. We note that 
we discuss physician PACS workstation in section II.A of this rule. The 
items that comprise the physician PACS mammography workstation are 
listed in Table 19. We requested public comment as to the 
appropriateness of this list and if some items are indirect expenses or 
belong in other codes. We also invited commenters to provide any 
invoices that would help with future pricing of these items.

            Table 19--Physician PACS Mammography Workstation
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
PC Tower.
Monitors 5 MP (mammo) (x2).
3rd & 4th monitor (for speech recognition, etc.).
Admin Monitor (the extra working monitor).
Keyboard & Mouse.
Powerscribe Microphone.
Software--SV APP SYNC 1.3.0.
Software--R2 Cenova.
------------------------------------------------------------------------

    We also note that for CY 2015, the CPT Editorial Panel created CPT 
codes 77061, 77062, and 77063 to describe unilateral, bilateral, and 
screening digital breast tomosynthesis, respectively. CPT code 77063 is 
an add-on code to CPT code 77057, the CPT code for screening 
mammography. To be consistent with our use of G-codes for digital 
mammography, we did not implement two of these three CPT codes for 
Medicare purposes. We only adopted CPT code 77063 as an add-on code to 
HCPCS code G0202. Instead of adopting stand-alone CPT codes 77061 and 
77062, we created a new code, G0279 Diagnostic digital breast 
tomosynthesis, as an add-on code to the diagnostic digital mammography 
HCPCS codes G0204 and G0206 and assigned it values based on CPT code 
77063. Pending revaluation of the mammography codes using direct PE 
inputs, we proposed in CY 2017 to maintain the current coding structure 
for digital breast tomosynthesis with the technical change that HCPCS 
code G0279 be reported with CPT codes 77065 or 77066 as the replacement 
codes for HCPCS codes G0204 and G0206.
    Comment: Many commenters expressed support for our decision to 
prevent a drastic reduction in payment for the technical component of 
these services by maintaining the PE RVUs from CMS' digital mammography 
coding. A few commenters expressed concern that shifting to our 
standard resource-based PE valuation methodology in future rulemaking 
would drastically reduce payments. Some commenters agreed that CMS does 
not have sufficient pricing data to value digital mammography. One 
commenter stated that the RUC-recommended direct PE inputs do not need 
to be re-considered, as they include pricing data provided by the 
specialty that most frequently furnishes the service.
    Response: We will continue to carefully consider the potential 
negative impact that our valuation of these services will have on 
beneficiary access as we evaluate all relevant sources of data in 
future rulemaking, including data provided by the RUC.
    Comment: A commenter did not support our intention to seek more 
pricing information in the commercial market, stating that commercial 
payers are generally more responsive to market incentives to reduce 
rather than increase prices.
    Response: We refer readers to the CY 2010 PFS final rule with 
comment period (74 FR 61743 through 61748) that describes CMS' 
methodology in evaluating practice expense. We would consider a variety 
of different data sources, pending their availability and 
applicability. We believe that having

[[Page 80316]]

more information regarding pricing in the commercial market may help us 
to contextualize recommended pricing, as well as potential impact of 
significant changes in payment.
    Comment: One commenter expressed concern that, despite our 
maintenance of PE RVUs and our acceptance of RUC-recommended work RVUs, 
these services will still see significant payment reductions.
    Response: We are accepting the RUC-recommended work RVUs, which 
equal the sum of the base code work RVUs for mammography and for CAD. 
The work RVUs for the new mammography coding are therefore not changing 
from their current values. Furthermore, as we are retaining the PE RVUs 
from the digital mammography G-codes in the new coding, the practice 
expense valuation is not changing. Therefore, payment amounts for 
mammography services will not see significant reductions for CY 2017. 
We expect to revalue these services through our standard code valuation 
process in future rulemaking.
    Comment: One commenter said that CMS should accept the RUC-
recommended direct PE inputs.
    Response: As noted earlier, we did not propose the RUC-recommended 
inputs for these three codes for several reasons, including our 
concerns that drastic changes in coding and payment for these services 
could be disruptive in ways that could adversely affect beneficiary 
access to necessary services, and that unlike almost any other high-
volume PFS service, the RVUs used for payment for many years have not 
been developed through the generally applicable PFS methodologies. 
Therefore, instead of proposing to simultaneously adopt the revised CPT 
coding and drastic reductions in overall payment rates, we believed it 
was advisable to propose to adopt the new coding, including the 
elimination of separate billing for CAD, for CY 2017 without proposing 
immediate implementation of the recommended resource inputs.
    Comment: One commenter requested clarification regarding if the PE 
RVUs were valued using the RUC-recommended direct PE inputs, as these 
inputs were posted in Public Use Files (PUFs) for the CY 2017 Proposed 
Rule.
    Response: We thank the commenter for pointing out that direct PE 
inputs were posted for these codes. These inputs were inadvertently 
included in the Public Use Files. We reiterate that we are not 
implementing PE inputs for these services, and we are instead 
crosswalking the PE RVUs from the digital mammography HCPCS codes 
G0202, G0204, and G0206, as doing so prevents a drastic reduction in 
payments. We included potential direct PE inputs in the text of the CY 
2017 proposed rule to facilitate public comment and information in 
anticipation of developing updated PE RVUs for these services in future 
rulemaking.
    Comment: A commenter stated that this coding violates statutory 
requirements set forth by BIPA that required the agency to: (1) create 
separate codes with higher payment amounts for digital mammography 
compared to film mammography and (2) pay separately when computer-aided 
detection (CAD) was used.
    Response: The BIPA requirements specifically refer to screening and 
diagnostic mammography furnished during the period beginning on April 
1, 2001, and ending on December 31, 2001. CMS chose to retain the 
payment rates for the technical component following this period.
    Comment: A number of commenters volunteered to help CMS in pricing 
direct PE inputs for these services.
    Response: We thank the commenters and seek as much information as 
possible regarding appropriate establishment of direct PE inputs for 
these services.
    Comment: A commenter stated that the potential reductions to the 
technical component that we are avoiding would have been based on 
flawed methodology, particularly stating that the PE per hour values 
used in PE ratesetting methodology is inaccurate as it is based on the 
Physician Practice Expense Information Survey (PPIS) from 2007-2008, 
which the commenter considers to be flawed. The commenter also stated 
that the interest rate applied to high cost capital equipment such as 
imaging is inappropriately low, and that the equipment utilization rate 
assumption is inappropriately high.
    Response: We note that the 90 percent equipment utilization rate 
only applies to diagnostic imaging services with equipment priced at $1 
million dollars or more. The most recent recommended inputs for these 
services do not include imaging equipment priced at $1 million dollars 
or more, so the 90 percent equipment utilization would not apply. 
However, we would address any application of a different utilization 
rate through notice and comment rulemaking when valuing the codes under 
our standard PE methodology. As always, we welcome information about 
the validity of the assumptions we make in calculation of direct and 
indirect costs in terms of PE. We previously noted our interest in 
improving PE calculations through incorporation of alternative data 
sources and we continue to seek information from interested 
stakeholders as to the kinds of data sources that might be available.
    For CY 2017, we are finalizing the proposed work RVUs and PE RVUs 
associated with CPT codes 77067, 77066 and 77065 for use with HCPCS 
codes G0202, G0204, and G0206, respectively.
(41) Radiation Treatment Devices (CPT Codes 77332, 77333, and 77334)
    We identified CPT codes 77332, 77333, and 77334 through the high 
expenditures by specialty screen. These services represent an 
incremental increase of complexity from the simple to the intermediate 
to the complex in design of radiation treatment devices. The RUC 
recommended no change from the current work RVUs of 0.54 for CPT code 
77332, 0.84 for CPT code 77333 and 1.24 for CPT code 77334. We believed 
the recommended work RVUs overstate the work involved in furnishing 
these services, as they do not sufficiently reflect the degree to which 
the RUC concurrently recommended a decrease in intraservice or total 
time. For CPT code 77332, we believed the RUC recommendation to 
maintain its current value despite a 34 percent decrease in total time 
appeared to ignore the change in time. Therefore, we proposed a value 
for this code based on a crosswalk from the value from CPT code 93287 
(Peri-procedural device evaluation (in person) and programming of 
device system parameters before or after a surgery, procedure, or test 
with analysis, review and report by a physician or other qualified 
health care professional; single, dual, or multiple lead implantable 
defibrillator system), due to its identical intraservice time, similar 
total time, and similar level of intensity. We therefore proposed a 
work RVU of 0.45 for CPT code 77332. We further supported this 
valuation with CPT code 97760 (Orthotic(s) management and training 
(including assessment and fitting when not otherwise reported) upper 
extremity(s), lower extremity(s) and/or trunk, each 15 minutes), which 
has similar physician time and intensity measurements and a work RVU of 
0.45. As these codes are designed to reflect an incremental increase in 
work value from simple, to intermediate, and complex device designs, we 
used an incremental difference methodology to value CPT codes 77333 and 
77334. We proposed a work RVU of 0.75 for CPT code 77333, maintaining 
its recommended increment from CPT code 77332. For CPT code 77334, we 
proposed a work RVU of 1.15, which would maintain its increment from 
CPT code 77332.

[[Page 80317]]

    Comment: Several commenters did not support CMS' use of CPT code 
93287 as a crosswalk code to value CPT code 77332, as it is not a 
radiology service.
    Response: We appreciate the commenters' concern about using a non-
radiology service to assist in our valuation of this code family. We 
note that it is fundamental to the validity of the relative value 
system that codes furnished by different kinds of physicians remain 
valid relative to each other. We commonly value codes by use of 
crosswalks to other codes that are similar in terms of time and 
intensity, and this may extend across different mixes of specialties 
furnishing each service on the MPFS.
    Comment: One commenter did not support CMS' pointing to the RUC's 
recommendation of a reduction of total time without a commensurate 
reduction in work RVU, as the current time is a CMS/Other source time, 
which is not derived from a survey and was assigned over 20 years ago.
    Response: We utilize a variety of methodologies and approaches in 
developing work RVUs, and we believe that the total time value for this 
service is one of several appropriate criteria that can be used to 
estimate the overall time and intensity. We believe that the 
intraservice and total times listed for this service are valid elements 
in allowing us to determine an appropriate work RVU. Furthermore, we 
note that the current times assigned to this code have been used to 
allocate indirect PE to services furnished by the same specialties, and 
use of this value is consistent with code valuation methodology.
    Comment: One commenter asked for clarification regarding if CMS is 
comparing the total time for CPT code 93287 to the current physician 
time of 77332 or to the survey time on which the RUC recommendation was 
based. One commenter stated that CMS' characterization of the 
intraservice time of crosswalk CPT code 93287 as identical to CPT code 
77332 is incorrect; the intraservice time for 77332 is 15 minutes, and 
the intraservice time of CPT code 93287 is 13.5 minutes.
    Response: We thank the commenter for bringing this to our 
attention; our previous statement that the intraservice time of CPT 
code 93287 is identical to the RUC-recommended intraservice time is 
incorrect. The RUC-recommended intraservice time of 15 minutes is 
similar, but not identical to the intraservice time of CPT code 93287 
which is 13.5 minutes. We continue to believe that a work RVU of 0.45 
is appropriate because we continue to believe the overall work for 
these services is approximately the same as 97760. As further support 
for our proposed value, we refer to 93016 (Cardiovascular stress test 
using maximal or submaximal treadmill or bicycle exercise, continuous 
electrocardiographic monitoring, and/or pharmacological stress; 
supervision only, without interpretation and report) which has an 
intraservice time that is identical to the RUC-recommended intraservice 
time for 77332, as well as a similar total time.
    Comment: One commenter stated that these codes have XXX global 
periods, and therefore, do not have standard pre or post service 
packages. These standard pre and post services packages did not exist 
at the time that this service was valued, thus the convention of 
eliminating pre-service time and applying minimal post-service time to 
services with XXX global periods was not applied at that time.
    Response: We appreciate the commenter's concerns about standard 
time packages not being applied to these codes. We continue to believe, 
however, that use of the RUC-recommended time to value the work RVU in 
this case is appropriate because we believe that time values are a 
critical element of establishing work RVUs.
    Comment: A few commenters stated that CMS' proposed reduction in 
the work RVUs for CPT codes 77333 and 77334 based on an incremental 
relationship with CPT code 77332 is arbitrary, and that a reduction to 
the work RVU for CPT code 77332 does not automatically justify a 
reduction to the other two family codes.
    A commenter supported the use of incremental valuation methodology 
in theory but did not believe it is appropriately applied to these 
codes, because the commenter believes that the valuation of CPT code 
77332, upon which the increments are based, is incorrect.
    Response: We refer readers to a discussion of the methodology for 
establishing work RVUs in section II.L.2 of this final rule. As 
outlined there, we frequently use an incremental methodology to 
identify potential work RVUs for particular codes. We note that we are 
maintaining the RUC-recommended incremental relationship between these 
three codes. This code family is structured to represent simple, 
intermediate, and complex procedures, and we seek to maintain that 
structure for this code family. Therefore, we are finalizing the work 
RVUs as proposed. We provide the information in Table 20 to illustrate 
our valuation of CPT code 77332 and its value relative to our crosswalk 
codes:

                        Table 20--Valuation of CPT Code 77332 Relative to Crosswalk Codes
----------------------------------------------------------------------------------------------------------------
               HCPCS                     Description         Intra time      Total time       Work RVU     IWPUT
----------------------------------------------------------------------------------------------------------------
77332--Current....................  Treatment devices,     ..............              28             .54  .....
                                     design and
                                     construction; simple
                                     (simple block,
                                     simple bolus).
77332--CMS........................  Treatment devices,                 15              18             .45  0.012
                                     design and                                                              6
                                     construction; simple
                                     (simple block,
                                     simple bolus).
93287.............................  Peri-procedural                  13.5              26             .45  0.012
                                     device evaluation &                                                     6
                                     programming.
97760.............................  Orthotic management                14              18             .45  0.025
                                     and training.                                                           7
93016.............................  Cardiovascular stress              15              19             .45  0.024
                                     test.                                                                   0
----------------------------------------------------------------------------------------------------------------

(42) Special Radiation Treatment (CPT Code 77470)
    We identified CPT code 77470 through the high expenditures by 
specialty screen. We proposed the RUC-recommended work RVU of 2.03. 
However, we believe the description of service and vignette describe 
different and unrelated treatments being performed by the physician and 
clinical staff for a typical patient, and this presents a disparity 
between the work RVUs and PE RVUs. We solicited comment on information 
that would clarify this apparent disparity to help determine 
appropriate PE inputs. In addition, we solicited comment to determine 
if creating two G-codes, one that describes the work portion of this 
service, and one that describes the PE portion, may be a potentially 
more accurate method of valuing and paying for the service or services 
described by this code.

[[Page 80318]]

    Comment: Some commenters maintained that the clinical labor and 
physician work component are related and are necessarily reported 
together. Commenters did not approve of CMS suggestion of breaking the 
work and PE components of this service into two separate G-codes in 
future rulemaking, stating that the CPT descriptor is accurate and 
represents the typical patient. Some commenters sought greater 
explanation for why CMS believes that the work and PE portions of this 
service are unrelated; commenters question if it is because the 
vignettes offered for the work and PE describe treatments for two 
separate diagnoses. Commenters also questioned if CMS is assuming that 
the ``devices'' mentioned in the description of clinical labor 
activities overlap with Radiation Treatment Devices codes which are 
also being evaluated in this rule. A commenter stated that if CMS is 
suggesting that there should be multiple CPT codes for every possible 
diagnosis for the use of this code, then that suggestion is 
problematic.
    Response: According to the description of work provided for this 
service, the physician performs cognitive work such as planning, 
consideration of test results, and therapeutic treatment contingency 
planning that is in addition to what he or she would typically be 
performing for most radiation treatments. Meanwhile, the radiation 
therapist handles the treatment devices, performs tasks such as 
positioning the patient, and helps facilitate the scan of the patient. 
We believe that this may describe activities that are fundamentally 
disconnected. To illustrate our concern, we offer the example that this 
is akin to a physician removing a mole from a patient's hand while the 
clinical staff places a cast on the patient's foot; we see no 
compelling clinical evidence to indicate that the two tasks are 
related. In addition, the disparate diagnoses described by the 
vignettes further calls into question the degree to which the work and 
PE components are interrelated. While we agree that there should not 
separate coding for each possible diagnosis for a particular service, 
in trying to accurately assess relative value, we believe that the work 
and PE components should be valued under unified assumptions about the 
typical service. We are finalizing the RUC-recommended work RVU and PE 
inputs as proposed; however, we continue to have serious concerns about 
the validity of this coding.
(43) Interstitial Radiation Source Codes (CPT Codes 77778 and 77790)
    In the CY 2016 PFS final rule with comment period, we established 
an interim final value for CPT code 77790 without a work RVU, 
consistent with the RUC's recommendation. We did not use the RUC-
recommended work RVU to establish the interim final values for CPT code 
77778. We stated that the specialty society survey included a work time 
that was significantly higher than the RUC-recommended work time 
without a commensurate change in the work RVU. For CY 2016, we 
established the 25th percentile work RVU survey result of 8.00 as 
interim final for CPT code 77778 and 0 work RVUs for CPT code 77790.
    Comment on the CY 2016 PFS final rule with comment period: 
Commenters agreed that the preservice survey times and the RUC-
recommended survey times were inconsistent and explained that this 
inconsistency resulted from the RUC's use of preservice packages in 
developing recommendations. In addition, commenters stated that because 
the work associated with CPT code 77790 (including pre-time 
supervision, handling, and loading of radiation seeds into needles) was 
bundled into CPT code 77778, that the additional work should be 
reflected in the RVU for CPT code 77778. Commenters encouraged us to 
accept the RUC-recommended work RVU of 8.78 and requested that CPT code 
77778 be referred to the refinement panel.
    Response in the CY 2017 PFS proposed rule: We did not refer CPT 
code 77778 to the CY 2016 multispecialty refinement panel because 
commenters did not provide new clinical information. We continued to 
believe that, based on the reduction in total work time, an RVU of 8.00 
accurately reflected the work involved in furnishing CPT code 77778.
    In the CY 2017 proposed rule, we proposed a work RVU of 8.00 for 
CPT code 77778 and 0 work RVUs for CPT code 77790. We also sought 
comment on whether we should use time values based on preservice 
packages if the recommended work value was based on time values that 
were significantly different than those ultimately recommended.
    The following is a summary of the comments we received regarding 
our proposed valuations for CPT codes 77778 and 77790:
    Comment: Some commenters stated that CMS underestimates the 
additional work inherent in furnishing CPT code 77778, considering that 
it is being bundled with CPT code 77790.
    Commenters did not agree with our decision not to accept the RUC-
recommended work RVU of 8.78 and to propose for CY 2017 a work RVU of 
8.00, considering the disparity between the survey total time and the 
RUC-recommended total time. According to the RUC, the survey 
respondents had accurately estimated the work RVU based on magnitude 
estimation while overestimating the relatively low intensity pre-
service time involved in performing this service, and this explains the 
disparity between the survey time and the RUC-recommended total time. 
One commenter noted that the RUC significantly reduced the pre-time 
because it did not include work in supervising the ordering of the 
isotope. Several commenters stated that CMS routinely accepts and uses 
pre-service time packages as recommended by the RUC.
    Response: We continue to question how the same survey respondents 
that significantly overestimated the total time based on the RUC's 
analysis could nonetheless accurately estimate the overall work. We are 
also concerned about the specialty society's perspective that the RUC 
does not consider the work of supervising the ordering of the isotope 
as part of the service, given the survey respondents clearly considered 
such work to be described by the code. We believe that it is important 
that a particular code clearly describes the work involved in 
furnishing a service. While we appreciate the usefulness of pre-time 
packages generally, for this particular code, we believe that in this 
case the drastic time difference from the survey time value to the RUC- 
recommended time value that the pre-time package produces is 
problematic, especially since there does not appear to be consensus 
regarding which services are included in the code, or which might be 
perceived to be separately reportable.
    In general we are concerned with using recommended time values that 
are disconnected from recommended work RVUs, including in cases where 
the recommended work RVU may include elements of work that are not 
reflected in the assumptions in time, as appears to be the case for 
this code. We reiterate that we believe the statute directs us to 
establish work RVUs that reflect the relative resource costs in time 
and intensity, so we believe that there should be an identifiable 
relationship between time and work RVUs.
    To align the time and work associated with this code, we proposed a 
reduction of the work RVU from 8.78 to 8.00 as we proposed. However, 
upon consideration of comments, we were persuaded that

[[Page 80319]]

the RUC-recommended work RVUs for this service are appropriate, 
particularly because the work includes the supervision, handling, and 
loading of radiation seeds, and it reflects the bundling with CPT code 
77790.
    While we are not finalizing a change in the time associated with 
this code since we proposed to use the RUC recommended value based on 
the pre-service package, we seek additional information regarding the 
best approach to valuing work when there is a clear disconnect between 
assumptions regarding time described by a code and the time recommended 
by the RUC. We understand that pre-service time packages can be a 
helpful tool in assigning estimates of time to particular codes 
relative to others on the PFS and that these times may be significantly 
different than those derived from survey results. However, since the 
RUC has repeatedly stated that its recommendations reflect the typical 
resources involved in furnishing PFS services, we believe it would be 
important for us to be able to identify cases where the recommended 
time values reflect the application of particular policies rather than 
the best estimate of the actual time involved in furnishing procedures.
(44) Colon Transit Imaging (78264, 78265, 78266)
    In establishing CY 2016 interim final values, we accepted the RUC 
recommended work RVUs for CPT codes 78265 and 78266. We believed that 
the RUC-recommended RVU of 0.80 overestimated the work involved in 
furnishing CPT code 78264 and as a result, we established an interim 
final work RVU of 0.74 based on a crosswalk to CPT code 78226 
(hepatobiliary system imaging, including gallbladder when present), due 
to similar intraservice times and intensities.
    Comment on the CY 2016 PFS final rule with comment period: 
Commenters did not support our interim final work RVU for CPT code 
78264. Commenters disagreed with our assessment of CPT code 78264 as 
having a higher work RVU and shorter intraservice time relative to the 
other codes in the family. One commenter stated that a difference of 
two minutes in intraservice time was insignificant and should not be 
used as a rationale for revaluing. Another commenter stated that we 
should have maintained the RUC-recommended crosswalk of CPT code 78264 
to CPT code 78227 (Hepatobiliary system imaging, including gallbladder 
when present; with pharmacologic intervention, including quantitative 
measurement(s) when performed) due to similarities in service, work and 
intensity. Based on these concerns, commenters requested that CPT code 
78264 be referred to the refinement panel.
    Response in the CY 2017 PFS proposed rule: CPT code 78264 was 
referred to the CY 2016 multi-specialty refinement panel for further 
review. We calculated the refinement panel results as the median of 
each vote. That result for CPT code 78264 was 0.79 RVUs.
    In the CY 2017 proposed rule, we proposed a value of 0.79 for CPT 
code 78264.
    The following is a summary of the comments we received regarding 
our proposed valuation of the Colon Transit Imaging codes:
    Comment: A commenter recommended that we reexamine the data 
associated with these codes to ensure the accuracy of the final values.
    Response: We thank the commenter for this input. We continue to 
believe that the proposed valuation on CPT code 78264 most accurately 
describes the work, time and intensity associated with this service; 
therefore, we are finalizing the work RVU as proposed.
(45) Cytopathology Fluids, Washings or Brushings and Cytopathology 
Smears, Screening, and Interpretation (CPT Codes 88104, 88106, 88108, 
88112, 88160, 88161, and 88162)
    In the CY 2016 PFS final rule with comment period, we made a series 
of refinements to the recommended direct PE inputs for this family of 
codes. We removed the equipment time for the solvent recycling system 
(EP038) and the associated clinical labor described by the tasks 
``Recycle xylene from stainer'' and ``Order, restock, and distribute 
specimen containers and or slides with requisition forms'' due to our 
belief that these were forms of indirect PE. This refinement applied to 
all seven codes in the family. We also noticed what appeared to be an 
error in the quantity of non-sterile gloves (SB022), impermeable staff 
gowns (SB027), and eye shields (SM016) assigned to CPT codes 88108 and 
88112. The recommended value of these supplies was a quantity of 0.2, 
which we believed was intended to be a quantity of 2. We therefore 
refined the value of these supplies to 2 for CPT codes 88108 and 88112.
    Comment on the CY 2016 PFS final rule with comment period: Several 
commenters disagreed with our characterization of the solvent recycling 
system and its associated clinical labor tasks as indirect PE. 
Commenters stated that the solvent recycling system costs are direct 
expenses since they are based on the amount of recycled solvent 
allocated to each specimen, with solvents allocated to specific 
specimens based on batch size. They indicated that the related clinical 
labor tasks are direct PE as they are also based on the amount of 
recycled solvent allocated to each specimen. The time for these tasks 
varies based on the batch size, which varies by procedure.
    Response in the CY 2017 PFS proposed rule: We maintained our 
previously stated belief that these are forms of indirect PE, as they 
are not allocated to any individual service. Under the established PE 
methodology, direct PE inputs are defined as clinical labor, medical 
supplies, or medical equipment that are individually allocable to a 
particular patient for a particular service. We continue to believe 
that a solvent recycling system would be in general use for a lab 
practice, and that the associated clinical labor tasks for ordering and 
restocking specimen containers can be more accurately described as 
administrative activities. We proposed to maintain these refinements 
from the previous rulemaking cycle for CPT codes 88104-88162.
    Comment on the CY 2016 PFS final rule with comment period: A 
commenter indicated that we did not account for the batch size when 
considering the supply quantities for CPT codes 88108 and 88112. The 
commenter indicated that the practice expense inputs should be assumed 
to have a batch size of five for these two codes, and therefore, no 
edits should be made. The commenter requested that we restore the 
quantity of 0.2 for the gloves, gowns, and eye shields associated with 
these procedures. This did not apply to the other codes on the 
submitted spreadsheet, which had a batch size of one.
    Response in the CY 2017 PFS proposed rule: We appreciated the 
assistance of the commenter in clarifying the batch size for these 
procedures. As a result, we proposed to refine the supply quantity of 
the non-sterile gloves (SB022), impermeable staff gowns (SB027), and 
eye shields (SM016) back to the RUC-recommended value of 0.2 for CPT 
codes 88108 and 88112.
    The following is a summary of the comments we received regarding 
our proposed valuation of the Cytopathology Fluids and Cytopathology 
Smears codes:
    Comment: A few commenters continued to disagree that the proposed 
refinements to the direct PE inputs were forms of indirect PE. 
Commenters stated that these tasks are direct expenses, as they are 
variable based on the volume

[[Page 80320]]

of these services, with the clinical labor and equipment time directly 
attributable to the quantity of specimens typically provided from a 
typical laboratory. Commenters also stated that these activities were 
not captured in the questions asked on the indirect practice expense 
cost survey.
    Response: We continue to believe that these are administrative 
tasks that are more accurately classified as forms of indirect PE 
because they are not allocable to an individual service. Whether these 
tasks are variable based on the volume of the services is unrelated to 
this classification. For example, some services may require additional 
time for administrative staff to record electronic health records or 
restock inventory than other services, but in all cases these are 
defined as indirect PE under the established methodology, as they are 
administrative tasks that are not allocated to any individual service. 
We disagree that the validity of the practice expense data rests on 
whether or not particular questions were asked on the survey. We note 
that we understand medical practice and technology often change over 
time and the PE survey data is used to capture the relative difference 
in practice expenses incurred by various specialties as opposed to 
representing a summation of all individual items that incur an expense. 
Therefore, we do not believe that inclusion or exclusion of particular 
items means that the underlying data are invalid for purposes of 
measuring relativity.
    Comment: A commenter agreed with the changes to the RUC-recommended 
supply quantity of 0.2 for the non-sterile gloves (SB022), impermeable 
staff gowns (SB027), and eye shields (SM016) in CPT codes 88108 and 
88112.
    Response: We appreciate the support from the commenter.
    After consideration of comments, we are finalizing the proposed 
direct PE inputs for CPT codes 88104, 88106, 88108, 88112, 88160, 
88161, and 88162.
(46) Flow Cytometry Interpretation (CPT Codes 88184, 88185, 88187, 
88188, and 88189)
    The Flow Cytometry Interpretation family of codes is split into a 
pair of codes used to describe the technical component of flow 
cytometry (CPT codes 88184 and 88185) that do not have a work 
component, and a trio of codes (CPT codes 88187, 88188, and 88189) that 
do not have direct practice expense inputs, as they are professional 
component only services. CPT codes 88184 and 88185 were reviewed by the 
RUC in April 2014, and their CMS refined values were included in the CY 
2016 PFS final rule with comment period. The full family of codes was 
reviewed again at the January 2016 RUC meeting, and new recommendations 
were submitted to CMS as part of the CY 2017 PFS rulemaking cycle.
    We proposed the RUC-recommended work RVU of 0.74 for CPT code 
88187, and the RUC-recommended work RVU of 1.70 for CPT code 88189. For 
CPT code 88188, we proposed a work RVU of 1.20 instead of the RUC-
recommended work RVU of 1.40. We arrived at this value by noticing that 
there were no comparable codes with no global period in the RUC 
database with intraservice time and total time of 30 minutes that had a 
work RVU higher than 1.20. The RUC-recommended work RVU of 1.40 would 
go beyond the current maximum value and establish a new high, which is 
not consistent with our estimation of the overall intensity of this 
service relative to the others. As a result, we believe it is more 
accurate to crosswalk CPT code 88188 to the work value of the code with 
the current highest value, which is CPT code 88120 (Cytopathology, in 
situ hybridization (for example, FISH), urinary tract specimen with 
morphometric analysis, 3-5 molecular probes) at a work RVU of 1.20. We 
believe that CPT code 88120 is crosswalk comparable code since it 
shares the identical intraservice time and total time of 30 minutes 
with CPT code 88188.
    We also noted that the survey increment between CPT codes 88187 and 
88188 at the RUC-recommended 25th percentile was 0.40 (between work 
RVUs of 1.00 and 1.40), and this increment of 0.40 when added to CPT 
code 88187's work RVU of 0.74 would arrive at a value of 1.14. In 
addition, the total time for CPT code 88188 decreases from 43 minutes 
to 30 minutes, which is a ratio of 0.70, and when this time ratio is 
multiplied by CPT code 88188's previous work value of 1.69, the result 
would be a new work RVU of 1.18. With this information in mind, we 
proposed a work RVU of 1.20 for CPT code 88188 as a result of a direct 
crosswalk to CPT code 88120.
    For CPT codes 88184 and 88185, which describe the technical 
component of flow cytometry, we proposed to use the RUC-recommended 
inputs with a series of refinements. However, we believe that the 
coding for these two procedures may inhibit accurate valuation. CPT 
code 88184 describes the first marker for flow cytometry, while CPT 
code 88185 is an add-on code that describes each additional marker. We 
believe that it may be more accurate to have a single CPT code that 
describes the technical component of flow cytometry on a per patient 
case basis, as these two procedures are always performed together and 
it is difficult to determine the clinical labor, supplies, and 
equipment used in the typical case under the current coding structure. 
We solicited comments regarding the public interest in consolidating 
these two procedures into a single code used to describe the technical 
component of flow cytometry.
    Absent such a change in coding, we proposed to refine the clinical 
labor time for ``Instrument start-up, quality control functions, 
calibration, centrifugation, maintaining specimen tracking, logs and 
labeling'' from 15 minutes to 13 minutes for CPT code 88184. We 
maintained that 13 minutes for this activity, which is the current time 
value, would be typical for the procedure, as CPT code 88182 also uses 
13 minutes for the identical clinical labor task. We also proposed to 
refine the L054A clinical labor for ``Load specimen into flow 
cytometer, run specimen, monitor data acquisition, and data modeling, 
and unload flow cytometer'' from 10 minutes to 7 minutes using the same 
rationale, a comparison to CPT code 88182.
    We proposed to maintain the clinical labor for ``Print out 
histograms, assemble materials with paperwork to pathologists Review 
histograms and gating with pathologist'' for CPT code 88184 at 2 
minutes, as opposed to the RUC-recommended 5 minutes. A clinical labor 
time of 2 minutes is standard for this activity; we disagree with the 
RUC rationale that reviewing histograms and gating with the pathologist 
in this procedure is not similar to other codes. We also note that the 
review of histograms with a pathologist is not even described by CPT 
code 88184, which again refers to the technical component of flow 
cytometry, not the professional component. We also proposed to refine 
the L033A clinical labor time for ``Clean room/equipment following 
procedure'' from 2 minutes to 1 minute for CPT code 88184. We have 
established 1 minute in previous rulemaking (80 FR 70902) as the 
standard time for this clinical labor activity in the laboratory 
setting.
    We proposed to maintain our removal of the clinical labor time for 
``Enter data into laboratory information system, multiparameter 
analyses and field data entry, complete quality assurance 
documentation'' for both CPT code 88182 and CPT code 88184. As we 
stated in the CY 2016 PFS final rule with comment period (80 FR 70979), 
we have not recognized the laboratory information system as an 
equipment

[[Page 80321]]

item that can be allocated to an individual service. We continue to 
believe that this is a form of indirect PE, and therefore, we do not 
recognize the laboratory information system as a direct PE input, and 
we do not consider this task as typically performed by clinical labor 
on a per-service basis.
    We proposed to maintain the quantity of the ``lysing reagent'' 
supply (SL089) at 2 ml for CPT code 88185, as opposed to the RUC-
recommended quantity of 3 ml. In our discussions with pathology 
specialists who perform flow cytometry, we were informed that the use 
of 50-55 ml of the lysing reagent would be typical for an entire 
patient case. The RUC recommendation similarly suggested a quantity of 
46 ml or 48 ml per patient case. We were also told that the most 
typical number of markers used for flow cytometry is 24, consisting of 
1 service of CPT code 88184 and 23 services of CPT code 88185. An 
investigation of our claims data confirmed this information, indicating 
that 24 markers is the most frequent per patient case for flow 
cytometry, and the use of more than 20 markers is typical. We believe 
that this data supports our refinement of the lysing reagent from a 
quantity of 3 ml to a quantity of 2 ml for CPT code 88185, which is 
also the current value for the procedure and the RUC-recommended value 
from the previous set of recommendations. For the typical case of 24 
markers, our value would produce a total lysing reagent quantity of 51 
ml (5 ml from the single service of CPT code 88184 and 46 ml from the 
23 services of CPT code 88185), which matches with the amount required 
for a total per patient case. If we were to adopt the RUC 
recommendation, the total lysing reagent quantity would be 74 ml, which 
is well in excess of what we believe to be typical for these 
procedures.
    We also proposed to refine the quantity of the ``antibody, flow 
cytometry'' supply (SL186) from quantity 1.6 to quantity 1, which is 
also the current value for the supply and the RUC-recommended value 
from the previous set of recommendations. We do not agree that more 
than one antibody would be typically used for each marker. We are 
reaffirming the previous RUC recommendation, and maintaining the 
current quantity of 1 antibody for each marker.
    We did not agree with the recommended additional time for the 
``printer, dye sublimation (photo, color)'' equipment (ED031). We 
proposed to maintain the equipment time at 2 minutes for CPT code 
88184, and at 1 minute for CPT code 88185. As we stated in the CY 2016 
PFS final rule with comment period (80 FR 70979), we proposed to assign 
equipment time for the dye sublimation printer to match the clinical 
labor time for ``Print out histograms, assemble materials with 
paperwork to pathologists.'' We do not believe that it would be typical 
for the printer to be in use longer than it takes to accomplish this 
clinical labor task.
    The following is a summary of the comments we received regarding 
our proposed valuation of the Flow Cytometry Interpretation codes. Due 
to the large number of comments we received for this code family, we 
will first summarize the comments related to the coding structure of 
CPT codes 88184 and 88185, followed by the comments related to specific 
work RVUs, and finally the comments related to the direct PE inputs.
    Comment: Many commenters disagreed with the potential concept of 
consolidating CPT codes 88184 and 88185 into a single code used to 
describe the technical component of flow cytometry. Commenters stated 
that the resources required for the first marker and for each 
subsequent marker differ, and with flow cytometry, there is no 
``typical case.'' Because the number of markers differ for different 
disease states, such as HIV, Lyme disease, and acute leukemias, the 
current coding structure is designed to reflect different valuations of 
the professional component codes, based on the number of markers that 
must be interpreted. Many commenters stressed that this makes one code 
for the technical component of flow cytometry infeasible, and strongly 
advised against it. One commenter was also concerned that a coding 
structure change may exacerbate the undervaluation of these services, 
which have been recently reviewed twice by the RUC and resulted in 
substantial decreases in the practice expense relative values.
    A few commenters supported the possibility of combining CPT codes 
88184 and 88185 into a single code. One commenter stated that the 
current coding structure does not incentivize the use of less reagents, 
and actually penalizes labs that appropriately test fewer markers. 
According to this commenter, moving to a single code structure would be 
consistent with the vast majority of lab tests, would simplify billing 
processes, and may make development of more cost-effective panels 
financially desirable. The commenter supported further examination of a 
single CPT code and urged that current payment rates should be frozen 
while such examination occurs. Another commenter suggested a slightly 
different coding structure, one which would collapse the codes into a 
series of case rate codes that reflect the procedures: screening, 
classification, and monitoring. There was support from one additional 
commenter for a three code proposal designed to track this workflow.
    Response: We appreciate the detailed responses from the commenters 
about the proper coding structure used to describe the technical 
component of flow cytometry. We do not intend to finalize any 
recommendations regarding the coding structure at this time, but we 
will consider this information for future proposals regarding these 
services.
    Comment: Many commenters made general comments about decreases to 
the proposed rates for either the professional or the technical 
component of the flow cytometry codes. Commenters stated that there was 
no justification for the reduction in payment rates, and that the 
decreases would hamper laboratories' ability to offer the flow 
cytometry services. One commenter stated that the payment cuts were not 
realistic and would result in flow cytometry not being financially 
feasible in the less expensive physician-office setting. Another 
commenter indicated that further reductions to these codes would result 
in an inability to maintain the level of professional services required 
to reduce medical errors.
    Response: We share the concern of the commenters in ensuring that 
payment for Medicare services is based on an accurate assessment of the 
relative resource costs involved in furnishing the service. With 
regards to the technical component of flow cytometry, most of the 
decrease in code valuation is taking place due to a decrease in the 
quantity of the lysing reagent supply (SL089). The RUC has agreed that 
there was previously an excess of this supply in CPT codes 88184-88185, 
and has recommended a decrease of approximately 78 percent in this 
supply quantity, from 336 ml to 74 ml, in the typical case of 24 
markers. Due to the resource-based nature of the RVU system, this 
substantial reduction in supply costs will be reflected in the RVUs for 
these procedures. We note that since CY 2016 the phase-in of 
significant reductions in RVUs has been in effect; 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, 
those decreases are limited to a 19 percent reduction in total RVUs. We 
note that the phase-in mechanism allows reductions to be transitioned 
in over time rather than instituting large decreases in a single

[[Page 80322]]

rule cycle. Please see section II.H for more information regarding the 
phase-in of significant RVU reductions.
    Comment: Many commenters disagreed with the proposed work RVU of 
1.20 for CPT code 88188. Several commenters took issue with the CMS 
statement that there were no comparable codes with no global period in 
the RUC database with intra-service time and total time of 30 minutes 
that had a work RVU higher than 1.20. These commenters indicated that 
there were at least 10 such codes valued over 1.20 RVUs in the 2016 RUC 
database (1 XXX and 9 ZZZ add-on global codes), ranging in work value 
from 1.38 to 2.40 RVUs, with a median of 1.67. The commenters suggested 
that these codes supported the higher RUC-recommended work RVU of 1.40 
for CPT code 88188.
    Response: We continue to believe that there are no comparable codes 
with the same global period with intraservice time and total time of 30 
minutes that have a work RVU higher than 30 minutes. When we used the 
phrase ``no global period'' to refer to CPT code 88188, we were not 
referring to add-on codes with a global period of ZZZ. We have stated 
on numerous occasions that we believe the resources required to furnish 
add-on codes constitute a separate category, and we typically only 
compare add-on codes to other add-on codes. We do not believe that it 
is appropriate to compare the work RVU of add-on codes with 30 minutes 
of intraservice time to the work RVU of CPT code 88188, which is not an 
add-on code.
    With regards to non-add on codes, Table 21 lists all 13 codes in 
the RUC database with 30 minutes of intraservice time, fewer than 40 
minutes of total time, and a global period of XXX:

   Table 21: Work RVU of Codes With Comparable Time Values to CPT Code
                                  88188
------------------------------------------------------------------------
                                                                   Work
                HCPCS                         Descriptor           RVU
------------------------------------------------------------------------
77331................................  Special radiation            0.87
                                        dosimetry.
78195................................  Lymph system imaging....     1.20
78456................................  Acute venous thrombus        1.00
                                        image.
86079................................  Phys blood bank serv         0.94
                                        authrj.
88120................................  Cytp urne 3-5 probes ea      1.20
                                        spec.
88187................................  Flowcytometry/read 2-8..     0.74
88365................................  Insitu hybridization         0.88
                                        (fish).
88368................................  Insitu hybridization         0.88
                                        manual.
88374................................  M/phmtrc alys ishquant/      0.93
                                        semiq.
93750................................  Interrogation vad in         0.92
                                        person.
95251................................  Gluc monitor cont phys       0.85
                                        i&r.
97004................................  Ot re-evaluation........     0.60
97606................................  Neg press wound tx >50       0.60
                                        cm.
------------------------------------------------------------------------

    As we stated previously, there are no codes with a work RVU higher 
than 1.20, which is where we proposed to value CPT code 88188. We 
acknowledge that there are global XXX codes with 30 minutes of 
intraservice time that have a work RVU greater than 1.20. However, all 
of these codes have at least 40 minutes of total time, which is 33 
percent higher at a minimum than the total time for CPT code 88188. We 
believe that a crosswalk to CPT code 88120, which shares the identical 
time values as CPT 88188, is a more appropriate choice than codes that 
have substantially higher total time. In the particular case of CPT 
code 88188, we continue to believe that establishing a new maximum work 
value above 1.20 would not be consistent with our estimation of the 
overall intensity of this service relative to the others on the PFS.
    Comment: Some commenters disagreed with the proposed work RVU of 
CPT code 88188 based on the work increments between the codes in the 
family. These commenters stated that the original recommended work 
values had almost identical increments between the three services (0.60 
between CPT codes 88187 and 88188, and 0.63 between CPT codes 88188 and 
88189); however the median survey results indicated a much greater 
physician work increment between CPT codes 88188 and 88189. According 
to commenters, the final RUC recommendations were based on the 
expertise of the RUC to establish the work increment between CPT codes 
88187 and 88188 (0.74) higher than the increment between CPT codes 
88188 and 88189 (0.30). In other words, the recommended work increment 
between CPT code 88187 (work RVU = 0.74) and CPT code 88188 (work RVU = 
1.40) was significantly larger than the work increment between CPT code 
88188 (work RVU = 1.40) and CPT code 88189 (work RVU = 1.70). The 
commenters stated that the survey results and expert opinion justified 
this smaller increment between the final two codes, and the RUC-
recommended work RVU of 1.40 for CPT code 88188.
    Response: We disagree that the survey data justifies a smaller 
increment between the final two codes. While this is true for the 25th 
percentile survey results, the exact opposite is true for the survey 
median results, in which the increment between CPT codes 88187 and 
88188 is 0.35 and the increment between CPT codes 88188 and 88189 is 
0.70. In addition, in the current pre-reviewed version of these codes, 
the increment between CPT codes 88187 and 88188 is 0.33, while the 
increment between CPT codes 88188 and 88189 is 0.54. We believe that 
this suggests the survey data on the work increments is conflicting, 
not conclusive, and that the RUC-recommended increments are a departure 
from the previous incremental structure of this code family, in which 
the second two codes had a larger increment than the first two codes. 
We do not agree that the work increments at the survey 25th percentile 
are a sufficient justification for adopting the recommended work RVU 
for CPT code 88188 due to the additional data regarding work increments 
between these codes detailed above.
    Comment: Several commenters stated that over the last decade, flow 
cytometric analyses have changed through new technological advances 
that have led to an increased interpretative sophistication. It is now 
typical for the physician to analyze substantially more data than in 
the past. According to commenters, with the advent of 5, 6, 8, and 10 
color flow cytometry the intensity and complexity of these services has 
significantly increased. Commenters stated that this increased 
intensity and complexity is reflected in the RUC recommendation for 
this service, based on new physician work associated with technological 
changes, time, and intensity.
    Response: We appreciate this additional information about the 
professional interpretation of flow cytometry from the commenters. 
However, we note that the RUC-recommended intensity of CPT codes 88187 
and 88189 has actually decreased compared to the current pre-reviewed 
version of these codes. We believe that this indicates that the same 
new technological advances also allow practitioners to analyze data 
faster and with fewer errors, which is reflected in the decreased work 
RVUs and time values in the RUC recommendations. The only one of the 
three codes with a RUC-recommended increase in intensity is CPT code 
88188. This increased intensity in the second code creates an anomalous 
relationship within the

[[Page 80323]]

family, as the RUC-recommended intensity for CPT code 88188 is equal to 
the intensity for CPT code 88189, in contrast to the current pre-
reviewed version of these codes where the three codes have a linear 
increase in intensity (IWPUT = 0.39, 0.43, 0.50). We do not understand 
why the professional interpretation of 9 to 15 markers would have an 
equal intensity to interpreting 16 or more markers. Logic would suggest 
that CPT code 88188 should have a lower intensity than CPT code 88189, 
which is indeed the case at our proposed work RVU of 1.20. The proposed 
value also re-establishes a linear increase in intensity between the 
three codes as additional markers are interpreted (IWPUT = 0.37, 0.40, 
0.47). We believe that this intensity data offers additional support 
for our proposed work RVU.
    Comment: One commenter disagreed with the CMS crosswalk to the work 
RVU of CPT code 88120, which the commenter suggested was completely 
different in step by step work effort, intensity, and complexity. The 
commenter stated that CPT code 88120 typically only involves 
identifying and quantifying a limited subset molecular probes (for 
example, FISH probes for chromosomes 3, 7, 17 and 9p21 loss), using two 
to four color signal enumeration to detect aneuploidy staining of 
nuclei on slides from isolated cell preparations, usually from 
morphologically well-characterized specimens. In contrast, the 
commenter stated that for CPT code 88188 the pathologist is required to 
integrate multi-parameter diagnostic information on different cell 
populations (both abnormal and normal), by assessing cell scatter (size 
and shape) along with signal intensity and pattern of staining of cell 
surface markers with antibody reagents using four to six (or more) 
color fluorescent antibody probes. The pathologist must perform 
successive, iterative analyses of 2- and 3-dimensional plots and 
histograms and re-gating of identified cell populations (based on size, 
shape, relative staining patterns, signal intensity, etc.) to 
characterize cell lineage and render a final diagnosis and 
interpretation. Due to this clinical rationale, the commenter indicated 
that the work and complexity of CPT code 88188 was substantially 
greater than CPT code 88120.
    Response: We disagree with the commenter that CPT code 88120 is an 
inappropriate crosswalk code for CPT code 88188. These codes are both 
recently-reviewed pathology codes with identical intraservice time and 
total time values within the Cytopathology listing of the CPT manual. 
We also note that many of the activities listed by the commenter are 
not detailed in the intraservice work description for CPT code 88188, 
and may not be needed in the typical case.
    The following comments address the proposed direct PE inputs for 
the Flow Cytometry family of codes.
    Comment: Many commenters disagreed with the proposed time of 13 
minutes for the clinical labor activity ``Instrument start-up, quality 
control functions, calibration, centrifugation, maintaining specimen 
tracking, logs and labeling.'' Commenters stated that the CMS 
comparison to CPT code 88182 was not appropriate, as that code uses 
older/simpler technology, with CPT code 88184 using 4-6 or more color 
channels while CPT code 88182 uses 1-2 channels. Commenters stressed 
that these clinical labor tasks are unique to this flow cytometry 
service, and they should not be assumed to take the identical time as 
other services. Other commenters stated that three instruments must be 
run consecutively, and the task includes quality control calibration, 
taking a minimum of 13 to 16 minutes in dedicated technical staff time. 
Another commenter indicated that the time required to complete these 
activities is continually increasing as more regulatory requirements 
are added, and that the recently added flow cytometry requirement for 
individual antibody lot/shipment testing increased this time 
exponentially.
    Response: We disagree with the commenters that the identical 
clinical labor activity would take longer to perform for CPT code 88184 
than it would for CPT code 88182. Both of these procedures use the same 
equipment to perform this task, a flow cytometer (EP014) and a 
centrifuge (EP007). We do not agree that there is additional clinical 
labor time required for using additional color channels in CPT code 
88184, as the same equipment is being used to perform the same clinical 
labor task as in CPT code 88182. We did not receive data from the 
commenters suggesting that regulatory requirements are increasing the 
time required to perform this clinical labor task, nor was this 
reflected in the RUC recommendations, which continued to recommend the 
same unchanged time for this task.
    Comment: Many commenters objected to the proposed clinical labor 
time of 7 minutes for the ``Load specimen into flow cytometer, run 
specimen, monitor data acquisition, and data modeling, and unload flow 
cytometer'' activity for CPT code 88184. Commenters stated that the CMS 
comparison to the clinical labor time used for this same activity in 
CPT code 88182 was not appropriate as CPT code 88184 uses 4-6 color 
channel instruments and up, while 88182 uses only 1-2 channels. 
According to the commenters, the time it takes for data capture, data 
modeling, data acquisition, and computational analysis is exponentially 
longer for CPT code 88184 than for CPT code 88182, since additional 
colors result in more complicated profiles which are more difficult and 
time consuming to evaluate. Another commenter stated that 7 minutes was 
wholly inadequate to perform all of these tasks, and that analysis of a 
specimen can take 12 to 15 minutes, depending on the complexity of the 
case.
    Response: We continue to disagree with the commenters that the 
identical clinical labor activity would take longer to perform for CPT 
code 88184 than it would for CPT code 88182. As we stated in response 
to the previous comment, we do not agree that there is additional 
clinical labor time required for using additional color channels in CPT 
code 88184, as the same equipment is being used to perform the same 
clinical labor task as in CPT code 88182. For the same reason, we do 
not agree that this clinical labor activity takes 12 to 15 minutes to 
perform, since the identical task only requires 7 minutes for CPT code 
88182.
    Comment: Many commenters opposed the proposed value of 2 minutes 
for the clinical labor activity ``Print out histograms, assemble 
materials with paperwork to pathologists Review histograms and gating 
with pathologist'' for CPT code 88184. Commenters stated that it was 
not reasonable to expect that a flow cytometry technologist could print 
out histograms, assemble the documents and deliver them to a 
pathologist, and review the histograms with a pathologist, all in the 
span of a mere 120 seconds. Commenters were concerned that flow 
cytometry technologists cannot produce a high-quality product and 
ensure its accuracy and completeness for presentation to a pathologist 
in the proposed time. One commenter noted that although their specific 
procedure for these steps was largely electronic, their workflow 
analysis corroborated the RUC's conclusion because it showed that it 
took 5 minutes for staff to complete the equivalent activities. Several 
other commenters stated that if the time the cyotechnologist takes to 
determine exactly which histograms to print is subtracted, then they 
could agree with the proposed 2 minutes. Commenters also stated that 
printing is not performed all at one time, with 25-30 pages of 
information and data printed over a 5 minute time span, and one

[[Page 80324]]

commenter indicated that the process was ``largely electronic'' with 
clinical staff not using the equipment for the full duration that it is 
in use.
    Response: We appreciate the support from several of the commenters. 
In responding to the comments for this clinical labor activity and the 
equipment time for the dye sublimation printer (ED031), it became clear 
that the clinical labor time for printing was not the same as the 
equipment time that the printer was in use. Based on the information 
from the commenters that printing is not performed all at one time, we 
are assigning the full 5 minutes of equipment time for the dye 
sublimation printer; however, we are maintaining our proposed 2 minutes 
of clinical labor time for ``Print out histograms, assemble materials 
with paperwork to pathologists Review histograms and gating with 
pathologist'', as commenters have informed us that the clinical staff 
do not use the equipment for the full duration that it is in use.
    Comment: Several commenters disagreed with the proposed clinical 
labor time of 1 minute for ``Clean room/equipment following procedure'' 
for CPT code 88184. The commenters stated that this time is allocated 
over entire patient case, and that it is typical and critical to clean 
the equipment between patient cases. The commenters also supplied 
details about the cleaning process, regarding how the laboratory 
technician cleans the equipment and workspace by decontaminating the 
equipment and work bench surfaces, as well as carrying out waste 
management after the procedure.
    Response: We appreciate the additional information from the 
commenters regarding the cleaning of the room. However, the commenters 
did not provide a rationale as to why CPT code 88184 requires 
additional clinical labor above the standard value of 1 minute for room 
cleaning in lab procedures. We continue to believe that the standard 
clinical labor time is the most accurate valuation for this clinical 
labor task.
    Comment: Many commenters requested that CMS restore the clinical 
labor time for the ``Enter data into laboratory information system, 
multiparameter analyses and field data entry, complete quality 
assurance documentation'' activity. Commenters stated that this data 
entry is manually entered and must be performed for each individual 
patient case. Several commenters indicated that entering test-specific 
data takes between five and ten minutes, and entry of client 
information and demographics and specimen information takes additional 
time that cannot be short-changed. Commenters emphasized that these are 
extremely important tasks that require technical skills, and assigning 
zero minutes to this critical task was illogical for a service like 
flow cytometry. One commenter stated that the current RUC-recommended 
value of four minutes was already a gross underestimation of the time 
required to complete these activities for the majority of testing, and 
suggested that these activities commonly take more than ten minutes to 
perform.
    Response: We agree with the commenters that entering patient data 
into information systems is an important task, and we agree that it 
would take more than zero minutes to perform. However, the commenters 
did not address our rationale for removing this clinical labor time 
from CPT codes 88184 and 88185, which is that this task is indirect PE. 
As we stated in the CY 2016 final rule with comment period (80 FR 
70979), we have not recognized the laboratory information system as an 
equipment item that can be allocated to an individual service. We 
continue to believe that this is indirect PE, and therefore, we do not 
recognize the laboratory information system as a direct PE input, and 
we do not consider this task as typically performed by clinical labor 
on a per-service basis.
    Comment: One commenter requested the inclusion of additional 
cytotechnologist time of 10 minutes for CPT code 88184 and 2 minutes 
for CPT code 88185, as well as an additional desktop computer with 
monitor (ED021) equipment times of 10 minutes for 88184 and 2 minutes 
for 88185. This additional time was intended to reflect the time spent 
using the flow cytometry analytics software (EQ380).
    Response: We agree with the RUC recommendations that the clinical 
labor and equipment time associated with the flow cytometry analytics 
software is already accounted for in the recommended clinical labor 
inputs. As the recommendations indicate, this time is included as part 
of the clinical labor activities ``Accession specimen'', ``Instrument 
start-up, quality control functions'', ``Load specimen into flow 
cytometer, run specimen'' and ``Print out histograms, assemble 
materials with paperwork to pathologists.''
    Comment: Many commenters disagreed with the proposed supply 
quantity of 2 for the lysing reagent (SL089) in CPT code 88185. 
Commenters stated that although they acknowledged that the current 
Medicare data showed that a patient case of 24 markers is typical, this 
result ignored other relevant pieces of information. The commenters 
indicated that an analysis of the 2014 Medicare 5% Sample Carrier 
Database showed that over 50 percent of individual providers typically 
bill fewer than 20 markers per patient case, and that since these 
providers are generally smaller and see fewer annual cases, the 
proposed supply quantity of 2 would potentially drive these providers 
to consider ceasing their flow cytometry services. The commenter also 
stated that these codes are often billed as part of either the Hospital 
IPPS or OPPS, which should be factored into the typical number of 
markers billed per case. The commenter also stated that the most common 
professional component of flow cytometry, CPT code 88189, would be 
associated with patient cases that bill for fewer than 24 markers, from 
16 to 24.
    Response: We reiterate that we establish payment rates based on the 
typical case, which the commenters agreed was 24 total markers. We have 
historically established payment rates based on the typical service and 
do not believe that it would be appropriate or serve the purpose of 
relativity to deviate from that practice in this case. We also do not 
believe that the payment for these codes under the IPPS or OPPS is a 
directly relevant factor in defining the typical case under the 
Physician Fee Schedule. We believe that the patient population and 
typical case under the IPPS would not necessarily be the same as the 
typical case under the PFS. Finally, we agree that CPT code 88189 would 
be associated with patient cases that bill for fewer than 24 markers, 
as the code descriptor states that it refers to the performance of 16 
or more markers. However, we do not believe that this affects the 
number of markers in the typical case, which the commenters agreed was 
24 for the typical patient.
    Comment: A commenter stated that that it opposed putting a number 
or cap on markers because there is a wide range of possible markers 
required to achieve patient diagnosis.
    Response: We agree with the commenter, and we are not establishing 
a cap or determining a fixed number of markers to use for these 
procedures. As stated previously, however, we are required to establish 
payment rates based on the typical case, which our internal data and 
commenter feedback has agreed is 24 markers.
    Comment: Other commenters disagreed with the CMS proposal for the 
lysing reagent based on the supply quantity needed to perform the 
procedure. A commenter stated that the 46-48 mL quantity detailed by 
CMS in

[[Page 80325]]

the proposed rule was based on a RUC recommendation; however, the RUC's 
amount was based on an average of 16 markers, not 24 markers. Although 
the commenter agreed that 24 markers reflected a common case, the 
commenter stated that it was necessary to consider the amount of lysing 
agent for a 24 marker case, not to assume that the 46-48 mL amount 
based upon 16 markers also applies to 24 markers. Another commenter 
stated that a laboratory using ammonia chloride needs at least 2.5 ml 
of lysing reagent for each time that CPT code 88185 is performed.
    Response: We did not base our proposal for this supply quantity 
upon the RUC recommendation. As we stated in the proposed rule, we were 
informed that the use of 50-55 ml of the lysing reagent would be 
typical for an entire patient case based on our discussions with 
pathology specialists who perform flow cytometry. For the typical case 
of 24 markers, our value would produce a total lysing reagent quantity 
of 51 ml (5 ml from the single service of CPT code 88184 and 46 ml from 
the 23 services of CPT code 88185), which matches with the amount 
required for a total per patient case. Since commenters agreed that 24 
markers was the typical patient case, we continue to believe that our 
proposed quantity of 2 ml is the most accurate value for CPT code 
88185.
    Comment: Many commenters objected to the proposed supply quantity 
of 1 for the flow cytometry antibody (SL186) in CPT codes 88184 and 
88185. Commenters stated that although it is standard practice to use a 
single antibody multiple times during the analysis, each antibody or 
marker can only be billed once per analysis. According to commenters, 
multiple use of such antibodies are not reportable or billable, but are 
critical to the overall analysis and interpretation of results and are 
part of the total cost for each procedure performed. Some commenters 
explained that the recommended quantity of 1.6 antibodies per billed 
marker was based on averaging together two separate analyses: a survey 
of 59 professionals performing flow cytometry that found 1.52 
antibodies required per marker, and a customer survey that found 1.87 
antibodies per marker. A different commenter stated that its member 
laboratories found that under the current four-color process, 1.36 
antibodies per marker is necessary. Another commenter stated that while 
one antibody is generally used per marker, the required use of controls 
for many of these markers for analysis or quality control means that 
this value is greater than 1 antibody per marker reported.
    Response: We appreciate the additional data presented regarding the 
clinical use of the flow cytometry antibody supply. However, we 
continue to have reservations regarding the information that we have 
received regarding the 1.6 quantity for this supply. Different 
commenters recommended different quantities of this supply required to 
furnish the procedure, ranging from 1 to 1.36 to 1.52 to 1.6 to 1.87. 
We are hesitant to increase the quantity of this supply given the wide-
ranging information that we received from commenters. We are also 
concerned that although commenters referenced studies that found 
different supply quantities for SL186, commenters did not submit the 
data associated with these studies for our review. We would be more 
open to the idea of increasing the supply quantity to 1.6 if this data 
were supported by clinical data or study. We also note that one 
commenter stated that one antibody is ``generally used'' per marker, 
which supports our contention that the proposed value of 1 antibody for 
CPT codes 88184 and 88185 would be typical. As a result, we are 
maintaining a supply quantity of 1 for the flow cytometry antibody 
supply, which is also the current value for the supply and the RUC-
recommended value from the previous set of recommendations.
    Comment: Several commenters disagreed with the proposed equipment 
time for the dye sublimation printer (ED031). Commenters stated that 
printing is not performed all at one time, with 25-30 pages of 
information and data printed over a 5 minute time span. Commenters 
indicated that this time cannot be linked directly to one particular 
clinical labor task line, and the printer cannot be used for any other 
task during these 5 minutes even while it is not actively printing.
    Response: We appreciated the additional information from the 
commenters regarding the use of the dye sublimation printer. Due to the 
presentation of this new information detailing how the equipment time 
for the printer is disassociated from any clinical labor tasks, we will 
increase the equipment time to the RUC-recommended 5 minutes for CPT 
code 88184 and 2 minutes for CPT code 88185.
    After consideration of comments received, we are finalizing the 
proposed work RVUs for CPT code 88187, 88188, and 88189. We are also 
finalizing the proposed direct PE inputs, with the refinement to the 
dye sublimation printer detailed above.
(47) Microslide Consultation (CPT Codes 88321, 88323, and 88325)
    CPT codes 88321, 88323, and 88325 were reviewed by the RUC in April 
2014 for their direct PE inputs only, and the CMS refined values were 
included in the CY 2016 PFS final rule with comment period. The family 
of codes was reviewed again at the January 2016 RUC meeting for both 
work values and direct PE inputs, and new recommendations were 
submitted to CMS as part of the CY 2017 PFS rulemaking cycle.
    In the CY 2016 PFS final rule with comment period, we finalized our 
proposal to remove many of the inputs for clinical labor, supplies, and 
equipment for CPT code 88325. The descriptor for this code did not 
state that slide preparation was taking place, and therefore, we 
refined the labor, supplies, and equipment inputs to align with the 
inputs recommended for CPT code 88321, which also does not include the 
preparation of slides. After further discussion with pathologists and 
consideration of comments received, we have been persuaded that slide 
preparation does take place in conjunction with the service described 
by CPT code 88325. In the RUC-recommended direct PE inputs from the 
January 2016 meeting, the labor, supplies, and equipment inputs related 
to slide preparation were added once again to CPT code 88325. We 
proposed to accept these restorations related to slide preparation 
without refinement.
    Regarding the clinical labor direct PE inputs, we proposed to 
assign 1 minute of L037B clinical labor for ``Complete workload 
recording logs. Collate slides and paperwork. Deliver to pathologist'' 
for CPT codes 88323 and 88325. We are maintaining this at the current 
value for CPT code 88323, and adding this 1 minute to CPT code 88325 
based on our new understanding that slide preparation is undertaken as 
part of the service described by this code. We proposed to remove the 
clinical labor for ``Assemble and deliver slides with paperwork to 
pathologists'' from all three codes, as we believe this clinical labor 
is redundant with the labor assigned for ``Complete workload recording 
logs.'' We similarly proposed to remove the clinical labor for ``Clean 
equipment while performing service'' from CPT codes 88323 and 88325, as 
we believe it to be redundant with the clinical labor assigned for 
``Clean room/equipment following procedure.''
    We proposed to maintain the quantity of the ``stain, hematoxylin'' 
supply

[[Page 80326]]

(SL135) at 16 ml for CPT codes 88323 and 88325, as opposed to the RUC-
recommended quantity of 32 ml. The RUC recommendation stated that the 
hematoxylin supply does not include eosin and should not be redundant; 
the stains are not mixed together, but are instead sequential. The 
recommendation also made a comparison to the use of the hematoxylin 
supply quantity in CPT code 88305. However, we note that CPT code 88305 
does not include 8 ml of eosin stain (SL201), but instead 8 gm of eosin 
solution (SL063), and these are not the same supply. Therefore we do 
not agree that a direct comparison of the supply quantities is the most 
accurate way to value these procedures. For CPT codes 88323 and 88325, 
we continue to note that the prior supply inputs for these procedures 
had quantity 2.4 of the eosin solution (SL063) and quantity 4.8 of the 
hematoxylin stain (SL135); in other words, a 1:2 ratio between the 
eosin and hematoxylin. We proposed to maintain that 1:2 ratio with 8 ml 
of the eosin stain (SL201) and 16 ml of the hematoxylin stain (SL135).
    We also proposed to update the use of the eosin solution (sometimes 
listed as ``eosin y'') in our supply database. We believe that the 
eosin solution supply (SL063), which is measured in grams, reflects an 
older process of creating eosin stains by hand. This is in contrast to 
the eosin stain supply (SL201), which is measured in milliliters, and 
can be ordered in a state that is ready for staining immediately. We do 
not believe that the use of eosin solution would reflect typical lab 
practice today, with the readily availability for purchase of 
inexpensive eosin staining materials. We also note that in the CY 2016 
PFS final rule with comment period, we removed 8 gm of the eosin 
solution and replaced it with 8 ml of the eosin stain, and this 
substitution was accepted without further change in the most recent set 
of RUC recommendations. As a result, we proposed to update the price of 
the eosin stain supply from $0.044 per ml to $0.068 per ml to reflect 
the current cost of the supply. We also proposed to use CPT codes 88323 
and 88325 as a model, and replace the use of eosin solution with an 
equal quantity of eosin stain for the rest of the codes that make use 
of this supply. This applies to 15 other CPT codes: 88302 (Level II--
Surgical pathology, gross and microscopic examination), 88304 (Level 
III--Surgical pathology, gross and microscopic examination), 88305 
(Level IV--Surgical pathology, gross and microscopic examination), 
88307 (Level V--Surgical pathology, gross and microscopic examination), 
88309 (Level VI--Surgical pathology, gross and microscopic 
examination), 88364 (In situ hybridization (e.g., FISH), per specimen; 
each additional single probe stain procedure), 88365 (In situ 
hybridization (e.g., FISH), per specimen; initial single probe stain 
procedure), 88366 (In situ hybridization (e.g., FISH), per specimen; 
each multiplex probe stain procedure), 88367 (Morphometric analysis, in 
situ hybridization (quantitative or semi-quantitative), using computer-
assisted technology, per specimen; initial single probe stain 
procedure), 88368 (Morphometric analysis, in situ hybridization 
(quantitative or semi-quantitative), manual, per specimen; initial 
single probe stain procedure), 88369 (Morphometric analysis, in situ 
hybridization (quantitative or semi-quantitative), manual, per 
specimen; each additional single probe stain procedure), 88373 
(Morphometric analysis, in situ hybridization (quantitative or semi-
quantitative), using computer-assisted technology, per specimen; each 
additional single probe stain procedure), 88374 (Morphometric analysis, 
in situ hybridization (quantitative or semi-quantitative), using 
computer-assisted technology, per specimen; each multiplex probe stain 
procedure), 88377 (Morphometric analysis, in situ hybridization 
(quantitative or semi-quantitative), manual, per specimen; each 
multiplex probe stain procedure), and G0416 (Surgical pathology, gross 
and microscopic examinations, for prostate needle biopsy, any method).
    The following is a summary of the comments we received regarding 
our proposed valuation of the Microslide Consultation codes.
    Comment: One commenter supported the restoration of the direct PE 
inputs related to slide preparation in CPT code 88325 and requested 
that CMS update the PE data files for CY 2016 to reflect these changes.
    Response: We appreciate the support from the commenter. The 
proposed rates for CY 2017 reflected these changes to the direct PE 
inputs. However, the RVUs for CY 2016 were unaffected by this proposal, 
as has been our longstanding practice for interim final codes.
    Comment: Several commenters requested that CMS add an additional 1 
minute for the clinical labor activity ``Complete workload recording 
logs. Collate slides and paperwork. Deliver to pathologist'' in CPT 
code 88321. Commenters stated that this clinical labor task was 
accidently left off of the April 2014 RUC recommendation for CPT code 
88321, and that it was a necessary task that was not redundant with 
other clinical labor activities.
    Response: We agree with the commenters that 1 minute of clinical 
labor time for this task is an appropriate addition for CPT 88321 to be 
consistent with the identical clinical labor task taking place in other 
codes in the family.
    After consideration of comments received, we are finalizing our 
proposed work RVUs for CPT code 88321, 88323, and 88325. We are also 
finalizing the proposed direct PE inputs, with the addition of 1 minute 
of clinical labor time as detailed above for CPT code 88321. We note as 
well that we are finalizing the replacement of eosin solution with 
eosin stain, as detailed in the PE section of this final rule (see 
section II.A. of this final rule).
(48) Immunohistochemistry (CPT Codes 88341, 88342, 88344, and 88350)
    In the CY 2014 PFS final rule with comment period (78 FR 74341), we 
assigned a status indicator of I (Not valid for Medicare purposes) to 
CPT codes 88342 and 88343 and instead created two G-codes, G0461 and 
G0462, to report immunohistochemistry services. We did this, in part, 
to avoid creating incentives for overutilization.
    For CY 2015, the CPT coding was revised with the creation of two 
new CPT codes, 88341 and 88344, the revision of CPT code 88342 and the 
deletion of CPT code 88343. In the past for similar procedures in this 
family, the RUC recommended a work RVU for the add-on code (CPT code 
88364) that was 60 percent of the work RVU for the base code (CPT code 
88365). In the CY 2015 PFS final rule with comment period, we stated 
that the relative resources involved in furnishing an add-on service in 
this family would be reflected appropriately using the same 60 percent 
metric and subsequently established an interim final work RVU of 0.42 
for CPT code 88341, which was 60 percent of the work RVU of 0.70 for 
the base CPT code 88342. In the CY 2016 PFS proposed rule, we revised 
the add-on codes from 60 percent to 76 percent of the base code and 
subsequently proposed a work RVU of 0.53 for CPT code 88341. However, 
we inadvertently published work RVUs for CPT code 88341 in Addendum B 
on the CMS Web site without explicitly discussing it in the preamble 
text. In the CY 2016 PFS final rule with comment period, we maintained 
the CY 2015 work RVU of 0.53 for CPT code 88341 as interim final for CY 
2016 and requested public comment. Also, in the CY 2016 PFS final rule 
with comment period, we

[[Page 80327]]

established an interim final work RVU of 0.70 for CPT codes 88342 and 
88344.
    Comment on the CY 2016 PFS final rule with comment period: Several 
commenters objected to a standard discount for the physician work 
involved in pathology add-on services and urged us to accept the RUC-
recommend work RVU of 0.65 for CPT code 88341.
    Response in the CY 2017 PFS proposed rule: We responded to the 
comments by stating our appreciation of the commenters' concerns 
regarding a standard discount; however, we believed that it was 
reasonable to estimate work RVUs for a base and an add-on code, and to 
recognize efficiencies between them, by looking at how similar 
efficiencies are reflected in work RVUs for other PFS services. Also we 
noted that the intravascular codes for which we initially established 
our base/add-on code relationship for CPT codes 88346 and 88350 were 
deleted in CY 2016 and replaced with two new codes; CPT codes 37252 and 
37253. The relationship between CPT codes 37252 and 37253 represents a 
20 percent discount for the add-on code as the base CPT code 37252 has 
a work RVU of 1.80 and CPT code 37253 has a work RVU of 1.44. As CPT 
codes 37252 and 37253 replaced the codes on which our discounts for 
base and add-on codes were based (please see the CY 2016 PFS final rule 
with comment period (80 FR 70972) for a detailed discussion), we 
believed it would be appropriate to maintain the same 20 percent 
relationship for CPT codes 88346 and 88350. Therefore, for CY 2017, we 
proposed a work RVU of 0.56 for CPT code 88341, which represents 80 
percent of the work RVU of 0.70 for the base code. For CY 2016, we 
finalized a work RVU of 0.56 for CPT code 88350 which, represented 76 
percent of the work RVU of 0.74 for the base code. To maintain 
consistency within this code family, for CY 2017 we proposed to revalue 
CPT code 88350 using the 20 percent discount discussed above. To value 
CPT code 88350, we multiplied the work RVU of 0.74 for CPT code 88346 
by 80 percent, and then subtracted the product from 0.74, resulting in 
a work RVU of 0.59 for CPT code 88350. For CY 2017, we proposed a work 
RVU of 0.59 for CPT code 88350.
    The following is a summary of the comments we received regarding 
our proposed valuations for the Immunohistochemistry family:
    Comments: Several commenters stated concerns regarding the level of 
reimbursement these pathology codes would receive if CMS reduced the 
work RVUs as proposed. The commenters stated the reduced reimbursement 
would force pathologists to decrease the number of technical staff, 
which would interfere with pathologists' ability to perform these 
services accurately and timely.
    The RUC stated the CY 2017 proposed work RVUs for CPT codes 88341 
and 88350 do not represent the work involved in furnishing the 
procedure and present a rank order anomaly for other services. The RUC 
also stated that the services furnished by CPT codes 37252 and 37253, 
which we used to establish the relationship between the base code and 
the add-on code, are not medically comparable services to CPT codes 
88341 and 88350. Additionally, the RUC stated each pathology service 
has individual intensities and complexities. Specifically, for 
additional immunohistochemistry services represented by add-on CPT 
codes 88341 and 88350, each antibody is evaluated separately on 
different slides and each additional service is separate and distinct.
    Lastly, the RUC stated its approach of evaluating the actual work 
associated with each unique base and each unique add-on service is far 
more accurate, rational, and responsive to the specific circumstances 
than holding codes equal to a fixed discount from the base code. 
Applying ratio comparisons and fixed discounts to arrive at a work 
relative value will continue to create inter-specialty rank order 
anomalies of physician work RVUs.
    Another commenter noted there were RUC surveys that evaluated 
physician work differentials between the base codes and the add-on 
codes for pathology services. The commenter offered CPT codes 88333 
(Pathology consultation during surgery; cytologic examination (e.g., 
touch prep, squash prep), initial site) and 88334 (Pathology 
consultation during surgery; cytologic examination (e.g., touch prep, 
squash prep), each additional site (List separately in addition to code 
for primary procedure)) and CPT codes 88331 (Pathology consultation 
during surgery; first tissue block, with frozen section(s), single 
specimen) and 88332 (Pathology consultation during surgery; each 
additional tissue block with frozen section(s) (List separately in 
addition to code for primary procedure) as examples for consideration.
    Response: We appreciate commenters' concern regarding the level of 
reimbursement and will continue to consider input from the medical 
community on this issue through evaluation of CPT coding changes and 
associated RUC recommendations, as well as feedback received through 
public comments, as we value these services through future notice and 
comment rulemaking. We also note that the PFS is a relative value 
system and, as such, values services across all specialties. We believe 
it is important that there are accurate comparisons between codes in 
different families.
    As discussed in detail in previous proposed and final rules, we 
continue to believe the metric we use to value add-on codes relative to 
their base codes is appropriate and representative of the work involved 
and note that there is no rank order anomaly within this particular 
code family. In response to the commenter's statement that there should 
be no comparison of intravascular ultrasound services to any pathology 
service, we continue to believe any difference in work RVUs for codes 
describing different kinds of services should reflect the relative 
differences in time and intensity involved in furnishing the services. 
Therefore, we believe that it is imperative that we can compare the 
assumptions regarding overall work between any two codes, regardless of 
their characteristics.
    We appreciate commenters' concerns regarding a standard discount, 
and we do not consider the use of a particular increment to establish a 
new standard. Instead, we reiterate that we believe that it is 
reasonable to estimate work RVUs for a base and an add-on code, and to 
recognize efficiencies between them, by looking at how similar 
efficiencies are reflected in work RVUs for other PFS services. We 
appreciate the commenters' concerns regarding the time ratio 
methodologies and have responded to these concerns about our 
methodology in section II.L of this final rule.
    Therefore, for CY 2017 we are finalizing a work RVU of 0.56, 0.70, 
0.70, and 0.59 for CPT codes 88341, 88342, 88344 and 88350, 
respectively.
(49) Morphometric Analysis (CPT Codes 88364, 88365, 88367, 88368, 88369 
and 88373)
    For CY 2015, the CPT Editorial Panel revised the code descriptors 
for the in situ hybridization procedures, CPT codes 88365, 88367 and 
88368, to specify ``each separately identifiable probe per block.'' 
Additionally, three new add-on codes (CPT codes 88364, 88369 and 88373) 
were created to specify ``each additional separately identifiable probe 
per slide.'' Some of the add-on codes in this family had RUC-
recommended work RVUs that were 60 percent of the work RVU of the base 
procedure. We believed this accurately reflected the resources used in 
furnishing these add-on codes and

[[Page 80328]]

subsequently established interim final work RVUs of 0.53 for CPT code 
88364 (60 percent of the work RVU of CPT code 88365); 0.53 for CPT code 
88369 (60 percent of the work RVU of CPT code 88368); and 0.43 for CPT 
code 88373 (60 percent of the work RVU of CPT code 88367).
    For CY 2016, the RUC re-reviewed these services due to the 
specialty society's initially low survey response rate. In our review 
of these codes, we noticed that the latest RUC recommendation was 
identical to the RUC recommendation provided for CY 2015. Therefore, we 
proposed to retain the CY 2015 work RVUs and work time for CPT codes 
88367 and 88368 for CY 2016. For CPT code 88365 we finalized a work RVU 
of 0.88 for CY 2016. For CPT codes 88364 and 88369, we increased the 
work RVUs for both of these add-on codes from 0.53 to 0.67, which 
reflected 76 percent of the work RVUs of the base procedures for these 
services. However, we inadvertently omitted the rationale for this 
revision to the work RVUs in the preamble to CY 2016 proposed rule. 
Consequently, we maintained the CY 2015 interim final values of the 
work RVU of 0.67 for CPT codes 88464 and 88369 and sought comment on 
these values for CY 2016. For CPT code 88373 we finalized a work RVU of 
0.43.
    Comment on the CY 2016 PFS final rule with comment period: A few 
commenters stated their objection to our use of a standard discount for 
pathology add-on services and for suggesting that each service is 
separate and unique. Commenters also stated there should be no 
comparison of intravascular ultrasound services to morphometric 
analysis, immunohistochemistry, immunofluorescence, or any pathology 
service.
    Response in the CY 2017 PFS proposed rule: In reviewing the RUC 
recommended base/add-on relationships between several pathology codes, 
we continue to believe the base/add-on code time relationships for 
pathology services are appropriate and have not been presented with any 
compelling evidence that conflicts with the RUC-recommended 
relationships. However, as we stated above, the intravascular codes we 
initially examined in revaluing CPT codes 88364 and 88369 were deleted 
in CY 2016 and replaced with CPT codes 37252 and 37253. For the reasons 
stated above we continue to believe this 20 percent discount 
relationship between the base and add-on code accurately reflects the 
work involved in furnishing these services. Therefore, for CY 2017, we 
are proposing a work RVU of 0.70 for CPT codes 88364 and 88369 which 
represents a 20 percent discount from the base code. As the 
relationship between the base code and add-on code now represents a 20 
percent difference we are proposing to revalue CPT code 88373 at 0.58 
work RVUs.
    In the CY 2017 proposed rule, we proposed a work RVU of 0.58 for 
CPT code 88373.
    The following is a summary of the comments we received regarding 
our proposed valuation of the Morphometric Analysis codes:
    Comments: The RUC stated appreciation for the proposed increase in 
work RVUs for CPT codes 88364 and 88369 although it stated the increase 
still does not represent the proper work RVU for the work involved and 
presents a rank order anomaly relative to other services. The RUC, 
along with other commenters, stated the services described by CPT codes 
37252 and 37253 are not comparable medical services to those furnished 
by CPT codes 88364 and 88369, and there should be no comparison of 
intravascular ultrasound services to any pathology services.
    The RUC also stated that although some medical procedures and 
services may present efficiencies between base and add-on services, 
this is not the case for CPT codes 88364 and 88369, as each pathology 
service is individual so that any rational comparison of the physician 
work of intravascular ultrasound services with pathology services is 
impossible. The RUC also stated that no pathology add-on service can be 
presumed to have a discount in physician work from the base service.
    Another commenter stated for CPT code 88373, it is irrational to 
assume that second and subsequent services designated by convention as 
``add-on'' services require a reduction in resources relative to the 
corresponding initial service.
    Another commenter noted that in the CY 2017 proposed rule, CMS 
incorrectly stated it was utilizing a RUC recommendation specific to 
these codes. According to the CY 2015 Final Rule (79 FR 67548), the 
codes on which CMS based its discount were CPT codes 88334, 88335, 
88177, and 88172. The commenter states the distinction between the 
codes cited in the CY 2015 final rule, CPT codes 88334, 88335, 88177, 
88172, and the new add-on codes, CPT codes 88364, 88369 and 88373, is 
that the discount factor is specific to services for which a diagnosis 
has already been furnished. For the new codes to which CMS applied this 
discount, no such corresponding interpretative diagnosis has been made.
    The same commenter stated for morphometric codes, the pathologist 
is reviewing a second, unique and distinct probe with an entirely 
different signal than that of its base code, and the work involved with 
these add-on services requires the same level of intensity and time as 
their base codes.
    The commenter also stated that pathology consultation and 
cytopathology evaluation codes were clinically different and are not 
valid proxies to identify efficiencies for the new add-on codes.
    Response: We do not agree that there are rank order anomalies 
within this code family, and we note that this code family was valued 
within itself and not in relation to other services within the PFS. In 
response to the commenter's statement that there should be no 
comparison of intravascular ultrasound services to any pathology 
service as discussed above, we continue to believe it is valid to 
compare services across the PFS when determining appropriate values.
    We also continue to believe that it is reasonable to recognize 
efficiencies between them a base and an add-on code. In reviewing the 
RUC-recommended base/add-on relationships between several pathology 
codes, we continue to believe the base/add-on code time relationships 
for pathology services are appropriate and have not been presented with 
any persuasive evidence or rationale that conflicts with the RUC-
recommended relationships.
    We agree with the commenter that the designation ``add-on'' does 
not automatically imply a reduction; however, in the case of these 
similar pathology services, we continue to believe using the same 
valuation metrics is valid. Therefore, for CY 2017, we are finalizing a 
work RVU of 0.70, 0.73, 0.88, 0.70 and 0.58 for CPT codes 88364, 88367, 
88368, 88369 and 88373, respectively.
(50) Liver Elastography (CPT Code 91200)
    For CY 2016, we received a RUC recommendation of 0.27 work RVUs for 
CPT code 91200. After careful review of the recommendation, we 
established the RUC-recommended work RVU and direct PE inputs as 
interim final for CY 2016.
    Comment on the CY 2016 PFS final rule with comment period: A few 
commenters requested that we reconsider the level of payment assigned 
to this service when furnished in a nonfacility setting, stating that 
the

[[Page 80329]]

code met the definition for the potentially misvalued code list as 
there is a significant difference in payment between sites of service. 
The commenters also asked us to reconsider the assigned 50 percent 
utilization rate for the FibroScan equipment in this procedure as the 
current utilization rate would translate to over 50 procedures per 
week. Instead, the commenters suggested the typical number of 
procedures done per week ranges between 15 and 25 and requested we 
adopt a 25 percent utilization rate which corresponds to that number of 
procedures.
    Response in the CY 2017 PFS proposed rule: We refer commenters to 
the CY 2016 final rule with comment period (80 FR 71057-71058) where we 
discussed and addressed the comparison of the PFS payment amount to the 
OPPS payment amount for CPT 91200. For the commenter's statement about 
the utilization rate, 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 
support 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. The commenters did not provide any verifiable data 
suggesting a lower utilization rate. Therefore, for CY 2017 we proposed 
a work RVU of 0.27 for CPT code 91200, consistent with the CY 2016 
interim final value, and we continued to explore and solicit comments 
regarding publically available data sources to identify the most 
accurate equipment utilization rate assumptions possible. We also noted 
that following the publication of the CY 2016 PFS final rule with 
comment period (80 FR 70886) there was an inconsistency in the Work 
Time file published on the CMS Web site. For CPT code 91200 the RUC 
recommended 16 minutes total service time whereas our file reflected 18 
minutes total time for the service. For CY 2017, we proposed to update 
the Work Time file to reflect the RUC's recommendation, which is 16 
minutes for CPT code 91200.
    The following is a summary of the comments we received regarding 
our proposed valuation of CPT code 91200.
    Comment: Many commenters disagreed with the proposed valuation of 
CPT code 91200, suggesting that the $34 payment rate in the nonfacility 
setting for CY 2016 underestimated the resource cost of the procedure. 
Commenters stated that this code is a first-line method used to assess 
fibrosis scores in patients with chronic liver disease, especially 
those with chronic Hepatitis C, and that the current reimbursement was 
not sufficient to cover the cost of providing the service. Some 
commenters compared the use of the Fibroscan device in CPT code 91200 
to more expensive and more invasive liver biopsies, or compared the 
cost of the procedure to the treatment provided in hospital-based 
payment systems. Commenters urged CMS to increase the valuation of CPT 
code 91200 to encourage providers to adopt the use of the Fibroscan 
device.
    Response: We remind commenters that we are obligated by statute to 
set payment rates based on the resources used to furnish the procedure, 
and that as a result pricing for codes on the PFS does not necessarily 
mirror pricing for codes under different payment systems. We also note 
that we proposed the RUC-recommended work RVU and direct PE inputs for 
CPT code 91200 without alteration.
    Comment: Many of the commenters also addressed the pricing of the 
Fibroscan equipment (ER101). Commenters provided CMS a range of 
different prices for this equipment item, individually suggesting that 
the equipment costs $120k, $130k, $140k, and $150k. One commenter 
supplied an individual invoice for the Fibroscan, including the device 
itself along with a CAP option, an S probe, a printer, and shipping/
maintenance costs.
    Response: We appreciate the submission of additional information 
regarding the proper pricing of the Fibroscan. We encourage more 
commenters to include invoices with their comment submissions if they 
believe that existing supplies or equipment items are undervalued, as 
we have had longstanding reservations about establishing pricing based 
on single invoices. In the specific case of the Fibroscan equipment, we 
agree that the price should be increased based on the submitted 
invoice. We are pricing ER101 at $183,390 based on a combination of the 
cost of the Fibroscan itself ($131,950), the CAP option ($22,955), the 
S probe ($27,950), and the printer ($495). We note that we do not 
typically pay for shipping costs or maintenance costs, as equipment 
maintenance costs are built into the equipment cost per minute formula. 
We are also changing the name of ER101 from ``Fibroscan'' to 
``Fibroscan with printer'' to reflect the fact that this pricing 
incorporates a printer.
    After consideration of comments received, we are finalizing our 
proposed work RVUs and direct PE inputs, with the price increase to the 
Fibroscan with printer equipment.
(51) Closure of Paravalvular Leak (CPT Codes 93590, 93591, and 93592)
    The CPT Editorial Panel developed three new codes (two base codes 
and one add-on code) to describe paravalvular leak closure procedures 
that were previously reported using an unlisted code. The RUC 
recommended a work RVU of 17.97 for CPT code 93591. We proposed a work 
RVU of 14.50 for CPT code 93591, a direct crosswalk from CPT code 
37227. We stated in the CY 2017 proposed rule that we believe that a 
direct crosswalk to CPT code 37227 accurately reflected the time and 
intensity described in CPT code 93591 since CPT code 37227 also 
described a transcatheter procedure with similar service times.
    To maintain relativity among the codes in this family, we proposed 
refinements to the recommended work RVUs for CPT code 93590. The RUC 
noted that the additional work associated with CPT code 93590 compared 
to CPT code 93591 was due to the addition of a transseptal puncture to 
access the mitral valve. The RUC identified a work RVU of 3.73 for a 
transseptal puncture. Therefore, for CPT code 93590, we proposed a work 
RVU of 18.23 by using our proposed work RVU of 14.50 for CPT code 93591 
and adding the value of a transseptal puncture (3.73).
    CPT code 93592 is an add-on code used to report placement of 
additional occlusion devices for percutaneous transcatheter 
paravalvular leak closure, performed in conjunction with either an 
initial mitral or aortic paravalvular leak closure. The RUC recommended 
a work RVU of 8.00 for this code. In the proposed rule, we stated that 
we considered applying the relative increment between CPT codes 93590 
and 93591; however, we believed that a direct crosswalk to CPT code 
35572, with a work RVU of 6.81, more accurately reflected the time and 
intensity of furnishing the service. Therefore, for CPT code 93592, we 
proposed a work RVU of 6.81.
    Comment: For CPT code 93591, commenters opposed CMS' assertion that 
a cardiovascular intervention

[[Page 80330]]

performed in an immobile leg is comparable in intensity and patient 
risk to an intervention performed in a beating, moving heart. 
Commenters suggested that CMS' proposed crosswalk to CPT code 37227 was 
not appropriate since CPT code 37227 is generally performed in an 
outpatient setting, while CPT code 93591 is generally performed in a 
facility setting due to the intensity and risk associated with the 
procedure. Subsequently, commenters suggested that CMS finalize the 
RUC-recommended work RVU of 17.97 for CPT code 93591.
    For CPT code 93590, commenters, including the RUC, supported CMS' 
proposed use of the same building block methodology used in the RUC 
recommendations, by proposing to apply a work RVU of 3.73 to the base 
code value of 93591. However, commenters suggested that CMS apply the 
value of a transeptal puncture to the RUC-recommended value for CPT 
code 93591, and therefore, finalize the RUC-recommended work RVU of 
21.70 for CPT code 93590.
    For CPT code 93592, commenters, including the RUC, disagreed with 
CMS' proposed comparison of CPT code 93592 to CPT code 35572 (Harvest 
of femoropopliteal vein, 1 segment, for vascular reconstruction 
procedure (e.g., aortic valve services)). Commenters stated that CMS's 
proposed crosswalk is inappropriate and does not recognize the 
intensity and skill level needed to place a device to close a 
paravalvular leak in a moving, beating heart, frequently in patients 
with heart failure. Commenters stated that CPT code 35572 was only 
similar to CPT code 93592 in that both procedures are cardiovascular in 
nature. Commenters also stated that surgical harvest of the lower 
extremity vein is not clinically similar to the transcatheter 
percutaneous structural heart therapies.
    Response: We thank the commenters for their feedback on our 
proposal. After consideration of the comments received, we are 
finalizing the RUC-recommended work RVUs for each of the codes in this 
family. Therefore, we are finalizing a work RVU of 21.70 for CPT code 
93590, a work RVU of 17.97 for CPT code 93591, and a work RVU of 8.00 
for CPT code 93592.
(52) Electroencephalogram (EEG) (CPT Codes 95812, 95813, and 95957)
    In February 2016, the RUC submitted recommendations for work and 
direct PE inputs for CPT codes 95812, 95813, and 95957. We proposed to 
use the RUC-recommended physician work and direct PE inputs for CPT 
code 95957 and to use the RUC-recommended work RVUs for CPT codes 95812 
and 95813.
    In the CY 2016 PFS final rule with comment period (80 FR 70886), we 
finalized direct PE input refinements for several clinical labor times 
for CPT codes 95812 and 95813. The RUC's February 2016 direct PE 
summary of recommendations indicated that the specialty society expert 
panel disagreed with CMS' refinements to clinical labor time for these 
two codes. The RUC recommended 62 minutes for clinical labor task 
``perform procedure'' for CPT code 95812 and 96 minutes for the same 
clinical labor task for CPT code 95813, similar to the values 
recommended by the RUC in April 2014.
    We proposed to maintain the CMS-refined CY 2016 PE inputs for 
clinical labor task ``perform procedure'' for CPT codes 95812 (50 
minutes) and 95813 (80 minutes), since the RUC's PE summary of 
recommendations stated that CPT code 95812 required 50 minutes of 
clinical labor time for EEG recording, and CPT code 95813 required 80 
minutes of clinical labor time for the same clinical labor task.
    We did not receive any comments on our proposals for this family of 
codes. Therefore, for CY 2017, we are finalizing our proposed direct PE 
inputs for these codes without modifications. We are also finalizing 
for CY 2017 work RVUs of 1.08 for CPT code 95812, 1.63 for CPT code 
95813, 1.98 for CPT code 95957.
(53) Analysis of Neurostimulator Pulse Generator System (CPT Codes 
95971, 95972)
    CPT codes 95971 and 95972 were established as interim final 
following the CY 2016 final rule with comment period. For CY 2017, we 
proposed to maintain their work RVUs and direct PE inputs.
    Comment: A commenter expressed support for the proposal to maintain 
the current work and PE RVUs, stating that these codes were revalued in 
2015 and there was no reason to make any changes.
    Response: We appreciate the support from the commenter.
    After consideration of comments received, we are finalizing our 
proposed work RVUs and proposed direct PE inputs for CPT codes 95971 
and 95972.
(54) Patient, Caregiver-focused Health Risk Assessment (CPT Codes 96160 
and 96161)
    In October 2015, the CPT Editorial Panel created two new PE-only 
CPT codes, 96160 (Administration of patient-focused health risk 
assessment instrument (e.g., health hazard appraisal) with scoring and 
documentation, per standardized instrument) and 96161 (Administration 
of caregiver-focused health risk assessment instrument (e.g., 
depression inventory) for the benefit of the patient, with scoring and 
documentation, per standardized instrument). For CPT code 96160, we 
proposed the RUC-recommended direct PE inputs. For CPT code 96161, the 
service is furnished to a patient who may not be a Medicare 
beneficiary, and therefore, we did not believe the code would be 
eligible for Medicare payment. We proposed to assign a procedure status 
of I (Not valid for Medicare purposes) for CPT code 96161.
    We noted that we believed that CPT code 96160 describes a service 
that is frequently reasonable and necessary in the treatment of illness 
or injury, such as when there has been a change in health status. 
However, when the service described by CPT code 96160 is explicitly 
included in another service being furnished, such as the Annual 
Wellness Visit (AWV), this code should not be billed separately, much 
like other codes that describe services included in codes with broader 
descriptions. We also noted that this service should not be billed 
separately if furnished as a preventive service as it would describe a 
non-covered service. However, we also solicited comment on whether this 
service may be better categorized as an add-on code and welcomed 
stakeholder input regarding whether or not there are circumstances when 
this service might be furnished as a stand-alone service.
    Comment: Many commenters recommended that CMS should recognize and 
make separate payment for CPT code 96160, as proposed, as well as 96161 
using the RUC-recommended values. Several of these commenters argued 
that the medical community has recognized that health risk assessment 
of caregivers is an integral part of ongoing medical care for patients 
with particular needs. These commenters offered several examples where 
such an assessment is integral to treating patients, such as:
     Assessment of maternal depression in the active care of 
infants,
     Assessment of parental mental health as part of evaluating 
a child's functioning,
     Assessment of caretaker conditions as indicated where 
atypical parent/child interactions are observed during care,
     Assessment of caregivers as part of care management for 
adults whose physical or cognitive status renders them incapable of 
independent living and dependent on another adult caregiver. Some 
examples might be intellectually disabled adults, seriously

[[Page 80331]]

disabled military veterans and adults with significant musculoskeletal 
or central nervous system impairments.
    Because commenters noted that these assessments were generally 
administered during E/M services, they were receptive to making both 
CPT codes 96160 and 96161 add-on codes to E/M services.
    Response: After considering comments, we believe that CPT codes 
96160 and 96161 describe services that, in particular cases, can be 
necessary components of services furnished to Medicare beneficiaries. 
While we recognize that in many cases we have previously assigned non-
payment indicators to codes that describe interactions with caregivers, 
we also note that we have also recognized that in current medical 
practice, practitioner interaction with caregivers is an integral part 
of treatment for some patients. Accordingly, the descriptions for 
several payable codes under the PFS include direct interactions between 
practitioners and caregivers.
    In developing our proposal regarding the payment disposition of 
this code, we noted that it singularly described a service administered 
to a caregiver. However, based on public comments, including the 
receptivity to our assignment of add-on code status, we understand that 
in actual practice, this service is integrated with E/M visits under 
particular circumstances. Consequently, we believe the appropriate 
payment status for the code should be determined by looking at the 
overall service as described by the two codes together. We agree with 
commenters, then, that there are circumstances where this service is an 
essential part of a service to a Medicare beneficiary. Therefore, we 
are assigning an active payment status to both codes for CY 2017. We 
are also establishing use of the RUC recommended values for these 
codes. We are also assigning an add-on code status to both of these 
services. As add-on codes, CPT codes 96160 and 96161 describe 
additional resource components of a broader service furnished to the 
patient that are not accounted for in the valuation of the base code.
(55) Reflectance Confocal Microscopy (CPT Codes 96931, 96932, 96933, 
96934, 96935, and 96936)
    For CY 2015, the CPT Editorial Panel established six new Category I 
codes to describe reflectance confocal microscopy (RCM) for imaging of 
skin. For CPT codes 96931 and 96933, the specialty society and the RUC 
agreed that the physician work required for both codes were identical, 
and therefore, should be valued the same. The RUC recommended a work 
RVU of 0.80 for CPT codes 96931 and 96933 based on the 25th percentile 
of the survey. Based on the similarity of the services being performed 
in CPT codes 96931 and 96933 and the identical intra-service times of 
96931, 96933 and 88305, the key reference code from the survey, we 
believe a direct crosswalk from CPT code 88305 to CPT codes 96931 and 
96933 would more accurately reflect the work involved in furnishing the 
procedure. Therefore, for CY 2017, we proposed a work RVU of 0.75 for 
CPT codes 96931 and 96933. In addition, we proposed removing 3 minutes 
of preservice time from CPT codes 96931 and 96933 since it is not 
included in CPT code 88305 and as a result, we did not believe it was 
appropriate in CPT codes 96931 and 96933.
    For CPT codes 96934 and 96936, the specialty society and the RUC 
agreed that the physician work required for both codes were identical, 
and therefore, should be valued the same. In its recommendation, the 
RUC stated that it believed the survey respondents somewhat 
overestimated the work for CPT code 96934 with the 25th percentile 
yielding a work RVU of 0.79. Consequently, the RUC reviewed the survey 
results from CPT code 96936 and agreed that the 25th percentile work 
RVU of 0.76 accurately accounted for the work involved for the service. 
Therefore, the RUC recommended a work RVU of 0.76 for CPT codes 96934 
and 96936.
    We believe that the incremental difference between the RUC-
recommended values for the base and add-on codes accurately captures 
the difference in work between the code pairs. However, because we 
valued the base codes differently than the RUC, we proposed values for 
the add-on codes that maintain the RUC's 0.04 increment instead of the 
RUC-recommended values. Therefore we proposed a work RVU of 0.71 for 
CPT codes 96934 and 96936.
    We also proposed to reduce the preservice clinical labor for 
``Patient clinical information and questionnaire reviewed by 
technologist, order from physician confirmed and exam protocoled by 
physician'' for CPT codes 96934 and 93936 as this work is performed in 
the two base CPT codes 93931 and 93933. We proposed to reduce the 
service period clinical labor for ``Prepare and position patient/
monitor patient/set up IV'' from 2 to 1 minute for CPT codes 93934 and 
93936 since we believed that less positioning time is needed with 
subsequent lesions. We proposed to refine the service period clinical 
labor for ``Other Clinical Activity--Review imaging with interpreting 
physician'' to zero minutes for CPT codes 96933 and 96936 as these are 
interpretation and report only codes and not image acquisition.
    Comment: Several commenters, including the RUC, objected to the 
proposed valuations for CPT codes 96931, 96933, 96934, and 96936. The 
RUC disagreed with pre-service time being removed from a survey code 
simply due to a key reference code not also having pre-service time. 
The RUC stated CPT codes 96931 and 96933 are distinct procedures from 
CPT codes 88305 and the CMS proposal to remove 3 minutes of pre-time 
from the base RCM codes was grounded on faulty logic. The RUC stated 
its agreement with the specialty society that 3 minutes of preservice 
time was necessary for the physician to review clinical history and 
referral information. The RUC further stated with the 3 minutes of pre-
service time in its recommendation for the RCM base codes were 
appropriately in line with top key reference CPT code 88305 and urged 
CMS to accept the survey 25th percentile work RVUs for CPT codes 96931, 
96933, 96934, and 96936. Other commenters stated there were very 
significant differences in the technologies used and the work involved 
between the procedures of CPT code 88305, the key reference code, and 
CPT codes 96931 and 96933, with CPT codes 96931 and 96933 being more 
complex procedures.
    One commenter stated CMS incorrectly removed technician time for 
``Other Clinical Activity--Review imaging with interpreting physician'' 
for CPT codes 96933 and 96936 noting the technician still must review 
the imaging with the interpreting physician and urged CMS to accept the 
RUC recommendations.
    Response: After consideration of comments received, we agree with 
the commenters and will finalize the RUC-recommended work RVUs of 0.80, 
0.80, 0.76, and 0.76 for CPT codes 96931, 96933, 96934 and 96936; 
respectively. We will also restore the 3 minutes of preservice time to 
CPT codes 96931 and 96933.
(56) Evaluative Procedures for Physical Therapy and Occupational 
Therapy (CPT Codes 97161, 97162, 97163, 97164, 97165, 97166, 97167, 
97168)
    For CY 2017, the CPT Editorial Panel deleted four CPT codes (97001, 
97002, 97003, and 97004) and created eight new CPT codes (97161-97168) 
to describe the evaluative procedures furnished by physical therapists 
and

[[Page 80332]]

occupational therapists. There are three new codes, stratified by 
complexity, to replace a single CPT code 97001, for physical therapy 
(PT) evaluation, and three new codes, also stratified by complexity, to 
replace a single code CPT code 97003, for occupational therapy (OT) 
evaluation, and one new code each to replace the re-evaluation codes 
for physical and occupational therapy, CPT codes 97002 and 97004. Table 
23 includes the long descriptors and the required components of each of 
the eight new CPT codes for the PT and OT services.
    The CPT Editorial Panel's creation of the new codes for PT and OT 
evaluative procedures grew out of a CPT workgroup that was originally 
convened in January 2012 when contemplating major revision of the 
Physical Medicine and Rehabilitation CPT section of codes in response 
to our nomination of therapy codes as potentially misvalued codes, 
including CPT code 97001 (and, as a result, all four codes in the 
family) in the CY 2012 PFS proposed rule.
    In reviewing the eight new CPT codes for evaluative procedures, the 
HCPAC forwarded recommendations for work RVUs and direct PE inputs for 
each code. Currently, CPT codes 97001 and 97003 both have a work RVU of 
1.20, and CPT codes 97002 and 97004 both have a work RVU of 0.60. These 
CPT codes have reflected the same work RVUs since CY 1998 when we 
accepted the HCPAC values during CY 1998 rulemaking.
i. Valuation of Evaluation Codes
    In the CY 2017 PFS proposed rule, we noted that the HCPAC submitted 
work RVU recommendations for each of the six new PT and OT evaluation 
codes. These recommendations are intended to be work neutral relative 
to the valuation for the previous single evaluation code for PT and OT, 
respectively. However, that assessment for each family of codes is 
dependent on the accuracy of the utilization forecast for the different 
complexity levels within the PT or OT family. As used in this section, 
work neutrality is distinct from the budget neutrality that is applied 
broadly in the PFS. Specifically, work neutrality is intended to 
reflect that despite changes in coding, the overall amount of work RVUs 
for a set of services is held constant from one year to the next. For 
example, if a service is reported using a single code with a work RVU 
of 2.0 for one year but that same service would be reported using two 
codes, one for ``simple'' and another for ``complex'' in the subsequent 
year valued at 1.0 and 3.0 respectively, work neutrality could only be 
attained if exactly half the services were reported using each of the 
two new codes. If more than half of the services were reported using 
the ``simple'' code, then there would be fewer overall work RVUs. If 
more than half of the services were reported using the ``complex'' 
code, then there would be more overall work RVUs. Therefore, work 
neutrality can only be assessed with an understanding of the relative 
frequency of how often particular codes will be reported.
    The HCPAC recommended a work RVU of 0.75 for CPT code 97161, a work 
RVU of 1.18 for CPT code 97162, and a work RVU of 1.5 for CPT code 
97163. The PT specialty society projected that the moderate complexity 
evaluation code would be reported 50 percent of the time because it is 
the typical evaluation, and the CPT codes for the low and high 
complexity evaluations are each expected to be billed 25 percent of the 
time. The HCPAC-recommended work RVU of 1.18 for CPT code 97162 
represents the survey median with 30 minutes of intraservice time, 10 
minutes of preservice time, and 15 minutes postservice time. The HCPAC 
notes this work value is appropriately ranked between levels 2 and 3 of 
the E/M office visit codes for new patients.
    The HCPAC recommended a work RVU of 0.88 for CPT code 97165, a work 
RVU of 1.20 for CPT code 97166, and a work RVU of 1.70 for CPT code 
97167. For the OT codes, work neutrality would be achieved only with a 
projected utilization in which the low complexity evaluation is billed 
50 percent of the time; the moderate complexity evaluation is billed 40 
percent of the time, and the high complexity evaluation only billed 10 
percent of the time. For purposes of calculating work neutrality, the 
HCPAC recommended assuming that the low complexity code will be most 
frequently reported even though the HCPAC-recommended work RVU of 1.20 
and 45 minutes of intraservice time for moderate complexity code is 
identical to that of the current OT evaluation code. The HCPAC believes 
that the work RVU of 1.20 is appropriately ranked between 99202 and 
99203, levels 2 and 3 for E/M office visits for new outpatients.
ii. Valuation of Evaluation Codes and Discussion of PAMA
    In our review of the HCPAC recommendations, we noted the work 
neutrality and the inherent reliance on the utilization assumptions. We 
considered the three complexity levels for the PT evaluations and the 
three complexity levels for the OT evaluations; and we also considered 
the evaluation services described by the codes as a whole. The varying 
work RVUs and the dependence on utilization for each complexity level 
to ensure work neutrality in the PT and OT code families make it 
difficult for us evaluate the HCPAC's recommended values or to predict 
with a high degree of certainty whether physical and occupational 
therapists will actually bill for these services at the same rate 
forecast by their respective specialty societies.
    We were concerned that the coding stratification in the PT and OT 
evaluation codes may result in upcoding incentives, especially while 
physical and occupational therapists gain familiarity and expertise in 
the differential coding of the new PT and OT evaluation codes that now 
include the typical face-to-face times and new required components that 
are not enumerated in the current codes. We were also concerned that 
stratified payment rates may provide, in some cases, a payment 
incentive to therapists to upcode to a higher complexity level than was 
actually furnished to receive a higher payment.
    We understood that there may be multiple reasons for the CPT 
Editorial Panel to stratify coding for OT and PT evaluation codes based 
on complexity. We also noted that the codes will be used by payers in 
addition to Medicare, and other payers may have direct interest in 
making such differential payment based on complexity of OT and PT 
evaluation. Given our concerns regarding appropriate valuation, work 
neutrality, and potential upcoding, however, we did not believe that 
making different payment based on the reported complexity for these 
services is, at current, advantageous for Medicare or Medicare 
beneficiaries.
    Given the advantages inherent and public interest in using CPT 
codes once they become part of the code set, we proposed to adopt the 
new CPT codes for use in Medicare for CY 2017. However, given our 
concerns about appropriate pricing and payment for the stratified 
services, we proposed to price the services described by these 
stratified codes as a group instead of individually. To do that, we 
proposed to utilize the authority in section 220(f) of the Protecting 
Access to Medicare Act (PAMA), which revised section 1848(c)(2)(C) of 
the Act to authorize the Secretary to determine RVUs for groups of 
services, rather than determining RVUs at the individual service level. 
We believed that using this authority instead of proposing to make 
payment based on Medicare G-codes will preserve consistency in the code 
set

[[Page 80333]]

across payers, thus lessening burden on providers, while retaining 
flexibilities that are beneficial to Medicare.
    We proposed a work RVU of 1.20 for both the PT and the OT 
evaluation groups of services. We proposed this work RVU because we 
believed it best represents the typical PT and OT evaluation. This is 
the value recommended by the HCPAC for the OT moderate complexity 
evaluation and nearly the same work RVU for corresponding PT evaluation 
(1.18). Additionally, a work RVU of 1.20 is the long-standing value for 
the current evaluation codes, CPT codes 97001 and 97003, and thus, 
assures work neutrality without reliance on particular assumptions 
about utilization, which we believed was the intent of the HCPAC 
recommendation.
    Because we proposed to use the same work RVU for the six evaluation 
codes, we are not addressing any additional concerns about the 
utilization assumptions recommended to us. Because we proposed the same 
work values for each code in the family, there will be no ratesetting 
impact to work neutrality. As such, we are not revising the utilization 
crosswalks as projected by the respective therapy specialties to 
achieve work neutrality. However, were we to value each code in the PT 
or OT evaluation families individually, we would seek objective data 
from stakeholders to support the utilization crosswalks, particularly 
those for the OT family in which the low-level complexity evaluation is 
depicted as typical and the high complexity is projected to be billed 
infrequently at 10 percent of the overall number of OT evaluations.
    We proposed to use the direct PE inputs forwarded by the HCPAC 
(with the refinements described below) for the moderate complexity PT 
and OT evaluations in the development of PE RVUs for the PT and OT 
codes as a group of services. For the PT codes, we proposed to use the 
recommended inputs for the moderate complexity code for the direct PE 
inputs of all three codes based on its assumption as the typical 
service. Our proposed direct PE inputs reflect the recommended values 
minus 2 minutes of physical therapist assistant (PTA) time in the 
service period because we believe that PTA tasks to administer certain 
assessment tools are appropriately included as part of the physical 
therapist's work and the time of the PTA to explain and score self-
reported outcome measures is not separately included in the clinical 
labor of other codes. We proposed to include the recommended four 
sheets of laser paper without an association to a specific equipment 
item, but we solicited comment regarding the paper's use.
    For the OT evaluation codes, we considered proposing to use the 
direct PE inputs for the low complexity evaluation because the OT 
specialty organization believes it represents the typical OT evaluation 
service with a projected 50 percent utilization rate. However, we 
proposed to use the moderate-level direct inputs instead, because the 
direct PE for this level is based on a vignette that is valued with the 
same intraservice time, 45 minutes, as the current code, CPT code 
97003. Consequently, we proposed to use the recommended direct PE 
inputs for the moderate complexity code for use in developing PE RVUs 
for this group of services.
    Our proposed direct PE inputs reflect the recommended values minus 
2 minutes of occupational therapist assistant (OTA) time in the service 
period because we believe that OTA tasks to administer certain 
assessment tools are appropriately included as part of the occupational 
therapist's work and the time of the OTA to explain and score self-
reported outcome measures is not separately included in the clinical 
labor of other codes. We also rounded up the recommended 6.8 minutes to 
7 minutes to represent the time the OTA assists the occupational 
therapist during the intraservice time period. For the Vision Kit 
equipment item, our proposed price reflects the submitted invoice that 
clearly defined a kit.
iii. Valuation of Re-evaluation Codes
    The recommendations the HCPAC sent to us for the PT and OT re-
evaluation codes are not work neutral. For the new PT re-evaluation 
code, CPT code 97164, the HCPAC recommended a work RVU of 0.75 compared 
to the work RVU of 0.60 for CPT code 97002. This recommended work RVU 
falls between the 25th percentile of the survey and the survey's median 
value and was based on a direct crosswalk to CPT code 95992 for 
canalith repositioning with 20 minutes intraservice time and 10 minutes 
immediate postservice time. The HCPAC supported this 0.15 work RVU 
increase based on an anomalous relationship between PT services and E/M 
office visit codes for established patients, noting that physician E/M 
codes have historically been used as a relative comparison. The HCPAC 
stated its recommendation of a work RVU of 0.75 for CPT code 97164 
appropriately ranks it between the key reference codes for this 
service, CPT codes 99212 and 99213, levels 2 and 3 E/M office-visit 
codes for established patients.
    The HCPAC provided a work RVU of 0.80 for the OT re-evaluation 
code, CPT code 97168, based on the 25th percentile of the survey, which 
represents an increase over the current work RVU of 0.60 for CPT code 
97004. This work value includes 30 minutes of intraservice time, 5 
minutes preservice time, and 10 minutes immediate postservice time. The 
HCPAC noted that the increase in work compared to the PT re-evaluation 
code (0.75) is because the occupational therapist spends more time 
observing and assessing the patient and, in general, the OT patient 
typically has more functional and cognitive disabilities. The HCPAC 
recommendation notes that the 0.80 work RVU recommendation 
appropriately ranks it between the level 1 and 2 E/M office-visit codes 
for new patients.
    The HCPAC's recommended increases to work RVUs for the PT and OT 
re-evaluation codes are not work neutral. We are unclear why the HCPAC 
did not maintain work neutrality for the OT and PT re-evaluation codes 
since maintaining work neutrality was important to the establishment of 
the six new evaluation codes. We proposed to maintain the overall work 
RVUs for these services by proposing a work RVU of 0.60 for CPT codes 
97164 and 97168, consistent with the work RVUs for the deleted re-
evaluation codes. We solicited comments from stakeholders on whether 
there are reasons that the re-evaluation codes should be revalued 
without regard to work neutrality.
    We proposed the HCPAC-recommended direct PE inputs for CPT code 
97164 with a reduction in time for the PTA by 1 minute (from 5 to 4) in 
the service period--the line for ``Other Clinical Activity''--because 
the time to explain and score the self-reported outcome measure (for 
example, Oswestry) is not separately included in the clinical labor of 
other codes.
    We proposed the HCPAC-recommended direct PE inputs for CPT code 
97168 with a reduction in time for the OTA by 1 minute (from 3 to 2) in 
the service period--the line for ``Other Clinical Activity''--for the 
same reason we proposed to reduce the corresponding line for PTAs--
because the time to explain and score any patient-self-administered 
functional and other standardized outcome measure is not separately 
included in the clinical labor of other codes.
    Because the new CPT code descriptors contain new coding 
requirements for each complexity level, we solicited comment from the 
PT and

[[Page 80334]]

OT specialty organizations, as well as other stakeholders to clarify 
how therapists will be educated to distinguish the required complexity 
level components and the selection of the number of elements that 
impact the plan of care. For example, for the OT codes, we invited 
comment on how to define performance deficits, what process the 
occupational therapist uses to identify the number of these performance 
deficits that result in activity limitations, and performance factors 
needed for each complexity level. For the PT codes, we sought more 
information about how the physical therapist differentiates the number 
of personal factors that actually affect the plan of care. We were also 
interested in understanding more about how the physical therapist 
selects the number of elements from any of the body structures and 
functions, activity limitations, and participation restrictions to make 
sure there is no duplication during the physical therapist's 
examination of body systems.
    The following is summary of the comments we received:
    Comment: Several commenters disagreed with our proposal to accept 
the new CPT codes for PT and OT evaluations and re-evaluations and 
urged us to keep the current four-code set. A few of these commenters 
noted our proposal to accept the stratified code sets for PT and OT 
evaluations would increase the administrative burden associated with 
documentation and education training of therapists, billers and coders. 
Other commenters believed that CMS should first implement the new 
complexity-defined CPT code set on a demonstration or pilot project 
basis before we apply it nationally. One commenter proposed that, 
rather than accepting the new CPT eight-code set with varying 
descriptors for each PT and OT complexity level, we adopt just two 
codes that both the PT and OT disciplines could use: a code for PT/OT 
evaluation and another for PT/OT re-evaluation. Another commenter told 
us that ``implementation of the complex scheme for determining the 
evaluation level will excessively complicate patient evaluations where 
clinicians will require more mental effort to meet the demands of the 
documentation with less time and attention directed at treating the 
patient.'' One commenter suggested that instead of implementing the 
stratified code sets, CMS should develop an alternative coding and 
payment model for therapy services and recommended that we create a 
value-based payment program, consistent with the Triple Aim of health 
care, which includes reliable and valid outcome and quality measures to 
demonstrate the outcome and value of therapy.
    Response: We thank the commenters for voicing their concerns about 
our adoption of the new CPT codes for PT and OT evaluative procedures 
and their alternative coding suggestions. However, we note that we do 
not have the authority to change CPT code descriptors or use deleted 
codes without creating G-codes to do so. We also note that adopting a 
demonstration or pilot program is not a typical CMS payment policy 
response to the creation of new CPT codes or code sets. After 
considering these comments, we continue to believe that our proposal to 
adopt the eight new CPT codes for use in Medicare for CY 2017, rather 
than retain the current coding structure by creating G-codes, is the 
best option given the advantages inherent and public interest in using 
the CPT codes once they become part of the code set. As such, we are 
finalizing our proposal to adopt new CPT codes 97161-97168 for PT and 
OT evaluations and re-evaluations.
    Comment: Many commenters objected to our proposal to use the PAMA 
authority to price the services described by the stratified sets of PT 
and OT evaluation codes as a group instead of individually and asked us 
to accept or consider the HCPAC work RVU values for each of these six 
evaluation services. Some commenters expressed concern that we ignored 
the HCPAC recommendations and proposed to maintain the work RVU of 
1.20, since the codes have not been reviewed for this purposes in 
nearly 20 years. Other commenters stated that CMS, by valuing the PT 
and OT evaluation complexity levels with the same work RVUs, was 
failing to appropriately align cost and quality as mandated in the ACA 
and MACRA.
    Because we proposed the same values, a few commenters were 
concerned that we failed to discuss the difference in the PT and OT 
evaluation services. These commenters told us that the HCPAC 
recommendations included higher work RVUs for the OT services because 
they reflected greater intraservice times from the surveys, and these 
times led, in part, to the HCPAC's belief that the typical patient 
receiving OT services is more complex and intense to treat than the 
patient receiving PT services. The HCPAC and the OT specialty society 
urged us to consider the increase in work RVUs for the OT evaluative 
services, indicating in their comments that while the HCPAC 
recommendations for the PT evaluations were work-neutral, those for the 
OT evaluations were not. The HCPAC requested that we consider the 
difference in PT services versus OT services.
    Some commenters presumed that our proposal to value the work the 
same for each evaluation complexity level was temporary. Another 
commenter expressed hope that we did not intend to equally value the PT 
high complexity evaluation the same as the low complexity one in 
perpetuity. Several commenters requested that CMS describe our future 
plans to revisit these code sets and asked that the future proposal for 
these payment amounts be subject to public comment. One of these 
commenters that favored keeping the current code structure urged us not 
to adopt the new CPT codes until we are ready to differentiate payments 
based on the complexity of the provided service.
    Some commenters told us that our lack of payment stratification for 
the three PT and three OT evaluation codes would likely prompt coding 
and billing behavioral change by some therapists and other providers of 
therapy services. One of these commenters claimed that assigning the 
same work RVU to each evaluation complexity level would cause some 
providers not to adhere to the new coding stratification which could 
result in inaccurate data on the levels being reported. Another 
commenter stated that the lack of payment stratification to reflect the 
therapist's time and expertise at each complexity level could signal to 
therapists that the accurate coding of evaluations is of diminished 
interest to CMS. Other commenters stated that the failure to recognize 
payment stratification between the complexity levels would be 
detrimental to patient care and the practice of therapy, for example, 
by reducing incentives for therapists to thoroughly evaluate patients 
with multiple and complex conditions who fall into the high complexity 
evaluation.
    Response: After a review of the comments, we continue to believe 
that using the PAMA RVU authority to value the PT and OT evaluation 
codes as a group of services is appropriate. Given our concerns about 
appropriate pricing and payment for the PT and OT stratified evaluation 
services as described in the CY 2017 proposed rule, we are finalizing 
our proposal to use the PAMA authority to value services as groups 
rather than individually--valuing each complexity level at 1.2 work 
RVUs for the PT and OT family of evaluation codes for CY 2017. We 
believe this policy has advantages for the Medicare program. It limits 
the incentives for and consequences of

[[Page 80335]]

upcoding by therapists and providers, especially as therapists become 
more familiar with the new set of codes. Additionally, the policy 
assures work neutrality for these PT and OT code families while 
allowing us to collect and analyze utilization data of the complexity 
levels for possible future rulemaking.
    We understand commenters' concerns about the possibility that the 
absence of payment stratification in the complexity levels of the PT 
and OT evaluations could have an effect on some therapists' coding 
behavior in for these services in CY 2017. However, we are also 
concerned with the implication that financial incentives are the 
primary drivers for accurate coding for a significant number of 
therapists, and if that is the case, we believe that implementing 
stratified coding would likely encourage upcoding since that is 
consistent with the financial incentives. We believe that the 
implementation of these new PT and OT code sets carries with it an 
inherent change for the therapists furnishing the services since there 
will be three complexity levels to replace just one and each new code 
contains newly defined necessary components. We also believe that it is 
premature to predict how therapists will code and bill the new 
complexity levels before therapists gain familiarity with the new 
codes.
    Comment: We received several comments on utilization assumptions 
inherent to the HCPAC recommendations. Several commenters questioned 
why we did not treat the HCPAC-recommended utilization assumptions for 
the PT and OT complexity-stratified evaluation code sets as we have 
historically treated other codes sets that come to us from the HCPAC or 
RUC; that is, using the utilization assumptions provided in the 
recommendations. The HCPAC explained that if the assumptions are 
overestimated, the HCPAC or RUC will examine and determine whether to 
recommend reductions.
    We received several comments from stakeholders in response to our 
statement in the proposed rule that we would request additional 
objective data to support the utilization crosswalks, especially for 
the OT codes, if we were to value the codes individually for the PT and 
OT evaluation complexity levels. In its comments, the OT specialty 
society explained that their frequency estimations of the three 
complexity levels were based on the most recent utilization frequency 
data from the 2014 Medicare utilization from the five percent sample 
file. The OT specialty society also stated that it defined the 
complexity levels using certain groups of diagnoses and patient types. 
The PT specialty society stated that because its survey process 
included a broad cross-section of therapists working in the various 
Medicare settings, it believed its utilization projections for the low, 
moderate and high complexity evaluation were representative. Many 
commenters told us because some therapists may not initially code the 
complexity levels correctly, that we would need to consider an entire 
year of utilization data to ensure its accuracy.
    Response: We appreciate the views expressed and the information 
that the commenters forwarded to us. However, we continue to have 
concerns that therapists, particularly occupational therapists, will 
not bill with the same utilization frequencies forecast by their 
specialty societies for the low, moderate, and high complexity 
evaluations as described in the CY 2017 proposed rule. In other words, 
we are concerned with the possibility that we would establish rates 
(including for purposes of PFS budget neutrality) that rely on the 
national organizations' assessment of what ought to be billed, but 
Medicare spending and subsequent PFS budget neutrality assumptions will 
reflect actual billing given the financial incentives inherent in 
stratified payment. Should we propose to value the evaluation codes 
individually in future rulemaking, we would seek additional objective 
data at that time. We agree that an entire year of data is likely 
needed to appropriately analyze the utilization of these evaluation 
services. We appreciate that our historical practice regarding 
significant revision of CPT coding scheme has required us to make 
significant assumptions regarding utilization for new codes. We note 
that in many cases, we have not accepted the assumptions recommended by 
specialty societies and the RUC and that we were not pricing groups of 
services together in the past.
    Comment: Several commenters expressed concern about the new PT and 
OT CPT code descriptors, specifically, that each descriptor includes 
minimal coding requirements. Several commenters expressed skepticism 
that therapists will be able to report the new codes accurately--one of 
these commenters believes the new codes rely on subjective clinical 
reasoning and decision making that will lead to further significant 
coding and audit concerns for CMS. Several commenters told us that they 
believe the true complexity of evaluating patients cannot be solely 
based on personal factors, comorbidities, performance deficits, or time 
requirements. One of these commenters noted that some patients with 
multiple comorbidities and body structures involved are not 
complicated, while others with few comorbidities and body structures 
involved are deceptively very complex, difficult to diagnose and treat. 
Another commenter specifically recommended that each PT and OT 
evaluation complexity level should have the same timeframes, as well as 
the same component requirements. A few commenters voiced concern about 
how CMS and our contractors will note these multiple required 
components of each CPT code. One commenter noted that an evaluation may 
have characteristics that fall between two complexity levels and told 
us that it should be up to the clinician to determine which level is 
most appropriate. A few commenters noted that the new detailed 
requirements that dictate the level of each code's definition may cause 
confusion for physical and occupational therapists, especially as they 
begin to navigate the new codes.
    Response: We appreciate the commenters' concerns about new code 
descriptors that detail the minimal required components for each of the 
eight new PT and OT evaluative procedures. We realize that it may take 
time to train therapists about the various required components of each 
new PT and OT evaluative procedure code and we have addressed this 
training in the comment and response below. We also appreciate the 
commenters' concern that the evaluative process is likely more complex 
than the component parts comprising each code's new coding 
requirements; however, as noted in the CY 2017 proposed rule, we 
proposed to adopt the new CPT codes for PT and OT evaluative procedures 
rather than propose a different coding structure using G-codes. We 
would like to clarify for the commenters that were concerned about 
``time requirements'' in the new PT and OT CPT code descriptors for 
evaluative procedures that these ``typical times'' are included as a 
frame of reference and do not represent a minimum coding requirement. 
Just as the typical times included for each E/M code represent the 
physician face-to-face time with the patient, the typical times in the 
new PT and OT CPT codes represent the typical face-to-face time of the 
physical or occupational therapist with the patient. Regarding the 
commenter's concern about evaluations that fall between two complexity 
levels, we would note general coding principles applicable to all 
codes--that the therapist should select the evaluation complexity level 
that best

[[Page 80336]]

represents the furnished service and for which the medical necessity is 
clearly documented.
    Comment: Many commenters requested that we delay documentation 
requirements for the new PT and OT evaluative procedure codes; several 
commenters requested a one year reprieve from application of medical 
review and audit requirements; and a few commenters requested that we 
delay the implementation of the new CPT codes until CY 2018. Most of 
these delay requests, commenters told us, were related to the time 
needed to educate therapists about the new codes. Most of these 
commenters who asked us not to implement new documentation requirements 
also supported payment stratification of the complexity levels for the 
PT and OT evaluation complexity levels. Concerned about the proposed 
lack of payment stratification, the PT specialty society noted in its 
comments that it asked CPT to postpone the codes for CPT 2017, but CPT 
denied the request. In its comments, the PT society, along with a few 
other stakeholders, also asked CMS to delay implementing the new CPT 
codes for CY 2017 ``if there is any way possible that does not disrupt 
patient care.''
    A few commenters say they will need a delay of six months, at a 
minimum, to train therapists, since all new descriptors include various 
required elements and the typical time for each PT and OT complexity 
level and the re-evaluation codes. The majority of commenters, though, 
indicated they would need a year for their educational efforts to be 
successful. In addition to therapists, a few commenters told us they 
would have to educate coders and billers in the use of the new CPT 
codes. A few commenters noted the time to implement these new codes 
into their billing systems was too short.
    The PT and OT specialty societies each told us about their plans to 
educate their therapist members and nonmembers to ensure coding 
accuracy. Each therapy association has already begun this training, 
some of which will include webinars, self-paced online courses, 
frequently asked questions, documentation resources, published 
articles, etc.
    Some commenters asked CMS to work with various stakeholders and to 
either establish guidelines or assist in educating therapists about the 
new codes through Open Door Forums, MLN articles, etc. Additionally, 
they also wanted to work with CMS on LCDs established by contractors. 
One commenter stated that CMS must provide clear guidance regarding the 
selection of the appropriate level of evaluation services provided by 
physical and occupational therapists and the associated documentation 
requirements to ensure consistency and appropriate reporting of these 
services.
    Several commenters asked us to consider a one-year reprieve from 
the payment consequences of medical review and audit requirements that 
address lack of documentation to support the complexity level of the 
code billed.
    Response: We understand that implementing the new code sets for PT 
and OT evaluative procedures will require time for therapists to be 
educated in their proper use. We would like to remind those requesting 
we assist in writing guidelines that the CPT manual PM&R subsections 
for PT and OT Evaluations contain official CPT guidelines. We 
understand the many requests for delay of new documentation 
requirements during the initial year of their use. As such, for CY 
2017, we will delay changes to our current manual instructions for 
documentation for evaluations and re-evaluations in the Medicare 
Benefits Policy Manual (MBPM), chapter 15, section 220.3.
    We understand and appreciate that the PT and OT specialty societies 
are already underway in their educational efforts of therapists, as it 
has been our past experience with the implementation of other CPT codes 
and code sets that the leading educational role is assumed by the 
specialty societies responsible for the code changes.
    Comment: We received many comments objecting to our proposal to 
maintain a work RVU of 0.60 for the re-evaluation codes. Many 
commenters--including therapy specialty societies and organization 
representing therapy providers and private practice physical and 
occupational therapists, among other stakeholders--disagreed with our 
proposal to maintain the work RVUs for the PT and OT re-evaluation 
codes and expressed their disappointment that we did not consider or 
accept the HCPAC recommendations for increased work RVUs of 0.75 for PT 
(CPT code 97164) and 0.8 for OT (CPT code 97168).
    One commenter supported increasing the work RVUs, but suggested 
that the PT and OT re-evaluation codes should be equally valued for the 
relative work, PE and MP RVUs. This same commenter contended that 
because the patients treated by the PT and OT disciplines for hand 
rehabilitation are the same; that is, have the same functional and 
cognitive deficits, the same time and expertise of both physical and 
occupational therapists is required to perform a thorough re-
evaluation. The commenter recommended that both re-evaluations reflect 
the 30-minute typical time that is inherent to the OT re-evaluation 
code.
    Several commenters reminded us that the work RVU recommendations 
forwarded to us were not considered work neutral because the HCPAC 
accepted the PT and OT specialty societies' beliefs as compelling 
evidence that the practice of PT and OT have each significantly changed 
over the past two decades.
    Some commenters reasoned that we should accept the HCPAC-
recommended work RVUs for these codes, in part, because the PT and OT 
specialty societies completed the RUC-HCPAC defined survey process, 
including time and intensity of the services.
    Comments from the HCPAC, the PT and OT specialty societies, and a 
few other stakeholders provided the rationale that the practice of PT 
and OT has significantly changed since 1997, including the work of 
physical therapists and occupational therapists. Some of their 
rationale included: (a) advances in technology has created 
opportunities for additional types of treatment approaches; and, (b) 
the work RVUs for the PT and OT re-evaluation codes have not kept pace 
with the relativity of increases in work RVUs of comparable E/M codes 
that have historically been used as comparison: In 1997 the 0.60 work 
RVUs for CPT codes 97002 and 97004 was 90 percent of that for CPT code 
99213; today, it is just 62 percent. Other rationales included ones 
often cited by commenters requesting increases in RVUs, including 
increased patient acuity and administrative and reporting burdens.
    Response: We appreciate the commenters' remarks and the rationale 
forwarded in response to our request for comments. After a careful 
consideration of the comments, we agree that modification of our 
proposal, to recognize the change in practice since 1997 for the work 
of physical and occupational therapists, is appropriate. Because we 
believe that PT and OT have similar work, though, we are finalizing the 
value of both codes at the same work RVUs by assigning a work RVU of 
0.75--the HCPAC-recommended work RVU for the PT re-evaluation and the 
PT low complexity evaluation.
    We would like to take this opportunity to remind physical and 
occupational therapists about our manual instructions regarding the 
reporting of a both the evaluation and re-evaluation codes (MBPM, 
Chapter 15, section 220). Of note, to be separately payable, the re-
evaluation requires a

[[Page 80337]]

significant change in the patient's condition or functional status that 
was not anticipated in the plan of care. The MBPM full definitions 
follow in Table 22.

                                       Table 22--Full Definitions for MBPM
----------------------------------------------------------------------------------------------------------------
            Therapy service                                             Definition
----------------------------------------------------------------------------------------------------------------
EVALUATION.............................  EVALUATION is a separately payable comprehensive service provided by a
                                          clinician, as defined above, that requires professional skills to make
                                          clinical judgments about conditions for which services are indicated
                                          based on objective measurements and subjective evaluations of patient
                                          performance and functional abilities. Evaluation is warranted for
                                          example, for a new diagnosis or when a condition is treated in a new
                                          setting. These evaluative judgments are essential to development of
                                          the plan of care, including goals and the selection of interventions.
RE-EVALUATION..........................  RE-EVALUATION provides additional objective information not included in
                                          other documentation. Re-evaluation is separately payable and is
                                          periodically indicated during an episode of care when the professional
                                          assessment of a clinician indicates a significant improvement, or
                                          decline, or change in the patient's condition or functional status
                                          that was not anticipated in the plan of care. Although some state
                                          regulations and state practice acts require re-evaluation at specific
                                          times, for Medicare payment, re-evaluations must also meet Medicare
                                          coverage guidelines.
----------------------------------------------------------------------------------------------------------------

    Comment: We received a few comments regarding our PE proposals in 
the CY 2017 proposed rule for the PT and OT evaluation and re-
evaluation codes. In its comments, the PT specialty society, in 
response to our PE proposal, explained, per our request, the use of the 
4 sheets of paper as supply items in the PT evaluation and re-
evaluation codes. The OT specialty society noted that they accepted the 
PE refinements we proposed in the proposed rule.
    Response: We appreciate the comments from both the PT and OT 
specialty societies. We will finalize the PE input changes as proposed 
and include them in the calculation of the final PE RVUs of the PT and 
OT evaluation and re-evaluation codes.
    After considering the comments, in summary, we are finalizing our 
proposals to (a) accept the new CPT codes 97161-97168 for PT and OT 
evaluative procedures and (b) use the PAMA smoothing authority to value 
the PT and OT complexity level evaluations as groups of services rather 
than individually by assigning a work RVU of 1.2 to each complexity 
level. We are modifying our proposal for the valuation of the PT and OT 
re-evaluation codes and are finalizing a work RVU of 0.75 for each 
code. Lastly, we are finalizing the PE inputs as proposed.
iv. Always Therapy Codes
    It is important to note that CMS defines the codes for these 
evaluative services as ``always therapy.'' This means that they always 
represent therapy services regardless of who performs them and always 
require a therapy modifier, GP or GO, to signify that the services are 
furnished under a PT or OT plan of care, respectively. These codes will 
also be subject to the therapy MPPR and to statutory therapy caps.

 Table 23--CPT Long Descriptors for Physical Medicine and Rehabilitation
------------------------------------------------------------------------
                                             CPT long descriptors for
              New CPT code                    physical medicine and
                                                  rehabilitation
------------------------------------------------------------------------
97161..................................  Physical therapy evaluation:
                                          low complexity, requiring
                                          these components:
                                          A history with no
                                          personal factors and/or
                                          comorbidities that impact the
                                          plan of care;
                                          An examination of body
                                          system(s) using standardized
                                          tests and measures addressing
                                          1-2 elements from any of the
                                          following: body structures and
                                          functions, activity
                                          limitations, and/or
                                          participation restrictions;
                                          A clinical
                                          presentation with stable and/
                                          or uncomplicated
                                          characteristics; and
                                          Clinical decision
                                          making of low complexity using
                                          standardized patient
                                          assessment instrument and/or
                                          measurable assessment of
                                          functional outcome.
                                         Typically, 20 minutes are spent
                                          face-to-face with the patient
                                          and/or family.
97162..................................  Physical therapy evaluation:
                                          moderate complexity, requiring
                                          these components:
                                          A history of present
                                          problem with 1-2 personal
                                          factors and/or comorbidities
                                          that impact the plan of care;
                                          An examination of body
                                          systems using standardized
                                          tests and measures in
                                          addressing a total of 3 or
                                          more elements from any of the
                                          following body structures and
                                          functions, activity
                                          limitations, and/or
                                          participation restrictions;
                                          An evolving clinical
                                          presentation with changing
                                          characteristics; and
                                          Clinical decision
                                          making of moderate complexity
                                          using standardized patient
                                          assessment instrument and/or
                                          measurable assessment of
                                          functional outcome.
                                         Typically, 30 minutes are spent
                                          face-to-face with the patient
                                          and/or family.
97163..................................  Physical therapy evaluation:
                                          high complexity, requiring
                                          these components:
                                          A history of present
                                          problem with 3 or more
                                          personal factors and/or
                                          comorbidities that impact the
                                          plan of care;
                                          An examination of body
                                          systems using standardized
                                          tests and measures addressing
                                          a total of 4 or more elements
                                          from any of the following:
                                          body structures and functions,
                                          activity limitations, and/or
                                          participation restrictions;
                                          A clinical
                                          presentation with unstable and
                                          unpredictable characteristics;
                                          and
                                          Clinical decision
                                          making of high complexity
                                          using standardized patient
                                          assessment instrument and/or
                                          measurable assessment of
                                          functional outcome.
                                         Typically, 45 minutes are spent
                                          face-to-face with the patient
                                          and/or family.

[[Page 80338]]

 
97164..................................  Re-evaluation of physical
                                          therapy established plan of
                                          care, requiring these
                                          components:
                                          An examination
                                          including a review of history
                                          and use of standardized tests
                                          and measures is required; and
                                          Revised plan of care
                                          using a standardized patient
                                          assessment instrument and/or
                                          measurable assessment of
                                          functional outcome.
                                         Typically, 20 minutes are spent
                                          face-to-face with the patient
                                          and/or family.
97165..................................  Occupational therapy
                                          evaluation, low complexity,
                                          requiring these components:
                                          An occupational
                                          profile and medical and
                                          therapy history, which
                                          includes a brief history
                                          including review of medical
                                          and/or therapy records
                                          relating to the presenting
                                          problem;
                                          An assessment(s) that
                                          identifies 1-3 performance
                                          deficits (i.e., relating to
                                          physical, cognitive, or
                                          psychosocial skills) that
                                          result in activity limitations
                                          and/or participation
                                          restrictions; and
                                          Clinical decision
                                          making of low complexity,
                                          which includes an analysis of
                                          the occupational profile,
                                          analysis of data from problem-
                                          focused assessment(s), and
                                          consideration of a limited
                                          number of treatment options.
                                          Patient presents with no
                                          comorbidities that affect
                                          occupational performance.
                                          Modification of tasks or
                                          assistance (eg, physical or
                                          verbal) with assessment(s) is
                                          not necessary to enable
                                          completion of evaluation
                                          component.
                                         Typically, 30 minutes are spent
                                          face-to-face with the patient
                                          and/or family.
97166..................................  Occupational therapy
                                          evaluation, moderate
                                          complexity, requiring these
                                          components:
                                          An occupational
                                          profile and medical and
                                          therapy history, which
                                          includes an expanded review of
                                          medical and/or therapy records
                                          and additional review of
                                          physical, cognitive, or
                                          psychosocial history related
                                          to current functional
                                          performance;
                                          An assessment(s) that
                                          identifies 3-5 performance
                                          deficits (i.e., relating to
                                          physical, cognitive, or
                                          psychosocial skills) that
                                          result in activity limitations
                                          and/or participation
                                          restrictions; and
                                          Clinical decision
                                          making of moderate analytic
                                          complexity, which includes an
                                          analysis of the occupational
                                          profile, analysis of data from
                                          detailed assessment(s), and
                                          consideration of several
                                          treatment options. Patient may
                                          present with comorbidities
                                          that affect occupational
                                          performance. Minimal to
                                          moderate modification of tasks
                                          or assistance (eg, physical or
                                          verbal) with assessment(s) is
                                          necessary to enable patient to
                                          complete evaluation component.
                                         Typically, 45 minutes are spent
                                          face-to-face with the patient
                                          and/or family.
97167..................................  Occupational therapy
                                          evaluation, high complexity,
                                          requiring these components:
                                          An occupational
                                          profile and medical and
                                          therapy history, which
                                          includes review of medical and/
                                          or therapy records and
                                          extensive additional review of
                                          physical, cognitive, or
                                          psychosocial history related
                                          to current functional
                                          performance;
                                          An assessment(s) that
                                          identify 5 or more performance
                                          deficits (i.e., relating to
                                          physical, cognitive, or
                                          psychosocial skills) that
                                          result in activity limitations
                                          and/or participation
                                          restrictions; and
                                          A clinical decision-
                                          making is of high analytic
                                          complexity, which includes an
                                          analysis of the patient
                                          profile, analysis of data from
                                          comprehensive assessment(s),
                                          and consideration of multiple
                                          treatment options. Patient
                                          presents with comorbidities
                                          that affect occupational
                                          performance. Significant
                                          modification of tasks or
                                          assistance (eg, physical or
                                          verbal) with assessment(s) is
                                          necessary to enable patient to
                                          complete evaluation component.
                                         Typically, 60 minutes are spent
                                          face-to-face with the patient
                                          and/or family.
97168..................................  Re-evaluation of occupational
                                          therapy established plan of
                                          care, requiring these
                                          components:
                                          An assessment of
                                          changes in patient functional
                                          or medical status with revised
                                          plan of care;
                                          An update to the
                                          initial occupational profile
                                          to reflect changes in
                                          condition or environment that
                                          affect future interventions
                                          and/or goals; and
                                          A revised plan of
                                          care. A formal reevaluation is
                                          performed when there is a
                                          documented change in
                                          functional status or a
                                          significant change to the plan
                                          of care is required.
                                         Typically, 30 minutes are spent
                                          face-to-face with the patient
                                          and/or family.
------------------------------------------------------------------------

v. Potentially Misvalued Therapy Codes
    Since 2010, in addition to the codes for evaluative services, CMS 
has periodically added codes that represent therapy services to the 
list of potentially misvalued codes. The current list of ten therapy 
codes was based on the statutory category ``codes that account for the 
majority of spending under the physician fee schedule,'' as specified 
in section 1848(c)(2)(K)(ii)(VII) of the Act. We understand that the 
therapy specialty organizations have pursued the development of coding 
changes through the CPT process for these modality and procedure 
services. While we understand that, in some cases, it may take several 
years to develop appropriate coding revisions, we are, in the meantime, 
seeking information regarding appropriate valuation for the existing 
codes. See Table 24.
    Comment: We received multiple comments on our nomination of the ten 
therapy codes to the potentially misvalued code list. The PT and OT 
specialty societies each expressed concern that we issued the 
potentially misvalued code list knowing that they are currently working 
with the AMA

[[Page 80339]]

Relativity Assessment Workgroup (RAW) to survey and submit CPT changes 
to certain intervention codes in the PM&R family, including some codes 
on the misvalued code list. Nonetheless, the PT specialty society told 
us that it will work with the RUC (as the appropriate venue) this fall 
to survey and value the codes; but asked to meet with us in early 2017 
to discuss their progress. The OT specialty society stated that it has 
already begun work with AMA to expedite valuation surveys for relevant 
codes, but also noted its intent to resume work with the RAW to replace 
some of the codes on the misvalued code list, including CPT code 97535, 
as soon as the misvalued code survey process is complete. In addition, 
the OT specialty society noted its belief that CMS staff attendance at 
the RAW condoned their timeline for proceeding with various PM&R code 
revisions.
    A few commenters believe the codes on the potentially misvalued 
code list are already valued correctly as the PE inputs for many 
therapy codes, including those defined by 15-minute intervals, have 
already been adjusted by the PEAC/RUC/HCPAC to account for efficiencies 
when billed with other therapy codes. Several commenters cautioned that 
any review must also consider that all of these codes are already 
subject to a 50 percent MPPR reduction. One commenter believes the work 
of CPT code 97140 is undervalued compared to other codes since it 
requires the more skilled therapist using manual techniques to touch 
the patient.
    Response: We will include a valuation discussion during CY 2018 
rulemaking of those codes for which we receive RUC recommendations by/
at its February 2017 meeting.

      Table 24--Potentially Misvalued Codes Identified Through High
                     Expenditure by Specialty Screen
------------------------------------------------------------------------
            HCPCS code                        Short descriptor
------------------------------------------------------------------------
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.
------------------------------------------------------------------------

(57) Valuation of Services Where Moderate Sedation is an Inherent Part 
of the Procedure and Valuation of Moderate Sedation Services (CPT Codes 
99151, 99152, 99153, 99155, 99156, and 99157; and HCPCS Code G0500)
    In the CY 2015 PFS proposed rule (79 FR 40349), we noted that it 
appeared that practice patterns for endoscopic procedures were 
changing. Anesthesia services are increasingly being separately 
reported for endoscopic procedures, meaning that resource costs 
associated with sedation were no longer incurred by the practitioner 
reporting the procedure. Subsequently, in the CY 2016 PFS proposed rule 
(80 FR 41707), we solicited public comment and recommendations on 
approaches to address the appropriate valuation of moderate sedation 
related to the approximately 400 diagnostic and therapeutic procedures 
for which the CPT Editorial Panel has determined that moderate sedation 
is an inherent part of furnishing the service. The CPT Editorial Panel 
created separate codes for reporting moderate sedation services (see 
Table 25).

            Table 25--Moderate Sedation Codes and Descriptors
------------------------------------------------------------------------
           CPT/HCPCS code                         Descriptor
------------------------------------------------------------------------
99151..............................  Moderate sedation services provided
                                      by the same physician or other
                                      qualified health care professional
                                      performing the diagnostic or
                                      therapeutic service that the
                                      sedation supports, requiring the
                                      presence of an independent trained
                                      observer to assist in the
                                      monitoring of the patient's level
                                      of consciousness and physiological
                                      status; initial 15 minutes of
                                      intra-service time, patient
                                      younger than 5 years of age.
99152..............................  Moderate sedation services provided
                                      by the same physician or other
                                      qualified health care professional
                                      performing the diagnostic or
                                      therapeutic service that the
                                      sedation supports, requiring the
                                      presence of an independent trained
                                      observer to assist in the
                                      monitoring of the patient's level
                                      of consciousness and physiological
                                      status; initial 15 minutes of
                                      intra-service time, patient age 5
                                      years or older.
99153..............................  Moderate sedation services provided
                                      by the same physician or other
                                      qualified health care professional
                                      performing the diagnostic or
                                      therapeutic service that the
                                      sedation supports, requiring the
                                      presence of an independent trained
                                      observer to assist in the
                                      monitoring of the patient's level
                                      of consciousness and physiological
                                      status; each additional 15 minutes
                                      of intra-service time (List
                                      separately in addition to code for
                                      primary service).
99155..............................  Moderate sedation services provided
                                      by a physician or other qualified
                                      health care professional other
                                      than the physician or other
                                      qualified health care professional
                                      performing the diagnostic or
                                      therapeutic service that the
                                      sedation supports; initial 15
                                      minutes of intra-service time,
                                      patient younger than 5 years of
                                      age.
99156..............................  Moderate sedation services provided
                                      by a physician or other qualified
                                      health care professional other
                                      than the physician or other
                                      qualified health care professional
                                      performing the diagnostic or
                                      therapeutic service that the
                                      sedation supports; initial 15
                                      minutes of intra-service time,
                                      patient age 5 years or older.
99157..............................  Moderate sedation services provided
                                      by a physician or other qualified
                                      health care professional other
                                      than the physician or other
                                      qualified health care professional
                                      performing the diagnostic or
                                      therapeutic service that the
                                      sedation supports; each additional
                                      15 minutes intra-service time
                                      (List separately in addition to
                                      code for primary service).
------------------------------------------------------------------------

    For the newly created moderate sedation CPT codes, we proposed to 
use the RUC-recommended work RVUs for CPT codes 99151, 99152, 99155, 
and 99157. We stated in the CY 2017 proposed rule that CPT codes 99151 
and 99152 make a distinction between moderate sedation services 
furnished to patients younger than 5 years of age and patients 5 years 
or older, with CPT codes 99155 and 99156 making a similar distinction. 
The RUC recommendations included a work RVU increment of 0.25 between 
CPT codes 99151 and 99152. For CPT code 99156, we proposed a work RVU 
of 1.65 to maintain the 0.25 increment relative to CPT code 99155 (a 
RUC-recommended work RVU of 1.90) and maintain relativity among the CPT 
codes in this family. We proposed to use the RUC-recommended direct PE 
inputs for all six codes.
    We stated in the CY 2017 proposed rule that when moderate sedation 
is reported for Medicare beneficiaries, we expect that it would most 
frequently be reported using the code that describes moderate sedation 
furnished by the same person who also performs the primary procedure 
for patients 5 years

[[Page 80340]]

of age or older. Under the new coding structure, these moderate 
sedation services would be reported using CPT code 99152, for which we 
proposed a work RVU of 0.25, consistent with the RUC recommendations 
for this code. Stakeholders presented information that illustrated that 
the specialty group survey data regarding the work involved in 
furnishing moderate sedation described by CPT code 99152 showed a 
significant bimodal distribution between procedural services furnished 
by gastroenterologists (GI) and those services furnished by other 
specialties. The GI societies' survey data reported a median valuation 
of 0.10 work RVUs for moderate sedation furnished by the same person 
furnishing the base procedure. Given the significant volume of moderate 
sedation furnished by GI practitioners and the significant difference 
in RVUs reported in the survey data, we proposed to make payment using 
a GI endoscopy-specific moderate sedation code (HCPCS code G0500) that 
would be used in lieu of the new CPT moderate sedation coding for use 
with other services.
     G0500: moderate sedation services provided by the same 
physician or other qualified health care professional performing a 
gastrointestinal endoscopic service (excluding biliary procedures) that 
sedation supports, requiring the presence of an independent trained 
observer to assist in the monitoring of the patient's level of 
consciousness and physiological status; initial 15 minutes of intra-
service time; patient age 5 years or older.
    We proposed to value HCPCS code G0500 at 0.10 work RVUs based on 
the median survey result for GI respondents in the survey data. We 
proposed that when moderate sedation services are furnished by the same 
practitioner reporting the GI endoscopy procedure, practitioners would 
report the sedation services using HCPCS code G0500 instead of CPT code 
99152. In all other cases, we proposed that practitioners would report 
moderate sedation using one of the new moderate sedation CPT codes 
consistent with CPT guidance. This would include the full range of 
codes for those furnishing moderate sedation with the remaining (non-GI 
endoscopy) base procedures, as well as for the other circumstances 
during which moderate sedation is furnished along with a GI endoscopy 
(for example, to a patient under 5 years of age or for a biliary 
procedure, the endoscopist furnishing moderate sedation should not use 
HCPCS code G0500, but instead use the appropriate CPT code.
    In addition to proposing work RVUs for the new codes used to 
separately report moderate sedation, we stated in the proposed rule 
that the RUC provided recommendations that valued the procedural 
services without moderate sedation. However, the RUC recommended 
removing fewer RVUs from the procedures than it recommended for valuing 
the moderate sedation services that were removed from the procedure 
codes. In other words, the RUC recommended that overall payments for 
these procedures should be increased now that practitioners would be 
required to report the sedation services that were previously included 
as inherent parts of the procedures. We stated in the proposed rule 
that we believe that if we were to use the RUC recommendations for 
revaluation of the procedural services without refinement, the RVUs 
currently attributable to the redundant payment for sedation services 
when anesthesia is separately reported would be used exclusively to 
increase overall payment for these services. We refer readers to 
section II.D.5. of this final rule, which includes a more extensive 
discussion of our general principle that overall resource costs for 
procedures that include moderate sedation do not inherently change 
based solely on changes in coding.
    To account for the separate billing of moderate sedation services, 
we proposed to maintain current values for the procedure codes less the 
work RVUs associated with the most frequently reported corresponding 
moderate sedation code so that practitioners furnishing the moderate 
sedation services previously considered to be inherent in the procedure 
would have no change in overall work RVUs. Since we proposed 0.10 work 
RVUs for moderate sedation for the GI endoscopy procedures, we proposed 
a corresponding 0.10 reduction in work RVUs for these same procedures. 
For all other Appendix G procedures that currently include moderate 
sedation as an inherent part of the procedure, we proposed to remove 
0.25 work RVUs from the current values.
    We received 22 comments from medical professionals, ambulatory 
surgical centers (ASCs), manufacturers, and professional medical 
specialty societies representing radiation oncology, brachytherapy, 
colon and rectal surgeons, certified registered nurse anesthetists 
(CRNAs), pediatrics, cardiology, thorasic surgery, general surgery, 
gastroenterology, emergency medicine, interventional radiology, and 
vascular surgery. Commenters were generally supportive of CMS' 
proposals related to valuation of the new moderate sedation codes. A 
few commenters disagreed with our proposed refinements for one of the 
new moderate sedation CPT codes. While most commenters were supportive 
of CMS' proposal to use a methodology to revalue the procedural 
services without moderate sedation, some commenters suggested that we 
should revalue certain procedures differently (for example, apply a 
lower work RVU reduction or make no reduction). A few commenters were 
opposed to separate reporting of moderate sedation and suggested 
alternatives for CMS to consider. Our responses to commenters' specific 
issues are included below.
    Comment: Many commenters expressed support for CMS' proposal to 
accept the RUC's recommendations for new moderate sedation CPT codes 
99151, 99152, 99153, 99155, and 99157. Several commenters, including 
the RUC and medical specialty societies, disagreed with CMS' proposal 
to value CPT code 99156 at 1.65 work RVUs. Commenters requested that 
CMS finalize the RUC-recommended work RVU of 1.84 (the 25th percentile 
survey result). Commenters stated that there were clinical differences 
in the typical patients that receive services that would be reported 
using CPT code 99156, disagreeing with CMS' proposal to reduce the work 
RVU for CPT code 99156 to maintain relativity among the code pairs in 
this family. Commenters suggested that CPT code 99156 would be used to 
report moderate sedation services that are currently reported using CPT 
code 99149. Commenters stated that CPT code 99149 was typically 
performed in the emergency department (approximately 58 percent of the 
time), indicating that the typical patient is either acutely ill or 
injured, and that moderate sedation services are typically performed 
without support staff, which commenters suggested further justified a 
work RVU of 1.84 for CPT code 99156.
    Response: The code descriptors for each of the new moderate 
sedation CPT codes make distinctions between the ages of the patients 
and the clinical staff involved in furnishing the moderate sedation 
services. The typical patient vignettes used in the specialty 
societies' surveys did not indicate clinical differences between 
patients receiving moderate sedation services reported using CPT code 
99156 compared to services reported with CPT code 99155. Additionally, 
the typical patient vignettes for CPT codes 99151 and 99152 did not 
indicate clinical differences in the patients. We continue to believe 
that the work RVU increment of 0.25 should be maintained between CPT 
codes 99155 and 99156 since these

[[Page 80341]]

codes have the same younger than age 5/older than age 5 dynamic as 
described by CPT codes 99151 and 99152.
    Therefore, for CY 2017, we are finalizing work RVUs for the 
moderate sedation codes as follows:
     Work RVU of 0.50 for CPT code 99151;
     Work RVU of 0.25 for CPT code 99152;
     Work RVU of 1.90 for CPT code 99155;
     Work RVU of 1.65 for CPT code 99156; and
     Work RVU of 1.25 for CPT code 99157.
    We note that CPT code 99153 is a PE-only code and we are finalizing 
the proposed PE inputs for CPT code 99153, as well as finalizing the 
proposed PE inputs for all other codes in this family without 
modification.
    Comment: While many commenters supported use of a methodological 
approach to revaluing Appendix G procedural services, some commenters 
disagreed with CMS' proposed refinements to the RUC's recommended 
methodology. Commenters suggested that the RUC's approach was 
consistent with how the services were originally valued and was budget 
neutral within these services. The RUC, along with several commenters 
representing specialty medical societies, requested that CMS use the 
same RUC-approved two-tier methodology for removing work RVUs 
associated with the work of moderate sedation from Appendix G services 
based on whether the code was assigned to one of two preservice time 
packages used by the RUC in developing recommendations. Using the same 
two-tier methodology, the RUC suggested removal of 0.10 work RVUs for 
some GI services and 0.19 work RVUs from other GI services, depending 
on the RUC's assignment of pre-service time.
    Response: We understand that some stakeholders would prefer that we 
use the RUC's recommendations so that the RVUs currently attributable 
to the redundant payment for sedation services when anesthesia is 
separately reported would be used exclusively to increase overall 
payment for these services. We also understand that the RUC assumes 
that the amount of pre-service time for particular services may reflect 
a different level of preparation required for sedation services. 
However, we continue to believe that the overall resource costs for the 
procedures including moderate sedation do not inherently change based 
solely on changes in coding, so we do not believe that our assignment 
of overall work RVUs should increase in cases where the moderate 
sedation is performed by the proceduralists, as previously assumed. 
Therefore, we believe that a different amount of work RVUs should be 
removed from the Appendix G services only in cases where the typical 
moderate sedation code also has a different amount of assigned work 
RVUs, such as the case with codes that would be reported with G0500. In 
other words, we believe that there should be a direct relationship, for 
each code, between the work RVUs attributable to moderate sedation, 
regardless of whether it is automatically included in payment for a 
given procedure (at current) or separately reported (as proposed).
    Comment: A few commenters expressed concerns that the proposed 
revaluation methodology would disturb the relativity of many of the 
Appendix G codes, along with the increasing administrative burden by 
requiring separate reporting of the procedural and moderate sedation 
services. Other commenters suggested that CMS consider alternatives 
including only addressing revaluation of Appendix G services where 
moderate sedation is no longer inherent or only those procedural 
services reported with separate anesthesia services the majority of the 
time.
    Response: We appreciate the concerns of commenters regarding both 
the issues of relativity within families of codes, as well as concerns 
regarding administrative burden. However, we believe that it serves 
relativity to maintain the overall work RVUs for each of the services 
when reported with moderate sedation, which would be typical for many 
of these codes. While we understand the value in reducing the number of 
codes required to be reported for payment under the PFS, we also 
believe that it is important that the coding be granular enough to 
allow us to identify which services are furnished to Medicare 
beneficiaries by which practitioners. It is also clear to us that the 
accuracy of the assumption of moderate sedation as inherent for 
particular procedures may change over time, as we have seen reflected 
in the claims data. We do not believe that a shifting set of services 
where moderate sedation values are alternatively included or not 
included in the valuation of particular codes based on annual analysis 
of claims data would be likely to be administratively easier for 
practitioners.
    Comment: A few commenters requested that CMS not finalize its 
proposal to reduce the work RVUs for certain procedures. Some 
commenters indicated that certain codes identified in Appendix G were 
valued before Appendix G was established, or the work of moderate 
sedation was not included in the valuation of certain procedures.
    Response: We appreciate the commenters' feedback regarding our 
proposals. We remind stakeholders that the potentially misvalued code 
process is intended to improve the accuracy of the RVUs assigned to 
particular codes. We welcome feedback from interested individuals, 
stakeholders, and specialty societies regarding the valuation of 
specific codes for consideration in future rulemaking.
    Comment: A few commenters stated that CMS did not provide a 
rationale to support that moderate sedation furnished with GI endoscopy 
services required less work than moderate sedation furnished with other 
Appendix G procedures.
    Response: Our proposal was based on the GI societies' survey data 
included in the RUC recommendations that reported a median valuation of 
0.10 work RVUs for moderate sedation furnished by the same person 
furnishing the base procedure.
    Comment: A few commenters suggested that creation of HCPCS code 
G0500 would cause confusion among practitioners since the new CPT codes 
developed to report moderate sedation do not differentiate between GI 
and non-GI procedures. One commenter stated that HCPCS code G0500 is 
time based, and therefore, to report the code, at least 50 percent of 
the time (7.5 minutes) is required, but the GI subset of data that CMS 
accepted to create the HCPCS code G0500 indicates an intraservice time 
of 5 minutes. The commenter went on to state that it would appear that 
a majority of the GI endoscopists would never be able to report HCPCS 
code G0500.
    Response: We expect that practitioners will report the appropriate 
CPT or HCPCS code that most accurately describes the services performed 
during a patient encounter, including those services performed 
concurrently and in support of a procedural service consistent with CPT 
guidance. We note that the commenter refers to the time for moderate 
sedation in the survey data, while the time thresholds for the moderate 
sedation codes are intended to match the intraservice time of the 
procedure itself. We reviewed the intraservice time assumptions for the 
procedure codes, and only one includes an intraservice time as low as 
7.5 minutes and none lower. Table 26 identifies the GI endoscopic 
services for which HCPCS code G0500 will be used to report moderate 
sedation services (available in the ``downloads'' section of the PFS

[[Page 80342]]

Web site at http://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html).
    Comment: Several commenters disagreed with CMS' proposal to revalue 
Appendix G esophageal dilation, biliary endoscopy, and ERCP procedures 
minus 0.25 work RVUs instead of minus 0.10 work RVUs, similar to other 
endoscopy services identified in Appendix G. Commenters requested that 
CMS only reduce these procedural services with a 0.10 work RVU 
reduction, and allow reporting of moderate sedation using HCPCS code 
G0500, similar to other endoscopy procedures identified in Appendix G.
    Response: While we continue to believe that the moderate sedation 
work for Appendix G esophageal dilation, biliary endoscopy, and ERCP 
procedures is more extensive than for other endoscopy procedures 
identified in Appendix G, for CY 2017, after considering the comments, 
we are finalizing a revaluation of certain esophageal dilation, biliary 
endoscopy, and ERCP procedures minus 0.10 work RVUs instead of the 0.25 
work RVU reduction as proposed (see Table 26 for additional 
information). We will continue to monitor claims data related to 
separately billed anesthesia services performed in conjunction with 
these procedures to inform future rulemaking related to the valuation 
of these codes. We are also modifying the code descriptor for HCPCS 
code G0500 to reflect these changes. Therefore, we are finalizing the 
descriptor for HCPCS code G0500 as:
     G0500: Moderate sedation services provided by the same 
physician or other qualified health care professional performing a 
gastrointestinal endoscopic service that sedation supports, requiring 
the presence of an independent trained observer to assist in the 
monitoring of the patient's level of consciousness and physiological 
status; initial 15 minutes of intra-service time; patient age 5 years 
or older. (additional time may be reported with 99153, as appropriate).
    Comment: Some commenters requested that CMS provide practitioners 
and providers with instructions on use of the newly created moderate 
sedation codes, allow for additional time to implement the coding 
changes, and provide MACs appropriate claims processing instructions 
specific to these codes.
    Response: We plan to issue appropriate claims processing 
instructions to the local MACs. We do not believe that an 
implementation delay is necessary since the new CPT and HCPCS codes 
will be effective January 1, 2017 and available for use by 
practitioners and providers at that time.
    In summary, after consideration of the comments, we are finalizing 
our proposed modifications to maintain the current values for the 
procedure codes less the work RVUs associated with the most frequently 
reported corresponding moderate sedation code. Practitioners furnishing 
the moderate sedation services previously considered to be inherent in 
the procedure will have no change in overall work RVUs. Since we are 
finalizing a work RVU of 0.10 (HCPCS code G0500) for moderate sedation 
for the GI endoscopy procedures, we are finalizing a corresponding 0.10 
reduction in work RVUs for the corresponding procedural services. For 
all other Appendix G procedures that currently include moderate 
sedation as an inherent part of the procedure, we are finalizing a 0.25 
work RVU reduction from the current values.
    Table 26 lists the CY 2016 work RVUs for each applicable service 
and our proposed and final CY 2017 refined work RVUs using the 
finalized revaluation methodology described above. Additionally, the 
table identifies the GI endoscopic services for which HCPCS code G0500 
will be used to report moderate sedation services (available in the 
``downloads'' section of the PFS Web site at http://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html).

                            Table 26--Valuations for Services Minus Moderate Sedation
----------------------------------------------------------------------------------------------------------------
                                                          CY 2017                       Use HCPCS code G0500 to
              CPT code                 CY 2016 work    proposed work   CY 2017 final   report moderate sedation
                                            RVU             RVU          work RVU                (Y/N)
----------------------------------------------------------------------------------------------------------------
10030...............................            3.00            2.75            2.75  N
19298...............................            6.00            5.75            5.75  N
20982...............................            7.27            7.02            7.02  N
20983...............................            7.13            6.88            6.88  N
22510...............................            8.15            7.90            7.90  N
22511...............................            7.58            7.33            7.33  N
22512...............................            4.00            4.00            4.00  N
22513...............................            8.90            8.65            8.65  N
22514...............................            8.24            7.99            7.99  N
22515...............................            4.00            4.00            4.00  N
22526...............................            6.10            5.85            5.85  N
22527...............................            3.03            3.03            3.03  N
31615...............................            2.09            1.84            1.84  N
31622...............................            2.78            2.53            2.53  N
31623...............................            2.88            2.63            2.63  N
31624...............................            2.88            2.63            2.63  N
31625...............................            3.36            3.11            3.11  N
31626...............................            4.16            3.91            3.91  N
31627...............................            2.00            2.00            2.00  N
31628...............................            3.80            3.55            3.55  N
31629...............................            4.00            3.75            3.75  N
31632...............................            1.03            1.03            1.03  N
31633...............................            1.32            1.32            1.32  N
31634...............................            4.00            3.75            3.75  N
31635...............................            3.67            3.42            3.42  N
31645...............................            3.16            2.91            2.91  N

[[Page 80343]]

 
31646...............................            2.72            2.47            2.47  N
31647...............................            4.40            4.15            4.15  N
31648...............................            4.20            3.95            3.95  N
31649...............................            1.44            1.44            1.44  N
31651...............................            1.58            1.58            1.58  N
31652...............................            4.71            4.46            4.46  N
31653...............................            5.21            4.96            4.96  N
31654...............................            1.40            1.40            1.40  N
31660...............................            4.25            4.00            4.00  N
31661...............................            4.50            4.25            4.25  N
31725...............................            1.96            1.71            1.71  N
32405...............................            1.93            1.68            1.68  N
32550...............................            4.17            3.92            3.92  N
32551...............................            3.29            3.04            3.04  N
32553...............................            3.80            3.55            3.55  N
33010...............................            2.24            1.99            1.99  N
33011...............................            2.24            1.99            1.99  N
33206...............................            7.39            7.14            7.14  N
33207...............................            8.05            7.80            7.80  N
33208...............................            8.77            8.52            8.52  N
33210...............................            3.30            3.05            3.05  N
33211...............................            3.39            3.14            3.14  N
33212...............................            5.26            5.01            5.01  N
33213...............................            5.53            5.28            5.28  N
33214...............................            7.84            7.59            7.59  N
33216...............................            5.87            5.62            5.62  N
33217...............................            5.84            5.59            5.59  N
33218...............................            6.07            5.82            5.82  N
33220...............................            6.15            5.90            5.90  N
33221...............................            5.80            5.55            5.55  N
33222...............................            5.10            4.85            4.85  N
33223...............................            6.55            6.30            6.30  N
33227...............................            5.50            5.25            5.25  N
33228...............................            5.77            5.52            5.52  N
33229...............................            6.04            5.79            5.79  N
33230...............................            6.32            6.07            6.07  N
33231...............................            6.59            6.34            6.34  N
33233...............................            3.39            3.14            3.14  N
33234...............................            7.91            7.66            7.66  N
33235...............................           10.15            9.90            9.90  N
33240...............................            6.05            5.80            5.80  N
33241...............................            3.29            3.04            3.04  N
33244...............................           13.99           13.74           13.74  N
33249...............................           15.17           14.92           14.92  N
33262...............................            6.06            5.81            5.81  N
33263...............................            6.33            6.08            6.08  N
33264...............................            6.60            6.35            6.35  N
33282...............................            3.50            3.25            3.25  N
33284...............................            3.00            2.75            2.75  N
33990...............................            8.15            7.90            7.90  N
33991...............................           11.88           11.63           11.63  N
33992...............................            4.00            3.75            3.75  N
33993...............................            3.51            3.26            3.26  N
35471...............................           10.05            9.80            9.80  N
35472...............................            6.90            6.65            6.65  N
35475...............................            6.60            6.35            6.35  N
35476...............................            5.10            4.85            4.85  N
36010...............................            2.43            2.18            2.18  N
36140...............................            2.01            1.76            1.76  N
36147...............................            3.72            3.47            3.47  N
36148...............................            1.00            1.00            1.00  N
36200...............................            3.02            2.77            2.77  N
36221...............................            4.17            3.92            3.92  N
36222...............................            5.53            5.28            5.28  N
36223...............................            6.00            5.75            5.75  N
36224...............................            6.50            6.25            6.25  N
36225...............................            6.00            5.75            5.75  N
36226...............................            6.50            6.25            6.25  N

[[Page 80344]]

 
36227...............................            2.09            2.09            2.09  N
36228...............................            4.25            4.25            4.25  N
36245...............................            4.90            4.65            4.65  N
36246...............................            5.27            5.02            5.02  N
36247...............................            6.29            6.04            6.04  N
36248...............................            1.01            1.01            1.01  N
36251...............................            5.35            5.10            5.10  N
36252...............................            6.99            6.74            6.74  N
36253...............................            7.55            7.30            7.30  N
36254...............................            8.15            7.90            7.90  N
36481...............................            6.98            6.73            6.73  N
36555...............................            2.68            2.43            2.43  N
36557...............................            5.14            4.89            4.89  N
36558...............................            4.84            4.59            4.59  N
36560...............................            6.29            6.04            6.04  N
36561...............................            6.04            5.79            5.79  N
36563...............................            6.24            5.99            5.99  N
36565...............................            6.04            5.79            5.79  N
36566...............................            6.54            6.29            6.29  N
36568...............................            1.92            1.67            1.67  N
36570...............................            5.36            5.11            5.11  N
36571...............................            5.34            5.09            5.09  N
36576...............................            3.24            2.99            2.99  N
36578...............................            3.54            3.29            3.29  N
36581...............................            3.48            3.23            3.23  N
36582...............................            5.24            4.99            4.99  N
36583...............................            5.29            5.04            5.04  N
36585...............................            4.84            4.59            4.59  N
36590...............................            3.35            3.10            3.10  N
36870...............................            5.20            4.95            4.95  N
37183...............................            7.99            7.74            7.74  N
37184...............................            8.66            8.41            8.41  N
37185...............................            3.28            3.28            3.28  N
37186...............................            4.92            4.92            4.92  N
37187...............................            8.03            7.78            7.78  N
37188...............................            5.71            5.46            5.46  N
37191...............................            4.71            4.46            4.46  N
37192...............................            7.35            7.10            7.10  N
37193...............................            7.35            7.10            7.10  N
37197...............................            6.29            6.04            6.04  N
37211...............................            8.00            7.75            7.75  N
37212...............................            7.06            6.81            6.81  N
37213...............................            5.00            4.75            4.75  N
37214...............................            2.74            2.49            2.49  N
37215...............................           18.00           17.75           17.75  N
37216...............................            0.00            0.00            0.00  N
37218...............................           15.00           14.75           14.75  N
37220...............................            8.15            7.90            7.90  N
37221...............................           10.00            9.75            9.75  N
37222...............................            3.73            3.73            3.73  N
37223...............................            4.25            4.25            4.25  N
37224...............................            9.00            8.75            8.75  N
37225...............................           12.00           11.75           11.75  N
37226...............................           10.49           10.24           10.24  N
37227...............................           14.50           14.25           14.25  N
37228...............................           11.00           10.75           10.75  N
37229...............................           14.05           13.80           13.80  N
37230...............................           13.80           13.55           13.55  N
37231...............................           15.00           14.75           14.75  N
37232...............................            4.00            4.00            4.00  N
37233...............................            6.50            6.50            6.50  N
37234...............................            5.50            5.50            5.50  N
37235...............................            7.80            7.80            7.80  N
37236...............................            9.00            8.75            8.75  N
37237...............................            4.25            4.25            4.25  N
37238...............................            6.29            6.04            6.04  N
37239...............................            2.97            2.97            2.97  N
37241...............................            9.00            8.75            8.75  N

[[Page 80345]]

 
37242...............................           10.05            9.80            9.80  N
37243...............................           11.99           11.74           11.74  N
37244...............................           14.00           13.75           13.75  N
37252...............................            1.80            1.80            1.80  N
37253...............................            1.44            1.44            1.44  N
43200...............................            1.52            1.42            1.42  Y
43201...............................            1.82            1.72            1.72  Y
43202...............................            1.82            1.72            1.72  Y
43204...............................            2.43            2.33            2.33  Y
43205...............................            2.54            2.44            2.44  Y
43206...............................            2.39            2.29            2.29  Y
43211...............................            4.30            4.20            4.20  Y
43212...............................            3.50            3.40            3.40  Y
43213...............................            4.73            4.63            4.63  Y
43214...............................            3.50            3.40            3.40  Y
43215...............................            2.54            2.44            2.44  Y
43216...............................            2.40            2.30            2.30  Y
43217...............................            2.90            2.80            2.80  Y
43220...............................            2.10            2.00            2.00  Y
43226...............................            2.34            2.24            2.24  Y
43227...............................            2.99            2.89            2.89  Y
43229...............................            3.59            3.49            3.49  Y
43231...............................            2.90            2.80            2.80  Y
43232...............................            3.69            3.59            3.59  Y
43233...............................            4.17            4.07            4.07  Y
43235...............................            2.19            2.09            2.09  Y
43236...............................            2.49            2.39            2.39  Y
43237...............................            3.57            3.47            3.47  Y
43238...............................            4.26            4.16            4.16  Y
43239...............................            2.49            2.39            2.39  Y
43240...............................            7.25            7.15            7.15  Y
43241...............................            2.59            2.49            2.49  Y
43242...............................            4.83            4.73            4.73  Y
43243...............................            4.37            4.27            4.27  Y
43244...............................            4.50            4.40            4.40  Y
43245...............................            3.18            3.08            3.08  Y
43246...............................            3.66            3.56            3.56  Y
43247...............................            3.21            3.11            3.11  Y
43248...............................            3.01            2.91            2.91  Y
43249...............................            2.77            2.67            2.67  Y
43250...............................            3.07            2.97            2.97  Y
43251...............................            3.57            3.47            3.47  Y
43252...............................            3.06            2.96            2.96  Y
43253...............................            4.83            4.73            4.73  Y
43254...............................            4.97            4.87            4.87  Y
43255...............................            3.66            3.56            3.56  Y
43257...............................            4.25            4.15            4.15  Y
43259...............................            4.14            4.04            4.04  Y
43260...............................            5.95            5.70            5.85  Y
43261...............................            6.25            6.00            6.15  Y
43262...............................            6.60            6.35            6.50  Y
43263...............................            6.60            6.35            6.50  Y
43264...............................            6.73            6.48            6.63  Y
43265...............................            8.03            7.78            7.93  Y
43266...............................            4.17            3.92            3.92  N
43270...............................            4.26            4.01            4.01  N
43273...............................            2.24            2.24            2.24  N
43274...............................            8.58            8.33            8.48  Y
43275...............................            6.96            6.71            6.86  Y
43276...............................            8.94            8.69            8.84  Y
43277...............................            7.00            6.75            6.90  Y
43278...............................            8.02            7.77            7.92  Y
43450...............................            1.38            1.13            1.28  Y
43453...............................            1.51            1.26            1.41  Y
44360...............................            2.59            2.49            2.49  Y
44361...............................            2.87            2.77            2.77  Y
44363...............................            3.49            3.39            3.39  Y
44364...............................            3.73            3.63            3.63  Y

[[Page 80346]]

 
44365...............................            3.31            3.21            3.21  Y
44366...............................            4.40            4.30            4.30  Y
44369...............................            4.51            4.41            4.41  Y
44370...............................            4.79            4.69            4.69  Y
44372...............................            4.40            4.30            4.30  Y
44373...............................            3.49            3.39            3.39  Y
44376...............................            5.25            5.15            5.15  Y
44377...............................            5.52            5.42            5.42  Y
44378...............................            7.12            7.02            7.02  Y
44379...............................            7.46            7.36            7.36  Y
44380...............................            0.97            0.87            0.87  Y
44381...............................            1.48            1.38            1.38  Y
44382...............................            1.27            1.17            1.17  Y
44384...............................            2.95            2.85            2.85  Y
44385...............................            1.30            1.20            1.20  Y
44386...............................            1.60            1.50            1.50  Y
44388...............................            2.82            2.72            2.72  Y
44388-53............................            1.41            1.36            1.36  Y
44389...............................            3.12            3.02            3.02  Y
44390...............................            3.84            3.74            3.74  Y
44391...............................            4.22            4.12            4.12  Y
44392...............................            3.63            3.53            3.53  Y
44394...............................            4.13            4.03            4.03  Y
44401...............................            4.44            4.34            4.34  Y
44402...............................            4.80            4.70            4.70  Y
44403...............................            5.60            5.50            5.50  Y
44404...............................            3.12            3.02            3.02  Y
44405...............................            3.33            3.23            3.23  Y
44406...............................            4.20            4.10            4.10  Y
44407...............................            5.06            4.96            4.96  Y
44408...............................            4.24            4.14            4.14  Y
44500...............................            0.49            0.39            0.39  Y
45303...............................            1.50            1.40            1.40  Y
45305...............................            1.25            1.15            1.15  Y
45307...............................            1.70            1.60            1.60  Y
45308...............................            1.40            1.30            1.30  Y
45309...............................            1.50            1.40            1.40  Y
45315...............................            1.80            1.70            1.70  Y
45317...............................            2.00            1.90            1.90  Y
45320...............................            1.78            1.68            1.68  Y
45321...............................            1.75            1.65            1.65  Y
45327...............................            2.00            1.90            1.90  Y
45332...............................            1.86            1.76            1.76  Y
45333...............................            1.65            1.55            1.55  Y
45334...............................            2.10            2.00            2.00  Y
45335...............................            1.14            1.04            1.04  Y
45337...............................            2.20            2.10            2.10  Y
45338...............................            2.15            2.05            2.05  Y
45340...............................            1.35            1.25            1.25  Y
45341...............................            2.22            2.12            2.12  Y
45342...............................            3.08            2.98            2.98  Y
45346...............................            2.91            2.81            2.81  Y
45347...............................            2.82            2.72            2.72  Y
45349...............................            3.62            3.52            3.52  Y
45350...............................            1.78            1.68            1.68  Y
45378...............................            3.36            3.26            3.26  Y
45378-53............................            1.68            1.63            1.63  Y
45379...............................            4.38            4.28            4.28  Y
45380...............................            3.66            3.56            3.56  Y
45381...............................            3.66            3.56            3.56  Y
45382...............................            4.76            4.66            4.66  Y
45384...............................            4.17            4.07            4.07  Y
45385...............................            4.67            4.57            4.57  Y
45386...............................            3.87            3.77            3.77  Y
45388...............................            4.98            4.88            4.88  Y
45389...............................            5.34            5.24            5.24  Y
45390...............................            6.14            6.04            6.04  Y
45391...............................            4.74            4.64            4.64  Y

[[Page 80347]]

 
45392...............................            5.60            5.50            5.50  Y
45393...............................            4.78            4.68            4.68  Y
45398...............................            4.30            4.20            4.20  Y
47000...............................            1.90            1.65            1.65  N
47382...............................           15.22           14.97           14.97  N
47383...............................            9.13            8.88            8.88  N
47532...............................            4.25            4.25            4.25  N
47533...............................            6.00            5.38            5.38  N
47534...............................            8.03            7.60            7.60  N
47535...............................            4.50            3.95            3.95  N
47536...............................            2.88            2.61            2.61  N
47538...............................            6.60            4.75            4.75  N
47539...............................            9.00            8.75            8.75  N
47540...............................           10.75            9.03            9.03  N
47541...............................            5.61            5.38            6.75  N
47542...............................            2.50            2.85            2.85  N
47543...............................            3.07            3.00            3.00  N
47544...............................            4.29            3.28            3.28  N
49405...............................            4.25            4.00            4.00  N
49406...............................            4.25            4.00            4.00  N
49407...............................            4.50            4.25            4.25  N
49411...............................            3.82            3.57            3.57  N
49418...............................            4.21            3.96            3.96  N
49440...............................            4.18            3.93            3.93  N
49441...............................            4.77            4.52            4.52  N
49442...............................            4.00            3.75            3.75  N
49446...............................            3.31            3.06            3.06  N
50200...............................            2.63            2.38            2.38  N
50382...............................            5.50            5.25            5.25  N
50384...............................            5.00            4.75            4.75  N
50385...............................            4.44            4.19            4.19  N
50386...............................            3.30            3.05            3.05  N
50387...............................            2.00            1.75            1.75  N
50430...............................            3.15            2.90            2.90  N
50432...............................            4.25            4.00            4.00  N
50433...............................            5.30            5.05            5.05  N
50434...............................            4.00            3.75            3.75  N
50592...............................            6.80            6.55            6.55  N
50593...............................            9.13            8.88            8.88  N
50606...............................            3.16            3.16            3.16  N
50693...............................            4.21            3.96            3.96  N
50694...............................            5.50            5.25            5.25  N
50695...............................            7.05            6.80            6.80  N
50705...............................            4.03            4.03            4.03  N
50706...............................            3.80            3.80            3.80  N
57155...............................            5.40            5.15            5.15  N
66720...............................            5.00            4.75            4.75  N
69300...............................            6.69            6.44            6.44  N
77371...............................            0.00            0.00            0.00  N
77600...............................            1.56            1.31            1.31  N
77605...............................            2.09            1.84            1.84  N
77610...............................            1.56            1.31            1.31  N
77615...............................            2.09            1.84            1.84  N
92920...............................           10.10            9.85            9.85  N
92921...............................            0.00            0.00            0.00  N
92924...............................           11.99           11.74           11.74  N
92925...............................            0.00            0.00            0.00  N
92928...............................           11.21           10.96           10.96  N
92929...............................            0.00            0.00            0.00  N
92933...............................           12.54           12.29           12.29  N
92934...............................            0.00            0.00            0.00  N
92937...............................           11.20           10.95           10.95  N
92938...............................            0.00            0.00            0.00  N
92941...............................           12.56           12.31           12.31  N
92943...............................           12.56           12.31           12.31  N
92944...............................            0.00            0.00            0.00  N
92953...............................            0.23            0.01            0.01  N
92960...............................            2.25            2.00            2.00  N

[[Page 80348]]

 
92961...............................            4.59            4.34            4.34  N
92973...............................            3.28            3.28            3.28  N
92974...............................            3.00            3.00            3.00  N
92975...............................            7.24            6.99            6.99  N
92978...............................            0.00            0.00            0.00  N
92979...............................            0.00            0.00            0.00  N
92986...............................           22.85           22.60           22.60  N
92987...............................           23.63           23.38           23.38  N
93312...............................            2.55            2.30            2.30  N
93313...............................            0.51            0.26            0.26  N
93314...............................            2.10            1.85            1.85  N
93315...............................            2.94            2.69            2.69  N
93316...............................            0.85            0.60            0.60  N
93317...............................            2.09            1.84            1.84  N
93318...............................            2.40            2.15            2.15  N
93451...............................            2.72            2.47            2.47  N
93452...............................            4.75            4.50            4.50  N
93453...............................            6.24            5.99            5.99  N
93454...............................            4.79            4.54            4.54  N
93455...............................            5.54            5.29            5.29  N
93456...............................            6.15            5.90            5.90  N
93457...............................            6.89            6.64            6.64  N
93458...............................            5.85            5.60            5.60  N
93459...............................            6.60            6.35            6.35  N
93460...............................            7.35            7.10            7.10  N
93461...............................            8.10            7.85            7.85  N
93462...............................            3.73            3.73            3.73  N
93463...............................            2.00            2.00            2.00  N
93464...............................            1.80            1.80            1.80  N
93505...............................            4.37            4.12            4.12  N
93530...............................            4.22            3.97            3.97  N
93561...............................            0.50            0.25            0.25  N
93562...............................            0.16            0.01            0.01  N
93563...............................            1.11            1.11            1.11  N
93564...............................            1.13            1.13            1.13  N
93565...............................            0.86            0.86            0.86  N
93566...............................            0.86            0.86            0.86  N
93567...............................            0.97            0.97            0.97  N
93568...............................            0.88            0.88            0.88  N
93571...............................            0.00            0.00            0.00  N
93572...............................            0.00            0.00            0.00  N
93582...............................           12.56           12.31           12.31  N
93583...............................           14.00           13.75           13.75  N
93609...............................            0.00            0.00            0.00  N
93613...............................            6.99            6.99            6.99  N
93615...............................            0.99            0.74            0.74  N
93616...............................            1.49            1.24            1.24  N
93618...............................            4.25            4.00            4.00  N
93619...............................            7.31            7.06            7.06  N
93620...............................           11.57           11.32           11.32  N
93621...............................            0.00            0.00            0.00  N
93622...............................            0.00            0.00            0.00  N
93624...............................            4.80            4.55            4.55  N
93640...............................            3.51            3.26            3.26  N
93641...............................            5.92            5.67            5.67  N
93642...............................            4.88            4.63            4.63  N
93644...............................            3.29            3.04            3.04  N
93650...............................           10.49           10.24           10.24  N
93653...............................           15.00           14.75           14.75  N
93654...............................           20.00           19.75           19.75  N
93655...............................            7.50            7.50            7.50  N
93656...............................           20.02           19.77           19.77  N
93657...............................            7.50            7.50            7.50  N
94011...............................            2.00            1.75            1.75  N
94012...............................            3.10            2.85            2.85  N
94013...............................            0.66            0.41            0.41  N
96440...............................            2.37            2.12            2.12  N
G0105...............................            3.36            3.26            3.26  Y

[[Page 80349]]

 
G0105-53............................            1.68            1.63            1.63  Y
G0121...............................            3.36            3.26            3.26  Y
G0121-53............................            1.68            1.63            1.63  Y
G0341...............................            6.98            6.98            6.98  N
----------------------------------------------------------------------------------------------------------------

(58) Prolonged Evaluation and Management Services (CPT Codes 99354, 
99358, and 99359)
    We previously received RUC recommendations for face-to-face and 
non-face-to-face prolonged E/M services. In response to the request for 
public comments in the CY 2016 PFS proposed rule about improving 
payment accuracy for cognitive services, commenters suggested that we 
consider making separate payment for CPT codes 99358 and 99359. As 
reflected in section II.E, we proposed to make separate payment for 
these services.
    We also proposed values for services in this family of codes based 
on the RUC-recommended values, including for CPT code 99354, which 
would increase the current work RVU to 2.33. Likewise, we proposed to 
adopt the RUC-recommended work RVU of 2.10 for CPT code 99358 and 1.00 
for CPT code 99359.
    Comment: One commenter recommended that CMS develop separate 
payment for a modifier and new G-codes that would account for 
additional non-face-to-face time spent on circumstances that fell 
outside that of a typical level-4 patient.
    Response: We appreciate the recommendation and will consider coding 
alternatives in future rulemaking.
    Comment: Many commenters were very supportive of CMS' proposal to 
pay separately for CPT codes 99258 and 99359, and to increase the 
current work RVU for CPT code 99354.
    Response: We thank commenters for their support, and are finalizing 
the values as proposed.
(59) Complex Chronic Care Management Services (CPT Codes 99487 and 
99489)
    We received RUC recommendations for CPT codes 99487 and 99489 
following the October 2012 RUC meeting, however we considered these 
services bundled and did not make separate payment. For CY 2017, we 
proposed to change the procedure status for CPT codes 99487 and 99489 
from B (bundled) to A (active), see II.E, and proposed to adopt the 
RUC-recommended work RVUs of 1.00 for CPT code 99487 and 0.50 for CPT 
code 99489, as well as direct PE inputs consistent with the RUC 
recommendations.
    We received no comments on the valuation of CPT codes 99487 and 
99489; therefore, we are finalizing as proposed.
(60) Prostate Biopsy, Any Method (HCPCS Code G0416)
    The College of American Pathologists and the American Society of 
Cytopathology formed an expert panel to make recommendations at the 
October 2015 RUC meeting to determine an appropriate work RVU for HCPCS 
code G0416, as they believed that the survey results were invalid. The 
panel made several arguments to the RUC in recommending a higher work 
RVU under the RUC's ``compelling evidence'' standard. These arguments 
were: (1) That incorrect assumptions were made in previous valuations; 
(2) the value of HCPCS code G0416 remained constant while the code 
descriptors changed over the years; and (3) the ``anomalous 
relationship'' between HCPCS code G0416 and CPT code 88305 (Level IV--
Surgical pathology, gross and microscopic examination). The expert 
panel recommended a work RVU of 4.00 based on a crosswalk from CPT code 
38240 (Hematopoietic progenitor cell (HPC); allogeneic transplantation 
per donor). The RUC agreed with the recommendation of the expert panel.
    We believed HCPCS code G0416 should not be valued as a direct 
crosswalk from CPT code 38240. Instead, since code G0416 describes 
services that would otherwise be reported using CPT code 88305 we 
believed that G0416 should be valued relative to CPT code 88305. To 
value HCPCS code G0416, we used the intra-service time ratio between 
HCPCS code G0416 and CPT code 88305 to arrive at a work RVU of 3.60. To 
further support this method, we noted that the IWPUT for HCPCS code 
G0416 with a work RVU of 3.60 is the same as CPT code 88305. Using the 
RUC-recommended RVU of 4.00 results in a higher IWPUT, and we did not 
believe there is a difference in work intensity between these codes. 
Therefore for CY 2017, we proposed a work RVU of 3.60 for HCPCS code 
G0416.
    Comment: A few commenters, including the RUC, stated their 
objection to the methodology used in proposing a value for this HCPCS 
code along with the proposed work RVU. The RUC stated its disagreement 
with what it called a formulaic approach of multiplying time by 
intensity to arrive at a value for this code. The RUC, along with other 
commenters, also urged CMS to accept the compelling evidence that G0416 
and 88305 have an anomalous relationship as a pathologist may examine 
30-60 slides when furnishing HCPCS code G0416 whereas only one slide is 
examined with CPT code 88305. The commenters also noted that CMS had 
previously stated its belief that the typical number of specimens 
evaluated for prostate biopsies was between 10 and 12, and therefore, 
would value the typical G0416 at 9.00 RVUs (0.75 x 12), if the number 
of specimens were used rather than a time ratio.
    Response: We continue to believe HCPCS code G0416 should not be 
valued as a direct crosswalk from CPT code 38240. CPT code 38240 
involves the intense monitoring of a patient's reactions to a critical 
infusion of cellular material. This process does not allow the 
physician to leave the patient. We do not believe the time, effort, and 
intensity required of this procedure is similar to a physician 
reviewing slides. While examining slides, it is possible for the 
physician to stop, refer to references, complete other tasks, and 
return to the slides. Thus the service does not have analogous or 
comparable intensity.
    We believe the vignette for CPT code 88305 typically involves, by 
definition, two blocks and resulting slides. Based upon that rationale, 
CMS values each block (and resulting slides) as worth a work RVU of 
0.375. Valuing the RVUs on a per block basis, then a sextant

[[Page 80350]]

(typical 10-12 blocks or slides) would result in 5 times 0.375 to 6 
times 0.375. Therefore, for CY 2017 we are finalizing a work RVU of 
3.60 for HCPCS G0416.
(61) Resource-Intensive Services (HCPCS Code G0501)
    As discussed in section II.E. of this final rule, we proposed to 
establish payment for services furnished to patients with mobility-
related disabilities, through a new add-on G-code, to be billable with 
office/outpatient E/M and TCM codes. Based on our analysis of the 
resources typically involved in furnishing office visits to patients 
with these needs (especially including the typical additional 
practitioner and staff time), we believed that the physician work and 
time for HCPCS code G0501 was most accurately valued through a direct 
crosswalk from CPT code 99212 (Level 2 office or other outpatient visit 
for the evaluation and management of an established patient). 
Therefore, we proposed a work RVU of 0.48 and a physician time of 16 
minutes for HCPCS code G0501. We sought comment on whether these work 
and time values accurately capture the additional physician work 
typically involved in furnishing services to patients with mobility 
impairments.
    We believed that a direct crosswalk to the clinical staff time 
associated with CPT code 99212, which is 27 minutes of LN/LPN/MTA 
(L037D) accurately represented the additional clinical staff time 
required to furnish an outpatient office visit or TCM to a patient with 
a mobility-related disability. We also proposed to include as direct PE 
inputs 27 minutes for a stretcher (EF018) and a high/low table (EF028), 
and 27 minutes for new equipment inputs associated with the following: 
A patient lift system, wheelchair accessible scale, and padded leg 
support positioning system. These items were included in the CY 2017 
proposed direct PE input database. We sought comments on whether these 
inputs are appropriate, and whether any additional inputs are typically 
used in treating patients with mobility impairments.
    Comment: Many commenters supported the proposed valuation of G0501 
and recommend we finalize as proposed, while others had questions or 
concerns about the crosswalk and the inputs.
    Response: As noted in section II.E.6. of this final rule, we are 
not finalizing payment for HCPCS code G0501 for CY 2017. We will 
continue to welcome recommendations from stakeholders on methods for 
improving the payment accuracy of services for individuals with 
disabilities.
    Comment: Several commenters noted that the Americans with 
Disabilities Act (ADA) provides federal tax credits for certain 
physicians to help cover the cost of specialized equipment for patients 
with mobility-related disabilities.
    Response: We remind practitioners that there are existing IRS tax 
credits and deductions to assist business with complying with the ADA. 
More information on these tax credits is available at https://www.ada.gov/taxcred.htm.
(62) Behavioral Health Integration: Psychiatric Collaborative Care 
Model (HCPCS Codes G0502, G0503, and G0504) and General Behavioral 
Health Integration (HCPCS Code G0507)
    For CY 2017, we proposed to establish and make separate Medicare 
payment using four new HCPCS G-codes, G0502 (Initial psychiatric 
collaborative care management, first 70 minutes in the first calendar 
month of behavioral health care manager activities, in consultation 
with a psychiatric consultant, and directed by the treating physician 
or other qualified health care professional), G0503 (Subsequent 
psychiatric collaborative care management, first 60 minutes in a 
subsequent month of behavioral health care manager activities, in 
consultation with a psychiatric consultant, and directed by the 
treating physician or other qualified health care professional), G0504 
(Initial or subsequent psychiatric collaborative care management, each 
additional 30 minutes in a calendar month of behavioral health care 
manager activities, in consultation with a psychiatric consultant, and 
directed by the treating physician or other qualified health care 
professional), and G0507 (Care management services for behavioral 
health conditions, at least 20 minutes of clinical staff time, directed 
by a physician or other qualified health care professional time, per 
calendar month) for collaborative care and care management for 
beneficiaries with behavioral health conditions, as detailed in section 
II.E of this final rule. To value HCPCS codes G0502, G0503, and G0504, 
we proposed to base the portion of the work RVU that accounts for the 
work of the treating physician or other qualified health care 
professional on a direct crosswalk to the proposed work values for the 
complex CCM codes, CPT codes 99487 and 99489. To value the portion of 
the work RVU that accounts for the psychiatric consultant, we estimated 
10 minutes of psychiatric consultant time per patient per month and a 
work RVU of 0.42, based on the per minute work RVUs for the highest 
volume codes typically billed by psychiatrists, since the resource 
costs of the consultant's work is being paid to the primary 
practitioner. Since the behavioral health care manager in the services 
described by HCPCS codes G0502, G0503, and G0504 should have 
specialized training in behavioral health, we proposed a new clinical 
labor type for the behavioral health care manager, L057B, at $0.57 per 
minute, based on the rates for genetic counselors in the direct PE 
input database. We solicited comment on all aspects of these proposed 
valuations.
    Comment: Some commenters stated that the work of the psychiatric 
consultant should be valued at least the same as the primary care 
practitioner. Commenters noted that the crosswalk to CPT code 90836 was 
inaccurate, as the work of the psychiatric consultant would not be 
similar to psychotherapy but instead be similar to E/M services. 
Commenters recommended that CMS value the work of the psychiatric 
consultant through a crosswalk to a level-4 outpatient E/M, such as CPT 
codes 99204 or 99214.
    Response: We thank commenters for their response and for providing 
CMS with additional perspectives on appropriate valuation of the work 
furnished by the psychiatric consultant. We note that for HCPCS codes 
G0502, G0503, and G0504, Medicare is making payment to the billing 
practitioner on the basis that he or she is incurring the costs 
associated with retaining the psychiatric consultant. In general, we 
consider such costs to be appropriately categorized under the PE RVUs, 
regardless of the degree of expertise for that particular contributor. 
Historically these costs have been included in the calculation of PE 
RVUs and incorporated as costs based on a national per minute payment 
rate for that kind of labor instead of varying based on which service 
is furnished. However, we recognize the unique nature of the services 
described by this code, especially with regard to the potential 
inclusion of the work of a physician as PE. We also recognize that the 
work of the psychiatrist under this model of care more closely 
resembles E/M work than that of psychotherapy, although not necessarily 
the work associated with a level-4 office visit. Therefore, for CY 
2017, we are finalizing work RVUs for these services that reflect the 
per minute intensity of E/M services instead of psychotherapy for the 
portion of the overall work RVU attributable to the psychiatric 
consultant.

[[Page 80351]]

    We welcome any information on the best way to account for the work, 
time, and practice expense resource costs associated with two 
physicians when one physician is typically incurring the resource costs 
of another. We are particularly interested in information regarding how 
CoCM might apply for beneficiaries receiving care in an institutional 
or inpatient setting.
    We believe that the work associated with the billing practitioner 
would overall be greater than the work associated with the psychiatric 
consultant. The work of the billing practitioner includes services such 
as broader care management, direction of the care manager, and by 
``incident to'' rules, the general supervision of other staff, while 
the psychiatric consultant primarily conducts review work. Therefore, 
in allocating differential portion of the work RVU to each 
practitioner, we believe the work RVU associated with the billing 
practitioner should be greater than the work RVU associated with the 
psychiatric consultant.
    After considering these comments, we are finalizing total work RVUs 
of 1.70 for G0502, 1.53 for G0503, and 0.82 for G0504. These RVUs 
include 0.52 for the psychiatric consultant based on a crosswalk to the 
work per minute of a level three established patient office visit.
    Comment: One commenter urged CMS to consider the forthcoming RUC 
recommendations.
    Response: We thank the commenter for their suggestion and will 
evaluate the RUC's recommendation according to our established review 
process in future rulemaking.
    Comment: A few commenters requested that CMS increase the facility 
setting PE RVUs, as patients in this setting are more complex, and 
therefore, the care manager would need to be more experienced. The 
extra costs in terms of clinical staff, commenters stated, would offset 
the decrease in other kinds of PE associated with the facility setting.
    Response: The clinical labor costs for PFS are generally included 
in the nonfacility rate but not included in the facility rate under the 
PFS, because applicable payment for the clinical labor costs would be 
made under the appropriate institutional payment system, like the OPPS. 
Historically we have not developed separate work RVUs for the facility 
and the non-facility setting for the same codes. The only cases where 
we have differentiated work between an institutional and a non-
institutional setting are when the HCPCS codes delineate between them, 
for example site specific codes describing E/M services furnished in an 
inpatient hospital setting versus those services furnished in an office 
setting. For this reason, we are not developing separate facility and 
non-facility work RVUs here.
    Comment: With regard to G0503, a few commenters stated that the 
allocation of 60 minutes is inappropriate because a comprehensive 
follow up would take longer than 60 minutes.
    Response: As these are temporary codes designed to facilitate one 
year of separate payment prior to receiving a RUC recommendations 
through CMS' standard process and we continue to believe that 60 
minutes would be typical of the time involved, we will not be making 
adjustments to the time values at this time. We remind commenters that 
PFS direct PE inputs are used for calculation of rates that we believe 
reflect the typical case for a service, and are not intended to be 
instructive to providers as to what is permitted under the code or what 
should be furnished in any particular case. We also wish to remind 
commenters that we have longstanding interest in robust extant data 
sources regarding times, and as these services continue to be furnished 
to Medicare beneficiaries, we would encourage stakeholders to develop 
sets of such data that we could potentially use in valuation, among 
other things.
    Comment: One commenter recommended that CMS pay separately for 
tools, such as multidimensional mental health monitoring tools, to 
assist practitioners in data analysis.
    Response: The CoCM model does not make reference to any specific 
health monitoring tools; therefore, we will not be including those as 
direct PE inputs in our valuation of these services.
    To value HCPCS code G0507, we proposed a work RVU of 0.61 based on 
a direct crosswalk from CPT code 99490 (Chronic care management 
services). We recognize that the services described by CPT code 99490 
are distinct from those furnished under the CoCM and we believe that 
these also vary based on different kinds of BHI care. We note that 
there are relatively few existing codes that describe these kinds of 
services over a calendar month. We also believe that the resources 
associated with CPT code 99490 may vary based on the ways different 
practitioners furnish the service. Until we have more information about 
how the services described by G0507 are typically furnished, we believe 
valuation based on an estimate of the typical resources would be most 
appropriate. To account for the care manager minutes in the direct PE 
inputs for HCPCS code G0507, we proposed to use clinical labor type 
L045C, which is the labor type for social workers/psychologists and has 
a rate of $0.45 per minute.
    Comment: Many commenters stated that 20 minutes of care manager 
time over the course of a month was an inaccurate representation of the 
resource costs incurred when furnishing BHI services, and that a longer 
duration was needed to fully reflect the time and resources associated 
with providing this care. A few commenters stated that CMS should 
create an add-on code for HCPCS code G0507 to account for any 
additional time.
    Response: We proposed HCPCS code G0507 to make separate payment for 
other kinds of BHI and we are concerned that an increased time 
threshold may not be typical across the range of services captured by 
G0507 and may present an additional barrier to appropriate utilization 
for some models of care. We continue to be interested in information 
from stakeholders regarding other models of BHI, including those that 
have longer associated times than are accurately captured by HCPCS code 
G0507.
    Comment: A few commenters recommended that CMS include the same 
clinical staff in HCPCS code G0507 as is included in HCPCS codes G0502, 
G0503, and G0504 because the complexity in care management would likely 
to be consistent across all four codes.
    Response: We agree with commenters, and will finalize 20 minutes of 
behavioral health care manager, L057B, time for HCPCS code G0507.
    After considering these comments, we are finalizing a total work 
RVU of 0.61 for G0507.
(63) Comprehensive Assessment and Care Planning for Patients With 
Cognitive Impairment (HCPCS Code G0505)
    For CY 2017, we proposed to create and pay separately for new HCPCS 
code G0505 (Cognition and functional assessment using standardized 
instruments with development of recorded care plan for the patient with 
cognitive impairment, history face-to-face obtained from patient and/or 
caregiver, in office or other outpatient setting or home or domiciliary 
or rest home), see II.E for further discussion. Based on similarities 
between work intensity and time, we believe that the physician work and 
time for this code would be accurately valued by combining the work 
RVUs from CPT code 99204 (Level 4 office or other outpatient visit for 
the evaluation and

[[Page 80352]]

management of a new patient) and half the work RVUs for HCPCS code 
G0181 (Physician supervision of a patient receiving Medicare-covered 
services furnished by a participating home health agency (patient not 
present) requiring complex and multidisciplinary care modalities 
involving regular physician development and/or revision of care plans, 
review of subsequent reports of patient status, review of laboratory 
and other studies, communication (including telephone calls) with other 
health care professionals involved in the patient's care, integration 
of new information into the medical treatment plan and/or adjustment of 
medical therapy, within a calendar month, 30 minutes or more). 
Therefore, we proposed a work RVU of 3.30.
    For direct PE inputs we proposed 70 total minutes of time for RN/
LPN/MTA (L037D). We believed this was typical based on information from 
several specialty societies representing practitioners who typically 
furnish this service and report, it, when appropriate, using E/M codes. 
We solicited comment on these valuation assumptions and welcomed 
additional information on the work and direct PE associated with 
furnishing this service.
    Comment: One commenter stated that to more accurately reflect the 
reality of the case complexity involved in assessment and care planning 
for patients with cognitive impairment, that the work RVU should be 
based on at least a Level 5 office visit with recognition that the work 
required is likely 1.5 times to two times greater than a Level 5 visit. 
Furthermore, the commenter stated that 120 minutes was a more 
appropriate time value. Many other commenters encouraged CMS to accept 
the RUC-recommended values for this code, presented at the April 2016 
RUC meeting. The AMA RUC submitted the recommendation of a work RVU of 
3.44 as part of its public comment.
    Response: After reviewing values recommended by the RUC in its 
comment, we are persuaded that many elements of its valuation 
accurately capture the resource costs associated with the provision of 
this service. Therefore, we are finalizing the physician work and time 
values in consideration of these comments as recommended. We are 
finalizing a work RVU of 3.44 as recommended by the RUC. We are 
removing 2 minutes of the 6 recommended clinical staff time for the 
task ``Gather and review X-ray, lab, pathology reports and prepare for 
physician review; conduct initial phone call for preliminary assessment 
of cognitive function; identify caregiver and explain assessment'' as 
we believe 4 minutes is a more typical time associated with this task.
(64) Comprehensive Assessment and Care Planning for Patients Requiring 
Chronic Care Management (HCPCS Code G0506)
    For CY 2017, we proposed to make payment for the resource costs of 
comprehensive assessment and care planning for patients requiring CCM 
services through HCPCS code G0506 as an add-on code to be billed with 
the initiating visit for CCM for patients that require extensive 
assessment and care planning (see section II.E). In valuing this code, 
we believed that a crosswalk to half the work and time values of HCPCS 
code G0181 (Physician supervision of a patient receiving Medicare-
covered services provided by a participating home health agency 
(patient not present) requiring complex and multidisciplinary care 
modalities involving regular physician development and/or revision of 
care plans, review of subsequent reports of patient status, review of 
laboratory and other studies, communication (including telephone calls) 
with other health care professionals involved in the patient's care, 
integration of new information into the medical treatment plan and/or 
adjustment of medical therapy, within a calendar month, 30 minutes or 
more) accurately accounts for the time and intensity of the work 
associated with furnishing this service over and above the work 
accounted for as part of the separately billed initiating visit. 
Therefore, we proposed a work RVU of 0.87 and 29 minutes of physician 
time. We also proposed 36 minutes for a RN/LPN/MTA (L037D) as the only 
direct PE input for this service.
    Comment: Many commenters supported the proposed work and PE values.
    Response: We thank commenters for supporting physician work and PE 
inputs for G0506 and we are finalizing as proposed.
(65) Telehealth Consultation for a Patient Requiring Critical Care 
Services (HCPCS Codes G0508and G0509)
    As discussed in section II.C, we proposed use of new HCPCS G-codes, 
G0508 (Telehealth consultation, critical care, physicians typically 
spend 60 minutes communicating with the patient via telehealth 
(initial) and G0509 (Telehealth consultation, critical care, physicians 
typically spend 50 minutes communicating with the patient via 
telehealth (subsequent)), to report telehealth consultations for a 
patient requiring critical care services, such as a stroke patient. We 
noted that due to limited coding granularity for high-intensity 
cognitive services, in the PFS, we did not believe there is an 
intuitive crosswalk code for ideal estimation of the work and time 
values for G0508. In general, we believed that the overall work for 
G0508 is not as great as 99291 (Critical care, evaluation and 
management of the critically ill or critically injured patient; first 
30-74 minutes) but that the service involves more work than HCPCS code 
G0427 (Telehealth consultation, emergency department or initial 
inpatient, typically 70 minutes or more communicating with the patient 
via telehealth). We believe that G0508 is most accurately valued by a 
crosswalk to the work RVU and physician intra-service time of CPT code 
38240 (Hematopoietic progenitor cell (HPC); allogeneic transplantation 
per donor). Therefore, we proposed a work RVU of 4.0 and solicited 
comment on the accuracy of these assumptions. We did not believe that 
direct PE inputs would typically be involved with furnishing this 
service from the distant site. For G0509 we proposed a work RVU of 3.86 
based on a crosswalk from G0427. We believed that G0427 has similar 
overall work intensity to G0509 and has a similar intraservice time. We 
also believed that no direct PE inputs would typically be associated 
with furnishing this service from the distant site.
    Comment: Many commenters supported the proposal, saying the codes 
will improve patient outcomes and quality of care.
    Response: We thank commenters for their support. We are finalizing 
the work RVUs for new HCPCS codes G0508 and G0509 as proposed.
    Comment: A few commenters encouraged CMS to recognize critical care 
as a telehealth service rather than create G-codes to facilitate 
payment. Commenters also stated that the complex nature of patients 
requiring critical care services necessitates the codes be billed more 
than once per day.
    Response: We continue to believe that the telehealth consultation 
model, including the limit on billing more than once per day, is more 
appropriate than the model used to describe the in-person critical care 
E/Ms. In general we believe that the complex nature of patients 
requiring critical care is described by in-person critical care E/Ms, 
which includes services that cannot be furnished via remote 
communication technology. Furthermore, we believe that the telehealth 
consultation model, including the limit on billing more than

[[Page 80353]]

once per day, appropriately captures the kind of work described as 
remote, critical consultations for critical care patients.
    Comment: A few commenters suggested that CMS clarify that the 
consulting doctor could communicate with staff or family members if the 
patient was unable to communicate.
    Response: We appreciate the comments and, in order to make it clear 
that the consultation could include conversations with other providers 
and caregivers if the patient is unable to communicate, we will 
finalize the following code descriptors:
     G0508: Telehealth consultation, critical care, physicians 
typically spend 60 minutes communicating with the patient and providers 
via telehealth (initial).
     G0509: Telehealth consultation, critical care, physicians 
typically spend 50 minutes communicating with the patient and providers 
via telehealth (subsequent).

                                 TABLE 27--Finalized CY 2017 Work RVUs for New, Revised and Potentially Misvalued Codes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                Proposed CY    Final CY 2017
             HCPCS Code                      Long Descriptor            CY 2016  Work RVU      2017 Work RVU     Work RVU     CMS Work  time  refinement
--------------------------------------------------------------------------------------------------------------------------------------------------------
00740...............................  Anesthesia for upper          0.00                                0.00            0.00  No.
                                       gastrointestinal endoscopic
                                       procedures, endoscope
                                       introduced proximal to
                                       duodenum.
00810...............................  Anesthesia for lower          0.00                                0.00            0.00  No.
                                       intestinal endoscopic
                                       procedures, endoscope
                                       introduced distal to
                                       duodenum.
10035...............................  Placement of soft tissue      1.70                                1.70            1.70  No.
                                       localization device(s) (eg,
                                       clip, metallic pellet, wire/
                                       needle, radioactive seeds),
                                       percutaneous, including
                                       imaging guidance; first
                                       lesion.
10036...............................  Placement of soft tissue      0.85                                0.85            0.85  No.
                                       localization device(s) (eg,
                                       clip, metallic pellet, wire/
                                       needle, radioactive seeds),
                                       percutaneous, including
                                       imaging guidance; each
                                       additional lesion.
11730...............................  Avulsion of nail plate,       1.10                                1.05            1.05  No.
                                       partial or complete,
                                       simple; single.
11732...............................  Avulsion of nail plate,       0.44                                0.38            0.38  Yes.
                                       partial or complete,
                                       simple; each additional
                                       nail plate.
20245...............................  Biopsy, bone, open; deep      8.95                                6.00            6.00  No.
                                       (eg, humerus, ischium,
                                       femur).
20550...............................  Injection(s); single tendon   0.75                                0.75            0.75  No.
                                       sheath, or ligament,
                                       aponeurosis (eg, plantar
                                       ``fascia'').
20552...............................  Injection(s); single or       0.66                                0.66            0.66  No.
                                       multiple trigger point(s),
                                       1 or 2 muscle(s).
20553...............................  Injection(s); single or       0.75                                0.75            0.75  No.
                                       multiple trigger point(s),
                                       3 or more muscles.
22853...............................  Insertion of interbody        NEW                                 4.25            4.25  No.
                                       biomechanical device(s)
                                       (eg, synthetic cage, mesh)
                                       with integral anterior
                                       instrumentation for device
                                       anchoring (eg, screws,
                                       flanges) when performed to
                                       intervertebral disc space
                                       in conjunction with
                                       interbody arthrodesis, each
                                       interspace.
22854...............................  Insertion of intervertebral   NEW                                 5.50            5.50  No.
                                       biomechanical device(s)
                                       (eg, synthetic cage, mesh)
                                       with integral anterior
                                       instrumentation for device
                                       anchoring (eg, screws,
                                       flanges) when performed to
                                       vertebral corpectomy(ies)
                                       (vertebral body resection,
                                       partial or complete)
                                       defect, in conjunction with
                                       interbody arthrodesis, each
                                       contiguous defect.
22859...............................  Insertion of intervertebral   NEW                                 5.50            5.50  No.
                                       biomechanical device(s)
                                       (eg, synthetic cage, mesh,
                                       methylmethacrylate) to
                                       intervertebral disc space
                                       or vertebral body defect
                                       without interbody
                                       arthrodesis, each
                                       contiguous defect.
22867...............................  Insertion of interlaminar/    NEW                                13.50           13.50  No.
                                       interspinous process
                                       stabilization/distraction
                                       device, without fusion,
                                       including image guidance
                                       when performed, with open
                                       decompression, lumbar;
                                       single level.
22868...............................  Insertion of interlaminar/    NEW                                 4.00            4.00  No.
                                       interspinous process
                                       stabilization/distraction
                                       device, without fusion,
                                       including image guidance
                                       when performed, with open
                                       decompression, lumbar;
                                       second level.
22869...............................  Insertion of interlaminar/    NEW                                 7.03            7.03  No.
                                       interspinous process
                                       stabilization/distraction
                                       device, without open
                                       decompression or fusion,
                                       including image guidance
                                       when performed, lumbar;
                                       single level.
22870...............................  Insertion of interlaminar/    NEW                                 2.34            2.34  No.
                                       interspinous process
                                       stabilization/distraction
                                       device, without open
                                       decompression or fusion,
                                       including image guidance
                                       when performed, lumbar;
                                       second level.
26356...............................  Repair or advancement,        9.56                                9.56            9.56  No.
                                       flexor tendon, in zone 2
                                       digital flexor tendon
                                       sheath (eg, no man's land);
                                       primary, without free
                                       graft, each tendon.
26357...............................  Repair or advancement,        10.53                              11.00           11.00  No.
                                       flexor tendon, in zone 2
                                       digital flexor tendon
                                       sheath (eg, no man's land);
                                       secondary, without free
                                       graft, each tendon.

[[Page 80354]]

 
26358...............................  Repair or advancement,        12.13                              12.60           12.60  No.
                                       flexor tendon, in zone 2
                                       digital flexor tendon
                                       sheath (eg, no man's land);
                                       secondary, with free graft
                                       (includes obtaining graft),
                                       each tendon.
27197...............................  Closed treatment of           NEW                                 1.53            1.53  Yes.
                                       posterior pelvic ring
                                       fracture(s),
                                       dislocation(s), diastasis
                                       or subluxation of the
                                       ilium, sacroiliac joint,
                                       and/or sacrum, with or
                                       without anterior pelvic
                                       ring fracture(s) and/or
                                       dislocation(s) of the pubic
                                       symphysis and/or superior/
                                       inferior rami, unilateral
                                       or bilateral; without
                                       manipulation.
27198...............................  Closed treatment of           NEW                                 4.75            4.75  Yes.
                                       posterior pelvic ring
                                       fracture(s),
                                       dislocation(s), diastasis
                                       or subluxation of the
                                       ilium, sacroiliac joint,
                                       and/or sacrum, with or
                                       without anterior pelvic
                                       ring fracture(s) and/or
                                       dislocation(s) of the pubic
                                       symphysis and/or superior/
                                       inferior rami, unilateral
                                       or bilateral; with
                                       manipulation, requiring
                                       more than local anesthesia
                                       (i.e., general anesthesia,
                                       moderate sedation, spinal/
                                       epidural).
28289...............................  Hallux rigidus correction     8.31                                6.90            6.90  No.
                                       with cheilectomy,
                                       debridement and capsular
                                       release of the first
                                       metatarsophalangeal joint.
28291...............................  Hallux rigidus correction     NEW                                 7.81            8.01  No.
                                       with cheilectomy,
                                       debridement and capsular
                                       release of the first
                                       metatarsophalangeal joint;
                                       with implant.
28292...............................  Correction, hallux valgus     9.05                                7.44            7.44  No.
                                       (bunion), with or without
                                       sesamoidectomy; Keller,
                                       McBride, or Mayo type
                                       procedure.
28295...............................  Correction, hallux valgus     NEW                                 8.25            8.57  No.
                                       (bunionectomy), with
                                       sesamoidectomy, when
                                       performed; with proximal
                                       metatarsal osteotomy, any
                                       method.
28296...............................  Correction, hallux valgus     8.35                                8.25            8.25  No.
                                       (bunion), with or without
                                       sesamoidectomy; with
                                       metatarsal osteotomy (eg,
                                       Mitchell, Chevron, or
                                       concentric type procedures).
28297...............................  Correction, hallux valgus     9.43                                9.29            9.29  No.
                                       (bunion), with or without
                                       sesamoidectomy; Lapidus-
                                       type procedure.
28298...............................  Correction, hallux valgus     8.13                                7.75            7.75  No.
                                       (bunion), with or without
                                       sesamoidectomy; by phalanx
                                       osteotomy.
28299...............................  Correction, hallux valgus     11.57                               9.29            9.29  No.
                                       (bunion), with or without
                                       sesamoidectomy; by double
                                       osteotomy.
31500...............................  Intubation, endotracheal,     2.33                                2.66            3.00  No.
                                       emergency procedure.
31551...............................  Laryngoplasty; for laryngeal  NEW                                21.50           21.50  No.
                                       stenosis, with graft,
                                       without indwelling stent
                                       placement, younger than 12
                                       years of age.
31552...............................  Laryngoplasty; for laryngeal  NEW                                20.50           20.50  No.
                                       stenosis, with graft,
                                       without indwelling stent
                                       placement, age 12 years or
                                       older.
31553...............................  Laryngoplasty; for laryngeal  NEW                                22.00           22.00  No.
                                       stenosis, with graft, with
                                       indwelling stent placement,
                                       younger than 12 years of
                                       age.
31554...............................  Laryngoplasty; for laryngeal  NEW                                22.00           22.00  No.
                                       stenosis, with graft, with
                                       indwelling stent placement,
                                       age 12 years or older.
31572...............................  Laryngoscopy, flexible; with  NEW                                 3.01            3.01  No.
                                       ablation or destruction of
                                       lesion(s) with laser,
                                       unilateral.
31573...............................  Laryngoscopy, flexible; with  NEW                                 2.43            2.43  No.
                                       therapeutic injection(s)
                                       (eg, chemodenervation agent
                                       or corticosteroid, injected
                                       percutaneous, transoral, or
                                       via endoscope channel),
                                       unilateral.
31574...............................  Laryngoscopy, flexible; with  NEW                                 2.43            2.43  No.
                                       injection(s) for
                                       augmentation (eg,
                                       percutaneous, transoral),
                                       unilateral.
31575...............................  Laryngoscopy, flexible        1.10                                0.94            0.94  No.
                                       fiberoptic; diagnostic.
31576...............................  Laryngoscopy, flexible        1.97                                1.89            1.89  No.
                                       fiberoptic; with biopsy.
31577...............................  Laryngoscopy, flexible        2.47                                2.19            2.19  No.
                                       fiberoptic; with removal of
                                       foreign body.
31578...............................  Laryngoscopy, flexible        2.84                                2.43            2.43  No.
                                       fiberoptic; with removal of
                                       lesion.
31579...............................  Laryngoscopy, flexible or     2.26                                1.88            1.88  No.
                                       rigid fiberoptic, with
                                       stroboscopy.
31580...............................  Laryngoplasty; for laryngeal  14.66                              14.60           14.60  No.
                                       web, 2-stage, with keel
                                       insertion and removal.
31584...............................  Laryngoplasty; with open      20.47                              17.58           17.58  No.
                                       reduction of fracture.
31587...............................  Laryngoplasty, cricoid split  15.27                              15.27           15.27  No.
31591...............................  Laryngoplasty,                NEW                                13.56           13.56  No.
                                       medialization; unilateral.
31592...............................  Cricotracheal resection.....  NEW                                25.00           25.00  No.

[[Page 80355]]

 
33340...............................  Percutaneous transcatheter    NEW                                13.00           14.00  No.
                                       closure of the left atrial
                                       appendage with endocardial
                                       implant, including
                                       fluoroscopy, transseptal
                                       puncture, catheter
                                       placement(s), left atrial
                                       angiography, left atrial
                                       appendage angiography, when
                                       performed, and radiological
                                       supervision and
                                       interpretation.
33390...............................  Valvuloplasty, aortic valve,  NEW                                35.00           35.00  No.
                                       open, with cardiopulmonary
                                       bypass; simple (i.e.,
                                       valvotomy, debridement,
                                       debulking and/or simple
                                       commissural resuspension).
33391...............................  Valvuloplasty, aortic valve,  NEW                                41.50           41.50  No.
                                       open, with cardiopulmonary
                                       bypass; complex (eg,
                                       leaflet extension, leaflet
                                       resection, leaflet
                                       reconstruction or
                                       annuloplasty).
36440...............................  Push transfusion, blood, 2    1.03                                1.03            1.03  No.
                                       years or younger.
36450...............................  Exchange transfusion, blood;  2.23                                3.50            3.50  No.
                                       newborn.
36455...............................  Exchange transfusion, blood;  2.43                                2.43            2.43  No.
                                       other than newborn.
36456...............................  Partial exchange              NEW                                 2.00            2.00  No.
                                       transfusion, blood, plasma
                                       or crystalloid
                                       necessitating the skill of
                                       a physician or other
                                       qualified health care
                                       professional, newborn.
36473...............................  Endovenous ablation therapy   NEW                                 3.50            3.50  No.
                                       of incompetent vein,
                                       extremity, inclusive of all
                                       imaging guidance and
                                       monitoring, percutaneous,
                                       mechanochemical; first vein
                                       treated.
36474...............................  Endovenous ablation therapy   NEW                                 1.75            1.75  No.
                                       of incompetent vein,
                                       extremity, inclusive of all
                                       imaging guidance and
                                       monitoring, percutaneous,
                                       mechanochemical; subsequent
                                       vein(s) treated in a single
                                       extremity, each through
                                       separate access sites.
36901...............................  Introduction of needle(s)     NEW                                 2.82            2.82  No.
                                       and/or catheter(s),
                                       dialysis circuit, with
                                       diagnostic angiography of
                                       the dialysis circuit,
                                       including all direct
                                       puncture(s) and catheter
                                       placement(s), injection(s)
                                       of contrast, all necessary
                                       imaging from the arterial
                                       anastomosis and adjacent
                                       artery through entire
                                       venous outflow including
                                       the inferior or superior
                                       vena cava, fluoroscopic
                                       guidance, radiologic
                                       supervision and
                                       interpretation and image
                                       documentation and report.
36902...............................  Introduction of needle(s)     NEW                                 4.24            4.24  No.
                                       and/or catheter(s),
                                       dialysis circuit, with
                                       diagnostic angiography of
                                       the dialysis circuit,
                                       including all direct
                                       puncture(s) and catheter
                                       placement(s), injection(s)
                                       of contrast, all necessary
                                       imaging from the arterial
                                       anastomosis and adjacent
                                       artery through entire
                                       venous outflow including
                                       the inferior or superior
                                       vena cava, fluoroscopic
                                       guidance, radiologic
                                       supervision and
                                       interpretation and image
                                       documentation and report;
                                       with transluminal balloon
                                       angioplasty, peripheral
                                       dialysis segment, including
                                       all imaging and
                                       radiological supervision
                                       and interpretation
                                       necessary to perform the
                                       angioplasty.
36903...............................  Introduction of needle(s)     NEW                                 5.85            5.85  No.
                                       and/or catheter(s),
                                       dialysis circuit, with
                                       diagnostic angiography of
                                       the dialysis circuit,
                                       including all direct
                                       puncture(s) and catheter
                                       placement(s), injection(s)
                                       of contrast, all necessary
                                       imaging from the arterial
                                       anastomosis and adjacent
                                       artery through entire
                                       venous outflow including
                                       the inferior or superior
                                       vena cava, fluoroscopic
                                       guidance, radiologic
                                       supervision and
                                       interpretation and image
                                       documentation and report;
                                       with transcatheter
                                       placement of intravascular
                                       stent(s) peripheral
                                       dialysis segment, including
                                       all imaging and
                                       radiological supervision
                                       and interpretation
                                       necessary to perform the
                                       stenting, and all
                                       angioplasty within the
                                       peripheral dialysis segment.
36904...............................  Percutaneous transluminal     NEW                                 6.73            6.73  No.
                                       mechanical thrombectomy and/
                                       or infusion for
                                       thrombolysis, dialysis
                                       circuit, any method,
                                       including all imaging and
                                       radiological supervision
                                       and interpretation,
                                       diagnostic angiography,
                                       fluoroscopic guidance,
                                       catheter placement(s), and
                                       intraprocedural
                                       pharmacological
                                       thrombolytic injection(s).

[[Page 80356]]

 
36905...............................  Percutaneous transluminal     NEW                                 8.46            8.46  No.
                                       mechanical thrombectomy and/
                                       or infusion for
                                       thrombolysis, dialysis
                                       circuit, any method,
                                       including all imaging and
                                       radiological supervision
                                       and interpretation,
                                       diagnostic angiography,
                                       fluoroscopic guidance,
                                       catheter placement(s), and
                                       intraprocedural
                                       pharmacological
                                       thrombolytic injection(s);
                                       with transluminal balloon
                                       angioplasty, peripheral
                                       dialysis segment, including
                                       all imaging and
                                       radiological supervision
                                       and interpretation
                                       necessary to perform the
                                       angioplasty.
36906...............................  Percutaneous transluminal     NEW                                 9.88            9.88  No.
                                       mechanical thrombectomy and/
                                       or infusion for
                                       thrombolysis, dialysis
                                       circuit, any method,
                                       including all imaging and
                                       radiological supervision
                                       and interpretation,
                                       diagnostic angiography,
                                       fluoroscopic guidance,
                                       catheter placement(s), and
                                       intraprocedural
                                       pharmacological
                                       thrombolytic injection(s);
                                       with transcatheter
                                       placement of an
                                       intravascular stent(s),
                                       peripheral dialysis
                                       segment, including all
                                       imaging and radiological
                                       supervision and
                                       interpretation to perform
                                       the stenting and all
                                       angioplasty within the
                                       peripheral dialysis circuit.
36907...............................  Transluminal balloon          NEW                                 2.48            2.48  No.
                                       angioplasty, central
                                       dialysis segment, performed
                                       through dialysis circuit,
                                       including all imaging and
                                       radiological supervision
                                       and interpretation required
                                       to perform the angioplasty.
36908...............................  Transcatheter placement of    NEW                                 3.73            3.73  No.
                                       an intravascular stent(s),
                                       central dialysis segment,
                                       performed through dialysis
                                       circuit, including all
                                       imaging and radiological
                                       supervision and
                                       interpretation required to
                                       perform the stenting, and
                                       all angioplasty in the
                                       central dialysis segment.
36909...............................  Dialysis circuit permanent    NEW                                 3.48            3.48  No.
                                       vascular embolization or
                                       occlusion (including main
                                       circuit or any accessory
                                       veins), endovascular,
                                       including all imaging and
                                       radiological supervision
                                       and interpretation
                                       necessary to complete the
                                       intervention.
37246...............................  Transluminal balloon          NEW                                 7.00            7.00  No.
                                       angioplasty (except lower
                                       extremity artery(s) for
                                       occlusive disease,
                                       intracranial, coronary,
                                       pulmonary, or dialysis
                                       circuit), open or
                                       percutaneous, including all
                                       imaging and radiological
                                       supervision and
                                       interpretation necessary to
                                       perform the angioplasty
                                       within the same artery;
                                       initial artery.
37247...............................  Transluminal balloon          NEW                                 3.50            3.50  No.
                                       angioplasty (except lower
                                       extremity artery(s) for
                                       occlusive disease,
                                       intracranial, coronary,
                                       pulmonary, or dialysis
                                       circuit), open or
                                       percutaneous, including all
                                       imaging and radiological
                                       supervision and
                                       interpretation necessary to
                                       perform the angioplasty
                                       within the same artery;
                                       each additional artery.
37248...............................  Transluminal balloon          NEW                                 6.00            6.00  No.
                                       angioplasty (except
                                       dialysis circuit), open or
                                       percutaneous, including all
                                       imaging and radiological
                                       supervision and
                                       interpretation necessary to
                                       perform the angioplasty
                                       within the same vein;
                                       initial vein.
37249...............................  Transluminal balloon          NEW                                 2.97            2.97  No.
                                       angioplasty (except
                                       dialysis circuit), open or
                                       percutaneous, including all
                                       imaging and radiological
                                       supervision and
                                       interpretation necessary to
                                       perform the angioplasty
                                       within the same vein; each
                                       additional vein.
41530...............................  Submucosal ablation of the    3.50                                3.50            3.50  No.
                                       tongue base,
                                       radiofrequency, 1 or more
                                       sites, per session.
43210...............................  Esophagogastroduodenoscopy,   7.75                                7.75            7.75  No.
                                       flexible, transoral; with
                                       esophagogastric
                                       fundoplasty, partial or
                                       complete, includes
                                       duodenoscopy when performed.
43284...............................  Laparoscopy, surgical,        NEW                                 9.03           10.13  No.
                                       esophageal sphincter
                                       augmentation procedure,
                                       placement of sphincter
                                       augmentation device (i.e.,
                                       magnetic band), including
                                       cruroplasty when performed.
43285...............................  Removal of esophageal         NEW                                 9.37           10.47  No.
                                       sphincter augmentation
                                       device.
47531...............................  Injection procedure for       1.80                                1.30            1.30  No.
                                       cholangiography,
                                       percutaneous, complete
                                       diagnostic procedure
                                       including imaging guidance
                                       (eg, ultrasound and/or
                                       fluoroscopy) and all
                                       associated radiological
                                       supervision and
                                       interpretation; existing
                                       access.

[[Page 80357]]

 
47532...............................  Injection procedure for       4.25                                4.25            4.25  No.
                                       cholangiography,
                                       percutaneous, complete
                                       diagnostic procedure
                                       including imaging guidance
                                       (eg, ultrasound and/or
                                       fluoroscopy) and all
                                       associated radiological
                                       supervision and
                                       interpretation; new access
                                       (eg, percutaneous
                                       transhepatic cholangiogram).
47533...............................  Placement of biliary          6.00                                5.38            5.38  No.
                                       drainage catheter,
                                       percutaneous, including
                                       diagnostic cholangiography
                                       when performed, imaging
                                       guidance (eg, ultrasound
                                       and/or fluoroscopy), and
                                       all associated radiological
                                       supervision and
                                       interpretation; external.
47534...............................  Placement of biliary          8.03                                7.60            7.60  No.
                                       drainage catheter,
                                       percutaneous, including
                                       diagnostic cholangiography
                                       when performed, imaging
                                       guidance (eg, ultrasound
                                       and/or fluoroscopy), and
                                       all associated radiological
                                       supervision and
                                       interpretation; internal-
                                       external.
47535...............................  Conversion of external        4.50                                3.95            3.95  No.
                                       biliary drainage catheter
                                       to internal-external
                                       biliary drainage catheter,
                                       percutaneous, including
                                       diagnostic cholangiography
                                       when performed, imaging
                                       guidance (eg, fluoroscopy),
                                       and all associated
                                       radiological supervision
                                       and interpretation.
47536...............................  Exchange of biliary drainage  2.88                                2.61            2.61  No.
                                       catheter (eg, external,
                                       internal-external, or
                                       conversion of internal-
                                       external to external only),
                                       percutaneous, including
                                       diagnostic cholangiography
                                       when performed, imaging
                                       guidance (eg, fluoroscopy),
                                       and all associated
                                       radiological supervision
                                       and interpretation.
47537...............................  Removal of biliary drainage   1.83                                1.84            1.84  No.
                                       catheter, percutaneous,
                                       requiring fluoroscopic
                                       guidance (eg, with
                                       concurrent indwelling
                                       biliary stents), including
                                       diagnostic cholangiography
                                       when performed, imaging
                                       guidance (eg, fluoroscopy),
                                       and all associated
                                       radiological supervision
                                       and interpretation.
47538...............................  Placement of stent(s) into a  6.60                                4.75            4.75  No.
                                       bile duct, percutaneous,
                                       including diagnostic
                                       cholangiography, imaging
                                       guidance (eg, fluoroscopy
                                       and/or ultrasound), balloon
                                       dilation, catheter
                                       exchange(s) and catheter
                                       removal(s) when performed,
                                       and all associated
                                       radiological supervision
                                       and interpretation, each
                                       stent; existing access.
47539...............................  Placement of stent(s) into a  9.00                                8.75            8.75  No.
                                       bile duct, percutaneous,
                                       including diagnostic
                                       cholangiography, imaging
                                       guidance (eg, fluoroscopy
                                       and/or ultrasound), balloon
                                       dilation, catheter
                                       exchange(s) and catheter
                                       removal(s) when performed,
                                       and all associated
                                       radiological supervision
                                       and interpretation, each
                                       stent; new access, without
                                       placement of separate
                                       biliary drainage catheter.
47540...............................  Placement of stent(s) into a  10.75                               9.03            9.03  No.
                                       bile duct, percutaneous,
                                       including diagnostic
                                       cholangiography, imaging
                                       guidance (eg, fluoroscopy
                                       and/or ultrasound), balloon
                                       dilation, catheter
                                       exchange(s) and catheter
                                       removal(s) when performed,
                                       and all associated
                                       radiological supervision
                                       and interpretation, each
                                       stent; new access, with
                                       placement of separate
                                       biliary drainage catheter
                                       (eg, external or internal-
                                       external).
47541...............................  Placement of access through   5.61                                5.38            6.75  No.
                                       the biliary tree and into
                                       small bowel to assist with
                                       an endoscopic biliary
                                       procedure (eg, rendezvous
                                       procedure), percutaneous,
                                       including diagnostic
                                       cholangiography when
                                       performed, imaging guidance
                                       (eg, ultrasound and/or
                                       fluoroscopy), and all
                                       associated radiological
                                       supervision and
                                       interpretation, new access.
47542...............................  Balloon dilation of biliary   2.50                                2.85            2.85  No.
                                       duct(s) or of ampulla
                                       (sphincteroplasty),
                                       percutaneous, including
                                       imaging guidance (eg,
                                       fluoroscopy), and all
                                       associated radiological
                                       supervision and
                                       interpretation, each duct.
47543...............................  Endoluminal biopsy(ies) of    3.07                                3.00            3.00  No.
                                       biliary tree, percutaneous,
                                       any method(s) (eg, brush,
                                       forceps, and/or needle),
                                       including imaging guidance
                                       (eg, fluoroscopy), and all
                                       associated radiological
                                       supervision and
                                       interpretation, single or
                                       multiple.

[[Page 80358]]

 
47544...............................  Removal of calculi/debris     4.29                                3.28            3.28  No.
                                       from biliary duct(s) and/or
                                       gallbladder, percutaneous,
                                       including destruction of
                                       calculi by any method (eg,
                                       mechanical,
                                       electrohydraulic,
                                       lithotripsy) when
                                       performed, imaging guidance
                                       (eg, fluoroscopy), and all
                                       associated radiological
                                       supervision and
                                       interpretation.
49185...............................  Sclerotherapy of a fluid      2.35                                2.35            2.35  No.
                                       collection (eg, lymphocele,
                                       cyst, or seroma),
                                       percutaneous, including
                                       contrast injection(s),
                                       sclerosant injection(s),
                                       diagnostic study, imaging
                                       guidance (eg, ultrasound,
                                       fluoroscopy) and
                                       radiological supervision
                                       and interpretation when
                                       performed.
50606...............................  Endoluminal biopsy of ureter  3.16                                3.16            3.16  No.
                                       and/or renal pelvis, non-
                                       endoscopic, including
                                       imaging guidance (eg,
                                       ultrasound and/or
                                       fluoroscopy) and all
                                       associated radiological
                                       supervision and
                                       interpretation.
50705...............................  Ureteral embolization or      4.03                                4.03            4.03  No.
                                       occlusion, including
                                       imaging guidance (eg,
                                       ultrasound and/or
                                       fluoroscopy) and all
                                       associated radiological
                                       supervision and
                                       interpretation.
50706...............................  Balloon dilation, ureteral    3.80                                3.80            3.80  No.
                                       stricture, including
                                       imaging guidance (eg,
                                       ultrasound and/or
                                       fluoroscopy) and all
                                       associated radiological
                                       supervision and
                                       interpretation.
51700...............................  Bladder irrigation, simple,   0.88                                0.60            0.60  No.
                                       lavage and/or instillation.
51701...............................  Insertion of non-indwelling   0.50                                0.50            0.50  No.
                                       bladder catheter (eg,
                                       straight catheterization
                                       for residual urine).
51702...............................  Insertion of temporary        0.50                                0.50            0.50  No.
                                       indwelling bladder
                                       catheter; simple (eg,
                                       Foley).
51703...............................  Insertion of temporary        1.47                                1.47            1.47  No.
                                       indwelling bladder
                                       catheter; complicated (eg,
                                       altered anatomy, fractured
                                       catheter/balloon).
51720...............................  Bladder instillation of       1.50                                0.87            0.87  No.
                                       anticarcinogenic agent
                                       (including retention time).
51784...............................  Electromyography studies      1.53                                0.75            0.75  No.
                                       (EMG) of anal or urethral
                                       sphincter, other than
                                       needle, any technique.
52000...............................  Cystourethroscopy (separate   2.23                                1.53            1.53  No.
                                       procedure).
55700...............................  Biopsy, prostate; needle or   2.58                                2.06            2.50  No.
                                       punch, single or multiple,
                                       any approach.
55866...............................  Laparoscopy, surgical         21.36                              21.36           26.80  No.
                                       prostatectomy, retropubic
                                       radical, including nerve
                                       sparing, includes robotic
                                       assistance, when performed.
58555...............................  Hysteroscopy, diagnostic      3.33                                2.65            2.65  No.
                                       (separate procedure).
58558...............................  Hysteroscopy, surgical; with  4.74                                4.17            4.17  No.
                                       sampling (biopsy) of
                                       endometrium and/or
                                       polypectomy, with or
                                       without D & C.
58559...............................  Hysteroscopy, surgical; with  6.16                                5.20            5.20  No.
                                       lysis of intrauterine
                                       adhesions (any method).
58560...............................  Hysteroscopy, surgical; with  6.99                                5.75            5.75  No.
                                       division or resection of
                                       intrauterine septum (any
                                       method).
58561...............................  Hysteroscopy, surgical; with  9.99                                6.60            6.60  No.
                                       removal of leiomyomata.
58562...............................  Hysteroscopy, surgical; with  5.20                                4.00            4.00  No.
                                       removal of impacted foreign
                                       body.
58563...............................  Hysteroscopy, surgical; with  6.16                                4.47            4.47  No.
                                       endometrial ablation (eg,
                                       endometrial resection,
                                       electrosurgical ablation,
                                       thermoablation).
58674...............................  Laparoscopy, surgical,        NEW                                14.08           14.08  No.
                                       ablation of uterine
                                       fibroid(s) including
                                       intraoperative ultrasound
                                       guidance and monitoring,
                                       radiofrequency.
61640...............................  Balloon dilatation of         N                                      N               N  No.
                                       intracranial vasospasm,
                                       percutaneous; initial
                                       vessel.
61641...............................  Balloon dilatation of         N                                      N               N  No.
                                       intracranial vasospasm,
                                       percutaneous; each
                                       additional vessel in same
                                       vascular family.
61642...............................  Balloon dilatation of         N                                      N               N  No.
                                       intracranial vasospasm,
                                       percutaneous; each
                                       additional vessel in
                                       different vascular family.
61645...............................  Percutaneous arterial         15.00                              15.00           15.00  No.
                                       transluminal mechanical
                                       thrombectomy and/or
                                       infusion for thrombolysis,
                                       intracranial, any method,
                                       including diagnostic
                                       angiography, fluoroscopic
                                       guidance, catheter
                                       placement, and
                                       intraprocedural
                                       pharmacological
                                       thrombolytic injection(s).

[[Page 80359]]

 
61650...............................  Endovascular intracranial     10.00                              10.00           10.00  No.
                                       prolonged administration of
                                       pharmacologic agent(s)
                                       other than for
                                       thrombolysis, arterial,
                                       including catheter
                                       placement, diagnostic
                                       angiography, and imaging
                                       guidance; initial vascular
                                       territory.
61651...............................  Endovascular intracranial     4.25                                4.25            4.25  No.
                                       prolonged administration of
                                       pharmacologic agent(s)
                                       other than for
                                       thrombolysis, arterial,
                                       including catheter
                                       placement, diagnostic
                                       angiography, and imaging
                                       guidance; each additional
                                       vascular territory.
62320...............................  Injection(s), of diagnostic   NEW                                 1.80            1.80  No.
                                       or therapeutic substance(s)
                                       (eg, anesthetic,
                                       antispasmodic, opioid,
                                       steroid, other solution),
                                       not including neurolytic
                                       substances, including
                                       needle or catheter
                                       placement, interlaminar
                                       epidural or subarachnoid,
                                       cervical or thoracic;
                                       without imaging guidance.
62321...............................  Injection(s), of diagnostic   NEW                                 1.95            1.95  No.
                                       or therapeutic substance(s)
                                       (eg, anesthetic,
                                       antispasmodic, opioid,
                                       steroid, other solution),
                                       not including neurolytic
                                       substances, including
                                       needle or catheter
                                       placement, interlaminar
                                       epidural or subarachnoid,
                                       cervical or thoracic; with
                                       imaging guidance (i.e.,
                                       fluoroscopy or CT).
62322...............................  Injection(s), of diagnostic   NEW                                 1.55            1.55  No.
                                       or therapeutic substance(s)
                                       (eg, anesthetic,
                                       antispasmodic, opioid,
                                       steroid, other solution),
                                       not including neurolytic
                                       substances, including
                                       needle or catheter
                                       placement, interlaminar
                                       epidural or subarachnoid,
                                       lumbar or sacral (caudal);
                                       without imaging guidance.
62323...............................  Injection(s), of diagnostic   NEW                                 1.80            1.80  No.
                                       or therapeutic substance(s)
                                       (eg, anesthetic,
                                       antispasmodic, opioid,
                                       steroid, other solution),
                                       not including neurolytic
                                       substances, including
                                       needle or catheter
                                       placement, interlaminar
                                       epidural or subarachnoid,
                                       lumbar or sacral (caudal);
                                       with imaging guidance
                                       (i.e., fluoroscopy or CT).
62324...............................  Injection(s), including       NEW                                 1.89            1.89  No.
                                       indwelling catheter
                                       placement, continuous
                                       infusion or intermittent
                                       bolus, of diagnostic or
                                       therapeutic substance(s)
                                       (eg, anesthetic,
                                       antispasmodic, opioid,
                                       steroid, other solution),
                                       not including neurolytic
                                       substances, interlaminar
                                       epidural or subarachnoid,
                                       cervical or thoracic;
                                       without imaging guidance.
62325...............................  Injection(s), including       NEW                                 2.20            2.20  No.
                                       indwelling catheter
                                       placement, continuous
                                       infusion or intermittent
                                       bolus, of diagnostic or
                                       therapeutic substance(s)
                                       (eg, anesthetic,
                                       antispasmodic, opioid,
                                       steroid, other solution),
                                       not including neurolytic
                                       substances, interlaminar
                                       epidural or subarachnoid,
                                       cervical or thoracic; with
                                       imaging guidance (i.e.,
                                       fluoroscopy or CT).
62326...............................  Injection(s), including       NEW                                 1.78            1.78  No.
                                       indwelling catheter
                                       placement, continuous
                                       infusion or intermittent
                                       bolus, of diagnostic or
                                       therapeutic substance(s)
                                       (eg, anesthetic,
                                       antispasmodic, opioid,
                                       steroid, other solution),
                                       not including neurolytic
                                       substances, interlaminar
                                       epidural or subarachnoid,
                                       lumbar or sacral (caudal);
                                       without imaging guidance.
62327...............................  Injection(s), including       NEW                                 1.90            1.90  No.
                                       indwelling catheter
                                       placement, continuous
                                       infusion or intermittent
                                       bolus, of diagnostic or
                                       therapeutic substance(s)
                                       (eg, anesthetic,
                                       antispasmodic, opioid,
                                       steroid, other solution),
                                       not including neurolytic
                                       substances, interlaminar
                                       epidural or subarachnoid,
                                       lumbar or sacral (caudal);
                                       with imaging guidance
                                       (i.e., fluoroscopy or CT).
62380...............................  Endoscopic decompression of   NEW                                 9.09               C  No.
                                       spinal cord, nerve root(s),
                                       including laminotomy,
                                       partial facetectomy,
                                       foraminotomy, discectomy
                                       and/or excision of
                                       herniated intervertebral
                                       disc; 1 interspace, lumbar.
64461...............................  Paravertebral block (PVB)     1.75                                1.75            1.75  No.
                                       (paraspinous block),
                                       thoracic; single injection
                                       site (includes imaging
                                       guidance, when performed).
64462...............................  Paravertebral block (PVB)     1.10                                1.10            1.10  No.
                                       (paraspinous block),
                                       thoracic; second and any
                                       additional injection
                                       site(s) (includes imaging
                                       guidance, when performed).

[[Page 80360]]

 
64463...............................  Paravertebral block (PVB)     1.81                                1.81            1.90  No.
                                       (paraspinous block),
                                       thoracic; continuous
                                       infusion by catheter
                                       (includes imaging guidance,
                                       when performed).
64553...............................  Percutaneous implantation of  2.36                                2.36            2.36  No.
                                       neurostimulator electrode
                                       array; cranial nerve.
64555...............................  Percutaneous implantation of  2.32                                2.32            2.32  No.
                                       neurostimulator electrode
                                       array; peripheral nerve
                                       (excludes sacral nerve).
64566...............................  Posterior tibial              0.60                                0.60            0.60  No.
                                       neurostimulation,
                                       percutaneous needle
                                       electrode, single
                                       treatment, includes
                                       programming.
65778...............................  Placement of amniotic         1.00                                1.00            1.00  No.
                                       membrane on the ocular
                                       surface; without sutures.
65779...............................  Placement of amniotic         2.50                                2.50            2.50  No.
                                       membrane on the ocular
                                       surface; single layer,
                                       sutured.
65780...............................  Ocular surface                7.81                                7.81            7.81  No.
                                       reconstruction; amniotic
                                       membrane transplantation,
                                       multiple layers.
65855...............................  Trabeculoplasty by laser      2.66                                3.00            3.00  No.
                                       surgery.
66170...............................  Fistulization of sclera for   11.27                              13.94           13.94  No.
                                       glaucoma; trabeculectomy ab
                                       externo in absence of
                                       previous surgery.
66172...............................  Fistulization of sclera for   12.57                              14.84           14.84  No.
                                       glaucoma; trabeculectomy ab
                                       externo with scarring from
                                       previous ocular surgery or
                                       trauma (includes injection
                                       of antifibrotic agents).
67101...............................  Repair of retinal             8.80                                3.50            3.50  No.
                                       detachment, 1 or more
                                       sessions; cryotherapy or
                                       diathermy, including
                                       drainage of subretinal
                                       fluid, when performed.
67105...............................  Repair of retinal             8.53                                3.39            3.39  No.
                                       detachment, 1 or more
                                       sessions; photocoagulation,
                                       including drainage of
                                       subretinal fluid, when
                                       performed.
67107...............................  Repair of retinal             14.06                              16.00           16.00  No.
                                       detachment; scleral
                                       buckling (such as lamellar
                                       scleral dissection,
                                       imbrication or encircling
                                       procedure), including, when
                                       performed, implant,
                                       cryotherapy,
                                       photocoagulation, and
                                       drainage of subretinal
                                       fluid.
67108...............................  Repair of retinal             15.19                              17.13           17.13  No.
                                       detachment; with
                                       vitrectomy, any method,
                                       including, when performed,
                                       air or gas tamponade, focal
                                       endolaser photocoagulation,
                                       cryotherapy, drainage of
                                       subretinal fluid, scleral
                                       buckling, and/or removal of
                                       lens by same technique.
67110...............................  Repair of retinal             8.31                               10.25           10.25  No.
                                       detachment; by injection of
                                       air or other gas (eg,
                                       pneumatic retinopexy).
67113...............................  Repair of complex retinal     19.00                              19.00           19.00  No.
                                       detachment (eg,
                                       proliferative
                                       vitreoretinopathy, stage C-
                                       1 or greater, diabetic
                                       traction retinal
                                       detachment, retinopathy of
                                       prematurity, retinal tear
                                       of greater than 90
                                       degrees), with vitrectomy
                                       and membrane peeling,
                                       including, when performed,
                                       air, gas, or silicone oil
                                       tamponade, cryotherapy,
                                       endolaser photocoagulation,
                                       drainage of subretinal
                                       fluid, scleral buckling,
                                       and/or removal of lens.
67227...............................  Destruction of extensive or   3.50                                3.50            3.50  No.
                                       progressive retinopathy
                                       (eg, diabetic retinopathy),
                                       cryotherapy, diathermy.
67228...............................  Treatment of extensive or     4.39                                4.39            4.39  No.
                                       progressive retinopathy
                                       (eg, diabetic retinopathy),
                                       photocoagulation.
70540...............................  Magnetic resonance (eg,       1.35                                1.35            1.35  No.
                                       proton) imaging, orbit,
                                       face, and/or neck; without
                                       contrast material(s).
70542...............................  Magnetic resonance (eg,       1.62                                1.62            1.62  No.
                                       proton) imaging, orbit,
                                       face, and/or neck; with
                                       contrast material(s).
70543...............................  Magnetic resonance (eg,       2.15                                2.15            2.15  No.
                                       proton) imaging, orbit,
                                       face, and/or neck; without
                                       contrast material(s),
                                       followed by contrast
                                       material(s) and further
                                       sequences.
72170...............................  Radiologic examination,       0.17                                0.17            0.17  No.
                                       pelvis; 1 or 2 views.
73501...............................  Radiologic examination, hip,  0.18                                0.18            0.18  No.
                                       unilateral, with pelvis
                                       when performed; 1 view.
73502...............................  Radiologic examination, hip,  0.22                                0.22            0.22  No.
                                       unilateral, with pelvis
                                       when performed; 2-3 views.
73503...............................  Radiologic examination, hip,  0.27                                0.27            0.27  No.
                                       unilateral, with pelvis
                                       when performed; minimum of
                                       4 views.
73521...............................  Radiologic examination,       0.22                                0.22            0.22  No.
                                       hips, bilateral, with
                                       pelvis when performed; 2
                                       views.
73522...............................  Radiologic examination,       0.29                                0.29            0.29  No.
                                       hips, bilateral, with
                                       pelvis when performed; 3-4
                                       views.
73523...............................  Radiologic examination,       0.31                                0.31            0.31  No.
                                       hips, bilateral, with
                                       pelvis when performed;
                                       minimum of 5 views.

[[Page 80361]]

 
73551...............................  Radiologic examination,       0.16                                0.16            0.16  No.
                                       femur; 1 view.
73552...............................  Radiologic examination,       0.18                                0.18            0.18  No.
                                       femur; minimum 2 views.
74712...............................  Magnetic resonance (eg,       3.00                                3.00            3.00  No.
                                       proton) imaging, fetal,
                                       including placental and
                                       maternal pelvic imaging
                                       when performed; single or
                                       first gestation.
74713...............................  Magnetic resonance (eg,       1.78                                1.85            1.85  No.
                                       proton) imaging, fetal,
                                       including placental and
                                       maternal pelvic imaging
                                       when performed; each
                                       additional gestation.
76706...............................  Ultrasound, abdominal aorta,  NEW                                 0.55            0.55  No.
                                       real time with image
                                       documentation, screening
                                       study for abdominal aortic
                                       aneurysm.
77001...............................  Fluoroscopic guidance for     0.38                                0.38            0.38  No.
                                       central venous access
                                       device placement,
                                       replacement (catheter only
                                       or complete), or removal
                                       (includes fluoroscopic
                                       guidance for vascular
                                       access and catheter
                                       manipulation, any necessary
                                       contrast injections through
                                       access site or catheter
                                       with related venography
                                       radiologic supervision and
                                       interpretation, and
                                       radiographic documentation
                                       of final catheter position).
77002...............................  Fluoroscopic guidance for     0.54                                0.38            0.54  No.
                                       needle placement (eg,
                                       biopsy, aspiration,
                                       injection, localization
                                       device).
77003...............................  Fluoroscopic guidance and     0.60                                0.38            0.60  No.
                                       localization of needle or
                                       catheter tip for spine or
                                       paraspinous diagnostic or
                                       therapeutic injection
                                       procedures (epidural or
                                       subarachnoid).
77065/G0206.........................  Diagnostic mammography,       NEW                                 0.81            0.81  No.
                                       including computer-aided
                                       detection (CAD) when
                                       performed; unilateral.
77066/G0204.........................  Diagnostic mammography,       NEW                                 1.00            1.00  No.
                                       including computer-aided
                                       detection (CAD) when
                                       performed; bilateral.
77067/G0202.........................  Screening mammography,        NEW                                 0.76            0.76  No.
                                       bilateral (2-view study of
                                       each breast), including
                                       computer-aided detection
                                       (CAD) when performed.
77332...............................  Treatment devices, design     0.54                                0.45            0.45  No.
                                       and construction; simple
                                       (simple block, simple
                                       bolus).
77333...............................  Treatment devices, design     0.84                                0.75            0.75  No.
                                       and construction;
                                       intermediate (multiple
                                       blocks, stents, bite
                                       blocks, special bolus).
77334...............................  Treatment devices, design     1.24                                1.15            1.15  No.
                                       and construction; complex
                                       (irregular blocks, special
                                       shields, compensators,
                                       wedges, molds or casts).
77470...............................  Special treatment procedure   2.09                                2.03            2.03  No.
                                       (eg, total body
                                       irradiation, hemibody
                                       radiation, per oral or
                                       endocavitary irradiation).
77778...............................  Interstitial radiation        8.00                                8.00            8.78  No.
                                       source application,
                                       complex, includes
                                       supervision, handling,
                                       loading of radiation
                                       source, when performed.
77790...............................  Supervision, handling,        0.00                                0.00            0.00  No.
                                       loading of radiation source.
78264...............................  Gastric emptying imaging      0.74                                0.79            0.79  No.
                                       study (eg, solid, liquid,
                                       or both).
78265...............................  Gastric emptying imaging      0.98                                0.98            0.98  No.
                                       study (eg, solid, liquid,
                                       or both); with small bowel
                                       transit.
78266...............................  Gastric emptying imaging      1.08                                1.08            1.08  No.
                                       study (eg, solid, liquid,
                                       or both); with small bowel
                                       and colon transit, multiple
                                       days.
88104...............................  Cytopathology, fluids,        0.56                                0.56            0.56  No.
                                       washings or brushings,
                                       except cervical or vaginal;
                                       smears with interpretation.
88106...............................  Cytopathology, fluids,        0.37                                0.37            0.37  No.
                                       washings or brushings,
                                       except cervical or vaginal;
                                       simple filter method with
                                       interpretation.
88108...............................  Cytopathology, concentration  0.44                                0.44            0.44  No.
                                       technique, smears and
                                       interpretation (eg,
                                       Saccomanno technique).
88112...............................  Cytopathology, selective      0.56                                0.56            0.56  No.
                                       cellular enhancement
                                       technique with
                                       interpretation (eg, liquid
                                       based slide preparation
                                       method), except cervical or
                                       vaginal.
88160...............................  Cytopathology, smears, any    0.50                                0.50            0.50  No.
                                       other source; screening and
                                       interpretation.
88161...............................  Cytopathology, smears, any    0.50                                0.50            0.50  No.
                                       other source; preparation,
                                       screening and
                                       interpretation.
88162...............................  Cytopathology, smears, any    0.76                                0.76            0.76  No.
                                       other source; extended
                                       study involving over 5
                                       slides and/or multiple
                                       stains.
88184...............................  Flow cytometry, cell          0.00                                0.00            0.00  No.
                                       surface, cytoplasmic, or
                                       nuclear marker, technical
                                       component only; first
                                       marker.
88185...............................  Flow cytometry, cell          0.00                                0.00            0.00  No.
                                       surface, cytoplasmic, or
                                       nuclear marker, technical
                                       component only; each
                                       additional marker.
88187...............................  Flow cytometry,               1.36                                0.74            0.74  No.
                                       interpretation; 2 to 8
                                       markers.

[[Page 80362]]

 
88188...............................  Flow cytometry,               1.69                                1.20            1.20  No.
                                       interpretation; 9 to 15
                                       markers.
88189...............................  Flow cytometry,               2.23                                1.70            1.70  No.
                                       interpretation; 16 or more
                                       markers.
88321...............................  Consultation and report on    1.63                                1.63            1.63  No.
                                       referred slides prepared
                                       elsewhere.
88323...............................  Consultation and report on    1.83                                1.83            1.83  No.
                                       referred material requiring
                                       preparation of slides.
88325...............................  Consultation, comprehensive,  2.50                                2.85            2.85  No.
                                       with review of records and
                                       specimens, with report on
                                       referred material.
88341...............................  Immunohistochemistry or       0.53                                0.56            0.56  No.
                                       immunocytochemistry, per
                                       specimen; each additional
                                       single antibody stain
                                       procedure (List separately
                                       in addition to code for
                                       primary procedure).
88342...............................  Immunohistochemistry or       0.70                                0.70            0.70  No.
                                       immunocytochemistry, per
                                       specimen; initial single
                                       antibody stain procedure.
88344...............................  Immunohistochemistry or       0.77                                0.77            0.77  No.
                                       immunocytochemistry, per
                                       specimen; each multiplex
                                       antibody stain procedure.
88350...............................  Immunofluorescence, per       0.56                                0.59            0.59  No.
                                       specimen; each additional
                                       single antibody stain
                                       procedure.
88364...............................  In situ hybridization (eg,    0.67                                0.70            0.70  No.
                                       FISH), per specimen; each
                                       additional single probe
                                       stain procedure.
88369...............................  Morphometric analysis, in     0.67                                0.70            0.70  No.
                                       situ hybridization
                                       (quantitative or semi-
                                       quantitative), manual, per
                                       specimen; each additional
                                       single probe stain
                                       procedure.
91110...............................  Gastrointestinal tract        3.64                                2.49            2.49  No.
                                       imaging, intraluminal (eg,
                                       capsule endoscopy),
                                       esophagus through ileum,
                                       with interpretation and
                                       report.
91111...............................  Gastrointestinal tract        1.00                                1.00            1.00  No.
                                       imaging, intraluminal (eg,
                                       capsule endoscopy),
                                       esophagus with
                                       interpretation and report.
91200...............................  Liver elastography,           0.27                                0.27            0.27  No.
                                       mechanically induced shear
                                       wave (eg, vibration),
                                       without imaging, with
                                       interpretation and report.
92132...............................  Scanning computerized         0.35                                0.30            0.30  No.
                                       ophthalmic diagnostic
                                       imaging, anterior segment,
                                       with interpretation and
                                       report, unilateral or
                                       bilateral.
92133...............................  Scanning computerized         0.50                                0.40            0.40  No.
                                       ophthalmic diagnostic
                                       imaging, posterior segment,
                                       with interpretation and
                                       report, unilateral or
                                       bilateral; optic nerve.
92134...............................  Scanning computerized         0.50                                0.45            0.45  No.
                                       ophthalmic diagnostic
                                       imaging, posterior segment,
                                       with interpretation and
                                       report, unilateral or
                                       bilateral; retina.
92235...............................  Fluorescein angiography       0.81                                0.75            0.75  No.
                                       (includes multiframe
                                       imaging) with
                                       interpretation and report.
92240...............................  Indocyanine-green             1.10                                0.80            0.80  No.
                                       angiography (includes
                                       multiframe imaging) with
                                       interpretation and report.
92250...............................  Fundus photography with       0.44                                0.40            0.40  No.
                                       interpretation and report.
92242...............................  Fluorescein angiography and   NEW                                 0.95            0.95  No.
                                       indocyanine-green
                                       angiography (includes
                                       multiframe imaging)
                                       performed at the same
                                       patient encounter with
                                       interpretation and report,
                                       unilateral or bilateral.
93050...............................  Arterial pressure waveform    0.17                                0.17            0.17  No.
                                       analysis for assessment of
                                       central arterial pressures,
                                       includes obtaining
                                       waveform(s), digitization
                                       and application of
                                       nonlinear mathematical
                                       transformations to
                                       determine central arterial
                                       pressures and augmentation
                                       index, with interpretation
                                       and report, upper extremity
                                       artery, non-invasive.
93590...............................  Percutaneous transcatheter    NEW                                18.23           21.70  No.
                                       closure of paravalvular
                                       leak; initial occlusion
                                       device, mitral valve.
93591...............................  Percutaneous transcatheter    NEW                                14.50           17.97  No.
                                       closure of paravalvular
                                       leak; initial occlusion
                                       device, aortic valve.
93592...............................  Percutaneous transcatheter    NEW                                 6.81            8.00  No.
                                       closure of paravalvular
                                       leak; each additional
                                       occlusion device (list
                                       separately in addition to
                                       code for primary service).
95144...............................  Professional services for     0.06                                0.06            0.06  No.
                                       the supervision of
                                       preparation and provision
                                       of antigens for allergen
                                       immunotherapy, single dose
                                       vial(s) (specify number of
                                       vials).
95165...............................  Professional services for     0.06                                0.06            0.06  No.
                                       the supervision of
                                       preparation and provision
                                       of antigens for allergen
                                       immunotherapy; single or
                                       multiple antigens (specify
                                       number of doses).
95812...............................  Electroencephalogram (EEG)    1.08                                1.08            1.08  No.
                                       extended monitoring; 41-60
                                       minutes.

[[Page 80363]]

 
95813...............................  Electroencephalogram (EEG)    1.73                                1.63            1.63  No.
                                       extended monitoring;
                                       greater than 1 hour.
95957...............................  Digital analysis of           1.98                                1.98            1.98  No.
                                       electroencephalogram (EEG)
                                       (eg, for epileptic spike
                                       analysis).
95971...............................  Electronic analysis of        0.78                                0.78            0.78  No.
                                       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 (i.e.,
                                       peripheral nerve, sacral
                                       nerve, neuromuscular)
                                       neurostimulator pulse
                                       generator/transmitter, with
                                       intraoperative or
                                       subsequent programming.
95972...............................  Electronic analysis of        0.80                                0.80            0.80  No.
                                       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 (i.e.,
                                       peripheral nerve, sacral
                                       nerve, neuromuscular)
                                       (except cranial nerve)
                                       neurostimulator pulse
                                       generator/transmitter, with
                                       intraoperative or
                                       subsequent programming.
96160...............................  Administration of patient-    NEW                                 0.00            0.00  No.
                                       focused health risk
                                       assessment instrument (eg,
                                       health hazard appraisal)
                                       with scoring and
                                       documentation, per
                                       standardized instrument.
96161...............................  Administration of caregiver-  NEW                                    I            0.00  No.
                                       focused health risk
                                       assessment instrument (eg,
                                       depression inventory) for
                                       the benefit of the patient,
                                       with scoring and
                                       documentation, per
                                       standardized instrument.
96931...............................  Reflectance confocal          0.00                                0.75            0.80  No.
                                       microscopy (RCM) for
                                       cellular and sub-cellular
                                       imaging of skin; image
                                       acquisition and
                                       interpretation and report,
                                       first lesion.
96932...............................  Reflectance confocal          0.00                                0.00            0.00  No.
                                       microscopy (RCM) for
                                       cellular and sub-cellular
                                       imaging of skin; image
                                       acquisition only, first
                                       lesion.
96933...............................  Reflectance confocal          0.00                                0.75            0.80  No.
                                       microscopy (RCM) for
                                       cellular and sub-cellular
                                       imaging of skin;
                                       interpretation and report
                                       only, first lesion.
96934...............................  Reflectance confocal          0.00                                0.71            0.76  No.
                                       microscopy (RCM) for
                                       cellular and sub-cellular
                                       imaging of skin; image
                                       acquisition and
                                       interpretation and report,
                                       each additional lesion.
96935...............................  Reflectance confocal          0.00                                0.00            0.00  No.
                                       microscopy (RCM) for
                                       cellular and sub-cellular
                                       imaging of skin; image
                                       acquisition only, each
                                       additional lesion.
96936...............................  Reflectance confocal          0.00                                0.71            0.76  No.
                                       microscopy (RCM) for
                                       cellular and sub-cellular
                                       imaging of skin;
                                       interpretation and report
                                       only, each additional
                                       lesion.
97161...............................  Physical therapy evaluation;  NEW                                 1.20            1.20  Yes.
                                       low complexity.
97162...............................  Physical therapy evaluation;  NEW                                 1.20            1.20  No.
                                       moderate complexity.
97163...............................  Physical therapy evaluation;  NEW                                 1.20            1.20  Yes.
                                       high complexity.
97164...............................  Reevaluation of physical      NEW                                 0.60            0.75  No.
                                       therapy established plan of
                                       care.
97165...............................  Occupational therapy          NEW                                 1.20            1.20  Yes.
                                       evaluation; low complexity.
97166...............................  Occupational therapy          NEW                                 1.20            1.20  No.
                                       evaluation; moderate
                                       complexity.
97167...............................  Occupational therapy          NEW                                 1.20            1.20  Yes.
                                       evaluation; high complexity.
97168...............................  Reevaluation of occupational  NEW                                 0.60            0.75  No.
                                       therapy care/established
                                       plan of care.
99151...............................  Moderate sedation services    NEW                                 0.50            0.50  No.
                                       provided by the same
                                       physician or other
                                       qualified health care
                                       professional performing the
                                       diagnostic or therapeutic
                                       service that the sedation
                                       supports, requiring the
                                       presence of an independent
                                       trained observer to assist
                                       in the monitoring of the
                                       patient's level of
                                       consciousness and
                                       physiological status;
                                       initial 15 minutes of intra-
                                       service time, patient
                                       younger than 5 years of age.

[[Page 80364]]

 
99152...............................  Moderate sedation services    NEW                                 0.25            0.25  No.
                                       provided by the same
                                       physician or other
                                       qualified health care
                                       professional performing the
                                       diagnostic or therapeutic
                                       service that the sedation
                                       supports, requiring the
                                       presence of an independent
                                       trained observer to assist
                                       in the monitoring of the
                                       patient's level of
                                       consciousness and
                                       physiological status;
                                       initial 15 minutes of intra-
                                       service time, patient age 5
                                       years or older.
99153...............................  Moderate sedation services    NEW                                 0.00            0.00  No.
                                       provided by the same
                                       physician or other
                                       qualified health care
                                       professional performing the
                                       diagnostic or therapeutic
                                       service that the sedation
                                       supports, requiring the
                                       presence of an independent
                                       trained observer to assist
                                       in the monitoring of the
                                       patient's level of
                                       consciousness and
                                       physiological status; each
                                       additional 15 minutes of
                                       intra-service time.
99155...............................  Moderate sedation services    NEW                                 1.90            1.90  No.
                                       provided by a physician or
                                       other qualified health care
                                       professional other than the
                                       physician or other
                                       qualified health care
                                       professional performing the
                                       diagnostic or therapeutic
                                       service that the sedation
                                       supports; initial 15
                                       minutes of intra-service
                                       time, patient younger than
                                       5 years of age.
99156...............................  Moderate sedation services    NEW                                 1.65            1.65  No.
                                       provided by a physician or
                                       other qualified health care
                                       professional other than the
                                       physician or other
                                       qualified health care
                                       professional performing the
                                       diagnostic or therapeutic
                                       service that the sedation
                                       supports; initial 15
                                       minutes of intra-service
                                       time, patient age 5 years
                                       or older.
99157...............................  Moderate sedation services    NEW                                 1.25            1.25  No.
                                       provided by a physician or
                                       other qualified health care
                                       professional other than the
                                       physician or other
                                       qualified health care
                                       professional performing the
                                       diagnostic or therapeutic
                                       service that the sedation
                                       supports; each additional
                                       15 minutes intra-service
                                       time.
99354...............................  Prolonged evaluation and      1.77                                2.33            2.33  No.
                                       management or psychotherapy
                                       service(s) (beyond the
                                       typical service time of the
                                       primary procedure) in the
                                       office or other outpatient
                                       setting requiring direct
                                       patient contact beyond the
                                       usual service; first hour.
99358...............................  Prolonged evaluation and      2.10                                2.10            2.10  No.
                                       management service before
                                       and/or after direct patient
                                       care; first hour.
99359...............................  Prolonged evaluation and      1.00                                1.00            1.00  No.
                                       management service before
                                       and/or after direct patient
                                       care; each additional 30
                                       minutes.
99487...............................  Complex chronic care          0.00                                1.00            1.00  No.
                                       management services, 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,
                                       establishment or
                                       substantial revision of a
                                       comprehensive care plan,
                                       moderate or high complexity
                                       medical decision making; 60
                                       minutes of clinical staff
                                       time directed by a
                                       physician or other
                                       qualified health care
                                       professional, per calendar
                                       month;
99489...............................  Complex chronic care          0.00                                0.50            0.50  No.
                                       management services, 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,
                                       establishment or
                                       substantial revision of a
                                       comprehensive care plan,
                                       moderate or high complexity
                                       medical decision making; 60
                                       minutes of clinical staff
                                       time directed by a
                                       physician or other
                                       qualified health care
                                       professional, per calendar
                                       month.; each additional 30
                                       minutes of clinical staff
                                       time directed by a
                                       physician or other
                                       qualified health care
                                       professional, per calendar
                                       month.
G0416...............................  Surgical pathology, gross     3.09                                3.60            3.60  No.
                                       and microscopic
                                       examinations, for prostate
                                       needle biopsy, any method.

[[Page 80365]]

 
G0500...............................  Moderate sedation services    NEW                                 0.10            0.10  No.
                                       provided by the same
                                       physician or other
                                       qualified health care
                                       professional performing a
                                       gastrointestinal endoscopic
                                       service that sedation
                                       supports, requiring the
                                       presence of an independent
                                       trained observer to assist
                                       in the monitoring of the
                                       patient's level of
                                       consciousness and
                                       physiological status;
                                       initial 15 minutes of intra-
                                       service time; patient age 5
                                       years or older. (additional
                                       time may be reported with
                                       99153, as appropriate).
G0501...............................  Resource-intensive services   NEW                                 0.48               B  No.
                                       for patients for whom the
                                       use of specialized mobility-
                                       assistive technology (such
                                       as adjustable height chairs
                                       or tables, patient lift,
                                       and adjustable padded leg
                                       supports) is medically
                                       necessary and used during
                                       the provision of an office/
                                       outpatient, evaluation and
                                       management visit. (List
                                       separately in addition to
                                       primary service).
G0502...............................  Initial psychiatric           NEW                                 1.59            1.70  No.
                                       collaborative care
                                       management, first 70
                                       minutes in the first
                                       calendar month of
                                       behavioral health care
                                       manager activities, in
                                       consultation with a
                                       psychiatric consultant, and
                                       directed by the treating
                                       physician or other
                                       qualified health care
                                       professional, with the
                                       following required
                                       elements:.
                                       outreach to and
                                       engagement in treatment of
                                       a patient directed by the
                                       treating physician or other
                                       qualified health care
                                       professional;.
                                       initial assessment
                                       of the patient, including
                                       administration of validated
                                       rating scales, with the
                                       development of an
                                       individualized treatment
                                       plan;.
                                       review by the
                                       psychiatric consultant with
                                       modifications of the plan
                                       if recommended;.
                                       entering patient in
                                       a registry and tracking
                                       patient follow-up and
                                       progress using the
                                       registry, with appropriate
                                       documentation, and
                                       participation in weekly
                                       caseload consultation with
                                       the psychiatric consultant;
                                       and.
                                       provision of brief
                                       interventions using
                                       evidence-based techniques
                                       such as behavioral
                                       activation, motivational
                                       interviewing, and other
                                       focused treatment
                                       strategies..
G0503...............................  Subsequent psychiatric        NEW                                 1.42            1.53  No.
                                       collaborative care
                                       management, first 60
                                       minutes in a subsequent
                                       month of behavioral health
                                       care manager activities, in
                                       consultation with a
                                       psychiatric consultant, and
                                       directed by the treating
                                       physician or other
                                       qualified health care
                                       professional, with the
                                       following required
                                       elements:  tracking
                                       patient follow-up and
                                       progress using the
                                       registry, with appropriate
                                       documentation;
                                       participation in
                                       weekly caseload
                                       consultation with the
                                       psychiatric consultant;.
                                       ongoing
                                       collaboration with and
                                       coordination of the
                                       patient's mental health
                                       care with the treating
                                       physician or other
                                       qualified health care
                                       professional and any other
                                       treating mental health
                                       providers;.
                                       additional review
                                       of progress and
                                       recommendations for changes
                                       in treatment, as indicated,
                                       including medications,
                                       based on recommendations
                                       provided by the psychiatric
                                       consultant;.
                                       provision of brief
                                       interventions using
                                       evidence-based techniques
                                       such as behavioral
                                       activation, motivational
                                       interviewing, and other
                                       focused treatment
                                       strategies;.
                                       monitoring of
                                       patient outcomes using
                                       validated rating scales;
                                       and relapse prevention
                                       planning with patients as
                                       they achieve remission of
                                       symptoms and/or other
                                       treatment goals and are
                                       prepared for discharge from
                                       active treatment..

[[Page 80366]]

 
G0504...............................  Initial or subsequent         NEW                                 0.71            0.82  No.
                                       psychiatric collaborative
                                       care management, each
                                       additional 30 minutes in a
                                       calendar month of
                                       behavioral health care
                                       manager activities, in
                                       consultation with a
                                       psychiatric consultant, and
                                       directed by the treating
                                       physician or other
                                       qualified health care
                                       professional (List
                                       separately in addition to
                                       code for primary
                                       procedure). (Use GPPP3 in
                                       conjunction with GPPP1,
                                       GPPP2).
G0505...............................  Cognition and functional      NEW                                 3.30            3.44  Yes.
                                       assessment using
                                       standardized instruments
                                       with development of
                                       recorded care plan for the
                                       patient with cognitive
                                       impairment, history
                                       obtained from patient and/
                                       or caregiver, in office or
                                       other outpatient setting or
                                       home or domiciliary or rest
                                       home.
G0506...............................  Comprehensive assessment of   NEW                                 0.87            0.87  No.
                                       and care planning for
                                       patients requiring chronic
                                       care management services.
                                       (List separately in
                                       addition to primary monthly
                                       care management service).
G0507...............................  Care management services for  NEW                                 0.61            0.61  No.
                                       behavioral health
                                       conditions, 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:
                                       Initial assessment
                                       or follow-up monitoring,
                                       including the use of
                                       applicable validated rating
                                       scales;.
                                       Behavioral health
                                       care planning in relation
                                       to behavioral/psychiatric
                                       health problems, including
                                       revision for patients who
                                       are not progressing or
                                       whose status changes;.
                                       Facilitating and
                                       coordinating treatment such
                                       as psychotherapy,
                                       pharmacotherapy, counseling
                                       and/or psychiatric
                                       consultation; and.
                                      Continuity of care
                                       with a designated member of
                                       the care team.
G0508...............................  Telehealth consultation,      NEW                                 4.00            4.00  No.
                                       critical care, initial,
                                       physicians typically spend
                                       60 minutes communicating
                                       with the patient and
                                       providers via telehealth.
G0509...............................  Telehealth consultation,      NEW                                 3.86            3.86  No.
                                       critical care, subsequent,
                                       physicians typically spend
                                       50 minutes communicating
                                       with the patient and
                                       providers via telehealth.
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 80367]]


                                                 Table 28--CY 2017 Final Rule Direct PE Refinement Table
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 RUC
               HCPCS code                          Input code             Labor activity   recommendation         CMS                            Direct
HCPCS code     description       Input  code      description     NF/F        (where      or current value    refinement         Comment         costs
                                                                           applicable)      (min or qty)     (min or qty)                        change
--------------------------------------------------------------------------------------------------------------------------------------------------------
11732.....  Remove nail       EF015...........  mayo stand.....  NF      ...............                 0               8  G1: See preamble        0.01
             plate add-on.                                                                                                   text.
11732.....  Remove nail       EF031...........  table, power...  NF      ...............                 7               8  E15: Refined            0.02
             plate add-on.                                                                                                   equipment time
                                                                                                                             to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
11732.....  Remove nail       EQ137...........  instrument       NF      ...............                 0               8  G1: See preamble        0.02
             plate add-on.                       pack, basic                                                                 text.
                                                 ($500-$1499).
11732.....  Remove nail       EQ168...........  light, exam....  NF      ...............                 7               8  E15: Refined            0.00
             plate add-on.                                                                                                   equipment time
                                                                                                                             to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
11732.....  Remove nail       L037D...........  RN/LPN/MTA.....  NF      Assist                          7               8  G1: See preamble        0.37
             plate add-on.                                                physician in                                       text.
                                                                          performing
                                                                          procedure.
11732.....  Remove nail       SC031...........  needle, 30g....  NF      ...............                 1               0  S9: Add-on code.       -0.34
             plate add-on.                                                                                                   Additional
                                                                                                                             supplies not
                                                                                                                             typical; see
                                                                                                                             preamble text.
11732.....  Remove nail       SC051...........  syringe 10-12ml  NF      ...............                 1               0  S9: Add-on code.       -0.18
             plate add-on.                                                                                                   Additional
                                                                                                                             supplies not
                                                                                                                             typical; see
                                                                                                                             preamble text.
11732.....  Remove nail       SG067...........  penrose drain    NF      ...............                 1               0  S9: Add-on code.       -0.50
             plate add-on.                       (0.25in x 4in).                                                             Additional
                                                                                                                             supplies not
                                                                                                                             typical; see
                                                                                                                             preamble text.
11732.....  Remove nail       SH047...........  lidocaine 1%-2%  NF      ...............                10               0  S9: Add-on code.       -0.35
             plate add-on.                       inj                                                                         Additional
                                                 (Xylocaine).                                                                supplies not
                                                                                                                             typical; see
                                                                                                                             preamble text.
11732.....  Remove nail       SH064...........  silver           NF      ...............               0.5               0  S9: Add-on code.       -0.08
             plate add-on.                       sulfadiazene                                                                Additional
                                                 cream                                                                       supplies not
                                                 (Silvadene).                                                                typical; see
                                                                                                                             preamble text.
11732.....  Remove nail       SJ053...........  swab-pad,        NF      ...............                 2               1  S9: Add-on code.       -0.01
             plate add-on.                       alcohol.                                                                    Additional
                                                                                                                             supplies not
                                                                                                                             typical; see
                                                                                                                             preamble text.
27197.....  Clsd tx pelvic    L037D...........  RN/LPN/MTA.....  F       99212 27                        2               0  G1: See preamble      -19.98
             ring fx.                                                     minutes.                                           text.
27197.....  Clsd tx pelvic    L037D...........  RN/LPN/MTA.....  F       99213 36                        1               0  G1: See preamble      -13.32
             ring fx.                                                     minutes.                                           text.
27198.....  Clsd tx pelvic    L037D...........  RN/LPN/MTA.....  F       99212 27                        1               0  G1: See preamble       -9.99
             ring fx.                                                     minutes.                                           text.
27198.....  Clsd tx pelvic    L037D...........  RN/LPN/MTA.....  F       99213 36                        2               0  G1: See preamble      -26.64
             ring fx.                                                     minutes.                                           text.
31551.....  Laryngoplasty     EQ137...........  instrument       F       ...............               138             129  E5: Refined            -0.02
             laryngeal sten.                     pack, basic                                                                 equipment time
                                                 ($500-$1499).                                                               to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             surgical
                                                                                                                             instrument packs.
31551.....  Laryngoplasty     EQ167...........  light source,    F       ...............                 0             108  E13: Equipment          3.00
             laryngeal sten.                     xenon.                                                                      item replaces
                                                                                                                             another item;
                                                                                                                             see preamble
                                                                                                                             text EQ170.
31551.....  Laryngoplasty     ES031...........  video system,    F       ...............                 0             108  E19: Refined           13.97
             laryngeal sten.                     endoscopy                                                                   equipment time
                                                 (processor,                                                                 to conform to
                                                 digital                                                                     established
                                                 capture,                                                                    policies for
                                                 monitor,                                                                    scope
                                                 printer, cart).                                                             accessories.
31551.....  Laryngoplasty     ES060...........  Video-flexible   F       ...............               198               0  G1: See preamble      -62.98
             laryngeal sten.                     laryngoscope                                                                text.
                                                 system.
31551.....  Laryngoplasty     ES063...........  rhinolaryngosco  F       ...............                 0             189  E4: Refined             8.76
             laryngeal sten.                     pe, flexible,                                                               equipment time
                                                 video, non-                                                                 to conform to
                                                 channeled.                                                                  established
                                                                                                                             policies for
                                                                                                                             scopes.
31552.....  Laryngoplasty     EQ137...........  instrument       F       ...............               138             129  E5: Refined            -0.02
             laryngeal sten.                     pack, basic                                                                 equipment time
                                                 ($500-$1499).                                                               to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             surgical
                                                                                                                             instrument packs.
31552.....  Laryngoplasty     EQ167...........  light source,    F       ...............                 0             108  E13: Equipment          3.00
             laryngeal sten.                     xenon.                                                                      item replaces
                                                                                                                             another item;
                                                                                                                             see preamble
                                                                                                                             text EQ170.
31552.....  Laryngoplasty     ES031...........  video system,    F       ...............                 0             108  E19: Refined           13.97
             laryngeal sten.                     endoscopy                                                                   equipment time
                                                 (processor,                                                                 to conform to
                                                 digital                                                                     established
                                                 capture,                                                                    policies for
                                                 monitor,                                                                    scope
                                                 printer, cart).                                                             accessories.
31552.....  Laryngoplasty     ES060...........  Video-flexible   F       ...............               198               0  G1: See preamble      -62.98
             laryngeal sten.                     laryngoscope                                                                text.
                                                 system.
31552.....  Laryngoplasty     ES063...........  rhinolaryngosco  F       ...............                 0             189  E4: Refined             8.76
             laryngeal sten.                     pe, flexible,                                                               equipment time
                                                 video, non-                                                                 to conform to
                                                 channeled.                                                                  established
                                                                                                                             policies for
                                                                                                                             scopes.
31553.....  Laryngoplasty     EQ137...........  instrument       F       ...............               138             129  E5: Refined            -0.02
             laryngeal sten.                     pack, basic                                                                 equipment time
                                                 ($500-$1499).                                                               to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             surgical
                                                                                                                             instrument packs.

[[Page 80368]]

 
31553.....  Laryngoplasty     EQ167...........  light source,    F       ...............                 0             108  E13: Equipment          3.00
             laryngeal sten.                     xenon.                                                                      item replaces
                                                                                                                             another item;
                                                                                                                             see preamble
                                                                                                                             text EQ170.
31553.....  Laryngoplasty     ES031...........  video system,    F       ...............                 0             108  E19: Refined           13.97
             laryngeal sten.                     endoscopy                                                                   equipment time
                                                 (processor,                                                                 to conform to
                                                 digital                                                                     established
                                                 capture,                                                                    policies for
                                                 monitor,                                                                    scope
                                                 printer, cart).                                                             accessories.
31553.....  Laryngoplasty     ES060...........  Video-flexible   F       ...............               198               0  G1: See preamble      -62.98
             laryngeal sten.                     laryngoscope                                                                text.
                                                 system.
31553.....  Laryngoplasty     ES063...........  rhinolaryngosco  F       ...............                 0             189  E4: Refined             8.76
             laryngeal sten.                     pe, flexible,                                                               equipment time
                                                 video, non-                                                                 to conform to
                                                 channeled.                                                                  established
                                                                                                                             policies for
                                                                                                                             scopes.
31554.....  Laryngoplasty     EQ137...........  instrument       F       ...............               138             129  E5: Refined            -0.02
             laryngeal sten.                     pack, basic                                                                 equipment time
                                                 ($500-$1499).                                                               to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             surgical
                                                                                                                             instrument packs.
31554.....  Laryngoplasty     EQ167...........  light source,    F       ...............                 0             108  E13: Equipment          3.00
             laryngeal sten.                     xenon.                                                                      item replaces
                                                                                                                             another item;
                                                                                                                             see preamble
                                                                                                                             text EQ170.
31554.....  Laryngoplasty     ES031...........  video system,    F       ...............                 0             108  E19: Refined           13.97
             laryngeal sten.                     endoscopy                                                                   equipment time
                                                 (processor,                                                                 to conform to
                                                 digital                                                                     established
                                                 capture,                                                                    policies for
                                                 monitor,                                                                    scope
                                                 printer, cart).                                                             accessories.
31554.....  Laryngoplasty     ES060...........  Video-flexible   F       ...............               198               0  G1: See preamble      -62.98
             laryngeal sten.                     laryngoscope                                                                text.
                                                 system.
31554.....  Laryngoplasty     ES063...........  rhinolaryngosco  F       ...............                 0             189  E4: Refined             8.76
             laryngeal sten.                     pe, flexible,                                                               equipment time
                                                 video, non-                                                                 to conform to
                                                 channeled.                                                                  established
                                                                                                                             policies for
                                                                                                                             scopes.
31572.....  Largsc w/laser    EQ167...........  light source,    NF      ...............                 0              38  E19: Refined            1.05
             dstrj les.                          xenon.                                                                      equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             scope
                                                                                                                             accessories.
31572.....  Largsc w/laser    ES031...........  video system,    NF      ...............                 0              38  E19: Refined            4.92
             dstrj les.                          endoscopy                                                                   equipment time
                                                 (processor,                                                                 to conform to
                                                 digital                                                                     established
                                                 capture,                                                                    policies for
                                                 monitor,                                                                    scope
                                                 printer, cart).                                                             accessories.
31572.....  Largsc w/laser    ES061...........  Video-flexible   NF      ...............                59               0  G1: See preamble      -14.89
             dstrj les.                          channeled                                                                   text.
                                                 laryngoscope
                                                 system.
31572.....  Largsc w/laser    ES064...........  rhinolaryngosco  NF      ...............                 0              65  E4: Refined             3.39
             dstrj les.                          pe, flexible,                                                               equipment time
                                                 video,                                                                      to conform to
                                                 channeled.                                                                  established
                                                                                                                             policies for
                                                                                                                             scopes.
31572.....  Largsc w/laser    SF029...........  laser tip, bare  NF      ...............                 0               1  S8: Supply item       150.00
             dstrj les.                          (single use).                                                               replaces another
                                                                                                                             item; see
                                                                                                                             preamble SF030.
31572.....  Largsc w/laser    SF030...........  laser tip,       NF      ...............                 1               0  S7: Supply item      -850.00
             dstrj les.                          diffuser fiber.                                                             replaced by
                                                                                                                             another item;
                                                                                                                             see preamble
                                                                                                                             SF029.
31573.....  Largsc w/ther     EQ167...........  light source,    NF      ...............                 0              33  E19: Refined            0.92
             injection.                          xenon.                                                                      equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             scope
                                                                                                                             accessories.
31573.....  Largsc w/ther     ES031...........  video system,    NF      ...............                 0              33  E19: Refined            4.27
             injection.                          endoscopy                                                                   equipment time
                                                 (processor,                                                                 to conform to
                                                 digital                                                                     established
                                                 capture,                                                                    policies for
                                                 monitor,                                                                    scope
                                                 printer, cart).                                                             accessories.
31573.....  Largsc w/ther     ES061...........  Video-flexible   NF      ...............                54               0  G1: See preamble      -13.63
             injection.                          channeled                                                                   text.
                                                 laryngoscope
                                                 system.
31573.....  Largsc w/ther     ES064...........  rhinolaryngosco  NF      ...............                 0              60  E4: Refined             3.13
             injection.                          pe, flexible,                                                               equipment time
                                                 video,                                                                      to conform to
                                                 channeled.                                                                  established
                                                                                                                             policies for
                                                                                                                             scopes.
31574.....  Largsc w/njx      EQ167...........  light source,    NF      ...............                 0              33  E19: Refined            0.92
             augmentation.                       xenon.                                                                      equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             scope
                                                                                                                             accessories.
31574.....  Largsc w/njx      ES031...........  video system,    NF      ...............                 0              33  E19: Refined            4.27
             augmentation.                       endoscopy                                                                   equipment time
                                                 (processor,                                                                 to conform to
                                                 digital                                                                     established
                                                 capture,                                                                    policies for
                                                 monitor,                                                                    scope
                                                 printer, cart).                                                             accessories.

[[Page 80369]]

 
31574.....  Largsc w/njx      ES060...........  Video-flexible   NF      ...............                60               0  G1: See preamble      -19.09
             augmentation.                       laryngoscope                                                                text.
                                                 system.
31574.....  Largsc w/njx      ES063...........  rhinolaryngosco  NF      ...............                 0              60  E4: Refined             2.78
             augmentation.                       pe, flexible,                                                               equipment time
                                                 video, non-                                                                 to conform to
                                                 channeled.                                                                  established
                                                                                                                             policies for
                                                                                                                             scopes.
31575.....  Diagnostic        EF008...........  chair with       NF      ...............                23              21  E15: Refined           -0.02
             laryngoscopy.                       headrest,                                                                   equipment time
                                                 exam,                                                                       to conform to
                                                 reclining.                                                                  changes in
                                                                                                                             clinical labor
                                                                                                                             time.
31575.....  Diagnostic        EQ167...........  light source,    NF      ...............                 0              18  E19: Refined            0.50
             laryngoscopy.                       xenon.                                                                      equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             scope
                                                                                                                             accessories.
31575.....  Diagnostic        EQ170...........  light,           NF      ...............                23              21  E15: Refined           -0.02
             laryngoscopy.                       fiberoptic                                                                  equipment time
                                                 headlight w-                                                                to conform to
                                                 source.                                                                     changes in
                                                                                                                             clinical labor
                                                                                                                             time.
31575.....  Diagnostic        EQ234...........  suction and      NF      ...............                23              21  E15: Refined           -0.02
             laryngoscopy.                       pressure                                                                    equipment time
                                                 cabinet, ENT                                                                to conform to
                                                 (SMR).                                                                      changes in
                                                                                                                             clinical labor
                                                                                                                             time.
31575.....  Diagnostic        ES031...........  video system,    NF      ...............                 0              18  E19: Refined            2.33
             laryngoscopy.                       endoscopy                                                                   equipment time
                                                 (processor,                                                                 to conform to
                                                 digital                                                                     established
                                                 capture,                                                                    policies for
                                                 monitor,                                                                    scope
                                                 printer, cart).                                                             accessories.
31575.....  Diagnostic        ES060...........  Video-flexible   NF      ...............                44               0  G1: See preamble      -14.00
             laryngoscopy.                       laryngoscope                                                                text.
                                                 system.
31575.....  Diagnostic        ES063...........  rhinolaryngosco  NF      ...............                 0              47  E4: Refined             2.18
             laryngoscopy.                       pe, flexible,                                                               equipment time
                                                 video, non-                                                                 to conform to
                                                 channeled.                                                                  established
                                                                                                                             policies for
                                                                                                                             scopes.
31575.....  Diagnostic        L037D...........  RN/LPN/MTA.....  NF      Clean room/                     3               1  G1: See preamble       -0.74
             laryngoscopy.                                                equipment by                                       text.
                                                                          physician
                                                                          staff.
31576.....  Laryngoscopy      EQ167...........  light source,    NF      ...............                 0              28  E19: Refined            0.78
             with biopsy.                        xenon.                                                                      equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             scope
                                                                                                                             accessories.
31576.....  Laryngoscopy      ES031...........  video system,    NF      ...............                 0              28  E19: Refined            3.62
             with biopsy.                        endoscopy                                                                   equipment time
                                                 (processor,                                                                 to conform to
                                                 digital                                                                     established
                                                 capture,                                                                    policies for
                                                 monitor,                                                                    scope
                                                 printer, cart).                                                             accessories.
31576.....  Laryngoscopy      ES061...........  Video-flexible   NF      ...............                55               0  G1: See preamble      -13.88
             with biopsy.                        channeled                                                                   text.
                                                 laryngoscope
                                                 system.
31576.....  Laryngoscopy      ES064...........  rhinolaryngosco  NF      ...............                 0              55  E4: Refined             2.87
             with biopsy.                        pe, flexible,                                                               equipment time
                                                 video,                                                                      to conform to
                                                 channeled.                                                                  established
                                                                                                                             policies for
                                                                                                                             scopes.
31577.....  Remove foreign    EF008...........  chair with       NF      ...............                99              96  E15: Refined           -0.03
             body larynx.                        headrest,                                                                   equipment time
                                                 exam,                                                                       to conform to
                                                 reclining.                                                                  changes in
                                                                                                                             clinical labor
                                                                                                                             time.
31577.....  Remove foreign    EF015...........  mayo stand.....  NF      ...............                99              96  E15: Refined            0.00
             body larynx.                                                                                                    equipment time
                                                                                                                             to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
31577.....  Remove foreign    EQ137...........  instrument       NF      ...............                40              39  E15: Refined            0.00
             body larynx.                        pack, basic                                                                 equipment time
                                                 ($500-$1499).                                                               to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
31577.....  Remove foreign    EQ167...........  light source,    NF      ...............                 0              30  E19: Refined            0.83
             body larynx.                        xenon.                                                                      equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             scope
                                                                                                                             accessories.
31577.....  Remove foreign    EQ170...........  light,           NF      ...............                99              96  E15: Refined           -0.02
             body larynx.                        fiberoptic                                                                  equipment time
                                                 headlight w-                                                                to conform to
                                                 source.                                                                     changes in
                                                                                                                             clinical labor
                                                                                                                             time.
31577.....  Remove foreign    EQ234...........  suction and      NF      ...............                99              96  E15: Refined           -0.03
             body larynx.                        pressure                                                                    equipment time
                                                 cabinet, ENT                                                                to conform to
                                                 (SMR).                                                                      changes in
                                                                                                                             clinical labor
                                                                                                                             time.
31577.....  Remove foreign    ES031...........  video system,    NF      ...............                 0              30  E19: Refined            3.88
             body larynx.                        endoscopy                                                                   equipment time
                                                 (processor,                                                                 to conform to
                                                 digital                                                                     established
                                                 capture,                                                                    policies for
                                                 monitor,                                                                    scope
                                                 printer, cart).                                                             accessories.
31577.....  Remove foreign    ES061...........  Video-flexible   NF      ...............                54               0  G1: See preamble      -13.63
             body larynx.                        channeled                                                                   text.
                                                 laryngoscope
                                                 system.
31577.....  Remove foreign    ES064...........  rhinolaryngosco  NF      ...............                 0              59  E4: Refined             3.08
             body larynx.                        pe, flexible,                                                               equipment time
                                                 video,                                                                      to conform to
                                                 channeled.                                                                  established
                                                                                                                             policies for
                                                                                                                             scopes.

[[Page 80370]]

 
31577.....  Remove foreign    L037D...........  RN/LPN/MTA.....  NF      Clean room/                     3               1  G1: See preamble       -0.74
             body larynx.                                                 equipment by                                       text.
                                                                          physician
                                                                          staff.
31577.....  Remove foreign    L037D...........  RN/LPN/MTA.....  NF      Obtain vital                    3               2  L17: Clinical          -0.37
             body larynx.                                                 signs.                                             labor task
                                                                                                                             redundant with
                                                                                                                             clinical labor
                                                                                                                             task ``Assist
                                                                                                                             physician in
                                                                                                                             performing the
                                                                                                                             procedure''
                                                                                                                             (L041B).
31578.....  Removal of        EQ167...........  light source,    NF      ...............                 0              33  E19: Refined            0.92
             larynx lesion.                      xenon.                                                                      equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             scope
                                                                                                                             accessories.
31578.....  Removal of        ES031...........  video system,    NF      ...............                 0              33  E19: Refined            4.27
             larynx lesion.                      endoscopy                                                                   equipment time
                                                 (processor,                                                                 to conform to
                                                 digital                                                                     established
                                                 capture,                                                                    policies for
                                                 monitor,                                                                    scope
                                                 printer, cart).                                                             accessories.
31578.....  Removal of        ES061...........  Video-flexible   NF      ...............                54               0  G1: See preamble      -13.63
             larynx lesion.                      channeled                                                                   text.
                                                 laryngoscope
                                                 system.
31578.....  Removal of        ES064...........  rhinolaryngosco  NF      ...............                 0              60  E4: Refined             3.13
             larynx lesion.                      pe, flexible,                                                               equipment time
                                                 video,                                                                      to conform to
                                                 channeled.                                                                  established
                                                                                                                             policies for
                                                                                                                             scopes.
31579.....  Diagnostic        EF008...........  chair with       NF      ...............                31              28  E15: Refined           -0.03
             laryngoscopy.                       headrest,                                                                   equipment time
                                                 exam,                                                                       to conform to
                                                 reclining.                                                                  changes in
                                                                                                                             clinical labor
                                                                                                                             time.
31579.....  Diagnostic        EF015...........  mayo stand.....  NF      ...............                31              28  E15: Refined            0.00
             laryngoscopy.                                                                                                   equipment time
                                                                                                                             to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
31579.....  Diagnostic        EQ167...........  light source,    NF      ...............                 0              25  E19: Refined            0.69
             laryngoscopy.                       xenon.                                                                      equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             scope
                                                                                                                             accessories.
31579.....  Diagnostic        EQ170...........  light,           NF      ...............                31              28  E15: Refined           -0.02
             laryngoscopy.                       fiberoptic                                                                  equipment time
                                                 headlight w-                                                                to conform to
                                                 source.                                                                     changes in
                                                                                                                             clinical labor
                                                                                                                             time.
31579.....  Diagnostic        EQ234...........  suction and      NF      ...............                31              28  E15: Refined           -0.03
             laryngoscopy.                       pressure                                                                    equipment time
                                                 cabinet, ENT                                                                to conform to
                                                 (SMR).                                                                      changes in
                                                                                                                             clinical labor
                                                                                                                             time.
31579.....  Diagnostic        ES031...........  video system,    NF      ...............                 0              25  E19: Refined            3.23
             laryngoscopy.                       endoscopy                                                                   equipment time
                                                 (processor,                                                                 to conform to
                                                 digital                                                                     established
                                                 capture,                                                                    policies for
                                                 monitor,                                                                    scope
                                                 printer, cart).                                                             accessories.
31579.....  Diagnostic        ES063...........  rhinolaryngosco  NF      ...............                 0              54  E4: Refined             2.50
             laryngoscopy.                       pe, flexible,                                                               equipment time
                                                 video, non-                                                                 to conform to
                                                 channeled.                                                                  established
                                                                                                                             policies for
                                                                                                                             scopes.
31579.....  Diagnostic        ES065...........  stroboscopy      NF      ...............                49              44  E19: Refined           -0.33
             laryngoscopy.                       system.                                                                     equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             scope
                                                                                                                             accessories.
31579.....  Diagnostic        L037D...........  RN/LPN/MTA.....  NF      Clean room/                     3               1  G1: See preamble       -0.74
             laryngoscopy.                                                equipment by                                       text.
                                                                          physician
                                                                          staff.
31579.....  Diagnostic        L037D...........  RN/LPN/MTA.....  NF      Obtain vital                    3               2  L17: Clinical          -0.37
             laryngoscopy.                                                signs.                                             labor task
                                                                                                                             redundant with
                                                                                                                             clinical labor
                                                                                                                             task ``Assist
                                                                                                                             physician in
                                                                                                                             performing the
                                                                                                                             procedure''
                                                                                                                             (L041B).
31580.....  Revision of       EQ137...........  instrument       F       ...............               138             129  E5: Refined            -0.02
             larynx.                             pack, basic                                                                 equipment time
                                                 ($500-$1499).                                                               to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             surgical
                                                                                                                             instrument packs.
31580.....  Revision of       EQ167...........  light source,    F       ...............                 0             108  E13: Equipment          3.00
             larynx.                             xenon.                                                                      item replaces
                                                                                                                             another item;
                                                                                                                             see preamble
                                                                                                                             text EQ170.
31580.....  Revision of       ES031...........  video system,    F       ...............                 0             108  E19: Refined           13.97
             larynx.                             endoscopy                                                                   equipment time
                                                 (processor,                                                                 to conform to
                                                 digital                                                                     established
                                                 capture,                                                                    policies for
                                                 monitor,                                                                    scope
                                                 printer, cart).                                                             accessories.
31580.....  Revision of       ES060...........  Video-flexible   F       ...............               198               0  G1: See preamble      -62.98
             larynx.                             laryngoscope                                                                text.
                                                 system.

[[Page 80371]]

 
31580.....  Revision of       ES063...........  rhinolaryngosco  F       ...............                 0             189  E4: Refined             8.76
             larynx.                             pe, flexible,                                                               equipment time
                                                 video, non-                                                                 to conform to
                                                 channeled.                                                                  established
                                                                                                                             policies for
                                                                                                                             scopes.
31584.....  Treat larynx      EQ137...........  instrument       F       ...............               138             129  E5: Refined            -0.02
             fracture.                           pack, basic                                                                 equipment time
                                                 ($500-$1499).                                                               to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             surgical
                                                                                                                             instrument packs.
31584.....  Treat larynx      EQ167...........  light source,    F       ...............                 0             108  E13: Equipment          3.00
             fracture.                           xenon.                                                                      item replaces
                                                                                                                             another item;
                                                                                                                             see preamble
                                                                                                                             text EQ170.
31584.....  Treat larynx      ES031...........  video system,    F       ...............                 0             108  E19: Refined           13.97
             fracture.                           endoscopy                                                                   equipment time
                                                 (processor,                                                                 to conform to
                                                 digital                                                                     established
                                                 capture,                                                                    policies for
                                                 monitor,                                                                    scope
                                                 printer, cart).                                                             accessories.
31584.....  Treat larynx      ES060...........  Video-flexible   F       ...............               198               0  G1: See preamble      -62.98
             fracture.                           laryngoscope                                                                text.
                                                 system.
31584.....  Treat larynx      ES063...........  rhinolaryngosco  F       ...............                 0             189  E4: Refined             8.76
             fracture.                           pe, flexible,                                                               equipment time
                                                 video, non-                                                                 to conform to
                                                 channeled.                                                                  established
                                                                                                                             policies for
                                                                                                                             scopes.
31587.....  Revision of       EQ137...........  instrument       F       ...............               138             129  E5: Refined            -0.02
             larynx.                             pack, basic                                                                 equipment time
                                                 ($500-$1499).                                                               to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             surgical
                                                                                                                             instrument packs.
31587.....  Revision of       EQ167...........  light source,    F       ...............                 0             108  E13: Equipment          3.00
             larynx.                             xenon.                                                                      item replaces
                                                                                                                             another item;
                                                                                                                             see preamble
                                                                                                                             text EQ170.
31587.....  Revision of       ES031...........  video system,    F       ...............                 0             108  E19: Refined           13.97
             larynx.                             endoscopy                                                                   equipment time
                                                 (processor,                                                                 to conform to
                                                 digital                                                                     established
                                                 capture,                                                                    policies for
                                                 monitor,                                                                    scope
                                                 printer, cart).                                                             accessories.
31587.....  Revision of       ES060...........  Video-flexible   F       ...............               198               0  G1: See preamble      -62.98
             larynx.                             laryngoscope                                                                text.
                                                 system.
31587.....  Revision of       ES063...........  rhinolaryngosco  F       ...............                 0             189  E4: Refined             8.76
             larynx.                             pe, flexible,                                                               equipment time
                                                 video, non-                                                                 to conform to
                                                 channeled.                                                                  established
                                                                                                                             policies for
                                                                                                                             scopes.
31591.....  Laryngoplasty     EQ137...........  instrument       F       ...............               138             129  E5: Refined            -0.02
             medialization.                      pack, basic                                                                 equipment time
                                                 ($500-$1499).                                                               to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             surgical
                                                                                                                             instrument packs.
31591.....  Laryngoplasty     EQ167...........  light source,    F       ...............                 0             108  E13: Equipment          3.00
             medialization.                      xenon.                                                                      item replaces
                                                                                                                             another item;
                                                                                                                             see preamble
                                                                                                                             text EQ170.
31591.....  Laryngoplasty     ES031...........  video system,    F       ...............                 0             108  E19: Refined           13.97
             medialization.                      endoscopy                                                                   equipment time
                                                 (processor,                                                                 to conform to
                                                 digital                                                                     established
                                                 capture,                                                                    policies for
                                                 monitor,                                                                    scope
                                                 printer, cart).                                                             accessories.
31591.....  Laryngoplasty     ES060...........  Video-flexible   F       ...............               198               0  G1: See preamble      -62.98
             medialization.                      laryngoscope                                                                text.
                                                 system.
31591.....  Laryngoplasty     ES063...........  rhinolaryngosco  F       ...............                 0             189  E4: Refined             8.76
             medialization.                      pe, flexible,                                                               equipment time
                                                 video, non-                                                                 to conform to
                                                 channeled.                                                                  established
                                                                                                                             policies for
                                                                                                                             scopes.
31592.....  Cricotracheal     EQ137...........  instrument       F       ...............               138             129  E5: Refined            -0.02
             resection.                          pack, basic                                                                 equipment time
                                                 ($500-$1499).                                                               to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             surgical
                                                                                                                             instrument packs.
31592.....  Cricotracheal     EQ167...........  light source,    F       ...............                 0             108  E13: Equipment          3.00
             resection.                          xenon.                                                                      item replaces
                                                                                                                             another item;
                                                                                                                             see preamble
                                                                                                                             text EQ170.
31592.....  Cricotracheal     ES031...........  video system,    F       ...............                 0             108  E19: Refined           13.97
             resection.                          endoscopy                                                                   equipment time
                                                 (processor,                                                                 to conform to
                                                 digital                                                                     established
                                                 capture,                                                                    policies for
                                                 monitor,                                                                    scope
                                                 printer, cart).                                                             accessories.
31592.....  Cricotracheal     ES060...........  Video-flexible   F       ...............               198               0  G1: See preamble      -62.98
             resection.                          laryngoscope                                                                text.
                                                 system.
31592.....  Cricotracheal     ES063...........  rhinolaryngosco  F       ...............                 0             189  E4: Refined             8.76
             resection.                          pe, flexible,                                                               equipment time
                                                 video, non-                                                                 to conform to
                                                 channeled.                                                                  established
                                                                                                                             policies for
                                                                                                                             scopes.
36473.....  Endovenous        EF014...........  light, surgical  NF      ...............                 0              48  E13: Equipment          0.48
             mchnchem 1st                                                                                                    item replaces
             vein.                                                                                                           another item;
                                                                                                                             see preamble
                                                                                                                             text EL015.
36473.....  Endovenous        EF031...........  table, power...  NF      ...............                 0              48  E13: Equipment          0.78
             mchnchem 1st                                                                                                    item replaces
             vein.                                                                                                           another item;
                                                                                                                             see preamble
                                                                                                                             text EL015.

[[Page 80372]]

 
36473.....  Endovenous        EL015...........  room,            NF      ...............                39               0  E12: Equipment        -54.67
             mchnchem 1st                        ultrasound,                                                                 item replaced by
             vein.                               general.                                                                    another item;
                                                                                                                             see preamble
                                                                                                                             text EQ250.
36473.....  Endovenous        EQ250...........  ultrasound       NF      ...............                 0              48  E13: Equipment          5.58
             mchnchem 1st                        unit, portable.                                                             item replaces
             vein.                                                                                                           another item;
                                                                                                                             see preamble
                                                                                                                             text EL015.
36473.....  Endovenous        L037D...........  RN/LPN/MTA.....  NF      Prepare room,                   2               0  G1: See preamble       -0.74
             mchnchem 1st                                                 equipment,                                         text.
             vein.                                                        supplies.
36473.....  Endovenous        L054A...........  Vascular         NF      Availability of                 2               0  G1: See preamble       -1.08
             mchnchem 1st                        Technologist.            prior images                                       text.
             vein.                                                        confirmed.
36473.....  Endovenous        L054A...........  Vascular         NF      Exam documents                  1               0  G1: See preamble       -0.54
             mchnchem 1st                        Technologist.            scanned into U/                                    text.
             vein.                                                        S machine.
                                                                          Exam completed
                                                                          in RIS system
                                                                          to generate
                                                                          billing
                                                                          process and to
                                                                          populate
                                                                          images into
                                                                          Radiologist
                                                                          work queue.
36473.....  Endovenous        L054A...........  Vascular         NF      Patient                         2               0  G1: See preamble       -1.08
             mchnchem 1st                        Technologist.            clinical                                           text.
             vein.                                                        information
                                                                          and
                                                                          questionnaire
                                                                          reviewed by
                                                                          technologist,
                                                                          order from
                                                                          physician
                                                                          confirmed and
                                                                          exam
                                                                          protocoled by
                                                                          radiologist.
36473.....  Endovenous        L054A...........  Vascular         NF      Review                          2               0  G1: See preamble       -1.08
             mchnchem 1st                        Technologist.            examination                                        text.
             vein.                                                        with
                                                                          interpreting
                                                                          MD.
36473.....  Endovenous        L054A...........  Vascular         NF      Technologist                    2               0  G1: See preamble       -1.08
             mchnchem 1st                        Technologist.            QCs images in                                      text.
             vein.                                                        PACS, checking
                                                                          all images,
                                                                          reformats, and
                                                                          dose page.
36473.....  Endovenous        SA016...........  kit, guidewire   NF      ...............                 1               0  S3: Supply not        -23.00
             mchnchem 1st                        introducer                                                                  typically used
             vein.                               (Micro-Stick).                                                              in this service.
36473.....  Endovenous        SH108...........  Sotradecol       NF      ...............                 2               1  S6: Refined          -110.20
             mchnchem 1st                        Sclerosing                                                                  supply quantity
             vein.                               Agent.                                                                      to what is
                                                                                                                             typical for the
                                                                                                                             procedure.
36474.....  Endovenous        EF014...........  light, surgical  NF      ...............                 0              30  E13: Equipment          0.30
             mchnchem add-on.                                                                                                item replaces
                                                                                                                             another item;
                                                                                                                             see preamble
                                                                                                                             text EL015.
36474.....  Endovenous        EF031...........  table, power...  NF      ...............                 0              30  E13: Equipment          0.49
             mchnchem add-on.                                                                                                item replaces
                                                                                                                             another item;
                                                                                                                             see preamble
                                                                                                                             text EL015.
36474.....  Endovenous        EL015...........  room,            NF      ...............                30               0  E12: Equipment        -42.05
             mchnchem add-on.                    ultrasound,                                                                 item replaced by
                                                 general.                                                                    another item;
                                                                                                                             see preamble
                                                                                                                             text EQ250.
36474.....  Endovenous        EQ250...........  ultrasound       NF      ...............                 0              30  E13: Equipment          3.49
             mchnchem add-on.                    unit, portable.                                                             item replaces
                                                                                                                             another item;
                                                                                                                             see preamble
                                                                                                                             text EL015.
36474.....  Endovenous        SH108...........  Sotradecol       NF      ...............                 2               1  S6: Refined          -110.20
             mchnchem add-on.                    Sclerosing                                                                  supply quantity
                                                 Agent.                                                                      to what is
                                                                                                                             typical for the
                                                                                                                             procedure.
36901.....  Intro cath        ED050...........  PACS             NF      ...............                54              52  E15: Refined           -0.04
             dialysis                            Workstation                                                                 equipment time
             circuit.                            Proxy.                                                                      to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
36901.....  Intro cath        EL011...........  room,            NF      ...............                37              35  E15: Refined          -10.51
             dialysis                            angiography.                                                                equipment time
             circuit.                                                                                                        to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
36901.....  Intro cath        L037D...........  RN/LPN/MTA.....  NF      Prepare and                     5               3  G1: See preamble       -0.74
             dialysis                                                     position pt/                                       text.
             circuit.                                                     monitor pt/set
                                                                          up IV.
36901.....  Intro cath        SJ041...........  povidone soln    NF      ...............                60               0  S7: Supply item        -0.48
             dialysis                            (Betadine).                                                                 replaced by
             circuit.                                                                                                        another item;
                                                                                                                             see preamble
                                                                                                                             SJ088.

[[Page 80373]]

 
36901.....  Intro cath        SJ088...........  swab, patient    NF      ...............                 0               2  S8: Supply item         3.62
             dialysis                            prep, 3.0 ml                                                                replaces another
             circuit.                            (chloraprep).                                                               item; see
                                                                                                                             preamble SJ041.
36902.....  Intro cath        ED050...........  PACS             NF      ...............                69              67  E15: Refined           -0.04
             dialysis                            Workstation                                                                 equipment time
             circuit.                            Proxy.                                                                      to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
36902.....  Intro cath        EL011...........  room,            NF      ...............                52              50  E15: Refined          -10.51
             dialysis                            angiography.                                                                equipment time
             circuit.                                                                                                        to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
36902.....  Intro cath        L037D...........  RN/LPN/MTA.....  NF      Prepare and                     5               3  G1: See preamble       -0.74
             dialysis                                                     position pt/                                       text.
             circuit.                                                     monitor pt/set
                                                                          up IV.
36902.....  Intro cath        SJ041...........  povidone soln    NF      ...............                60               0  S7: Supply item        -0.48
             dialysis                            (Betadine).                                                                 replaced by
             circuit.                                                                                                        another item;
                                                                                                                             see preamble.
36902.....  Intro cath        SJ088...........  swab, patient    NF      ...............                 0               2  S8: Supply item         3.62
             dialysis                            prep, 3.0 ml                                                                replaces another
             circuit.                            (chloraprep).                                                               item; see
                                                                                                                             preamble.
36903.....  Intro cath        ED050...........  PACS             NF      ...............                79              77  E15: Refined           -0.04
             dialysis                            Workstation                                                                 equipment time
             circuit.                            Proxy.                                                                      to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
36903.....  Intro cath        EL011...........  room,            NF      ...............                62              60  E15: Refined          -10.51
             dialysis                            angiography.                                                                equipment time
             circuit.                                                                                                        to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
36903.....  Intro cath        L037D...........  RN/LPN/MTA.....  NF      Prepare and                     5               3  G1: See preamble       -0.74
             dialysis                                                     position pt/                                       text.
             circuit.                                                     monitor pt/set
                                                                          up IV.
36903.....  Intro cath        SJ041...........  povidone soln    NF      ...............                60               0  S7: Supply item        -0.48
             dialysis                            (Betadine).                                                                 replaced by
             circuit.                                                                                                        another item;
                                                                                                                             see preamble.
36903.....  Intro cath        SJ088...........  swab, patient    NF      ...............                 0               2  S8: Supply item         3.62
             dialysis                            prep, 3.0 ml                                                                replaces another
             circuit.                            (chloraprep).                                                               item; see
                                                                                                                             preamble.
36904.....  Thrmbc/nfs        ED050...........  PACS             NF      ...............                89              87  E15: Refined           -0.04
             dialysis                            Workstation                                                                 equipment time
             circuit.                            Proxy.                                                                      to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
36904.....  Thrmbc/nfs        EL011...........  room,            NF      ...............                72              70  E15: Refined          -10.51
             dialysis                            angiography.                                                                equipment time
             circuit.                                                                                                        to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
36904.....  Thrmbc/nfs        L037D...........  RN/LPN/MTA.....  F       Complete pre-                   3               0  L3: Refined            -1.11
             dialysis                                                     service                                            clinical labor
             circuit.                                                     diagnostic and                                     time to conform
                                                                          referral forms.                                    with identical
                                                                                                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
36904.....  Thrmbc/nfs        L037D...........  RN/LPN/MTA.....  F       Coordinate pre-                 6               3  L3: Refined            -1.11
             dialysis                                                     surgery                                            clinical labor
             circuit.                                                     services.                                          time to conform
                                                                                                                             with identical
                                                                                                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
36904.....  Thrmbc/nfs        L037D...........  RN/LPN/MTA.....  F       Follow-up phone                 6               0  L3: Refined            -2.22
             dialysis                                                     calls and                                          clinical labor
             circuit.                                                     prescriptions.                                     time to conform
                                                                                                                             with identical
                                                                                                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
36904.....  Thrmbc/nfs        L037D...........  RN/LPN/MTA.....  F       Schedule space                  6               3  L3: Refined            -1.11
             dialysis                                                     and equipment                                      clinical labor
             circuit.                                                     in facility.                                       time to conform
                                                                                                                             with identical
                                                                                                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
36904.....  Thrmbc/nfs        L037D...........  RN/LPN/MTA.....  NF      Coordinate pre-                 6               3  L3: Refined            -1.11
             dialysis                                                     surgery                                            clinical labor
             circuit.                                                     services.                                          time to conform
                                                                                                                             with identical
                                                                                                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
36904.....  Thrmbc/nfs        L037D...........  RN/LPN/MTA.....  NF      Follow-up phone                 6               3  L3: Refined            -1.11
             dialysis                                                     calls and                                          clinical labor
             circuit.                                                     prescriptions.                                     time to conform
                                                                                                                             with identical
                                                                                                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
36904.....  Thrmbc/nfs        L037D...........  RN/LPN/MTA.....  NF      Prepare and                     5               3  G1: See preamble       -0.74
             dialysis                                                     position pt/                                       text.
             circuit.                                                     monitor pt/set
                                                                          up IV.
36904.....  Thrmbc/nfs        SD032...........  catheter,        NF      ...............                 1               0  S2: Supply           -101.75
             dialysis                            thrombectomy-                                                               removed due to
             circuit.                            Fogarty.                                                                    redundancy when
                                                                                                                             used together
                                                                                                                             with supply
                                                                                                                             SA015.
36904.....  Thrmbc/nfs        SD136...........  vascular sheath  NF      ...............                 2               1  S2: Supply            -20.50
             dialysis                                                                                                        removed due to
             circuit.                                                                                                        redundancy when
                                                                                                                             used together
                                                                                                                             with supply
                                                                                                                             SA015.
36904.....  Thrmbc/nfs        SJ041...........  povidone soln    NF      ...............                60               0  S7: Supply item        -0.48
             dialysis                            (Betadine).                                                                 replaced by
             circuit.                                                                                                        another item;
                                                                                                                             see preamble.
36904.....  Thrmbc/nfs        SJ088...........  swab, patient    NF      ...............                 0               2  S8: Supply item         3.62
             dialysis                            prep, 3.0 ml                                                                replaces another
             circuit.                            (chloraprep).                                                               item; see
                                                                                                                             preamble.
36905.....  Thrmbc/nfs        ED050...........  PACS             NF      ...............               104             102  E15: Refined           -0.04
             dialysis                            Workstation                                                                 equipment time
             circuit.                            Proxy.                                                                      to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.

[[Page 80374]]

 
36905.....  Thrmbc/nfs        EL011...........  room,            NF      ...............                87              85  E15: Refined          -10.51
             dialysis                            angiography.                                                                equipment time
             circuit.                                                                                                        to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
36905.....  Thrmbc/nfs        L037D...........  RN/LPN/MTA.....  F       Complete pre-                   3               0  L3: Refined            -1.11
             dialysis                                                     service                                            clinical labor
             circuit.                                                     diagnostic and                                     time to conform
                                                                          referral forms.                                    with identical
                                                                                                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
36905.....  Thrmbc/nfs        L037D...........  RN/LPN/MTA.....  F       Coordinate pre-                 6               3  L3: Refined            -1.11
             dialysis                                                     surgery                                            clinical labor
             circuit.                                                     services.                                          time to conform
                                                                                                                             with identical
                                                                                                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
36905.....  Thrmbc/nfs        L037D...........  RN/LPN/MTA.....  F       Follow-up phone                 6               0  L3: Refined            -2.22
             dialysis                                                     calls and                                          clinical labor
             circuit.                                                     prescriptions.                                     time to conform
                                                                                                                             with identical
                                                                                                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
36905.....  Thrmbc/nfs        L037D...........  RN/LPN/MTA.....  F       Schedule space                  6               3  L3: Refined            -1.11
             dialysis                                                     and equipment                                      clinical labor
             circuit.                                                     in facility.                                       time to conform
                                                                                                                             with identical
                                                                                                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
36905.....  Thrmbc/nfs        L037D...........  RN/LPN/MTA.....  NF      Coordinate pre-                 6               3  L3: Refined            -1.11
             dialysis                                                     surgery                                            clinical labor
             circuit.                                                     services.                                          time to conform
                                                                                                                             with identical
                                                                                                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
36905.....  Thrmbc/nfs        L037D...........  RN/LPN/MTA.....  NF      Follow-up phone                 6               3  L3: Refined            -1.11
             dialysis                                                     calls and                                          clinical labor
             circuit.                                                     prescriptions.                                     time to conform
                                                                                                                             with identical
                                                                                                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
36905.....  Thrmbc/nfs        L037D...........  RN/LPN/MTA.....  NF      Prepare and                     5               3  G1: See preamble       -0.74
             dialysis                                                     position pt/                                       text.
             circuit.                                                     monitor pt/set
                                                                          up IV.
36905.....  Thrmbc/nfs        SD032...........  catheter,        NF      ...............                 1               0  S2: Supply           -101.75
             dialysis                            thrombectomy-                                                               removed due to
             circuit.                            Fogarty.                                                                    redundancy when
                                                                                                                             used together
                                                                                                                             with supply
                                                                                                                             SA015.
36905.....  Thrmbc/nfs        SD136...........  vascular sheath  NF      ...............                 2               1  S2: Supply            -20.50
             dialysis                                                                                                        removed due to
             circuit.                                                                                                        redundancy when
                                                                                                                             used together
                                                                                                                             with supply
                                                                                                                             SA015.
36905.....  Thrmbc/nfs        SJ041...........  povidone soln    NF      ...............                60               0  S7: Supply item        -0.48
             dialysis                            (Betadine).                                                                 replaced by
             circuit.                                                                                                        another item;
                                                                                                                             see preamble.
36905.....  Thrmbc/nfs        SJ088...........  swab, patient    NF      ...............                 0               2  S8: Supply item         3.62
             dialysis                            prep, 3.0 ml                                                                replaces another
             circuit.                            (chloraprep).                                                               item; see
                                                                                                                             preamble.
36906.....  Thrmbc/nfs        ED050...........  PACS             NF      ...............               119             117  E15: Refined           -0.04
             dialysis                            Workstation                                                                 equipment time
             circuit.                            Proxy.                                                                      to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
36906.....  Thrmbc/nfs        EL011...........  room,            NF      ...............               102             100  E15: Refined          -10.51
             dialysis                            angiography.                                                                equipment time
             circuit.                                                                                                        to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
36906.....  Thrmbc/nfs        L037D...........  RN/LPN/MTA.....  F       Complete pre-                   3               0  L3: Refined            -1.11
             dialysis                                                     service                                            clinical labor
             circuit.                                                     diagnostic and                                     time to conform
                                                                          referral forms.                                    with identical
                                                                                                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
36906.....  Thrmbc/nfs        L037D...........  RN/LPN/MTA.....  F       Coordinate pre-                 6               3  L3: Refined            -1.11
             dialysis                                                     surgery                                            clinical labor
             circuit.                                                     services.                                          time to conform
                                                                                                                             with identical
                                                                                                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
36906.....  Thrmbc/nfs        L037D...........  RN/LPN/MTA.....  F       Follow-up phone                 6               0  L3: Refined            -2.22
             dialysis                                                     calls and                                          clinical labor
             circuit.                                                     prescriptions.                                     time to conform
                                                                                                                             with identical
                                                                                                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
36906.....  Thrmbc/nfs        L037D...........  RN/LPN/MTA.....  F       Schedule space                  6               3  L3: Refined            -1.11
             dialysis                                                     and equipment                                      clinical labor
             circuit.                                                     in facility.                                       time to conform
                                                                                                                             with identical
                                                                                                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
36906.....  Thrmbc/nfs        L037D...........  RN/LPN/MTA.....  NF      Coordinate pre-                 6               3  L3: Refined            -1.11
             dialysis                                                     surgery                                            clinical labor
             circuit.                                                     services.                                          time to conform
                                                                                                                             with identical
                                                                                                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
36906.....  Thrmbc/nfs        L037D...........  RN/LPN/MTA.....  NF      Follow-up phone                 6               3  L3: Refined            -1.11
             dialysis                                                     calls and                                          clinical labor
             circuit.                                                     prescriptions.                                     time to conform
                                                                                                                             with identical
                                                                                                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.

[[Page 80375]]

 
36906.....  Thrmbc/nfs        L037D...........  RN/LPN/MTA.....  NF      Prepare and                     5               3  G1: See preamble       -0.74
             dialysis                                                     position pt/                                       text.
             circuit.                                                     monitor pt/set
                                                                          up IV.
36906.....  Thrmbc/nfs        SD032...........  catheter,        NF      ...............                 1               0  S2: Supply           -101.75
             dialysis                            thrombectomy-                                                               removed due to
             circuit.                            Fogarty.                                                                    redundancy when
                                                                                                                             used together
                                                                                                                             with supply
                                                                                                                             SA015.
36906.....  Thrmbc/nfs        SD136...........  vascular sheath  NF      ...............                 2               1  S2: Supply            -20.50
             dialysis                                                                                                        removed due to
             circuit.                                                                                                        redundancy when
                                                                                                                             used together
                                                                                                                             with supply
                                                                                                                             SA015.
36906.....  Thrmbc/nfs        SJ041...........  povidone soln    NF      ...............                60               0  S7: Supply item        -0.48
             dialysis                            (Betadine).                                                                 replaced by
             circuit.                                                                                                        another item;
                                                                                                                             see preamble.
36906.....  Thrmbc/nfs        SJ088...........  swab, patient    NF      ...............                 0               2  S8: Supply item         3.62
             dialysis                            prep, 3.0 ml                                                                replaces another
             circuit.                            (chloraprep).                                                               item; see
                                                                                                                             preamble.
37246.....  Trluml balo       ED050...........  PACS             NF      ...............                91              89  E15: Refined           -0.04
             angiop 1st art.                     Workstation                                                                 equipment time
                                                 Proxy.                                                                      to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
37246.....  Trluml balo       EL011...........  room,            NF      ...............                72              70  E15: Refined          -10.51
             angiop 1st art.                     angiography.                                                                equipment time
                                                                                                                             to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
37246.....  Trluml balo       L037D...........  RN/LPN/MTA.....  NF      Prepare and                     5               3  G1: See preamble       -0.74
             angiop 1st art.                                              position                                           text.
                                                                          patient/
                                                                          monitor
                                                                          patient/set up
                                                                          IV.
37248.....  Trluml balo       ED050...........  PACS             NF      ...............                91              89  E15: Refined           -0.04
             angiop 1st vein.                    Workstation                                                                 equipment time
                                                 Proxy.                                                                      to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
37248.....  Trluml balo       EL011...........  room,            NF      ...............                72              70  E15: Refined          -10.51
             angiop 1st vein.                    angiography.                                                                equipment time
                                                                                                                             to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
37248.....  Trluml balo       L037D...........  RN/LPN/MTA.....  NF      Prepare and                     5               3  G1: See preamble       -0.74
             angiop 1st vein.                                             position                                           text.
                                                                          patient/
                                                                          monitor
                                                                          patient/set up
                                                                          IV.
47531.....  Injection for     ED050...........  PACS             NF      ...............                51              46  E18: Refined           -0.11
             cholangiogram.                      Workstation                                                                 equipment time
                                                 Proxy.                                                                      to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             PACS Workstation
                                                                                                                             Proxy.
47531.....  Injection for     EF018...........  stretcher......  NF      ...............                87              82  E6: Refined            -0.03
             cholangiogram.                                                                                                  equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             equipment with
                                                                                                                             4x monitoring
                                                                                                                             time.
47531.....  Injection for     EF027...........  table,           NF      ...............                87              82  E6: Refined            -0.01
             cholangiogram.                      instrument,                                                                 equipment time
                                                 mobile.                                                                     to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             equipment with
                                                                                                                             4x monitoring
                                                                                                                             time.
47531.....  Injection for     EL011...........  room,            NF      ...............                27              24  E15: Refined          -15.76
             cholangiogram.                      angiography.                                                                equipment time
                                                                                                                             to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
47531.....  Injection for     EQ011...........  ECG, 3-channel   NF      ...............                87              82  E6: Refined            -0.07
             cholangiogram.                      (with SpO2,                                                                 equipment time
                                                 NIBP, temp,                                                                 to conform to
                                                 resp).                                                                      established
                                                                                                                             policies for
                                                                                                                             equipment with
                                                                                                                             4x monitoring
                                                                                                                             time.
47531.....  Injection for     EQ032...........  IV infusion      NF      ...............                87              82  E6: Refined            -0.03
             cholangiogram.                      pump.                                                                       equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             equipment with
                                                                                                                             4x monitoring
                                                                                                                             time.
47531.....  Injection for     EQ168...........  light, exam....  NF      ...............                51              40  E1: Refined            -0.05
             cholangiogram.                                                                                                  equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment.
47531.....  Injection for     L037D...........  RN/LPN/MTA.....  NF      Assist                         15               0  L11: Removed           -5.55
             cholangiogram.                                               physician in                                       clinical labor
                                                                          performing                                         associated with
                                                                          procedure.                                         moderate
                                                                                                                             sedation;
                                                                                                                             moderate
                                                                                                                             sedation not
                                                                                                                             typical for this
                                                                                                                             procedure.
47531.....  Injection for     L041B...........  Radiologic       NF      Clean room/                     6               3  L1: Refined time       -1.23
             cholangiogram.                      Technologist.            equipment by                                       to standard for
                                                                          physician                                          this clinical
                                                                          staff.                                             labor task.
47531.....  Injection for     L051A...........  RN.............  NF      Sedate/Apply                    2               0  L11: Removed           -1.02
             cholangiogram.                                               anesthesia.                                        clinical labor
                                                                                                                             associated with
                                                                                                                             moderate
                                                                                                                             sedation;
                                                                                                                             moderate
                                                                                                                             sedation not
                                                                                                                             typical for this
                                                                                                                             procedure.
47532.....  Injection for     ED050...........  PACS             NF      ...............                34              76  E18: Refined            0.92
             cholangiogram.                      Workstation                                                                 equipment time
                                                 Proxy.                                                                      to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             PACS Workstation
                                                                                                                             Proxy MS minutes
                                                                                                                             backed out input.

[[Page 80376]]

 
47532.....  Injection for     EF018...........  stretcher......  NF      ...............               190             187  G1: See preamble       -0.02
             cholangiogram.                                                                                                  text MS minutes
                                                                                                                             backed out input.
47532.....  Injection for     EF027...........  table,           NF      ...............               190             187  G1: See preamble        0.00
             cholangiogram.                      instrument,                                                                 text MS minutes
                                                 mobile.                                                                     backed out input.
47532.....  Injection for     EL011...........  room,            NF      ...............                57              54  E15: Refined          -15.76
             cholangiogram.                      angiography.                                                                equipment time
                                                                                                                             to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time MS minutes
                                                                                                                             backed out input.
47532.....  Injection for     EQ011...........  ECG, 3-channel   NF      ...............               190             187  G1: See preamble       -0.04
             cholangiogram.                      (with SpO2,                                                                 text MS minutes
                                                 NIBP, temp,                                                                 backed out input.
                                                 resp).
47532.....  Injection for     EQ032...........  IV infusion      NF      ...............               190             187  G1: See preamble       -0.02
             cholangiogram.                      pump.                                                                       text MS minutes
                                                                                                                             backed out input.
47532.....  Injection for     EQ168...........  light, exam....  NF      ...............                34              70  E1: Refined             0.16
             cholangiogram.                                                                                                  equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment MS
                                                                                                                             minutes backed
                                                                                                                             out input.
47532.....  Injection for     EQ250...........  ultrasound       NF      ...............                34              70  E1: Refined             4.18
             cholangiogram.                      unit, portable.                                                             equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment MS
                                                                                                                             minutes backed
                                                                                                                             out input.
47532.....  Injection for     L041B...........  Radiologic       NF      Clean room/                     6               3  L1: Refined time       -1.23
             cholangiogram.                      Technologist.            equipment by                                       to standard for
                                                                          physician                                          this clinical
                                                                          staff.                                             labor task.
47532.....  Injection for     L051A...........  RN.............  NF      Assist                         45               0  G1: See preamble      -22.95
             cholangiogram.                                               Physician in                                       text MS minutes
                                                                          Performing                                         backed out input.
                                                                          Procedure (CS).
47532.....  Injection for     L051A...........  RN.............  NF      Monitor pt.                    15               0  G1: See preamble       -7.65
             cholangiogram.                                               following                                          text MS minutes
                                                                          moderate                                           backed out input.
                                                                          sedation.
47532.....  Injection for     L051A...........  RN.............  NF      Sedate/Apply                    2               0  G1: See preamble       -1.02
             cholangiogram.                                               anesthesia.                                        text MS minutes
                                                                                                                             backed out input.
47532.....  Injection for     SA044...........  pack, conscious  NF      ...............                 1               0  G1: See preamble      -17.31
             cholangiogram.                      sedation.                                                                   text MS supply
                                                                                                                             backed out input.
47533.....  Plmt biliary      ED050...........  PACS             NF      ...............                34              91  E18: Refined            1.26
             drainage cath.                      Workstation                                                                 equipment time
                                                 Proxy.                                                                      to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             PACS Workstation
                                                                                                                             Proxy MS minutes
                                                                                                                             backed out input.
47533.....  Plmt biliary      EF018...........  stretcher......  NF      ...............               190             187  G1: See preamble       -0.02
             drainage cath.                                                                                                  text MS minutes
                                                                                                                             backed out input.
47533.....  Plmt biliary      EF027...........  table,           NF      ...............               190             187  G1: See preamble        0.00
             drainage cath.                      instrument,                                                                 text MS minutes
                                                 mobile.                                                                     backed out input.
47533.....  Plmt biliary      EL011...........  room,            NF      ...............                72              69  E15: Refined          -15.76
             drainage cath.                      angiography.                                                                equipment time
                                                                                                                             to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time MS minutes
                                                                                                                             backed out input.
47533.....  Plmt biliary      EQ011...........  ECG, 3-channel   NF      ...............               190             187  G1: See preamble       -0.04
             drainage cath.                      (with SpO2,                                                                 text MS minutes
                                                 NIBP, temp,                                                                 backed out input.
                                                 resp).
47533.....  Plmt biliary      EQ032...........  IV infusion      NF      ...............               190             187  G1: See preamble       -0.02
             drainage cath.                      pump.                                                                       text MS minutes
                                                                                                                             backed out input.
47533.....  Plmt biliary      EQ168...........  light, exam....  NF      ...............                34              85  E1: Refined             0.22
             drainage cath.                                                                                                  equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment MS
                                                                                                                             minutes backed
                                                                                                                             out input.
47533.....  Plmt biliary      EQ250...........  ultrasound       NF      ...............                34              85  E1: Refined             5.93
             drainage cath.                      unit, portable.                                                             equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment MS
                                                                                                                             minutes backed
                                                                                                                             out input.
47533.....  Plmt biliary      L041B...........  Radiologic       NF      Clean room/                     6               3  L1: Refined time       -1.23
             drainage cath.                      Technologist.            equipment by                                       to standard for
                                                                          physician                                          this clinical
                                                                          staff.                                             labor task.
47533.....  Plmt biliary      L051A...........  RN.............  NF      Assist                         60               0  G1: See preamble      -30.60
             drainage cath.                                               Physician in                                       text MS minutes
                                                                          Performing                                         backed out input.
                                                                          Procedure (CS).
47533.....  Plmt biliary      L051A...........  RN.............  NF      Monitor pt.                    15               0  G1: See preamble       -7.65
             drainage cath.                                               following                                          text MS minutes
                                                                          moderate                                           backed out input.
                                                                          sedation.

[[Page 80377]]

 
47533.....  Plmt biliary      L051A...........  RN.............  NF      Sedate/Apply                    2               0  G1: See preamble       -1.02
             drainage cath.                                               anesthesia.                                        text MS minutes
                                                                                                                             backed out input.
47533.....  Plmt biliary      SA044...........  pack, conscious  NF      ...............                 1               0  G1: See preamble      -17.31
             drainage cath.                      sedation.                                                                   text MS supply
                                                                                                                             backed out input.
47534.....  Plmt biliary      ED050...........  PACS             NF      ...............                34              99  E18: Refined            1.43
             drainage cath.                      Workstation                                                                 equipment time
                                                 Proxy.                                                                      to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             PACS Workstation
                                                                                                                             Proxy MS minutes
                                                                                                                             backed out input.
47534.....  Plmt biliary      EF018...........  stretcher......  NF      ...............               190             187  G1: See preamble       -0.02
             drainage cath.                                                                                                  text MS minutes
                                                                                                                             backed out input.
47534.....  Plmt biliary      EF027...........  table,           NF      ...............               190             187  G1: See preamble        0.00
             drainage cath.                      instrument,                                                                 text MS minutes
                                                 mobile.                                                                     backed out input.
47534.....  Plmt biliary      EL011...........  room,            NF      ...............                80              77  E15: Refined          -15.76
             drainage cath.                      angiography.                                                                equipment time
                                                                                                                             to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time MS minutes
                                                                                                                             backed out input.
47534.....  Plmt biliary      EQ011...........  ECG, 3-channel   NF      ...............               190             187  G1: See preamble       -0.04
             drainage cath.                      (with SpO2,                                                                 text MS minutes
                                                 NIBP, temp,                                                                 backed out input.
                                                 resp).
47534.....  Plmt biliary      EQ032...........  IV infusion      NF      ...............               190             187  G1: See preamble       -0.02
             drainage cath.                      pump.                                                                       text MS minutes
                                                                                                                             backed out input.
47534.....  Plmt biliary      EQ168...........  light, exam....  NF      ...............                34              93  E1: Refined             0.26
             drainage cath.                                                                                                  equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment MS
                                                                                                                             minutes backed
                                                                                                                             out input.
47534.....  Plmt biliary      EQ250...........  ultrasound       NF      ...............                34              93  E1: Refined             6.86
             drainage cath.                      unit, portable.                                                             equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment MS
                                                                                                                             minutes backed
                                                                                                                             out input.
47534.....  Plmt biliary      L041B...........  Radiologic       NF      Clean room/                     6               3  L1: Refined time       -1.23
             drainage cath.                      Technologist.            equipment by                                       to standard for
                                                                          physician                                          this clinical
                                                                          staff.                                             labor task.
47534.....  Plmt biliary      L051A...........  RN.............  NF      Assist                         68               0  G1: See preamble      -34.68
             drainage cath.                                               Physician in                                       text MS minutes
                                                                          Performing                                         backed out input.
                                                                          Procedure (CS).
47534.....  Plmt biliary      L051A...........  RN.............  NF      Monitor pt.                    15               0  G1: See preamble       -7.65
             drainage cath.                                               following                                          text MS minutes
                                                                          moderate                                           backed out input.
                                                                          sedation.
47534.....  Plmt biliary      L051A...........  RN.............  NF      Sedate/Apply                    2               0  G1: See preamble       -1.02
             drainage cath.                                               anesthesia.                                        text MS minutes
                                                                                                                             backed out input.
47534.....  Plmt biliary      SA044...........  pack, conscious  NF      ...............                 1               0  G1: See preamble      -17.31
             drainage cath.                      sedation.                                                                   text MS supply
                                                                                                                             backed out input.
47535.....  Conversion ext    ED050...........  PACS             NF      ...............                34              76  E18: Refined            0.92
             bil drg cath.                       Workstation                                                                 equipment time
                                                 Proxy.                                                                      to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             PACS Workstation
                                                                                                                             Proxy MS minutes
                                                                                                                             backed out input.
47535.....  Conversion ext    EF018...........  stretcher......  NF      ...............               190             187  G1: See preamble       -0.02
             bil drg cath.                                                                                                   text MS minutes
                                                                                                                             backed out input.
47535.....  Conversion ext    EF027...........  table,           NF      ...............               190             187  G1: See preamble        0.00
             bil drg cath.                       instrument,                                                                 text MS minutes
                                                 mobile.                                                                     backed out input.
47535.....  Conversion ext    EL011...........  room,            NF      ...............                57              54  E15: Refined          -15.76
             bil drg cath.                       angiography.                                                                equipment time
                                                                                                                             to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time MS minutes
                                                                                                                             backed out input.
47535.....  Conversion ext    EQ011...........  ECG, 3-channel   NF      ...............               190             187  G1: See preamble       -0.04
             bil drg cath.                       (with SpO2,                                                                 text MS minutes
                                                 NIBP, temp,                                                                 backed out input.
                                                 resp).
47535.....  Conversion ext    EQ032...........  IV infusion      NF      ...............               190             187  G1: See preamble       -0.02
             bil drg cath.                       pump.                                                                       text MS minutes
                                                                                                                             backed out input.
47535.....  Conversion ext    EQ168...........  light, exam....  NF      ...............                34              70  E1: Refined             0.16
             bil drg cath.                                                                                                   equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment MS
                                                                                                                             minutes backed
                                                                                                                             out input.
47535.....  Conversion ext    L041B...........  Radiologic       NF      Clean room/                     6               3  L1: Refined time       -1.23
             bil drg cath.                       Technologist.            equipment by                                       to standard for
                                                                          physician                                          this clinical
                                                                          staff.                                             labor task.
47535.....  Conversion ext    L051A...........  RN.............  NF      Assist                         45               0  G1: See preamble      -22.95
             bil drg cath.                                                Physician in                                       text MS minutes
                                                                          Performing                                         backed out input.
                                                                          Procedure (CS).
47535.....  Conversion ext    L051A...........  RN.............  NF      Monitor pt.                    15               0  G1: See preamble       -7.65
             bil drg cath.                                                following                                          text MS minutes
                                                                          moderate                                           backed out input.
                                                                          sedation.
47535.....  Conversion ext    L051A...........  RN.............  NF      Sedate/Apply                    2               0  G1: See preamble       -1.02
             bil drg cath.                                                anesthesia.                                        text MS minutes
                                                                                                                             backed out input.
47535.....  Conversion ext    SA044...........  pack, conscious  NF      ...............                 1               0  G1: See preamble      -17.31
             bil drg cath.                       sedation.                                                                   text MS supply
                                                                                                                             backed out input.

[[Page 80378]]

 
47536.....  Exchange biliary  ED050...........  PACS             NF      ...............                34              51  E18: Refined            0.37
             drg cath.                           Workstation                                                                 equipment time
                                                 Proxy.                                                                      to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             PACS Workstation
                                                                                                                             Proxy MS minutes
                                                                                                                             backed out input.
47536.....  Exchange biliary  EF018...........  stretcher......  NF      ...............                70              67  G1: See preamble       -0.02
             drg cath.                                                                                                       text MS minutes
                                                                                                                             backed out input.
47536.....  Exchange biliary  EF027...........  table,           NF      ...............                70              67  G1: See preamble        0.00
             drg cath.                           instrument,                                                                 text MS minutes
                                                 mobile.                                                                     backed out input.
47536.....  Exchange biliary  EL011...........  room,            NF      ...............                32              29  E15: Refined          -15.76
             drg cath.                           angiography.                                                                equipment time
                                                                                                                             to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time MS minutes
                                                                                                                             backed out input.
47536.....  Exchange biliary  EQ011...........  ECG, 3-channel   NF      ...............                70              67  G1: See preamble       -0.04
             drg cath.                           (with SpO2,                                                                 text MS minutes
                                                 NIBP, temp,                                                                 backed out input.
                                                 resp).
47536.....  Exchange biliary  EQ032...........  IV infusion      NF      ...............                70              67  G1: See preamble       -0.02
             drg cath.                           pump.                                                                       text MS minutes
                                                                                                                             backed out input.
47536.....  Exchange biliary  EQ168...........  light, exam....  NF      ...............                34              45  E1: Refined             0.05
             drg cath.                                                                                                       equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment MS
                                                                                                                             minutes backed
                                                                                                                             out input.
47536.....  Exchange biliary  L041B...........  Radiologic       NF      Clean room/                     6               3  L1: Refined time       -1.23
             drg cath.                           Technologist.            equipment by                                       to standard for
                                                                          physician                                          this clinical
                                                                          staff.                                             labor task.
47536.....  Exchange biliary  L051A...........  RN.............  NF      Assist                         20               0  G1: See preamble      -10.20
             drg cath.                                                    Physician in                                       text MS minutes
                                                                          Performing                                         backed out input.
                                                                          Procedure (CS).
47536.....  Exchange biliary  L051A...........  RN.............  NF      Monitor pt.                    15               0  G1: See preamble       -7.65
             drg cath.                                                    following                                          text MS minutes
                                                                          moderate                                           backed out input.
                                                                          sedation.
47536.....  Exchange biliary  L051A...........  RN.............  NF      Sedate/Apply                    2               0  G1: See preamble       -1.02
             drg cath.                                                    anesthesia.                                        text MS minutes
                                                                                                                             backed out input.
47536.....  Exchange biliary  SA044...........  pack, conscious  NF      ...............                 1               0  G1: See preamble      -17.31
             drg cath.                           sedation.                                                                   text MS supply
                                                                                                                             backed out input.
47537.....  Removal biliary   ED050...........  PACS             NF      ...............                51              46  E18: Refined           -0.11
             drg cath.                           Workstation                                                                 equipment time
                                                 Proxy.                                                                      to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             PACS Workstation
                                                                                                                             Proxy.
47537.....  Removal biliary   EF018...........  stretcher......  NF      ...............                87              82  G1: See preamble       -0.03
             drg cath.                                                                                                       text.
47537.....  Removal biliary   EF027...........  table,           NF      ...............                87              82  G1: See preamble       -0.01
             drg cath.                           instrument,                                                                 text.
                                                 mobile.
47537.....  Removal biliary   EL011...........  room,            NF      ...............                27              24  E15: Refined          -15.76
             drg cath.                           angiography.                                                                equipment time
                                                                                                                             to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
47537.....  Removal biliary   EQ011...........  ECG, 3-channel   NF      ...............                87              82  G1: See preamble       -0.07
             drg cath.                           (with SpO2,                                                                 text.
                                                 NIBP, temp,
                                                 resp).
47537.....  Removal biliary   EQ032...........  IV infusion      NF      ...............                87              82  G1: See preamble       -0.03
             drg cath.                           pump.                                                                       text.
47537.....  Removal biliary   EQ168...........  light, exam....  NF      ...............                51              40  E1: Refined            -0.05
             drg cath.                                                                                                       equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment.
47537.....  Removal biliary   L037D...........  RN/LPN/MTA.....  NF      Assist                         15               0  L11: Removed           -5.55
             drg cath.                                                    physician in                                       clinical labor
                                                                          performing                                         associated with
                                                                          procedure.                                         moderate
                                                                                                                             sedation;
                                                                                                                             moderate
                                                                                                                             sedation not
                                                                                                                             typical for this
                                                                                                                             procedure.
47537.....  Removal biliary   L041B...........  Radiologic       NF      Clean room/                     6               3  L1: Refined time       -1.23
             drg cath.                           Technologist.            equipment by                                       to standard for
                                                                          physician                                          this clinical
                                                                          staff.                                             labor task.
47537.....  Removal biliary   L051A...........  RN.............  NF      Sedate/Apply                    2               0  L11: Removed           -1.02
             drg cath.                                                    anesthesia.                                        clinical labor
                                                                                                                             associated with
                                                                                                                             moderate
                                                                                                                             sedation;
                                                                                                                             moderate
                                                                                                                             sedation not
                                                                                                                             typical for this
                                                                                                                             procedure.
47538.....  Perq plmt bile    ED050...........  PACS             NF      ...............                34              84  E18: Refined            1.10
             duct stent.                         Workstation                                                                 equipment time
                                                 Proxy.                                                                      to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             PACS Workstation
                                                                                                                             Proxy MS minutes
                                                                                                                             backed out input.

[[Page 80379]]

 
47538.....  Perq plmt bile    EF018...........  stretcher......  NF      ...............               190             187  G1: See preamble       -0.02
             duct stent.                                                                                                     text MS minutes
                                                                                                                             backed out input.
47538.....  Perq plmt bile    EF027...........  table,           NF      ...............               190             187  G1: See preamble        0.00
             duct stent.                         instrument,                                                                 text MS minutes
                                                 mobile.                                                                     backed out input.
47538.....  Perq plmt bile    EL011...........  room,            NF      ...............                65              62  E15: Refined          -15.76
             duct stent.                         angiography.                                                                equipment time
                                                                                                                             to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time MS minutes
                                                                                                                             backed out input.
47538.....  Perq plmt bile    EQ011...........  ECG, 3-channel   NF      ...............               190             187  G1: See preamble       -0.04
             duct stent.                         (with SpO2,                                                                 text MS minutes
                                                 NIBP, temp,                                                                 backed out input.
                                                 resp).
47538.....  Perq plmt bile    EQ032...........  IV infusion      NF      ...............               190             187  G1: See preamble       -0.02
             duct stent.                         pump.                                                                       text MS minutes
                                                                                                                             backed out input.
47538.....  Perq plmt bile    EQ168...........  light, exam....  NF      ...............                34              78  E1: Refined             0.19
             duct stent.                                                                                                     equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment MS
                                                                                                                             minutes backed
                                                                                                                             out input.
47538.....  Perq plmt bile    L041B...........  Radiologic       NF      Clean room/                     6               3  L1: Refined time       -1.23
             duct stent.                         Technologist.            equipment by                                       to standard for
                                                                          physician                                          this clinical
                                                                          staff.                                             labor task.
47538.....  Perq plmt bile    L051A...........  RN.............  NF      Assist                         53               0  G1: See preamble      -27.03
             duct stent.                                                  Physician in                                       text MS minutes
                                                                          Performing                                         backed out input.
                                                                          Procedure (CS).
47538.....  Perq plmt bile    L051A...........  RN.............  NF      Monitor pt.                    15               0  G1: See preamble       -7.65
             duct stent.                                                  following                                          text MS minutes
                                                                          moderate                                           backed out input.
                                                                          sedation.
47538.....  Perq plmt bile    L051A...........  RN.............  NF      Sedate/Apply                    2               0  G1: See preamble       -1.02
             duct stent.                                                  anesthesia.                                        text MS minutes
                                                                                                                             backed out input.
47538.....  Perq plmt bile    SA044...........  pack, conscious  NF      ...............                 1               0  G1: See preamble      -17.31
             duct stent.                         sedation.                                                                   text MS supply
                                                                                                                             backed out input.
47538.....  Perq plmt bile    SD150...........  catheter,        NF      ...............                 0               2  S8: Supply item       130.00
             duct stent.                         balloon                                                                     replaces another
                                                 ureteral                                                                    item; see
                                                 (Dowd).                                                                     preamble.
47538.....  Perq plmt bile    SD152...........  catheter,        NF      ...............                 2               0  S7: Supply item      -487.00
             duct stent.                         balloon, PTA.                                                               replaced by
                                                                                                                             another item;
                                                                                                                             see preamble.
47539.....  Perq plmt bile    ED050...........  PACS             NF      ...............                34             106  E18: Refined            1.59
             duct stent.                         Workstation                                                                 equipment time
                                                 Proxy.                                                                      to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             PACS Workstation
                                                                                                                             Proxy MS minutes
                                                                                                                             backed out input.
47539.....  Perq plmt bile    EF018...........  stretcher......  NF      ...............               190             187  G1: See preamble       -0.02
             duct stent.                                                                                                     text MS minutes
                                                                                                                             backed out input.
47539.....  Perq plmt bile    EF027...........  table,           NF      ...............               190             187  G1: See preamble        0.00
             duct stent.                         instrument,                                                                 text MS minutes
                                                 mobile.                                                                     backed out input.
47539.....  Perq plmt bile    EL011...........  room,            NF      ...............                87              84  E15: Refined          -15.76
             duct stent.                         angiography.                                                                equipment time
                                                                                                                             to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time MS minutes
                                                                                                                             backed out input.
47539.....  Perq plmt bile    EQ011...........  ECG, 3-channel   NF      ...............               190             187  G1: See preamble       -0.04
             duct stent.                         (with SpO2,                                                                 text MS minutes
                                                 NIBP, temp,                                                                 backed out input.
                                                 resp).
47539.....  Perq plmt bile    EQ032...........  IV infusion      NF      ...............               190             187  G1: See preamble       -0.02
             duct stent.                         pump.                                                                       text MS minutes
                                                                                                                             backed out input.
47539.....  Perq plmt bile    EQ168...........  light, exam....  NF      ...............                34             100  E1: Refined             0.29
             duct stent.                                                                                                     equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment MS
                                                                                                                             minutes backed
                                                                                                                             out input.
47539.....  Perq plmt bile    EQ250...........  ultrasound       NF      ...............                34             100  E15: Refined            7.67
             duct stent.                         unit, portable.                                                             equipment time
                                                                                                                             to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time MS minutes
                                                                                                                             backed out input.
47539.....  Perq plmt bile    L041B...........  Radiologic       NF      Clean room/                     6               3  L1: Refined time       -1.23
             duct stent.                         Technologist.            equipment by                                       to standard for
                                                                          physician                                          this clinical
                                                                          staff.                                             labor task.
47539.....  Perq plmt bile    L051A...........  RN.............  NF      Assist                         75               0  G1: See preamble      -38.25
             duct stent.                                                  Physician in                                       text MS minutes
                                                                          Performing                                         backed out input.
                                                                          Procedure (CS).
47539.....  Perq plmt bile    L051A...........  RN.............  NF      Monitor pt.                    15               0  G1: See preamble       -7.65
             duct stent.                                                  following                                          text MS minutes
                                                                          moderate                                           backed out input.
                                                                          sedation.
47539.....  Perq plmt bile    L051A...........  RN.............  NF      Sedate/Apply                    2               0  G1: See preamble       -1.02
             duct stent.                                                  anesthesia.                                        text MS minutes
                                                                                                                             backed out input.
47539.....  Perq plmt bile    SA044...........  pack, conscious  NF      ...............                 1               0  G1: See preamble      -17.31
             duct stent.                         sedation.                                                                   text MS supply
                                                                                                                             backed out input.
47539.....  Perq plmt bile    SD150...........  catheter,        NF      ...............                 0               2  S8: Supply item       130.00
             duct stent.                         balloon                                                                     replaces another
                                                 ureteral                                                                    item; see
                                                 (Dowd).                                                                     preamble.
47539.....  Perq plmt bile    SD152...........  catheter,        NF      ...............                 2               0  S7: Supply item      -487.00
             duct stent.                         balloon, PTA.                                                               replaced by
                                                                                                                             another item;
                                                                                                                             see preamble.

[[Page 80380]]

 
47540.....  Perq plmt bile    ED050...........  PACS             NF      ...............                34             116  E18: Refined            1.81
             duct stent.                         Workstation                                                                 equipment time
                                                 Proxy.                                                                      to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             PACS Workstation
                                                                                                                             Proxy MS minutes
                                                                                                                             backed out input.
47540.....  Perq plmt bile    EF018...........  stretcher......  NF      ...............               190             187  G1: See preamble       -0.02
             duct stent.                                                                                                     text MS minutes
                                                                                                                             backed out input.
47540.....  Perq plmt bile    EF027...........  table,           NF      ...............               190             187  G1: See preamble        0.00
             duct stent.                         instrument,                                                                 text MS minutes
                                                 mobile.                                                                     backed out input.
47540.....  Perq plmt bile    EL011...........  room,            NF      ...............                97              94  E15: Refined          -15.76
             duct stent.                         angiography.                                                                equipment time
                                                                                                                             to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time MS minutes
                                                                                                                             backed out input.
47540.....  Perq plmt bile    EQ011...........  ECG, 3-channel   NF      ...............               190             187  G1: See preamble       -0.04
             duct stent.                         (with SpO2,                                                                 text MS minutes
                                                 NIBP, temp,                                                                 backed out input.
                                                 resp).
47540.....  Perq plmt bile    EQ032...........  IV infusion      NF      ...............               190             187  G1: See preamble       -0.02
             duct stent.                         pump.                                                                       text MS minutes
                                                                                                                             backed out input.
47540.....  Perq plmt bile    EQ168...........  light, exam....  NF      ...............                34             110  E1: Refined             0.33
             duct stent.                                                                                                     equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment MS
                                                                                                                             minutes backed
                                                                                                                             out input.
47540.....  Perq plmt bile    EQ250...........  ultrasound       NF      ...............                34             110  E15: Refined            8.83
             duct stent.                         unit, portable.                                                             equipment time
                                                                                                                             to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time MS minutes
                                                                                                                             backed out input.
47540.....  Perq plmt bile    L041B...........  Radiologic       NF      Clean room/                     6               3  L1: Refined time       -1.23
             duct stent.                         Technologist.            equipment by                                       to standard for
                                                                          physician                                          this clinical
                                                                          staff.                                             labor task.
47540.....  Perq plmt bile    L051A...........  RN.............  NF      Assist                         85               0  G1: See preamble      -43.35
             duct stent.                                                  Physician in                                       text MS minutes
                                                                          Performing                                         backed out input.
                                                                          Procedure (CS).
47540.....  Perq plmt bile    L051A...........  RN.............  NF      Monitor pt.                    15               0  G1: See preamble       -7.65
             duct stent.                                                  following                                          text MS minutes
                                                                          moderate                                           backed out input.
                                                                          sedation.
47540.....  Perq plmt bile    L051A...........  RN.............  NF      Sedate/Apply                    2               0  G1: See preamble       -1.02
             duct stent.                                                  anesthesia.                                        text MS minutes
                                                                                                                             backed out input.
47540.....  Perq plmt bile    SA044...........  pack, conscious  NF      ...............                 1               0  G1: See preamble      -17.31
             duct stent.                         sedation.                                                                   text MS supply
                                                                                                                             backed out input.
47540.....  Perq plmt bile    SD150...........  catheter,        NF      ...............                 0               2  S8: Supply item       130.00
             duct stent.                         balloon                                                                     replaces another
                                                 ureteral                                                                    item; see
                                                 (Dowd).                                                                     preamble SD152.
47540.....  Perq plmt bile    SD152...........  catheter,        NF      ...............                 2               0  S7: Supply item      -487.00
             duct stent.                         balloon, PTA.                                                               replaced by
                                                                                                                             another item;
                                                                                                                             see preamble
                                                                                                                             SD150.
47541.....  Plmt access bil   ED050...........  PACS             NF      ...............                34              91  E18: Refined            1.26
             tree sm bwl.                        Workstation                                                                 equipment time
                                                 Proxy.                                                                      to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             PACS Workstation
                                                                                                                             Proxy MS minutes
                                                                                                                             backed out input.
47541.....  Plmt access bil   EF018...........  stretcher......  NF      ...............               190             187  G1: See preamble       -0.02
             tree sm bwl.                                                                                                    text MS minutes
                                                                                                                             backed out input.
47541.....  Plmt access bil   EF027...........  table,           NF      ...............               190             187  G1: See preamble        0.00
             tree sm bwl.                        instrument,                                                                 text MS minutes
                                                 mobile.                                                                     backed out input.
47541.....  Plmt access bil   EL011...........  room,            NF      ...............                72              69  E15: Refined          -15.76
             tree sm bwl.                        angiography.                                                                equipment time
                                                                                                                             to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time MS minutes
                                                                                                                             backed out input.
47541.....  Plmt access bil   EQ011...........  ECG, 3-channel   NF      ...............               190             187  G1: See preamble       -0.04
             tree sm bwl.                        (with SpO2,                                                                 text MS minutes
                                                 NIBP, temp,                                                                 backed out input.
                                                 resp).
47541.....  Plmt access bil   EQ032...........  IV infusion      NF      ...............               190             187  G1: See preamble       -0.02
             tree sm bwl.                        pump.                                                                       text MS minutes
                                                                                                                             backed out input.
47541.....  Plmt access bil   EQ168...........  light, exam....  NF      ...............                34              85  E1: Refined             0.22
             tree sm bwl.                                                                                                    equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment MS
                                                                                                                             minutes backed
                                                                                                                             out input.

[[Page 80381]]

 
47541.....  Plmt access bil   EQ250...........  ultrasound       NF      ...............                34              85  E1: Refined             5.93
             tree sm bwl.                        unit, portable.                                                             equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment MS
                                                                                                                             minutes backed
                                                                                                                             out input.
47541.....  Plmt access bil   L041B...........  Radiologic       NF      Clean room/                     6               3  L1: Refined time       -1.23
             tree sm bwl.                        Technologist.            equipment by                                       to standard for
                                                                          physician                                          this clinical
                                                                          staff.                                             labor task.
47541.....  Plmt access bil   L051A...........  RN.............  NF      Assist                         60               0  G1: See preamble      -30.60
             tree sm bwl.                                                 Physician in                                       text MS minutes
                                                                          Performing                                         backed out input.
                                                                          Procedure (CS).
47541.....  Plmt access bil   L051A...........  RN.............  NF      Monitor pt.                    15               0  G1: See preamble       -7.65
             tree sm bwl.                                                 following                                          text MS minutes
                                                                          moderate                                           backed out input.
                                                                          sedation.
47541.....  Plmt access bil   L051A...........  RN.............  NF      Sedate/Apply                    2               0  G1: See preamble       -1.02
             tree sm bwl.                                                 anesthesia.                                        text MS minutes
                                                                                                                             backed out input.
47541.....  Plmt access bil   SA044...........  pack, conscious  NF      ...............                 1               0  G1: See preamble      -17.31
             tree sm bwl.                        sedation.                                                                   text MS supply
                                                                                                                             backed out input.
47542.....  Dilate biliary    EF018...........  stretcher......  NF      ...............                30               0  G1: See preamble       -0.15
             duct/ampulla.                                                                                                   text MS minutes
                                                                                                                             backed out input.
47542.....  Dilate biliary    EF027...........  table,           NF      ...............                30               0  G1: See preamble       -0.04
             duct/ampulla.                       instrument,                                                                 text MS minutes
                                                 mobile.                                                                     backed out input.
47542.....  Dilate biliary    EQ011...........  ECG, 3-channel   NF      ...............                30               0  G1: See preamble       -0.42
             duct/ampulla.                       (with Sp02,                                                                 text MS minutes
                                                 NIBP, temp,                                                                 backed out input.
                                                 resp).
47542.....  Dilate biliary    EQ032...........  IV infusion      NF      ...............                30               0  G1: See preamble       -0.19
             duct/ampulla.                       pump.                                                                       text MS minutes
                                                                                                                             backed out input.
47542.....  Dilate biliary    L051A...........  RN.............  NF      Assist                         30               0  G1: See preamble      -15.30
             duct/ampulla.                                                Physician in                                       text MS minutes
                                                                          Performing                                         backed out input.
                                                                          Procedure (CS).
47542.....  Dilate biliary    SD150...........  catheter,        NF      ...............                 0               1  S8: Supply item        65.00
             duct/ampulla.                       balloon                                                                     replaces another
                                                 ureteral                                                                    item; see
                                                 (Dowd).                                                                     preamble.
47542.....  Dilate biliary    SD152...........  catheter,        NF      ...............                 1               0  S7: Supply item      -243.50
             duct/ampulla.                       balloon, PTA.                                                               replaced by
                                                                                                                             another item;
                                                                                                                             see preamble.
47543.....  Endoluminal bx    EF018...........  stretcher......  NF      ...............                30               0  G1: See preamble       -0.15
             biliary tree.                                                                                                   text MS minutes
                                                                                                                             backed out input.
47543.....  Endoluminal bx    EF027...........  table,           NF      ...............                30               0  G1: See preamble       -0.04
             biliary tree.                       instrument,                                                                 text MS minutes
                                                 mobile.                                                                     backed out input.
47543.....  Endoluminal bx    EQ011...........  ECG, 3-channel   NF      ...............                30               0  G1: See preamble       -0.42
             biliary tree.                       (with Sp02,                                                                 text MS minutes
                                                 NIBP, temp,                                                                 backed out input.
                                                 resp).
47543.....  Endoluminal bx    EQ032...........  IV infusion      NF      ...............                30               0  G1: See preamble       -0.19
             biliary tree.                       pump.                                                                       text MS minutes
                                                                                                                             backed out input.
47543.....  Endoluminal bx    L051A...........  RN.............  NF      Assist                         30               0  G1: See preamble      -15.30
             biliary tree.                                                Physician in                                       text MS minutes
                                                                          Performing                                         backed out input.
                                                                          Procedure (CS).
47543.....  Endoluminal bx    SD315...........  Stone basket...  NF      ...............                 1               0  G1: See preamble     -417.00
             biliary tree.                                                                                                   text.
47544.....  Removal duct      EF018...........  stretcher......  NF      ...............                45               0  G1: See preamble       -0.23
             glbldr calculi.                                                                                                 text MS minutes
                                                                                                                             backed out input.
47544.....  Removal duct      EF027...........  table,           NF      ...............                45               0  G1: See preamble       -0.06
             glbldr calculi.                     instrument,                                                                 text MS minutes
                                                 mobile.                                                                     backed out input.
47544.....  Removal duct      EQ011...........  ECG, 3-channel   NF      ...............                45               0  G1: See preamble       -0.63
             glbldr calculi.                     (with Sp02,                                                                 text MS minutes
                                                 NIBP, temp,                                                                 backed out input.
                                                 resp).
47544.....  Removal duct      EQ032...........  IV infusion      NF      ...............                45               0  G1: See preamble       -0.28
             glbldr calculi.                     pump.                                                                       text MS minutes
                                                                                                                             backed out input.
47544.....  Removal duct      L051A...........  RN.............  NF      Assist                         45               0  G1: See preamble      -22.95
             glbldr calculi.                                              Physician in                                       text MS minutes
                                                                          Performing                                         backed out input.
                                                                          Procedure (CS).
47544.....  Removal duct      SD150...........  catheter,        NF      ...............                 0               1  S8: Supply item        65.00
             glbldr calculi.                     balloon                                                                     replaces another
                                                 ureteral                                                                    item; see
                                                 (Dowd).                                                                     preamble.
47544.....  Removal duct      SD152...........  catheter,        NF      ...............                 1               0  S7: Supply item      -243.50
             glbldr calculi.                     balloon, PTA.                                                               replaced by
                                                                                                                             another item;
                                                                                                                             see preamble.
47544.....  Removal duct      SD315...........  Stone basket...  NF      ...............                 0               1  G1: See preamble      417.00
             glbldr calculi.                                                                                                 text.
50606.....  Endoluminal bx    EL011...........  room,            NF      ...............                46              47  G1: See preamble        5.25
             urtr rnl plvs.                      angiography.                                                                text.
50705.....  Ureteral          EL011...........  room,            NF      ...............                61              62  G1: See preamble        5.25
             embolization/                       angiography.                                                                text.
             occl.
50706.....  Balloon dilate    EL011...........  room,            NF      ...............                61              62  G1: See preamble        5.25
             urtrl strix.                        angiography.                                                                text.
51700.....  Irrigation of     SD024...........  catheter, Foley  NF      ...............                 0               1  S8: Supply item         7.82
             bladder.                                                                                                        replaces another
                                                                                                                             item; see
                                                                                                                             preamble SD030.
51700.....  Irrigation of     SD030...........  catheter,        NF      ...............                 1               0  S7: Supply item        -1.70
             bladder.                            straight.                                                                   replaced by
                                                                                                                             another item;
                                                                                                                             see preamble
                                                                                                                             SD024.
51700.....  Irrigation of     SJ031...........  leg or urinary   NF      ...............                 0               1  S8: Supply item         3.08
             bladder.                            drainage bag.                                                               replaces another
                                                                                                                             item; see
                                                                                                                             preamble SD030.
51701.....  Insert bladder    SD024...........  catheter, Foley  NF      ...............                 1               0  S7: Supply item        -7.82
             catheter.                                                                                                       replaced by
                                                                                                                             another item;
                                                                                                                             see preamble
                                                                                                                             SD030.

[[Page 80382]]

 
51701.....  Insert bladder    SD030...........  catheter,        NF      ...............                 0               1  S8: Supply item         1.70
             catheter.                           straight.                                                                   replaces another
                                                                                                                             item; see
                                                                                                                             preamble SD024.
51701.....  Insert bladder    SJ031...........  leg or urinary   NF      ...............                 1               0  S7: Supply item        -3.08
             catheter.                           drainage bag.                                                               replaced by
                                                                                                                             another item;
                                                                                                                             see preamble
                                                                                                                             SD030.
52000.....  Cystoscopy......  EF027...........  table,           NF      ...............                17              22  E4: Refined             0.01
                                                 instrument,                                                                 equipment time
                                                 mobile.                                                                     to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             scopes.
52000.....  Cystoscopy......  EF031...........  table, power...  NF      ...............                17              22  E4: Refined             0.08
                                                                                                                             equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             scopes.
52000.....  Cystoscopy......  EQ167...........  light source,    NF      ...............                17              22  E4: Refined             0.14
                                                 xenon.                                                                      equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             scopes.
52000.....  Cystoscopy......  ES031...........  video system,    NF      ...............                17              22  E4: Refined             0.65
                                                 endoscopy                                                                   equipment time
                                                 (processor,                                                                 to conform to
                                                 digital                                                                     established
                                                 capture,                                                                    policies for
                                                 monitor,                                                                    scopes.
                                                 printer, cart).
58555.....  Hysteroscopy dx   L037D...........  RN/LPN/MTA.....  F       Conduct phone                   0               3  L1: Refined time        1.11
             sep proc.                                                    calls/call in                                      to standard for
                                                                          prescriptions.                                     this clinical
                                                                                                                             labor task.
58558.....  Hysteroscopy      EQ235...........  suction machine  NF      ...............                51               0  E9: Equipment          -0.10
             biopsy.                             (Gomco).                                                                    removed due to
                                                                                                                             redundancy when
                                                                                                                             used together
                                                                                                                             with equipment
                                                                                                                             EQ378.
58558.....  Hysteroscopy      SA123...........  Hysteroscopic    NF      ...............                 0               1  G1: See preamble      320.00
             biopsy.                             fluid                                                                       text.
                                                 management
                                                 tubing kit.
58558.....  Hysteroscopy      SD009...........  canister,        NF      ...............                 1               0  S1: Duplicative;       -3.91
             biopsy.                             suction.                                                                    supply is
                                                                                                                             included in
                                                                                                                             EQ378.
58558.....  Hysteroscopy      SD031...........  catheter,        NF      ...............                 1               0  S1: Duplicative;       -0.62
             biopsy.                             suction.                                                                    supply is
                                                                                                                             included in
                                                                                                                             EQ378.
58562.....  Hysteroscopy      L037D...........  RN/LPN/MTA.....  F       Conduct phone                   0               3  L1: Refined time        1.11
             remove fb.                                                   calls/call in                                      to standard for
                                                                          prescriptions.                                     this clinical
                                                                                                                             labor task.
62321.....  Njx interlaminar  EF018...........  stretcher......  NF      ...............                73              75  E1: Refined             0.01
             crv/thrc.                                                                                                       equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment.
62321.....  Njx interlaminar  EQ211...........  pulse oximeter   NF      ...............                73              75  E1: Refined             0.01
             crv/thrc.                           w-printer.                                                                  equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment.
62323.....  Njx interlaminar  EF018...........  stretcher......  NF      ...............                73              75  E1: Refined             0.01
             lmbr/sac.                                                                                                       equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment.
62323.....  Njx interlaminar  EQ211...........  pulse oximeter   NF      ...............                73              75  E1: Refined             0.01
             lmbr/sac.                           w-printer.                                                                  equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment.
62325.....  Njx interlaminar  EF018...........  stretcher......  NF      ...............                73              75  E1: Refined             0.01
             crv/thrc.                                                                                                       equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment.
62325.....  Njx interlaminar  EQ211...........  pulse oximeter   NF      ...............                73              75  E1: Refined             0.01
             crv/thrc.                           w-printer.                                                                  equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment.
62327.....  Njx interlaminar  EF018...........  stretcher......  NF      ...............                73              75  E1: Refined             0.01
             lmbr/sac.                                                                                                       equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment.
62327.....  Njx interlaminar  EQ211...........  pulse oximeter   NF      ...............                73              75  E1: Refined             0.01
             lmbr/sac.                           w-printer.                                                                  equipment time
                                                                                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment.
70540.....  Mri orbit/face/   ED053...........  Professional     NF      ...............                24              22  E18: Refined           -0.12
             neck w/o dye.                       PACS                                                                        equipment time
                                                 Workstation.                                                                to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             PACS Workstation
                                                                                                                             Proxy.

[[Page 80383]]

 
70542.....  Mri orbit/face/   ED053...........  Professional     NF      ...............                25              23  E18: Refined           -0.12
             neck w/dye.                         PACS                                                                        equipment time
                                                 Workstation.                                                                to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             PACS Workstation
                                                                                                                             Proxy.
70543.....  Mri orbt/fac/nck  ED053...........  Professional     NF      ...............                30              28  E18: Refined           -0.12
             w/o &w/dye.                         PACS                                                                        equipment time
                                                 Workstation.                                                                to conform to
                                                                                                                             established
                                                                                                                             policies for
                                                                                                                             PACS Workstation
                                                                                                                             Proxy.
77001.....  Fluoroguide for   ED050...........  PACS             NF      ...............                27              25  E15: Refined           -0.04
             vein device.                        Workstation                                                                 equipment time
                                                 Proxy.                                                                      to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
77001.....  Fluoroguide for   EL014...........  room,            NF      ...............                24              22  E15: Refined           -2.79
             vein device.                        radiographic-                                                               equipment time
                                                 fluoroscopic.                                                               to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
77001.....  Fluoroguide for   L041B...........  Radiologic       NF      Prepare room,                   2               0  L6: Add-on code.       -0.82
             vein device.                        Technologist.            equipment,                                         Additional time
                                                                          supplies.                                          for clinical
                                                                                                                             labor task not
                                                                                                                             typical; see
                                                                                                                             preamble text.
77002.....  Needle            ED050...........  PACS             NF      ...............                27              25  E15: Refined           -0.04
             localization by                     Workstation                                                                 equipment time
             xray.                               Proxy.                                                                      to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
77002.....  Needle            EL014...........  room,            NF      ...............                24              22  E15: Refined           -2.79
             localization by                     radiographic-                                                               equipment time
             xray.                               fluoroscopic.                                                               to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
77002.....  Needle            L041B...........  Radiologic       NF      Prepare room,                   2               0  L6: Add-on code.       -0.82
             localization by                     Technologist.            equipment,                                         Additional time
             xray.                                                        supplies.                                          for clinical
                                                                                                                             labor task not
                                                                                                                             typical; see
                                                                                                                             preamble text.
77003.....  Fluoroguide for   ED050...........  PACS             NF      ...............                27              25  E15: Refined           -0.04
             spine inject.                       Workstation                                                                 equipment time
                                                 Proxy.                                                                      to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
77003.....  Fluoroguide for   EL014...........  room,            NF      ...............                24              22  E15: Refined           -2.79
             spine inject.                       radiographic-                                                               equipment time
                                                 fluoroscopic.                                                               to conform to
                                                                                                                             changes in
                                                                                                                             clinical labor
                                                                                                                             time.
77003.....  Fluoroguide for   L041B...........  Radiologic       NF      Prepare room,                   2               0  L6: Add-on code.       -0.82
             spine inject.                       Technologist.            equipment,                                         Additional time
                                                                          supplies.                                          for clinical
                                                                                                                             labor task not
                                                                                                                             typical; see
                                                                                                                             preamble text.
88184.....  Flowcytometry/tc  L033A...........  Lab Technician.  NF      Clean room/                     2               1  L1: Refined time       -0.33
             1 marker.                                                    equipment                                          to standard for
                                                                          following                                          this clinical
                                                                          procedure                                          labor task.
                                                                          (including any
                                                                          equipment
                                                                          maintenance
                                                                          that must be
                                                                          done after the
                                                                          procedure).
88184.....  Flowcytometry/tc  L033A...........  Lab Technician.  NF      Enter data into                 4               0  G6: Indirect           -1.32
             1 marker.                                                    laboratory                                         Practice Expense
                                                                          information                                        input and/or not
                                                                          system,                                            individually
                                                                          multiparameter                                     allocable to a
                                                                          analyses and                                       particular
                                                                          field data                                         patient for a
                                                                          entry,                                             particular
                                                                          complete                                           service.
                                                                          quality
                                                                          assurance
                                                                          documentation.
88184.....  Flowcytometry/tc  L045A...........  Cytotechnologis  NF      Instrument                     15              13  L3: Refined            -0.90
             1 marker.                           t.                       start-up,                                          clinical labor
                                                                          quality                                            time to conform
                                                                          control                                            with identical
                                                                          functions,                                         labor activity
                                                                          calibration,                                       in other codes
                                                                          centrifugation                                     in the family.
                                                                          , maintaining
                                                                          specimen
                                                                          tracking, logs
                                                                          and labeling.
88184.....  Flowcytometry/tc  L045A...........  Cytotechnologis  NF      Load specimen                  10               7  L3: Refined            -1.35
             1 marker.                           t.                       into flow                                          clinical labor
                                                                          cytometer, run                                     time to conform
                                                                          specimen,                                          with identical
                                                                          monitor data                                       labor activity
                                                                          acquisition,                                       in other codes
                                                                          and data                                           in the family.
                                                                          modeling, and
                                                                          unload flow
                                                                          cytometer.
88184.....  Flowcytometry/tc  L045A...........  Cytotechnologis  NF      Print out                       5               2  L1: Refined time       -1.35
             1 marker.                           t.                       histograms,                                        to standard for
                                                                          assemble                                           this clinical
                                                                          materials with                                     labor task.
                                                                          paperwork to
                                                                          pathologists.
88184.....  Flowcytometry/tc  SL186...........  antibody, flow   NF      ...............               1.6               1  G1: See preamble       -5.10
             1 marker.                           cytometry                                                                   text.
                                                 (each test).

[[Page 80384]]

 
88185.....  Flowcytometry/tc  L033A...........  Lab Technician.  NF      Enter data into                 1               0  G6: Indirect           -0.33
             add-on.                                                      laboratory                                         Practice Expense
                                                                          information                                        input and/or not
                                                                          system,                                            individually
                                                                          multiparameter                                     allocable to a
                                                                          analyses and                                       particular
                                                                          field data                                         patient for a
                                                                          entry,                                             particular
                                                                          complete                                           service.
                                                                          quality
                                                                          assurance
                                                                          documentation.
88185.....  Flowcytometry/tc  SL089...........  lysing reagent   NF      ...............                 3               2  G1: See preamble       -4.49
             add-on.                             (FACS).                                                                     text.
88185.....  Flowcytometry/tc  SL186...........  antibody, flow   NF      ...............               1.6               1  G1: See preamble       -5.10
             add-on.                             cytometry                                                                   text.
                                                 (each test).
88321.....  Microslide        L037B...........  Histotechnologi  NF      Assemble and                    1               0  L2: Clinical           -0.37
             consultation.                       st.                      deliver slides                                     labor task
                                                                          with paperwork                                     redundant with
                                                                          to                                                 clinical labor
                                                                          pathologists.                                      task.
88321.....  Microslide        L037B...........  Histotechnologi  NF      Complete                        0               1  L3: Refined             0.37
             consultation.                       st.                      workload                                           clinical labor
                                                                          recording                                          time to conform
                                                                          logs. Collate                                      with identical
                                                                          slides and                                         labor activity
                                                                          paperwork.                                         in other codes
                                                                          Deliver to                                         in the family.
                                                                          pathologist.
88323.....  Microslide        L037B...........  Histotechnologi  NF      Assemble and                    1               0  L2: Clinical           -0.37
             consultation.                       st.                      deliver slides                                     labor task
                                                                          with paperwork                                     redundant with
                                                                          to                                                 clinical labor
                                                                          pathologists.                                      task.
88323.....  Microslide        L037B...........  Histotechnologi  NF      Clean equipment                 1               0  L2: Clinical           -0.37
             consultation.                       st.                      while                                              labor task
                                                                          performing                                         redundant with
                                                                          service.                                           clinical labor
                                                                                                                             task.
88323.....  Microslide        L037B...........  Histotechnologi  NF      Complete                        0               1  G1: See preamble        0.37
             consultation.                       st.                      workload                                           text.
                                                                          recording
                                                                          logs. Collate
                                                                          slides and
                                                                          paperwork.
                                                                          Deliver to
                                                                          pathologist.
88323.....  Microslide        SL135...........  stain,           NF      ...............                32              16  G1: See preamble       -0.70
             consultation.                       hematoxylin.                                                                text.
88325.....  Comprehensive     L037B...........  Histotechnologi  NF      Assemble and                    1               0  L2: Clinical           -0.37
             review of data.                     st.                      deliver slides                                     labor task
                                                                          with paperwork                                     redundant with
                                                                          to                                                 clinical labor
                                                                          pathologists.                                      task.
88325.....  Comprehensive     L037B...........  Histotechnologi  NF      Clean Equipment                 1               0  L2: Clinical           -0.37
             review of data.                     st.                      while                                              labor task
                                                                          performing                                         redundant with
                                                                          service.                                           clinical labor
                                                                                                                             task.
88325.....  Comprehensive     L037B...........  Histotechnologi  NF      Complete                        0               1  G1: See preamble        0.37
             review of data.                     st.                      workload                                           text.
                                                                          recording
                                                                          logs. Collate
                                                                          slides and
                                                                          paperwork.
                                                                          Deliver to
                                                                          pathologist.
88325.....  Comprehensive     SL135...........  stain,           NF      ...............                32              16  G1: See preamble       -0.70
             review of data.                     hematoxylin.                                                                text.
95812.....  EEG 41-60         EF003...........  bedroom          NF      ...............               108              99  E1: Refined            -0.05
             minutes.                            furniture                                                                   equipment time
                                                 (hospital bed,                                                              to conform to
                                                 table,                                                                      established
                                                 reclining                                                                   policies for non-
                                                 chair).                                                                     highly technical
                                                                                                                             equipment.
95812.....  EEG 41-60         EQ017...........  EEG, digital,    NF      ...............               108              99  E1: Refined            -1.32
             minutes.                            prolonged                                                                   equipment time
                                                 testing system                                                              to conform to
                                                 (computer w-                                                                established
                                                 remote camera).                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment.
95812.....  EEG 41-60         L047B...........  REEGT..........  NF      Perform                        62              50  G1: See preamble       -5.64
             minutes.                                                     procedure.                                         text.
95813.....  EEG over 1 hour.  EF003...........  bedroom          NF      ...............               142             129  E1: Refined            -0.08
                                                 furniture                                                                   equipment time
                                                 (hospital bed,                                                              to conform to
                                                 table,                                                                      established
                                                 reclining                                                                   policies for non-
                                                 chair).                                                                     highly technical
                                                                                                                             equipment.
95813.....  EEG over 1 hour.  EQ017...........  EEG, digital,    NF      ...............               142             129  E1: Refined            -1.91
                                                 prolonged                                                                   equipment time
                                                 testing system                                                              to conform to
                                                 (computer w-                                                                established
                                                 remote camera).                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment.
95813.....  EEG over 1 hour.  L047B...........  REEGT..........  NF      Perform                        96              80  G1: See preamble       -7.52
                                                                          procedure.                                         text.
96933.....  Rcm celulr        L042A...........  RN/LPN.........  NF      Review imaging                  2               0  G1: See preamble       -0.84
             subcelulr img                                                with                                               text.
             skn.                                                         interpreting
                                                                          physician.
96934.....  Rcm celulr        EF031...........  table, power...  NF      ...............                32              31  E1: Refined            -0.02
             subcelulr img                                                                                                   equipment time
             skn.                                                                                                            to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment.

[[Page 80385]]

 
96934.....  Rcm celulr        EQ168...........  light, exam....  NF      ...............                32              31  E1: Refined             0.00
             subcelulr img                                                                                                   equipment time
             skn.                                                                                                            to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment.
96934.....  Rcm celulr        ES056...........  reflectance      NF      ...............                32              31  E1: Refined            -0.37
             subcelulr img                       confocal                                                                    equipment time
             skn.                                imaging system.                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment.
96934.....  Rcm celulr        L042A...........  RN/LPN.........  NF      Patient                         2               0  L6: Add-on code.       -0.84
             subcelulr img                                                clinical                                           Additional time
             skn.                                                         information                                        for clinical
                                                                          and                                                labor task not
                                                                          questionnaire                                      typical; see
                                                                          reviewed by                                        preamble text.
                                                                          technologist,
                                                                          order from
                                                                          physician
                                                                          confirmed and
                                                                          exam
                                                                          protocoled by
                                                                          radiologist.
96934.....  Rcm celulr        L042A...........  RN/LPN.........  NF      Prepare and                     2               1  L6: Add-on code.       -0.42
             subcelulr img                                                position pt/                                       Additional time
             skn.                                                         monitor pt/set                                     for clinical
                                                                          up IV.                                             labor task not
                                                                                                                             typical; see
                                                                                                                             preamble text.
96934.....  Rcm celulr        L042A...........  RN/LPN.........  NF      Review imaging                  2               1  G1: See preamble       -0.42
             subcelulr img                                                with                                               text.
             skn.                                                         interpreting
                                                                          physician.
96935.....  Rcm celulr        EF031...........  table, power...  NF      ...............                32              31  E1: Refined            -0.02
             subcelulr img                                                                                                   equipment time
             skn.                                                                                                            to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment.
96935.....  Rcm celulr        EQ168...........  light, exam....  NF      ...............                32              31  E1: Refined             0.00
             subcelulr img                                                                                                   equipment time
             skn.                                                                                                            to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment.
96935.....  Rcm celulr        ES056...........  reflectance      NF      ...............                32              31  E1: Refined            -0.37
             subcelulr img                       confocal                                                                    equipment time
             skn.                                imaging system.                                                             to conform to
                                                                                                                             established
                                                                                                                             policies for non-
                                                                                                                             highly technical
                                                                                                                             equipment.
96935.....  Rcm celulr        L042A...........  RN/LPN.........  NF      Patient                         2               0  L6: Add-on code.       -0.84
             subcelulr img                                                clinical                                           Additional time
             skn.                                                         information                                        for clinical
                                                                          and                                                labor task not
                                                                          questionnaire                                      typical; see
                                                                          reviewed by                                        preamble text.
                                                                          technologist,
                                                                          order from
                                                                          physician
                                                                          confirmed and
                                                                          exam
                                                                          protocoled by
                                                                          radiologist.
96935.....  Rcm celulr        L042A...........  RN/LPN.........  NF      Prepare and                     2               1  L6: Add-on code.       -0.42
             subcelulr img                                                position pt/                                       Additional time
             skn.                                                         monitor pt/set                                     for clinical
                                                                          up IV.                                             labor task not
                                                                                                                             typical; see
                                                                                                                             preamble text.
96935.....  Rcm celulr        L042A...........  RN/LPN.........  NF      Review imaging                  2               0  G1: See preamble       -0.84
             subcelulr img                                                with                                               text.
             skn.                                                         interpreting
                                                                          physician.
97161.....  Pt eval low       EF028...........  table, mat, hi-  NF      ...............                13              20  E11: Refined            0.07
             complex 20 min.                     lo, 6 x 8                                                                   equipment time
                                                 platform.                                                                   to conform with
                                                                                                                             other codes in
                                                                                                                             the family.
97161.....  Pt eval low       EQ219...........  rehab and        NF      ...............                 5              10  E11: Refined            0.89
             complex 20 min.                     testing system                                                              equipment time
                                                 (BTE primus).                                                               to conform with
                                                                                                                             other codes in
                                                                                                                             the family.
97161.....  Pt eval low       EQ243...........  treadmill......  NF      ...............                 5               3  E11: Refined           -0.03
             complex 20 min.                                                                                                 equipment time
                                                                                                                             to conform with
                                                                                                                             other codes in
                                                                                                                             the family.
97161.....  Pt eval low       L023A...........  Physical         NF      Prepare and                     0               2  L3: Refined             0.46
             complex 20 min.                     Therapy Aide.            position pt/                                       clinical labor
                                                                          monitor pt/set                                     time to conform
                                                                          up IV.                                             with identical
                                                                                                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
97161.....  Pt eval low       L039B...........  Physical         NF      Assist physical                 5              10  L3: Refined             1.95
             complex 20 min.                     Therapy                  therapist with                                     clinical labor
                                                 Assistant.               exam/                                              time to conform
                                                                          evaluation,                                        with identical
                                                                          obtain records/                                    labor activity
                                                                          measures.                                          in other codes
                                                                                                                             in the family.
97161.....  Pt eval low       L039B...........  Physical         NF      Conduct phone                   0               3  L3: Refined             1.17
             complex 20 min.                     Therapy                  calls/call in                                      clinical labor
                                                 Assistant.               prescriptions.                                     time to conform
                                                                                                                             with identical
                                                                                                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
97161.....  Pt eval low       L039B...........  Physical         NF      Obtain/record                   5               8  L3: Refined             1.17
             complex 20 min.                     Therapy                  medical and                                        clinical labor
                                                 Assistant.               medication                                         time to conform
                                                                          history, self                                      with identical
                                                                          assessment                                         labor activity
                                                                          tools, and                                         in other codes
                                                                          fall screening                                     in the family.
                                                                          for PT review.
97161.....  Pt eval low       L039B...........  Physical         NF      Obtain vital                    3               5  L3: Refined             0.78
             complex 20 min.                     Therapy                  signs.                                             clinical labor
                                                 Assistant.                                                                  time to conform
                                                                                                                             with identical
                                                                                                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
97162.....  Pt eval mod       L039B...........  Physical         NF      Obtain/record                  10               8  G1: See preamble       -0.78
             complex 30 min.                     Therapy                  medical and                                        text.
                                                 Assistant.               medication
                                                                          history, self
                                                                          assessment
                                                                          tools, and
                                                                          fall screening
                                                                          for PT review.

[[Page 80386]]

 
97163.....  Pt eval high      EF028...........  table, mat, hi-  NF      ...............                30              20  E11: Refined           -0.10
             complex 45 min.                     lo, 6 x 8                                                                   equipment time
                                                 platform.                                                                   to conform with
                                                                                                                             other codes in
                                                                                                                             the family.
97163.....  Pt eval high      EQ148...........  kit, hand        NF      ...............                 5               2  E11: Refined           -0.01
             complex 45 min.                     dexterity,                                                                  equipment time
                                                 sensory,                                                                    to conform with
                                                 strength.                                                                   other codes in
                                                                                                                             the family.
97163.....  Pt eval high      EQ201...........  parallel bars,   NF      ...............                 5               0  E11: Refined           -0.02
             complex 45 min.                     platform                                                                    equipment time
                                                 mounted.                                                                    to conform with
                                                                                                                             other codes in
                                                                                                                             the family.
97163.....  Pt eval high      EQ243...........  treadmill......  NF      ...............                 0               3  E11: Refined            0.04
             complex 45 min.                                                                                                 equipment time
                                                                                                                             to conform with
                                                                                                                             other codes in
                                                                                                                             the family.
97163.....  Pt eval high      L039B...........  Physical         NF      Assist physical                15              10  L3: Refined            -1.95
             complex 45 min.                     Therapy                  therapist with                                     clinical labor
                                                 Assistant.               exam/                                              time to conform
                                                                          evaluation,                                        with identical
                                                                          obtain records/                                    labor activity
                                                                          measures.                                          in other codes
                                                                                                                             in the family.
97163.....  Pt eval high      L039B...........  Physical         NF      Obtain/record                  12               8  L3: Refined            -1.56
             complex 45 min.                     Therapy                  medical and                                        clinical labor
                                                 Assistant.               medication                                         time to conform
                                                                          history, self                                      with identical
                                                                          assessment                                         labor activity
                                                                          tools, and                                         in other codes
                                                                          fall screening                                     in the family.
                                                                          for PT review.
97163.....  Pt eval high      SM022...........  sanitizing       NF      ...............                 6               5  S5: Refined            -0.05
             complex 45 min.                     cloth-wipe                                                                  supply quantity
                                                 (surface,                                                                   to conform with
                                                 instruments,                                                                other codes in
                                                 equipment).                                                                 the family.
97164.....  Pt re-eval est    L039B...........  Physical         NF      Obtain/record                   5               4  G1: See preamble       -0.39
             plan care.                          Therapy                  medical and                                        text.
                                                 Assistant.               medication
                                                                          history, self
                                                                          assessment
                                                                          tools, and
                                                                          fall screening
                                                                          for PT review.
97165.....  Ot eval low       EF033...........  table,           NF      ...............                 0              10  E11: Refined            0.05
             complex 20 min.                     treatment, hi-                                                              equipment time
                                                 lo.                                                                         to conform with
                                                                                                                             other codes in
                                                                                                                             the family.
97165.....  Ot eval low       EL002...........  environmental    NF      ...............                10              11  E11: Refined            0.11
             complex 20 min.                     module--kitche                                                              equipment time
                                                 n.                                                                          to conform with
                                                                                                                             other codes in
                                                                                                                             the family.
97165.....  Ot eval low       EQ068...........  balance          NF      ...............                 0               8  E11: Refined            0.43
             complex 20 min.                     assessment-                                                                 equipment time
                                                 retraining                                                                  to conform with
                                                 system                                                                      other codes in
                                                 (Balance                                                                    the family.
                                                 Master).
97165.....  Ot eval low       EQ143...........  kit, ADL.......  NF      ...............                 8              11  E11: Refined            0.00
             complex 20 min.                                                                                                 equipment time
                                                                                                                             to conform with
                                                                                                                             other codes in
                                                                                                                             the family.
97165.....  Ot eval low       EQ151...........  kit, motor       NF      ...............                 2               3  E11: Refined            0.00
             complex 20 min.                     coordination.                                                               equipment time
                                                                                                                             to conform with
                                                                                                                             other codes in
                                                                                                                             the family.
97165.....  Ot eval low       EQ152...........  kit, sensory...  NF      ...............                 2               3  E11: Refined            0.00
             complex 20 min.                                                                                                 equipment time
                                                                                                                             to conform with
                                                                                                                             other codes in
                                                                                                                             the family.
97165.....  Ot eval low       ES057...........  environmental    NF      ...............                 0              10  E11: Refined            0.64
             complex 20 min.                     module--bathro                                                              equipment time
                                                 om.                                                                         to conform with
                                                                                                                             other codes in
                                                                                                                             the family.
97165.....  Ot eval low       ES058...........  kit, vision....  NF      ...............                 0               3  E11: Refined            0.00
             complex 20 min.                                                                                                 equipment time
                                                                                                                             to conform with
                                                                                                                             other codes in
                                                                                                                             the family.
97165.....  Ot eval low       L039B...........  Physical         NF      Assist                          5               7  L3: Refined             0.78
             complex 20 min.                     Therapy                  physician in                                       clinical labor
                                                 Assistant.               performing                                         time to conform
                                                                          procedure                                          with identical
                                                                          (15%).                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
97165.....  Ot eval low       L039B...........  Physical         NF      Obtain                          4               6  L3: Refined             0.78
             complex 20 min.                     Therapy                  measurements.                                      clinical labor
                                                 Assistant.                                                                  time to conform
                                                                                                                             with identical
                                                                                                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
97165.....  Ot eval low       L039B...........  Physical         NF      Obtain vital                    3               5  L3: Refined             0.78
             complex 20 min.                     Therapy                  signs.                                             clinical labor
                                                 Assistant.                                                                  time to conform
                                                                                                                             with identical
                                                                                                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
97166.....  Ot eval mod       L039B...........  Physical         NF      Obtain                          8               6  G1: See preamble       -0.78
             complex 30 min.                     Therapy                  measurements.                                      text.
                                                 Assistant.
97167.....  Ot eval high      EF033...........  table,           NF      ...............                15              10  E11: Refined           -0.03
             complex 45 min.                     treatment, hi-                                                              equipment time
                                                 lo.                                                                         to conform with
                                                                                                                             other codes in
                                                                                                                             the family.
97167.....  Ot eval high      EL002...........  environmental    NF      ...............                14              11  E11: Refined           -0.34
             complex 45 min.                     module--kitche                                                              equipment time
                                                 n.                                                                          to conform with
                                                                                                                             other codes in
                                                                                                                             the family.
97167.....  Ot eval high      EQ068...........  balance          NF      ...............                 0               8  E11: Refined            0.43
             complex 45 min.                     assessment-                                                                 equipment time
                                                 retraining                                                                  to conform with
                                                 system                                                                      other codes in
                                                 (Balance                                                                    the family.
                                                 Master).
97167.....  Ot eval high      EQ117...........  evaluation       NF      ...............                 5               4  E11: Refined           -0.07
             complex 45 min.                     system for                                                                  equipment time
                                                 upper                                                                       to conform with
                                                 extremity-hand                                                              other codes in
                                                 (Greenleaf).                                                                the family.

[[Page 80387]]

 
97167.....  Ot eval high      EQ143...........  kit, ADL.......  NF      ...............                15              11  E11: Refined           -0.01
             complex 45 min.                                                                                                 equipment time
                                                                                                                             to conform with
                                                                                                                             other codes in
                                                                                                                             the family.
97167.....  Ot eval high      EQ185...........  neurobehavioral  NF      ...............                11               0  E11: Refined           -0.59
             complex 45 min.                     status                                                                      equipment time
                                                 instrument.                                                                 to conform with
                                                                                                                             other codes in
                                                                                                                             the family.
97167.....  Ot eval high      EQ219...........  rehab and        NF      ...............                 5               3  E11: Refined           -0.36
             complex 45 min.                     testing system                                                              equipment time
                                                 (BTE primus).                                                               to conform with
                                                                                                                             other codes in
                                                                                                                             the family.
97167.....  Ot eval high      ES057...........  environmental    NF      ...............                14              10  E11: Refined           -0.26
             complex 45 min.                     module --                                                                   equipment time
                                                 bathroom.                                                                   to conform with
                                                                                                                             other codes in
                                                                                                                             the family.
97167.....  Ot eval high      L039B...........  Physical         NF      Assist                          9               7  L3: Refined            -0.78
             complex 45 min.                     Therapy                  physician in                                       clinical labor
                                                 Assistant.               performing                                         time to conform
                                                                          procedure                                          with identical
                                                                          (15%).                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
97167.....  Ot eval high      L039B...........  Physical         NF      Obtain                         12               6  L3: Refined            -2.34
             complex 45 min.                     Therapy                  measurements.                                      clinical labor
                                                 Assistant.                                                                  time to conform
                                                                                                                             with identical
                                                                                                                             labor activity
                                                                                                                             in other codes
                                                                                                                             in the family.
97168.....  Ot re-eval est    L039B...........  Physical         NF      Obtain                          3               2  G1: See preamble       -0.39
             plan care.                          Therapy                  measurements.                                      text.
                                                 Assistant.
G0416.....  Prostate biopsy,  SL063...........  eosin y........  NF      ...............                48               0  S7: Supply item       -38.45
             any mthd.                                                                                                       replaced by
                                                                                                                             another item;
                                                                                                                             see preamble
                                                                                                                             SL201.
G0416.....  Prostate biopsy,  SL201...........  stain, eosin...  NF      ...............                 0              48  S8: Supply item         3.24
             any mthd.                                                                                                       replaces another
                                                                                                                             item; see
                                                                                                                             preamble SL063.
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 80388]]


           Table 29--CY 2017 Final Rule No PE Refinement Table
------------------------------------------------------------------------
                HCPCS Code                        Short Descriptor
------------------------------------------------------------------------
00740.....................................  Anesth upper gi visualize.
00810.....................................  Anesth low intestine scope.
11730.....................................  Removal of nail plate.
19298.....................................  Place breast rad tube/caths.
20245.....................................  Bone biopsy excisional.
20550.....................................  Inj tendon sheath/ligament.
20552.....................................  Inj trigger point 1/2 muscl.
20553.....................................  Inject trigger points 3/>.
20982.....................................  Ablate bone tumor(s) perq.
20983.....................................  Ablate bone tumor(s) perq.
22512.....................................  Vertebroplasty addl inject.
22515.....................................  Perq vertebral augmentation.
22526.....................................  Idet single level.
22527.....................................  Idet 1 or more levels.
22853.....................................  Insj biomechanical device.
22854.....................................  Insj biomechanical device.
22859.....................................  Insj biomechanical device.
22867.....................................  Insj stablj dev w/dcmprn.
22868.....................................  Insj stablj dev w/dcmprn.
22869.....................................  Insj stablj dev w/o dcmprn.
22870.....................................  Insj stablj dev w/o dcmprn.
28289.....................................  Repair hallux rigidus.
28291.....................................  Corrj halux rigdus w/implt.
28292.....................................  Correction of bunion.
28295.....................................  Correction hallux valgus.
28296.....................................  Correction of bunion.
28297.....................................  Correction of bunion.
28298.....................................  Correction of bunion.
28299.....................................  Correction of bunion.
31615.....................................  Visualization of windpipe.
31622.....................................  Dx bronchoscope/wash.
31623.....................................  Dx bronchoscope/brush.
31624.....................................  Dx bronchoscope/lavage.
31625.....................................  Bronchoscopy w/biopsy(s).
31626.....................................  Bronchoscopy w/markers.
31627.....................................  Navigational bronchoscopy.
31628.....................................  Bronchoscopy/lung bx each.
31629.....................................  Bronchoscopy/needle bx each.
31632.....................................  Bronchoscopy/lung bx addl.
31633.....................................  Bronchoscopy/needle bx addl.
31634.....................................  Bronch w/balloon occlusion.
31635.....................................  Bronchoscopy w/fb removal.
31645.....................................  Bronchoscopy clear airways.
31646.....................................  Bronchoscopy reclear airway.
31652.....................................  Bronch ebus samplng 1/2
                                             node.
31653.....................................  Bronch ebus samplng 3/ node.
31654.....................................  Bronch ebus ivntj perph les.
32405.....................................  Percut bx lung/mediastinum.
32550.....................................  Insert pleural cath.
32553.....................................  Ins mark thor for rt perq.
33340.....................................  Perq clsr tcat l atr apndge.
33390.....................................  Valvuloplasty aortic valve.
33391.....................................  Valvuloplasty aortic valve.
35471.....................................  Repair arterial blockage.
35472.....................................  Repair arterial blockage.
35475.....................................  Repair arterial blockage.
35476.....................................  Repair venous blockage.
36010.....................................  Place catheter in vein.
36140.....................................  Establish access to artery.
36147.....................................  Access av dial grft for
                                             eval.
36148.....................................  Access av dial grft for
                                             proc.
36200.....................................  Place catheter in aorta.
36227.....................................  Place cath xtrnl carotid.
36228.....................................  Place cath intracranial art.
36245.....................................  Ins cath abd/l-ext art 1st.
36246.....................................  Ins cath abd/l-ext art 2nd.
36247.....................................  Ins cath abd/l-ext art 3rd.
36248.....................................  Ins cath abd/l-ext art addl.
36481.....................................  Insertion of catheter vein.
36555.....................................  Insert non-tunnel cv cath.
36557.....................................  Insert tunneled cv cath.
36558.....................................  Insert tunneled cv cath.
36560.....................................  Insert tunneled cv cath.
36561.....................................  Insert tunneled cv cath.
36563.....................................  Insert tunneled cv cath.
36565.....................................  Insert tunneled cv cath.
36566.....................................  Insert tunneled cv cath.
36568.....................................  Insert picc cath.
36570.....................................  Insert picvad cath.
36571.....................................  Insert picvad cath.
36576.....................................  Repair tunneled cv cath.
36578.....................................  Replace tunneled cv cath.
36581.....................................  Replace tunneled cv cath.
36582.....................................  Replace tunneled cv cath.
36583.....................................  Replace tunneled cv cath.
36585.....................................  Replace picvad cath.
36590.....................................  Removal tunneled cv cath.
36870.....................................  Percut thrombect av fistula.
36907.....................................  Balo angiop ctr dialysis
                                             seg.
36908.....................................  Stent plmt ctr dialysis seg.
36909.....................................  Dialysis circuit embolj.
37183.....................................  Remove hepatic shunt (tips).
37185.....................................  Prim art m-thrmbc sbsq vsl.
37186.....................................  Sec art thrombectomy add-on.
37193.....................................  Rem endovas vena cava
                                             filter.
37222.....................................  Iliac revasc add-on.
37223.....................................  Iliac revasc w/stent add-on.
37232.....................................  Tib/per revasc add-on.
37233.....................................  Tibper revasc w/ather add-
                                             on.
37234.....................................  Revsc opn/prq tib/pero
                                             stent.
37235.....................................  Tib/per revasc stnt & ather.
37237.....................................  Open/perq place stent ea
                                             add.
37239.....................................  Open/perq place stent ea
                                             add.
37247.....................................  Trluml balo angiop addl art.
37249.....................................  Trluml balo angiop addl
                                             vein.
37252.....................................  Intrvasc us noncoronary 1st.
37253.....................................  Intrvasc us noncoronary
                                             addl.
43200.....................................  Esophagoscopy flexible
                                             brush.
43201.....................................  Esoph scope w/submucous inj.
43202.....................................  Esophagoscopy flex biopsy.
43206.....................................  Esoph optical
                                             endomicroscopy.
43213.....................................  Esophagoscopy retro balloon.
43215.....................................  Esophagoscopy flex remove
                                             fb.
43216.....................................  Esophagoscopy lesion
                                             removal.
43217.....................................  Esophagoscopy snare les
                                             remv.
43220.....................................  Esophagoscopy balloon <30mm.
43226.....................................  Esoph endoscopy dilation.
43227.....................................  Esophagoscopy control bleed.
43229.....................................  Esophagoscopy lesion ablate.
43231.....................................  Esophagoscop ultrasound
                                             exam.
43232.....................................  Esophagoscopy w/us needle
                                             bx.
43235.....................................  Egd diagnostic brush wash.
43236.....................................  Uppr gi scope w/submuc inj.
43239.....................................  Egd biopsy single/multiple.
43245.....................................  Egd dilate stricture.
43247.....................................  Egd remove foreign body.
43248.....................................  Egd guide wire insertion.
43249.....................................  Esoph egd dilation <30 mm.
43250.....................................  Egd cautery tumor polyp.
43251.....................................  Egd remove lesion snare.
43252.....................................  Egd optical endomicroscopy.
43255.....................................  Egd control bleeding any.
43270.....................................  Egd lesion ablation.
43284.....................................  Laps esophgl sphnctr agmntj.
43285.....................................  Rmvl esophgl sphnctr dev.
43450.....................................  Dilate esophagus 1/mult
                                             pass.
43453.....................................  Dilate esophagus.
44380.....................................  Small bowel endoscopy br/wa.
44381.....................................  Small bowel endoscopy br/wa.
44382.....................................  Small bowel endoscopy.
44385.....................................  Endoscopy of bowel pouch.
44386.....................................  Endoscopy bowel pouch/biop.
44388.....................................  Colonoscopy thru stoma spx.
44389.....................................  Colonoscopy with biopsy.
44390.....................................  Colonoscopy for foreign
                                             body.
44391.....................................  Colonoscopy for bleeding.
44392.....................................  Colonoscopy & polypectomy.
44394.....................................  Colonoscopy w/snare.
44401.....................................  Colonoscopy with ablation.
44404.....................................  Colonoscopy w/injection.
44405.....................................  Colonoscopy w/dilation.
45303.....................................  Proctosigmoidoscopy dilate.
45305.....................................  Proctosigmoidoscopy w/bx.
45307.....................................  Proctosigmoidoscopy fb.
45308.....................................  Proctosigmoidoscopy removal.
45309.....................................  Proctosigmoidoscopy removal.
45315.....................................  Proctosigmoidoscopy removal.
45317.....................................  Proctosigmoidoscopy bleed.

[[Page 80389]]

 
45320.....................................  Proctosigmoidoscopy ablate.
45332.....................................  Sigmoidoscopy w/fb removal.
45333.....................................  Sigmoidoscopy & polypectomy.
45334.....................................  Sigmoidoscopy for bleeding.
45335.....................................  Sigmoidoscopy w/submuc inj.
45338.....................................  Sigmoidoscopy w/tumr remove.
45340.....................................  Sig w/tndsc balloon
                                             dilation.
45346.....................................  Sigmoidoscopy w/ablation.
45350.....................................  Sgmdsc w/band ligation.
45378.....................................  Diagnostic colonoscopy.
45379.....................................  Colonoscopy w/fb removal.
45380.....................................  Colonoscopy and biopsy.
45381.....................................  Colonoscopy submucous njx.
45382.....................................  Colonoscopy w/control bleed.
45384.....................................  Colonoscopy w/lesion
                                             removal.
45385.....................................  Colonoscopy w/lesion
                                             removal.
45386.....................................  Colonoscopy w/balloon dilat.
45388.....................................  Colonoscopy w/ablation.
45398.....................................  Colonoscopy w/band ligation.
47000.....................................  Needle biopsy of liver.
47382.....................................  Percut ablate liver rf.
47383.....................................  Perq abltj lvr cryoablation.
49411.....................................  Ins mark abd/pel for rt
                                             perq.
49446.....................................  Change g-tube to g-j perc.
50200.....................................  Renal biopsy perq.
50592.....................................  Perc rf ablate renal tumor.
50593.....................................  Perc cryo ablate renal tum.
51702.....................................  Insert temp bladder cath.
51703.....................................  Insert bladder cath complex.
51720.....................................  Treatment of bladder lesion.
51784.....................................  Anal/urinary muscle study.
55700.....................................  Biopsy of prostate.
57155.....................................  Insert uteri tandem/ovoids.
58559.....................................  Hysteroscopy lysis.
58560.....................................  Hysteroscopy resect septum.
58561.....................................  Hysteroscopy remove myoma.
58563.....................................  Hysteroscopy ablation.
58674.....................................  Laps abltj uterine fibroids.
61640.....................................  Dilate ic vasospasm init.
61641.....................................  Dilate ic vasospasm add-on.
61642.....................................  Dilate ic vasospasm add-on.
62320.....................................  Njx interlaminar crv/thrc.
62322.....................................  Njx interlaminar lmbr/sac.
62324.....................................  Njx interlaminar crv/thrc.
62326.....................................  Njx interlaminar lmbr/sac.
62380.....................................  Ndsc dcmprn 1 ntrspc lumbar.
66720.....................................  Destruction ciliary body.
67101.....................................  Repair detached retina.
67105.....................................  Repair detached retina.
69300.....................................  Revise external ear.
76706.....................................  Us abdl aorta screen aaa.
77332.....................................  Radiation treatment aid(s).
77333.....................................  Radiation treatment aid(s).
77334.....................................  Radiation treatment aid(s).
77470.....................................  Special radiation treatment.
77600.....................................  Hyperthermia treatment.
77605.....................................  Hyperthermia treatment.
77610.....................................  Hyperthermia treatment.
77615.....................................  Hyperthermia treatment.
91110.....................................  Gi tract capsule endoscopy.
91111.....................................  Esophageal capsule
                                             endoscopy.
92132.....................................  Cmptr ophth dx img ant
                                             segmt.
92133.....................................  Cmptr ophth img optic nerve.
92134.....................................  Cptr ophth dx img post
                                             segmt.
92235.....................................  Eye exam with photos.
92240.....................................  Icg angiography.
92242.....................................  Fluorescein icg angiography.
92250.....................................  Eye exam with photos.
92960.....................................  Cardioversion electric ext.
93312.....................................  Echo transesophageal.
93314.....................................  Echo transesophageal.
93451.....................................  Right heart cath.
93452.....................................  Left hrt cath w/
                                             ventrclgrphy.
93453.....................................  R&l hrt cath w/
                                             ventriclgrphy.
93454.....................................  Coronary artery angio s&i.
93455.....................................  Coronary art/grft angio s&i.
93456.....................................  R hrt coronary artery angio.
93457.....................................  R hrt art/grft angio.
93458.....................................  L hrt artery/ventricle
                                             angio.
93459.....................................  L hrt art/grft angio.
93460.....................................  R&l hrt art/ventricle angio.
93461.....................................  R&l hrt art/ventricle angio.
93464.....................................  Exercise w/hemodynamic meas.
93505.....................................  Biopsy of heart lining.
93566.....................................  Inject r ventr/atrial angio.
93567.....................................  Inject suprvlv aortography.
93568.....................................  Inject pulm art hrt cath.
93590.....................................  Perq transcath cls mitral.
93591.....................................  Perq transcath cls aortic.
93592.....................................  Perq transcath closure each.
93642.....................................  Electrophysiology
                                             evaluation.
93644.....................................  Electrophysiology
                                             evaluation.
95144.....................................  Antigen therapy services.
95165.....................................  Antigen therapy services.
95957.....................................  EEG digital analysis.
96160.....................................  Pt-focused hlth risk assmt.
96161.....................................  Caregiver health risk assmt.
96440.....................................  Chemotherapy intracavitary.
96931.....................................  Rcm celulr subcelulr img
                                             skn.
96932.....................................  Rcm celulr subcelulr img
                                             skn.
96936.....................................  Rcm celulr subcelulr img
                                             skn.
99151.....................................  Mod sed same phys/qhp <5
                                             yrs.
99152.....................................  Mod sed same phys/qhp 5/yrs.
99153.....................................  Mod sed same phys/qhp ea.
99155.....................................  Mod sed oth phys/qhp <5 yrs.
99156.....................................  Mod sed oth phys/qhp 5/yrs.
99157.....................................  Mod sed other phys/qhp ea.
G0341.....................................  Percutaneous islet
                                             celltrans.
------------------------------------------------------------------------


                                 Table 30--CY 2017 Final Rule New Invoices Table
----------------------------------------------------------------------------------------------------------------
                                   Invoices received for New Direct PE inputs
-----------------------------------------------------------------------------------------------------------------
                                                                                                Estimated  non-
                                                                                               facility  allowed
        CPT/HCPCS codes             Item name         CMS code      Average price   Number of    services  for
                                                                                    invoices      HCPCS  codes
                                                                                                using  this item
----------------------------------------------------------------------------------------------------------------
31551, 31552, 31553, 31554,     rhinolaryngoscope  ES063                 8,000.00           1            541,537
 31574, 31575, 31579, 31580,     , flexible,
 31584, 31587, 31591, 31592.     video, non-
                                 channeled.
31572, 31573, 31576, 31577,     rhinolaryngoscope  ES064                 9,000.00           1                756
 31578.                          , flexible,
                                 video, channeled.
31576, 31577, 31578...........  Disposable biopsy  SD318                    26.84           1                574
                                 forceps.

[[Page 80390]]

 
31579.........................  stroboscopy        ES065                16,843.87           1             54,466
                                 system.
31574.........................  Voice              SJ090                   575.00           1                 99
                                 Augmentation Gel.
36473.........................  Claravein Kit....  SA122                   890.00           1                264
36473, 36474..................  Sotradecol         SH108                   110.20           1                528
                                 Sclerosing Agent.
55700.........................  Biopsy Guide.....  EQ375                 7,000.00           0             85,731
58558.........................  Hysteroscopic      SF059                   629.00           2              2,677
                                 tissue removal
                                 device.
58558.........................  Hysteroscopic      EQ378                14,698.38           1              2,677
                                 fluid management
                                 system.
58558.........................  Hysteroscopic      EQ379                19,772.25           1              2,677
                                 resection system
                                 (control unit,
                                 footpiece,
                                 handpiece,
                                 sheath, and
                                 calibration
                                 device).
58558.........................  Hysteroscopic      SA123                   320.00           1              2,677
                                 fluid management
                                 tubing kit.
70540, 70542, 70543; over 400   Professional PACS  ED053                14,616.93           9         32,571,650
 additional codes.               Workstation.
77332.........................  knee wedge/foot    EQ376                 3,290.00           1             48,831
                                 block system.
77333.........................  Thermoplastic      SD321                    23.90           1              3,493
                                 tissue bolus
                                 30X30X0.3cm.
77333.........................  water bath,        EP120                 2,350.00           1              3,493
                                 digital control.
77333, 77334..................  Supine Breast/     EQ377                 5,773.15           1            290,969
                                 Lung Board.
77334.........................  Urethane Foaming   SL519                    53.50           1            287,476
                                 Agent.
88184, 88185..................  flow cytometry     EQ380                14,000.00           1          1,680,252
                                 analytics
                                 software.
95144, 95165..................  antigen vial       SK127                     1.50           2          6,464,311
                                 transport
                                 envelope.
96161.........................  Beck Depression    SK128                     2.26           1                  1
                                 Inventory,
                                 Second Edition
                                 (BDI-II).
96416.........................  IV infusion pump,  EQ381                 2,384.45           0            116,894
                                 ambulatory.
96931, 96932..................  Imaging Tray.....  SA121                    34.75           1                  5
96931, 96932..................  adhesive ruler...  SK125                     9.95           1                  5
96931, 96932, 96934, 96935....  reflectance        ES056                98,500.00           1                  9
                                 confocal imaging
                                 system.
97166, 97167, 97168...........  environmental      ES057                25,000.00           1            115,107
                                 module--bathroom.
97166, 97167..................  kit, vision......  ES058                   410.00           1             86,912
G0202, G0204, G0206...........  PACS Mammography   ED054               103,616.47           8          2,274,249
                                 Workstation.
G0501.........................  patient lift       EF045                 2,824.33           3         15,115,789
                                 system.
G0501.........................  wheelchair         EF046                   875.92           3         15,115,789
                                 accessible scale.
G0501.........................  leg positioning    EF047                 1,076.50           3         15,115,789
                                 system.
No Codes......................  Chloraprep         SJ091                     8.48           3                  0
                                 applicator (26
                                 ml).
No Codes......................  LED Light Source   EQ382                 1,915.00           1                  0
                                 (50W LED).
----------------------------------------------------------------------------------------------------------------


                                                  Table 31--CY 2017 Final Rule Existing Invoices Table
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Invoices received for Existing Direct PE inputs
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                        Estimated  non-
                                                                                                                                       facility  allowed
         CPT/HCPCS codes               Item name          CMS code      Current price   Updated price  Percent change     Number of      services  for
                                                                                                                          invoices        HCPCS  codes
                                                                                                                                        using  this item
--------------------------------------------------------------------------------------------------------------------------------------------------------
19030, 19081, 19082, 19281,       room, digital       EL013                168,214.00      362,935.00             116              10          2,294,862
 19282, 19283, 19284, 77053,       mammography.
 77054, G0202, G0204, G0206.
31551, 31552, 31553, 31554,       video system,       ES031                 33,232.50       33,391.00               0               3          1,497,130
 31572, 31573, 31574, 31575,       endoscopy
 31576, 31577, 31578, 31579,       (processor,
 31580, 31584, 31587, 31591,       digital capture,
 31592, 190+ other codes.          monitor, printer,
                                   cart).
58555, 58562, 58563, 58565......  endoscope, rigid,   ES009                  4,990.50        6,207.50              24               1                672
                                   hysteroscopy.

[[Page 80391]]

 
88323, 88355, 88380, 88381......  stain, eosin......  SL201                      0.04            0.07              55               5             45,393
88360, 88361....................  Antibody Estrogen   SL493                      3.19           14.00             339               4            216,208
                                   Receptor
                                   monoclonal.
91110...........................  kit, capsule        SA005                    450.00          520.00              16               1             30,464
                                   endoscopy w-
                                   application
                                   supplies (M2A).
91110, 91111....................  video system,       ES029                 17,000.00       12,450.00             -27               1             30,586
                                   capsule endoscopy
                                   (software,
                                   computer,
                                   monitor, printer).
91111...........................  kit, capsule, ESO,  SA094                    450.00          472.80               5               1                122
                                   endoscopy w-
                                   application
                                   supplies (ESO).
91200...........................  Fibroscan with      ER101                124,950.00      183,390.00              47               1              6,226
                                   printer.
95145, 95146, 95148, 95149......  antigen, venom....  SH009                     16.67           20.14              21               4             50,772
95147, 95148, 95149.............  antigen, venom,     SH010                     30.22           44.05              46               3             37,955
                                   tri-vespid.
122 codes.......................  light source,       EQ167                  6,723.33        7,000.00               4               1          2,149,616
                                   xenon.
59 codes........................  fiberscope,         ES020                  6,301.93        4,250.00             -33               1            581,924
                                   flexible,
                                   rhinolaryngoscopy.
--------------------------------------------------------------------------------------------------------------------------------------------------------

M. Therapy Caps

1. Outpatient Therapy Caps for CY 2017
    Section 1833(g) of the Act requires application of annual per 
beneficiary limitations on the amount of expenses that can be 
considered as incurred expenses for outpatient therapy services under 
Medicare Part B, commonly referred to as ``therapy caps.'' There is one 
therapy cap for outpatient occupational therapy (OT) services and 
another separate therapy cap for physical therapy (PT) and speech-
language pathology (SLP) services combined.
    The therapy caps apply to outpatient therapy services furnished in 
all settings, including the previously exempted hospital setting 
(effective October 1, 2012), critical access hospitals (CAHs) 
(effective January 1, 2014), and Maryland hospitals paid under the 
Maryland All-Payer Model (effective January 1, 2016).
    The therapy cap amounts under section 1833(g) of the Act are 
updated each year based on the Medicare Economic Index (MEI). 
Specifically, the annual caps are calculated by updating the previous 
year's cap by the MEI for the upcoming calendar year and rounding to 
the nearest $10.00. Increasing the CY 2016 therapy cap of $1,960 by the 
CY 2017 MEI of 1.2 percent and rounding to the nearest $10.00 results 
in a CY 2017 therapy cap amount of $1,980.
    An exceptions process for the therapy caps has been in effect since 
January 1, 2006. Originally required by section 5107 of the Deficit 
Reduction Act of 2005 (DRA), which amended section 1833(g)(5) of the 
Act, the exceptions process for the therapy caps has been extended 
multiple times through subsequent legislation as described in the CY 
2015 PFS final rule with comment period (79 FR 67730) and most recently 
extended by the MACRA. Our current authority to provide an exceptions 
process for therapy caps expires on December 31, 2017.
    CMS tracks each beneficiary's incurred expenses annually and counts 
them towards the therapy caps by applying the PFS rate for each service 
less any applicable multiple procedure payment reduction (MPPR) amount. 
As required by section 1833(g)(6)(B) of the Act, added by section 
603(b) of the American Taxpayer Relief Act of 2012 (ATRA) (Pub. L. 112-
240) and extended by subsequent legislation, the PFS-rate accrual 
process is applied to outpatient therapy services furnished by CAHs 
even though they are paid on a cost basis. As we explained in the CY 
2016 PFS final rule, we use cost-based rates to track each 
beneficiary's incurred expenses amounts for the outpatient therapy 
services furnished by the Maryland hospitals paid under the Maryland 
All-Payer Model, currently being tested under the authority of section 
1115A of the Act. After expenses incurred for the beneficiary's 
outpatient therapy services for the year have exceeded one or both of 
the therapy caps, therapy suppliers and providers use the KX modifier 
on claims for subsequent services to request an exception to the 
therapy caps. By using the KX modifier, the therapist is attesting that 
the services above the therapy caps are reasonable and necessary and 
that there is documentation of medical necessity for the services in 
the beneficiary's medical record. Claims for outpatient therapy 
services over the caps without the KX modifier are denied.

[[Page 80392]]

    Since October 1, 2012, under section 1833(g)(5)(C) of the Act as 
amended by the Middle Class Tax Relief and Jobs Creation Act of 2012 
(MCTRJCA) (Pub. L. 112-96), we have been required to apply a manual 
medical review process to therapy claims when a beneficiary's incurred 
expenses for outpatient therapy services exceed a threshold amount of 
$3,700. Just as there are two separate therapy caps, there are two 
separate thresholds of $3,700, one for OT services and one for PT and 
SLP services combined; and incurred expenses are counted towards these 
thresholds in the same manner as the caps. Under section 1833(g)(5) of 
the Act, as amended by section 202(b) of the MACRA, not all claims 
exceeding the therapy thresholds are subject to a manual medical review 
process as they were before. Instead, since MACRA, we are permitted to 
do a more targeted medical review on these claims using factors 
specified in section 1833(g)(5)(E)(ii) of the Act as amended by section 
202(b) of the MACRA, including targeting those therapy providers with a 
high claims denial rate for therapy services or with aberrant billing 
practices compared to their peers. The manual medical review process 
required under section 1833(g)(5)(C) of the Act expires at the same 
time as the exceptions process for therapy caps, on December 31, 2017. 
For information on the manual medical review process, go to https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Medical-Review/TherapyCap.html

III. Other Provisions of the Final Rule for PFS

A. Chronic Care Management (CCM) and Transitional Care Management (TCM) 
Supervision Requirements in Rural Health Clinics (RHCs) and Federally 
Qualified Health Centers (FQHCs)

    In the CY 2016 PFS final rule with comment period (80 FR 71080 
through 71088), we finalized policies for payment of CCM services in 
RHCs and FQHCs. Payment for CCM services in RHCs and FQHCs was 
effective beginning on January 1, 2016, for RHCs and FQHCs that 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 would place the patient at significant risk of death, 
acute exacerbation/decompensation, or functional decline. Payment is 
made when CPT code 99490 is billed alone or with other payable services 
on a RHC or FQHC claim, and the rate is based on the PFS national 
average non-facility payment rate. The requirement that RHC or FQHC 
services be furnished face-to-face was waived for CCM services 
furnished to a RHC or FQHC patient because CCM services are not 
required to be furnished face-to-face.
    Medicare payment for TCM services furnished by a RHC or FQHC 
practitioner was effective January 1, 2013, consistent with the 
effective date of payment for TCM services under the PFS (77 FR 68978 
through 68994; also, see CMS-Pub. 100-02, Medicare Benefit Policy 
Manual, chapter 13, section 110.4).
    TCM services are billable only when furnished within 30 days of the 
date of the patient's discharge from a hospital (including outpatient 
observation or partial hospitalization), skilled nursing facility, or 
community mental health center. Communication (direct contact, 
telephone, or electronic) with the patient or caregiver must commence 
within 2 business days of discharge, and a face-to-face visit must 
occur within 14 days of discharge for moderate complexity decision 
making (CPT code 99495), or within 7 days of discharge for high 
complexity decision making (CPT code 99496). The TCM visit is billed on 
the day that the TCM visit takes place, and only one TCM visit may be 
paid per beneficiary for services furnished during that 30 day post-
discharge period. If the TCM visit occurs on the same day as another 
billable visit, only one visit may be billed. TCM and CCM cannot be 
billed during the same time period for the same patient.
    In the CY 2016 PFS final rule with comment period (80 FR 71087), we 
responded to comments requesting that we make an exception to the 
supervision requirements for auxiliary personnel furnishing CCM and TCM 
services incident to physician services in RHCs and FQHCs (80 FR 
71087). Auxiliary personnel in RHCs and FQHCs furnish services incident 
to a RHC or FQHC visit and include nurses, medical assistants, and 
other clinical personnel who work under the direct supervision of a RHC 
or FQHC practitioner. The commenters suggested that the regulatory 
language be amended to be consistent with the provision in Sec.  
410.26(b)(5) for CCM and TCM services under the PFS, which states that 
services and supplies furnished incident to CCM and TCM services can be 
furnished under general supervision of the physician (or other 
practitioner) when they are provided by clinical staff. It further 
specifies 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, but only the supervising physician (or other practitioner) 
may bill Medicare for incident to services. We responded that due to 
the differences between physician offices and RHCs and FQHCs in their 
models of care and payment structures, we believe that the direct 
supervision requirement for services furnished by auxiliary personnel 
is appropriate for RHCs and FQHCs, but that we would consider changing 
this in future rulemaking if RHCs and FQHCs found that requiring direct 
supervision presents a barrier to furnishing CCM services.
    Since payment for CCM in RHCs and FQHCs began on January 1, 2016, 
some RHCs and FQHCs have informed us that, in their view, the direct 
supervision requirement for auxiliary personnel has limited their 
ability to furnish CCM services. Specifically, these RHCs and FQHCs 
have stated that the direct supervision requirement prevented them from 
entering into contracts with third party companies to provide CCM 
services, especially during hours that they were not open, and that 
they were unable to meet the CCM requirements within their current 
staffing and budget constraints.
    To bill for CCM services, RHCs and FQHCs must ensure that there is 
access to care management services on a 24 hour a day, 7 day a week 
basis. This includes providing the patient with a means to make timely 
contact with RHC or FQHC practitioners who have access to the patient's 
electronic care plan to address his or her urgent chronic care needs. 
The RHC or FQHC must ensure the care plan is available electronically 
at all times to anyone within the RHC or FQHC who is providing CCM 
services.
    Once the RHC or FQHC practitioner has initiated CCM services and 
the patient has consented to receiving this service, CCM services can 
be furnished by a RHC or FQHC practitioner, or by auxiliary personnel, 
as defined in Sec.  410.26(a)(1), which includes nurses, medical 
assistants, and other personnel working under physician supervision who 
meet the requirements to provide incident to services. Auxiliary 
personnel in RHCs and FQHCs must furnish services under direct 
supervision, which requires that a RHC or FQHC practitioner be present 
in the RHC or FQHC and immediately available to furnish assistance and 
direction. The RHC or FQHC practitioner does not need to be present

[[Page 80393]]

in the room when the service is furnished.
    Although many RHCs and FQHCs prefer to furnish CCM and TCM services 
utilizing existing personnel, some RHCs and FQHCs would like to 
contract with a third party to furnish aspects of their CCM and TCM 
services, but cannot do so because of the direct supervision 
requirement. Without the ability to contract with a third party, these 
RHCs and FQHCs have stated that they find it difficult to meet the CCM 
requirements for 24 hours a day, 7 days a week access to services.
    To enable RHCs and FQHCs to effectively contract with third parties 
to furnish aspects of CCM and TCM services, we proposed to revise Sec.  
405.2413(a)(5) and Sec.  405.2415(a)(5) to state that services and 
supplies furnished incident to CCM and TCM services can be furnished 
under general supervision of a RHC or FQHC practitioner. The proposed 
exception to the direct supervision requirement would apply only to 
auxiliary personnel furnishing CCM or TCM incident to services, and 
would not apply to any other RHC or FQHC services. The proposed 
revisions for CCM and TCM services and supplies furnished by RHCs and 
FQHCs are consistent with Sec.  410.26(b)(5), which allows CCM and TCM 
services and supplies to be furnished by clinical staff under general 
supervision when billed under the PFS.
    The following is a summary of the comments we received on revising 
the supervision requirements for RHCs and FQHCs to allow general 
supervision for auxiliary personnel furnishing CCM or TCM services.
    Comment: We received 23 comments on our proposal to allow services 
and supplies furnished incident to CCM and TCM services to be furnished 
under general supervision of a RHC or FQHC practitioner. All commenters 
supported this change.
    Response: We appreciate the support for this proposal.
    Comment: One commenter urged CMS to use the Advisory Panel on 
Hospital Outpatient Payment to determine RHC and FQHC supervision 
levels.
    Response: Auxiliary personnel in RHCs and FQHCs work under direct 
supervision of a RHC or FQHC practitioner (consistent with statutory 
and regulatory authority), and we proposed to make an exception for CCM 
and TCM services because they are the only RHC and FQHC services that 
have a non-face-to-face component. We do not foresee any additional 
exceptions to this policy.
    After considering the comments, we are finalizing this policy to 
revise Sec.  405.2413(a)(5) and Sec.  405.2415(a)(5) to state that 
services and supplies furnished incident to CCM and TCM services can be 
furnished under general supervision of a RHC or FQHC practitioner.

B. FQHC-Specific Market Basket

1. Background
    Section 10501(i)(3)(A) of the Affordable Care Act (Pub. L. 111-148 
and Pub. L. 111-152) added section 1834(o) of the Act to establish a 
payment system for the costs of FQHC services under Medicare Part B 
based on prospectively set rates. In the Prospective Payment System 
(PPS) for FQHC Final Rule published in the May 2, 2014 Federal Register 
(79 FR 25436), CMS implemented a methodology and payment rates for the 
FQHC PPS. The FQHC PPS base payment rate was determined using FQHC cost 
report and claims data and was effective for FQHC payments from October 
1, 2014, through December 31, 2015 (implementation year). The adjusted 
base payment rate for the implementation year was $158.85 (79 FR 
25455). When calculating the FQHC PPS payment, the base payment rate is 
multiplied by the FQHC geographic adjustment factor (GAF) based on the 
location of the FQHC, and adjusted for new patients or when an initial 
preventive physical examination or annual wellness visit are furnished. 
Beginning on October 1, 2014, FQHCs began to transition to the FQHC PPS 
based on their cost reporting periods. As of January 1, 2016, all FQHCs 
are paid under the FQHC PPS.
    Section 1834(o)(2)(B)(ii) of the Act requires that the payment for 
the first year after the implementation year be increased by the 
percentage increase in the MEI. Therefore, in CY 2016, the FQHC PPS 
base payment rate was increased by the MEI. The MEI was based on 2006 
data from the American Medical Association (AMA) for self-employed 
physicians and was used in the PFS Sustainable Growth Rate (SGR) 
formula to determine the conversion factor for physician service 
payments. (See the CY 2014 PFS final rule (78 FR 74264) for a complete 
discussion of the 2006-based MEI). Section 1834(o)(2)(B)(ii) of the Act 
also requires that beginning in CY 2017, the FQHC PPS base payment rate 
is to be increased by the percentage increase in a market basket of 
FQHC goods and services, or if such an index is not available, by the 
percentage increase in the MEI.
    For CY 2017, we proposed to create a 2013-based FQHC market basket. 
The market basket uses Medicare cost report (MCR) data submitted by 
freestanding FQHCs. In the discussion in the CY 2017 PFS proposed rule 
(81 FR 46378-46386) we provided an overview of the market basket and 
described the methodologies used to determine the cost categories, cost 
weights, and price proxies. In addition, we compared the growth rates 
of the proposed FQHC market basket to the growth rates of the MEI.
2. Overview of the FQHC Market Basket
    The 2013-based FQHC market basket is a fixed-weight, Laspeyres-type 
price index. A Laspeyres price index measures the change in price, over 
time, of the same mix of goods and services purchased in the base 
period. Any changes in the quantity or mix of goods and services (that 
is, intensity) purchased over time relative to a base period are not 
measured.
    The index itself is constructed in three steps. First, a base 
period is selected (in this final rule, the base period is CY 2013), 
total base period costs are estimated for a set of mutually exclusive 
and exhaustive cost categories, and the proportion of total costs that 
each cost category represents is calculated. These proportions are 
called cost weights. Second, each cost category is matched to an 
appropriate price or wage variable, referred to as a price proxy. These 
price proxies are derived from publicly available statistical series 
that are published on a consistent schedule (preferably at least on a 
quarterly basis). Finally, the cost weight for each cost category is 
multiplied by the established price proxy index level. The sum of these 
products (that is, the cost weights multiplied by their price levels) 
for all cost categories yields the composite index level of the market 
basket for the given time period. Repeating this step for other periods 
produces a series of market basket levels over time. Dividing the 
composite index level of one period by the composite index level for an 
earlier period produces a rate of growth in the input price index over 
that timeframe.
    As previously noted, the market basket is described as a fixed-
weight index because it represents the change in price over time of a 
constant mix (quantity and intensity) of goods and services needed to 
furnish FQHC services. The effects on total costs resulting from 
changes in the mix of goods and services purchased subsequent to the 
base period are not measured. For example, a FQHC hiring more nurses to 
accommodate the needs of patients would increase the volume

[[Page 80394]]

of goods and services purchased by the FQHC, but would not be factored 
into the price change measured by a fixed-weight FQHC market basket. 
Only when the index is rebased would changes in the quantity and 
intensity be captured, with those changes being reflected in the cost 
weights. Therefore, we rebase the market baskets periodically so that 
the cost weights reflect a current mix of goods and services purchased 
(FQHC inputs) to furnish FQHC services.
3. Creating a FQHC Market Basket
    In 2015, we began researching the possibility of creating a FQHC 
market basket that would be used in place of the MEI to update the FQHC 
PPS base payment rate annually. A FQHC market basket should reflect the 
cost structures of FQHCs while the MEI reflects the cost structures of 
self-employed physician offices. At the time of implementation of the 
FQHC PPS, a FQHC market basket had not been developed, and therefore, 
the law stipulated that the FQHC PPS base payment rate be updated by 
the MEI for the first year after implementation (CY 2016). In 
subsequent years, the FQHC PPS base payment rate should be annually 
updated by a FQHC market basket, if available.
    The MEI cost weights were derived from data collected by the AMA on 
the Physician Practice Expense Information Survey (PPIS), since 
physicians, unlike other Medicare providers, are not required to 
complete and submit a Medicare Cost Report. FQHCs submit expense data 
annually on the Medicare Cost Report form CMS-222-92 (OMB NO: 0938-
0107), ``Independent Rural Health Clinic and Freestanding Federally 
Qualified Health Center Cost Report''; therefore, we were able to 
estimate relative cost weights specific to FQHCs. We define a ``major 
cost weight'' as one calculated using the Medicare cost reports (for 
example, FQHC practitioner compensation). However, the Medicare cost 
report data allows multiple methods for reporting detailed expenses, 
either in detailed cost center lines or more broadly reported in 
general categories of expenses. An alternative data source is used to 
disaggregate further residual costs that could not be classified into a 
major cost category directly using only the Medicare Cost Report data. 
We estimated the cost weights for each year 2009 through 2013 and found 
the cost weights from each year to be similar, which provided 
confidence in the derived cost weights.
    We believe that the proposed methodologies for the FQHC market 
basket better reflect the cost structure of FQHC since it captures the 
scope of services that FQHCs furnish compared to the 2006-based MEI.
4. Development of Cost Categories and Cost Weights for the 2013-Based 
FQHC Market Basket
a. Use of Medicare Cost Report Data
    The 2013-based FQHC market basket consists of eight major cost 
categories, which were derived from the CY 2013 Medicare cost reports 
for freestanding FQHCs. These categories are FQHC-Practitioner 
Compensation, Other Clinical Compensation, Non-Health Compensation, 
Fringe Benefits, Pharmaceuticals, Fixed Capital, Moveable Capital, and 
an All Other (Residual) cost category. The All Other (Residual) cost 
category reflects the costs not captured in the other seven cost 
categories. The CY 2013 Medicare cost reports include all FQHCs whose 
cost reporting period began on or after January 1, 2013, and prior to 
or on December 31, 2013. We selected CY 2013 as the base year because 
the Medicare cost reports for that year were the most recent, complete 
set of Medicare cost report data available for FQHCs at the time of 
development of the cost share weights and proposed 2013-based FQHC 
market basket. As stated above, we compared the cost share weights from 
the MCR for CY 2009 through CY 2013 and the CY 2013 weights were 
consistent with the weights from prior years.
    The resulting 2013-based FQHC market basket cost weights reflect 
Medicare allowable costs. We define Medicare allowable costs for 
freestanding FQHC facilities as: Worksheet A, Columns 1 and 2, cost 
centers lines 1 through 51 but excluding line 20, which is professional 
liability insurance (PLI). We excluded PLI costs from the total 
Medicare allowable costs because FQHCs that receive section 330 grant 
funds also are eligible to apply for medical malpractice coverage under 
Federally Supported Health Centers Assistance Act (FSHCAA) of 1992 
(Pub. L. 102-501) and FSHCAA of 1995 (Pub. L. 104-73 amending section 
224 of the Public Health Service Act).
    Below we summarize how we derive the eight major cost category 
weights.
    (1) FQHC Practitioner Compensation: A FQHC practitioner is defined 
as one of the following occupations: Physicians, NPs, PAs, CNMs, 
Clinical Psychologist (CPs), and Clinical Social Worker (CSWs). Under 
certain conditions, a FQHC visit also may be provided by qualified 
practitioners of outpatient DSMT and MNT when the FQHC meets the 
relevant program requirements for provision of these services. FQHC 
Practitioner Compensation costs are derived as the sum of compensation 
and other costs as reported on Worksheet A; columns 1 and 2; lines 1, 
2, 3, 6, 7, 13, 14. The Medicare cost reports also captures ``Other'' 
compensation costs (the sum of costs reported on Worksheet A; columns 1 
and 2; lines 9, 10, 11, and 15). We allocated a portion of these 
compensation costs to FQHC Practitioner compensation by multiplying 
this amount by the ratio of FQHC Practitioner compensation costs to the 
sum of FQHC Practitioner compensation costs and Other Clinical 
compensation costs. We believe that the assumption of distributing the 
costs proportionally is reasonable since there is no additional detail 
on the specific occupations these compensation costs represent. We also 
included a proportion of Fringe Benefit costs as described in section 
III.B.1.a.iv of this final rule.
    (2) Other Clinical Compensation: Other Clinical Compensation 
includes any health-related clinical staff who does not fall under the 
definition of a FQHC practitioner from paragraph (1) (FQHC Practitioner 
Compensation). Other Clinical Compensation costs are derived as the sum 
of compensation and other costs as reported on Worksheet A; columns 1 
and 2; lines 4, 5, and 8. Similar to the FQHC Practitioner 
compensation, we also allocate a proportion of the ``Other'' Clinical 
compensation costs by multiplying this amount by the ratio of Other 
Clinical Compensation costs to the sum of FQHC Practitioner 
Compensation costs and Other Clinical compensation costs. Given the 
ambiguity in the costs reported on these lines, we believe that the 
assumption of distributing the costs proportionally is reasonable since 
there is no additional detail on the specific occupations these 
compensation costs represent. We also include a proportion of Fringe 
Benefit costs as described in section III.B.1.a.iv of this final rule.
    (3) Non-Health Compensation: Non-Health Compensation includes 
compensation costs for Office Staff, Housekeeping & Maintenance, and 
Pharmacy. Non-Health Compensation costs are derived as the sum of 
compensation costs as reported on Worksheet A; column 1 only for lines 
32 and 51; and Worksheet A; both columns 1 and 2 for line 38. We only 
use the costs from column 1 for housekeeping and maintenance and 
pharmacy since we believe that there are considerable costs other than 
compensation that could be reported for these categories. We use the 
costs from both column 1

[[Page 80395]]

and column 2 for office salaries (line 38) since only salaries or 
compensation should be reported on this line. We also include a 
proportion of Fringe Benefit costs as described in section III.B.1.a.iv 
of this final rule.
    (4) Fringe Benefits: Worksheet A; columns 1 and 2; line 45 of the 
Medicare cost report captures fringe benefits and payroll tax expenses. 
The fringe benefit cost weight are estimated as the fringe benefits 
costs divided by total Medicare allowable costs. We allocate the Fringe 
Benefits cost weight to the three compensation cost categories (FQHC 
practitioner compensation, other clinical compensation, and non-health 
compensation) based on their relative proportions. The fringe benefits 
ratio is equal to the compensation cost weight as a percent of the sum 
of the compensation cost weights for all three types of workers. These 
allocation ratios are 46 percent, 14 percent, and 40 percent, 
respectively. Therefore, we proposed to allocate 46 percent of the 
fringe benefits cost weight to the FQHC practitioner cost weight, 14 
percent of the fringe benefits cost weight to the clinical compensation 
cost weight, and 40 percent of the fringe benefits cost weight to the 
non-health compensation cost weight. Table 32 shows the three 
compensation category cost weights after the fringe benefit cost weight 
is allocated for the 2013-based FQHC market basket.

   Table 32--Compensation Category Cost Weights After Fringe Benefits
                               Allocation
------------------------------------------------------------------------
                                           Before fringe   After fringe
              Cost category                  benefits        benefits
                                           allocation %    allocation %
------------------------------------------------------------------------
FQHC Practitioner Compensation..........            26.8            31.8
Other Clinical Compensation.............             8.1             9.5
Non-Health Compensation.................            23.1            27.4
Fringe Benefits (distribute to comp)....            10.7             0.0
------------------------------------------------------------------------

    (5) Pharmaceuticals: Drugs and biologicals that are not usually 
self-administered, and certain Medicare-covered preventive injectable 
drugs are paid incident to a FQHC visit. Therefore, pharmaceutical 
costs include the non-compensation costs reported on Worksheet A, 
column 2, for the pharmacy cost center (line 51). We note that 
pharmaceutical costs are not included in the MEI since pharmaceutical 
costs are paid outside of the PFS.
    (6) Fixed Capital: Fixed capital costs are equal to the sum of 
costs for rent, interest on mortgage loans, depreciation on buildings 
and fixtures, and property tax as reported on Worksheet A; columns 1 
and 2; lines 26, 28, 30, and 33.
    (7) Moveable Capital: Moveable capital costs are equal to the sum 
of costs for depreciation of medical equipment, office equipment, and 
other equipment as reported on Worksheet A; column 1 and 2; lines 19, 
31, and 39.
    (8) All Other (Residual): After estimating the expenses for the 
seven cost categories listed above, we summed all remaining costs 
together for each FQHC to come up with All Other (Residual) costs. The 
costs included in the All Other (Residual) category include all costs 
reported for medical supplies, transportation, allowable GME pass 
through costs, facility insurance, utilities, office supplies, legal, 
accounting, administrative insurance, telephone, housekeeping & 
maintenance, nondescript healthcare costs, nondescript facility costs, 
and nondescript administrative costs.
    Although a cost weight for these categories could be obtained 
directly from the costs reported in that cost center's respective line 
on the cost report form, some FQHCs reported significant costs in other 
(specify), or ``free form,'' lines which made it difficult to determine 
the accuracy of these costs. For example, some FQHCs reported costs 
only in the free form lines and not in the cost center specific lines, 
while other FQHCs reported costs in both the cost center specific lines 
and the free form lines. Since a majority of FQHCs used the free form 
lines, relying solely on the costs reported in the cost center specific 
lines for costs could lead to an inaccurate cost weights in the market 
basket. For example, if a FQHC reported all other healthcare costs in 
line 21 rather than breaking the healthcare costs into the detailed 
cost centers (lines 17 through 20.50), then the cost weight for medical 
supplies could be lower than it should be if we did not allocate the 
costs reported in the free form lines to medical supplies.
    Section III.B.1.b explains the method used to allocate the residual 
costs to more detailed cost categories.
    After we derived costs for the eight major cost categories for each 
FQHC using the Medicare cost report data as previously described, we 
addressed data outliers using the following steps. First, we divided 
the costs for each of the eight categories by total Medicare allowable 
costs for each FQHC. We then removed those FQHCs whose derived cost 
weights fell in the top and bottom 5 percent of provider specific 
derived cost weights. Five percent is the standard trim applied for all 
CMS market basket cost weights. After these outliers were removed, we 
summed the costs for each category across all remaining FQHCs. We then 
divided this by the sum of total Medicare allowable costs across all 
remaining FQHCs to obtain a cost weight for the 2013-based FQHC market 
basket for the given category. See Table 33 for the resulting cost 
weights for these major cost categories that we obtained from the 
Medicare cost reports.

  Table 33--Major Cost Categories as Derived From Medicare Cost Reports
------------------------------------------------------------------------
                                                             2013 FQHC
                      Cost category                         weight (%)
------------------------------------------------------------------------
FQHC Practitioner Compensation..........................            26.8
Other Clinical Compensation.............................             8.1
Non-Health Compensation.................................            23.1
Fringe Benefits (distribute to compensation)............            10.7
Fixed Capital...........................................             4.5
Moveable Capital........................................             1.7
Non Salary Pharmaceuticals..............................             5.1
All Other (Residual)....................................            20.1
------------------------------------------------------------------------
Totals may not sum to 100.0% due to rounding.

b. Derivation of Detailed Cost Categories From the All Other (Residual) 
Cost Weight
    The All Other Residual cost weight was derived from summing all 
expenses reported on the Medicare cost report Worksheet A, columns 1 
and 2 for medical supplies (line 17), transportation (line 18), 
allowable GME pass through costs (line 20.50), facility

[[Page 80396]]

insurance (line 27), utilities (line 29), office supplies (line 40), 
legal (line 41), accounting (line 42), administrative insurance (line 
43), telephone (line 44), non-compensation housekeeping & maintenance 
(line 32, column 2 only), nondescript healthcare costs (lines 21-23), 
nondescript facility costs (lines 34-36), and nondescript 
administrative costs (lines 46-48).
    To further divide the ``All Other'' residual cost weight (20.1 
percent) estimated from the CY 2013 Medicare cost report data into more 
detailed cost categories, we used the relative cost shares from the 
2006-based MEI for nine detailed cost categories: Utilities; 
Miscellaneous Office Expenses; Telephone; Postage; Medical Equipment; 
Medical Supplies; Professional, Scientific, & Technical Services; 
Administrative & Facility Services; and Other Services. For example, 
the Utilities cost represents 7 percent of the sum of the 2006-based 
MEI ``All Other'' cost category weights; therefore, the Utilities cost 
weight would represent 7 percent of the 2013-based FQHC market basket's 
``All Other'' cost category (20.066 percent), yielding a ``final'' 
Utilities cost weight of 1.4 percent in the 2013-based FQHC market 
basket (7 percent * 20.1 percent = 1.4 percent).
    Table 34 shows the cost weight for each matching category from the 
2006-based MEI, the percent each cost category represents of the 2006-
baesd MEI ``All Other'' cost weight, and the resulting proposed 2013-
based FQHC market basket cost weights for detailed cost categories.

                                  Table 34--Detailed FQHC Cost Category Weights
----------------------------------------------------------------------------------------------------------------
                                                                                  Percent of the
                                                                  2006-based MEI  2006-based MEI    2013-based
                  FQHC Detailed cost categories                    cost weights    ``All other''   FQHC detailed
                                                                        (%)         cost weight    cost weights
                                                                                        (%)             (%)
----------------------------------------------------------------------------------------------------------------
Total All Other (Residual)......................................          17.976         100.000            20.1
    Utilities...................................................           1.266             7.0             1.4
    Miscellaneous Office Expenses...............................           2.478            13.8             2.8
    Telephone...................................................           1.501             8.4             1.7
    Postage.....................................................           0.898             5.0             1.0
    Medical Equipment...........................................           1.978            11.0             2.2
    Medical supplies............................................           1.760             9.8             2.0
    Professional, Scientific, & Tech. Services..................           2.592            14.4             2.9
    Administrative & Facility Services..........................           3.052            17.0             3.4
    Other Services..............................................           2.451            13.6             2.7
----------------------------------------------------------------------------------------------------------------

    FQHCs have liberty in how and where certain costs are reported on 
the Medicare cost report form CMS-222-92. We believe that, given the 
ambiguity in how the data are reported for these overhead cost centers 
on the FQHC cost report form, relying on the relative shares determined 
from the MEI is reasonable. We believe that the revised FQHC cost 
report form will allow us to better estimate the detailed cost weights 
for these categories directly. We expect all FQHCs to report PPS costs 
on the new form for cost report periods beginning after October 1, 
2014. The following is a description of the types of expenses included 
in the FQHC detailed cost categories derived from the All Other 
(Residual) cost category:
     Utilities: Includes expenses classified in the fuel, oil 
and gas, water and sewage, and electricity industries. These types of 
industries are classified in NAICS and include NAICS 2211 (Electric 
power generation, transmission, and distribution), 2212 (Natural gas 
distribution), and 2213 (Water, sewage, and other systems).
     Miscellaneous Office Expense: Includes expenses for office 
expenses not reported in other categories, miscellaneous expenses, 
included but not limited to, paper (such as paper towels), printing 
(such as toner for printers), miscellaneous chemicals (such as soap and 
hand sanitizer).
     Telephone: Includes expenses classified in NAICS 517 
(Telecommunications) and NAICS 518 (Internet service providers), and 
NAICS 515 (Cable and other subscription programming). Telephone 
service, which is one component of the Telecommunications expenses, 
accounts for the majority of the expenditures in this cost category.
     Postage: Includes expenses classified in NAICS 491 (Postal 
services) and NAICS 492 (Courier services).
     Medical Equipment Expenses: Includes the expenses related 
to maintenance contracts, and the leases or rental of medical equipment 
used in diagnosis or treatment of patients. It would also include the 
expenses for any medical equipment that was purchased in a single year 
and not financed.
     Medical Supplies Expenses: Includes the expenses related 
to medical supplies such as sterile gloves, needles, bandages, specimen 
containers, and catheters. We note that the Medical Supply cost 
category does not include expenses related to pharmaceuticals (drugs 
and biologicals).
     Professional, Scientific, & Technical Services: Includes 
the expenses for any professional services purchased from an outside 
agency or party and could include fees including but not limited to, 
legal, marketing, professional association memberships, licensure fees, 
journal fees, continuing education.
     Administrative & Facility Services: Includes the expenses 
for any administrative and facility services purchased from an outside 
agency or party and could include fees including but not limited to, 
accounting, billing, office management services, security services, 
transportation services, landscaping, or professional car upkeep.
     Other Services: Includes other service expenses including, 
but not limited to, nonresidential maintenance and repair, machinery 
repair, janitorial, and security services.
    Table 35 shows the cost categories and weights for the 2013-based 
FQHC market basket. The resulting cost weights include combining the 
cost weights derived from the Medicare Cost Report Data (shown in Table 
33), distributing the fringe benefits weight across the three 
compensation cost categories (shown in Table 32), and disaggregating 
the residual cost weight into detailed cost categories (shown in Table 
34). Additionally, we compare the cost weights of the 2013-based FQHC 
market basket to the cost weights in the 2006-based MEI, where we have 
grouped the cost weights from the MEI to align with the FQHC cost 
categories.

[[Page 80397]]



                  Table 35--Proposed FQHC Market Basket and MEI, Cost Categories, Cost Weights
----------------------------------------------------------------------------------------------------------------
                                                   2013 FQHC       2006 MEI
              FQHC cost category                  weight (%)      weight (%)            MEI cost category
----------------------------------------------------------------------------------------------------------------
FQHC Market Basket............................           100.0         100.000  MEI.
    Total Compensation........................            68.7          67.419     Total Compensation.
        FQHC Practitioner Compensation........            31.7          50.866       Physician Compensation.
        Other Clinical Compensation...........             9.5           6.503       Other Clinical
                                                                                      Compensation.
        Non-health Compensation...............            27.4          10.050       Non-health Compensation.
    All Other Products........................            16.1          14.176     All Other Products.
        Utilities.............................             1.4           1.266       Utilities.
        Miscellaneous Office Expenses.........             2.8           2.478       Miscellaneous Office
                                                                                      Expenses.
        Telephone.............................             1.7           1.501       Telephone.
        Postage...............................             1.0           0.898       Postage.
        Medical Equipment.....................             2.2           1.978       Medical Equipment.
        Medical Supplies......................             2.0           1.760       Medical Supplies.
        Professional Liability Insurance......              --           4.295       Professional Liability
                                                                                      Insurance.
        Pharmaceuticals.......................             5.1              --       Pharmaceuticals.
    All Other Services........................             9.0           8.095     All Other Services.
        Professional, Scientific & Technical               2.9           2.592       Professional, Scientific &
         Services.                                                                    Technical Services.
        Administrative & Facility Services....             3.4           3.052       Administrative & Facility
                                                                                      Services.
        Other Services........................             2.7           2.451       Other Services.
    Capital...................................             6.1          10.310     Capital.
        Fixed Capital.........................             4.5           8.957       Fixed Capital.
        Moveable Capital......................             1.7           1.353       Moveable Capital.
----------------------------------------------------------------------------------------------------------------

    Although the overall cost structure of the MEI, the index currently 
used to update the FQHC PPS base payment, is similar to the FQHC cost 
structure, there are a few key differences. First, though total 
compensation costs in the FQHC market basket and the MEI are each 
approximately 67-68 percent of total costs, non-health compensation 
accounts for a larger share of compensation costs in the FQHC setting 
than in the self-employed physician office. Likewise, physician 
compensation accounts for a larger percentage of costs in the MEI than 
FQHC practitioner compensation accounts for in the FQHC market basket. 
Second, the FQHC market basket includes a cost category for 
pharmaceuticals, while drug costs are excluded from the MEI. Drug costs 
are an expense in the FQHC PPS base payment rate since drugs and 
biologicals that are not usually self-administered, and certain 
Medicare-covered preventive injectable drugs are paid incident to a 
visit while drug costs are reimbursed separately under the PFS. Third, 
as mentioned previously, PLI expenditures are excluded from the FQHC 
market basket since most FQHC's PLI costs are covered under the FSHCAA, 
while in the MEI the PLI costs are a significant expense for self-
employed physicians. Finally, fixed capital expenses, which include 
costs such as office rent and depreciation, are about half of the share 
in the FQHC market basket as they are in the MEI.
c. Selection of Price Proxies for the 2013-Based FQHC Market Basket
    After establishing the 2013 cost weights for the FQHC market 
basket, an appropriate price proxy was selected for each cost category. 
The price proxies are chosen from a set of publicly available price 
indexes that best reflect the rate of price change for each cost 
category in the FQHC market basket. All of the proxies for the 2013-
based FQHC market basket are based on indexes published by the Bureau 
of Labor Statistics (BLS) and are grouped into one of the following BLS 
categories:
     Producer Price Indexes: Producer Price Indexes (PPIs) 
measure price changes for goods sold in markets other than the retail 
market. PPIs are preferable price proxies for goods and services that 
businesses purchase as inputs. For example, we proposed to use a PPI 
for prescription drugs, rather than the Consumer Price Index (CPI) for 
prescription drugs, because healthcare providers generally purchase 
drugs directly from a wholesaler. The PPIs measure price changes at the 
final stage of production.
     Consumer Price Indexes: CPIs measure change in the prices 
of final goods and services bought by the typical consumer. Because 
they may not represent the price encountered by a producer, we use CPIs 
only if an appropriate PPI is not available, or if the expenditures are 
more like those faced by retail consumers than by purchasers of goods 
at the wholesale level.
     Employment Cost Indexes: Employment Cost Indexes (ECIs) 
measure the rate of change in employee wage rates and employer costs 
for employee benefits per hour worked. These indexes are fixed-weight 
indexes and strictly measure the change in wage rates and employee 
benefits per hour. Appropriately, they are not affected by shifts in 
employment mix.
    We evaluate the price proxies using the criteria of reliability, 
timeliness, availability, and relevance. Reliability indicates that the 
index is based on valid statistical methods and has low sampling 
variability. Timeliness implies that the proxy is published regularly, 
preferably at least once a quarter. Availability means that the proxy 
is publicly available. Finally, relevance means that the proxy is 
applicable and representative of the cost category weight to which it 
is applied. We believe the PPIs, CPIs, and ECIs selected meet these 
criteria.
    Table 36 lists all price proxies for the 2013-based FQHC market 
basket. Below is a detailed explanation of the price proxies for each 
cost category; we note that many of the proxies for the 2013-based FQHC 
market basket are the same as those used for the 2006-based MEI.
    (1) FQHC Practitioner Compensation: We proposed to use the ECI for 
Total Compensation for Private Industry Workers in Professional and 
Related) (BLS series code CIU2010000120000I) to measure price growth of 
this category. There is no specific ECI for physicians and, therefore, 
similar to the MEI, we proposed to use an index that is based on 
professionals that receive advanced training. We note that the 2006-
based MEI has a separate cost category for

[[Page 80398]]

Physician Wages and Salaries and Physician Benefits. For these cost 
categories, the MEI uses the ECI for Wages and Salaries and ECI for 
Benefits for Professional and Related Occupations.
    (2) Other Clinical Compensation: We proposed to use the ECI for 
Total Compensation for all Civilian Workers in Health Care and Social 
Assistance (BLS series code CIU1016200000000I) to measure the price 
growth of this cost category. This cost category consists of 
compensation costs for Nurses, Laboratory Technicians, and all other 
health staff not included in the FQHC practitioner compensation 
category. Based on the clinical composition of these workers, we 
believe that the ECI for health-related workers is an appropriate proxy 
to measure compensation price pressures for these workers. The MEI uses 
the ECI for Wages and Salaries and benefits for Hospitals.
    (3) Non-health Compensation: We proposed to use the ECI for Total 
Compensation for Private Industry Workers in Office and Administrative 
Support (BLS series code CIU2010000220000I) to measure the price growth 
of this cost category. The Non-health compensation cost weight is 
predominately attributable to administrative and facility type 
occupations, as reported in the data from the Medicare cost reports. We 
note the MEI has a composite index of four price proxies, with the 
majority of the composite index accounted for by administrative 
occupations, proxied by the ECI for Wages & Salaries of Office and 
Administrative Support (Private).
    (4) Utilities: We proposed to use the CPI for Fuel and Utilities 
(BLS series code CUUR0000SAH2) to measure the price growth of this cost 
category. This is the same proxy used in the 2006-based MEI.
    (5) Miscellaneous Office Expenses: We proposed to use the CPI for 
All Items Less Food and Energy (BLS series code CUUR0000SA0L1E) to 
measure the price growth of this cost category. We believe that using 
the CPI for All Items Less Food and Energy avoids double counting of 
changes in food and energy prices already captured elsewhere in the 
market basket. We note the MEI does not have a separate cost category 
for miscellaneous office expenses.
    (6) Telephone Services: We proposed to use the CPI for Telephone 
Services (BLS series code CUUR0000SEED) to measure the price growth of 
this cost category. This is the same price proxy used in the 2006-based 
MEI.
    (7) Postage: We proposed to use the CPI for Postage (BLS series 
code CUUR0000SEEC01) to measure the price growth of this cost category. 
This is the same proxy used in the 2006-based MEI.
    (8) Medical Equipment: We proposed to use the PPI Commodities for 
Surgical and Medical Instruments (BLS series code WPU1562) as the price 
proxy for this category. This is the same proxy used in the current 
2006-based MEI.
    (9) Medical Supplies: We proposed to use a 50/50 blended index 
comprised of the PPI Commodities for Medical and Surgical Appliances 
and Supplies (BLS series code WPU156301) and the CPI-U for Medical 
Equipment and Supplies (BLS series code CUUR0000SEMG). The 50/50 blend 
is used in all market baskets where we do not have an accurate split 
available. We believe FQHCs purchase the types of supplies contained 
within these proxies, including such items as bandages, dressings, 
catheters, intravenous equipment, syringes, and other general 
disposable medical supplies, via wholesale purchase, as well as at the 
retail level. Consequently, we proposed to combine the two 
aforementioned indexes to reflect those modes of purchase. This is the 
same proxy used in the 2006-based MEI.
    (10) Pharmaceuticals: We proposed to use the PPI Commodities for 
Pharmaceuticals for Human Use, Prescription (BLS series code 
WPUSI07003) to measure the price growth of this cost category. We note 
the MEI does not have a separate cost category for Pharmaceuticals. 
This price proxy is used to measure prices of Pharmaceuticals in other 
CMS market baskets, such as 2010-based Inpatient Prospective Payment 
System and 2010-based Skilled Nursing Facility market baskets.
    (11) Professional, Scientific, & Technical Services: We proposed to 
use the ECI for Total Compensation for Private Industry Workers in 
Professional, Scientific, and Technical Services (BLS series code 
CIU2015400000000I) to measure the price growth of this cost category. 
This is the same proxy used in the 2006-based MEI.
    (12) Administrative & Facility Services: We proposed to use the ECI 
Total Compensation for Private Industry Workers in Office and 
Administrative Support (BLS series code CIU2010000220000I) to measure 
the price growth of this cost category. This is the same price proxy 
used in the 2006-based MEI.
    (13) Other Services: We proposed to use the ECI for Total 
Compensation for Private Industry Workers in Service Occupations (BLS 
series code CIU2010000300000I) to measure the price growth of this cost 
category. This is the same price proxy used in the 2006-based MEI.
    (14) Fixed Capital: We proposed to use the PPI Industry for Lessors 
of Nonresidential Buildings (BLS series code PCU531120531120) to 
measure the price growth of this cost category. This is the same price 
proxy used in the 2006-based MEI. We believe this is an appropriate 
proxy since fixed capital expenses in FQHCs should reflect inflation 
for the rental and purchase of business office space.
    (15) Moveable Capital: We proposed to use the PPI Commodities for 
Machinery and Equipment (series code WPU11) to measure the price growth 
of this cost category as this cost category represents nonmedical 
moveable equipment. This is the same proxy used in the 2006-based MEI.
    Table 36 lists the proposed price proxies for each cost category in 
the proposed FQHC market basket.

 Table 36--Cost Categories and Price Proxies for the FQHC Market Basket
------------------------------------------------------------------------
             Cost category                      FQHC price proxies
------------------------------------------------------------------------
FQHC Practitioner Compensation.........  ECI--for Total Compensation for
                                          Private Industry Workers in
                                          Professional and Related.
Other Clinical Compensation............  ECI--for Total Compensation for
                                          all Civilian Workers in Health
                                          Care and Social Assistance.
Non-health Compensation................  ECI--for Total Compensation for
                                          Private Industry Workers in
                                          Office and Administrative
                                          Support.
Utilities..............................  CPI-U for Fuels and Utilities.
Miscellaneous Office Expense...........  CPI-U for All Items Less Food
                                          And Energy.
Telephone..............................  CPI-U for Telephone.
Postage................................  CP-U for Postage.

[[Page 80399]]

 
Medical Equipment......................  PPI Commodities for Surgical
                                          and Medical Instruments.
Medical supplies.......................  Blend: PPI Commodities for
                                          Medical and Surgical
                                          Appliances and Supplies and
                                          CPI for Medical Equipment and
                                          Supplies.
Pharmaceuticals........................  PPI Commodities for
                                          Pharmaceuticals for Human Use,
                                          Prescription.
Professional, Scientific, and Technical  ECI--for Total Compensation for
 Services.                                Private Industry Workers in
                                          Professional, Scientific, and
                                          Technical Services.
Administrative & Facility Services.....  ECI--for Total Compensation for
                                          Private Industry Workers in
                                          Office and Administrative
                                          Support.
Other Services.........................  ECI--for Total compensation for
                                          Private industry workers in
                                          Service Occupations.
Fixed Capital..........................  PPI Industry--for Lessors of
                                          nonresidential buildings.
Moveable Capital.......................  PPI Commodities--for Machinery
                                          and Equipment.
------------------------------------------------------------------------

d. Inclusion of Multi-factor Productivity in the FQHC Market Basket
    Section 1834(o)(2)(B)(ii) of the Act describes the methods for 
determining updates to FQHC PPS payment. After the first year of 
implementation, the FQHC PPS base payment rate must be increased by the 
percentage increase in the MEI. In subsequent years, the FQHC PPS base 
payment rate shall be increased by the percentage increase in a market 
basket of FQHC goods and services as established through regulations 
or, if not available, the MEI published in the PFS final rule.
    The MEI published in the PFS final rule has a productivity 
adjustment. The MEI has been adjusted for changes in productivity since 
its inception. In the CY 2003 PFS final rule with comment period (67 FR 
80019), we implemented a change in the way the MEI was adjusted to 
account for changes in productivity. In 2012, we convened the MEI 
Technical Panel to review all aspects of the MEI including and the 
productivity adjustment. For more information regarding the MEI 
Technical Panel, see the CY 2014 PFS final rule with comment period (78 
FR 74264). The MEI Technical Panel concluded in Finding 5.1 that ``such 
an adjustment continues to be appropriate. This adjustment prevents 
`double counting' of the effects of productivity improvements, which 
would otherwise be reflected in both (i) the increase in compensation 
and other input price proxies underlying the MEI, and (ii) the growth 
in the number of physician services performed per unit of input 
resources, which results from advances in productivity by individual 
physician practices.''
    We proposed to include a productivity adjustment similar to the MEI 
in the FQHC market basket. We believe that applying a productivity 
adjustment is appropriate because this would be consistent with the 
MEI, which has an embedded productivity adjustment. We note that the 
MEI Technical Panel concluded that a productivity adjustment is 
appropriate for the MEI given the type of services performed in 
physician's offices. Specifically, the MEI Technical Panel report 
states that ``The input price increases within the MEI are reflected in 
the price proxies, such as changes in wages and benefits. Wages 
increase, in part, due to the ability of workers to increase the amount 
of output per unit of input. Absent a productivity adjustment in the 
MEI, physicians would be receiving increased payments resulting both 
from their ability to increase their individual outputs and from the 
productivity gains already reflected in the wage proxies used in the 
index. The productivity adjustment used in the MEI ensures the 
productivity gains reflected in increased outputs are not double 
counted, or paid for twice. Currently, the productivity adjustment in 
the MEI is based on changes in economy-wide productivity based on the 
rationale that the price proxy for physician income reflects changes in 
economy-wide wages. Implicitly, this assumes physicians can achieve the 
same level of productivity as the average general wage earner.'' We 
believe that the services performed in FQHC facilities are similar to 
those covered by physician visits, and therefore, a productivity 
adjustment is appropriate to avoid double counting of the effects of 
productivity improvements in the FQHC market basket.
    We proposed to use the most recent estimate of the 10-year moving 
average of changes in annual private nonfarm business (economy-wide) 
multifactor productivity (MFP), which is the same measure of MFP used 
in the MEI. The BLS publishes the official measure of private nonfarm 
business MFP. (See http://www.bls.gov/mfp for the published BLS 
historical MFP data). For the final FQHC market basket update, we 
proposed to use the most recent historical estimate of annual MFP as 
published by the BLS. Generally, the most recent historical MFP 
estimate is lagged two years from the payment year. Therefore, we 
proposed to use the 2015 MFP as published by BLS in the CY2017 FQHC 
market basket update.
    We note that MFP is derived by subtracting the contribution of 
labor and capital input growth from output growth. Since at the time of 
the proposed rule the 2015 MFP has not been published by BLS, we rely 
on a projection of MFP. The projection of MFP is currently produced by 
IHS Global Insight (IGI), a national economic forecasting firm with 
which CMS contracts to forecast the components of the market basket and 
MFP. A complete description of the MFP projection methodology is 
available at http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch.html.
    Using IGI's first quarter 2016 forecast, the productivity 
adjustment for CY 2017 (the 10-year moving average of MFP for the 
period ending CY 2015) was projected to be 0.4 percent. If more recent 
data are subsequently available (for example, a more recent estimate of 
the market basket and MFP adjustment), we would use such data to 
determine the CY 2017 increase in the FQHC market basket in the final 
rule.
5. CY 2017 Market Basket Update: CY 2017 FQHC Market Basket Update 
Compared to the MEI Update for CY 2017
    For CY 2017, we proposed to use the 2013-based FQHC market basket 
increase factor to update the FQHC PPS base payment rate. Consistent 
with CMS practice, we estimated the market basket update for the FQHC 
PPS based on the most recent forecast from IGI. Identical to the MEI, 
we proposed to use the update based on the most recent historical data 
available at the time of

[[Page 80400]]

publication of the final rule. For example, the final CY 2017 FQHC 
update would be based on the four-quarter moving-average percent change 
of the FQHC market basket through the second quarter of 2016 (based on 
the final rule's statutory publication schedule).
    Based on IGI's first quarter 2016 forecast with historical data 
through the fourth quarter of 2015, the projected proposed FQHC market 
basket increase factor for CY 2017 was 1.7 percent. This reflected a 
2.1-percent increase of FQHC input prices and a 0.4-percent adjustment 
for productivity. We also proposed that if more recent data are 
subsequently available (for example, a more recent estimate of the 
market basket or MFP) we would use such data, to determine the CY 2017 
update in the final rule.
    For comparison, the 2006-based MEI was projected to be 1.3 percent 
in CY 2017; this estimate was based on IGI's first quarter 2016 
forecast (with historical data through the fourth quarter of 2015). 
Table 37 compares the proposed 2013-based FQHC market basket updates 
and the proposed 2006-based MEI market basket updates for CY 2017.

    Table 37--Proposed FQHC Market Basket and MEI, Cost Categories, Cost Weights, MFP, and CY 2017 Update \1\
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
              FQHC cost category                        CY 2017 update                  MEI Cost category
                                                           (percent)
----------------------------------------------------------------------------------------------------------------
FQHC Market Basket............................             1.7             1.3  MEI.
Productivity adjustment.......................             0.4             0.4  Productivity adjustment.
FQHC Market Basket (unadjusted)...............             2.1             1.7  MEI (unadjusted).
    Total Compensation........................             2.1             2.0     Total Compensation.
        FQHC Practitioner Comp................             1.9             2.0       Physician Compensation.
        Other Clinical Compensation...........             1.9             2.0       Other Clinical
                                                                                      Compensation.
        Non-health Compensation...............             2.4               2.4Non-health Compensation.
    All Other Products........................             2.6            -0.6     All Other Products.
        Utilities.............................            -3.9            -3.9     Utilities.
        Miscellaneous Office Expenses.........             2.0            -1.7       Miscellaneous Office
                                                                                      Expenses.
        Telephone.............................             0.4             0.4       Telephone.
        Postage...............................             0.3             0.3       Postage.
        Medical Equipment.....................             1.2             1.2       Medical Equipment.
        Medical Supplies......................            -0.4            -0.4       Medical Supplies.
        Professional Liability Insurance......                            -0.4       Professional Liability
                                                                                      Insurance.
        Pharmaceuticals.......................             7.8                       Pharmaceuticals.
    All Other Services........................             2.0             2.0     All Other Services.
        Professional, Scientific & Technical               1.5             1.5       Professional, Scientific &
         Services.                                                                    Technical Services.
        Administrative & Facility Services....             2.4             2.4       Administrative & Facility
                                                                                      Services.
        Other Services........................             1.9             1.9       Other Services.
    Capital...................................             1.6             1.9       Capital.
        Fixed Capital.........................             2.1             2.1       Fixed Capital.
        Moveable Capital......................             0.1             0.1       Moveable Capital.
----------------------------------------------------------------------------------------------------------------
\1\ Based on IGI's first quarter 2016 forecast.

    For CY 2017, the proposed 2013-based FQHC market basket update (1.7 
percent) is 0.4 percent higher than the 2006-based MEI (1.3 percent). 
The 0.4 percentage point difference stems mostly from the inclusion of 
pharmaceuticals in the FQHC market basket. This cost category and 
associated price pressures are not included in the MEI.
    We proposed to update the FQHC PPS base payment rate by 1.7 percent 
for CY 2017 based on the 2013-based FQHC market basket. The FQHC market 
basket would more accurately reflect the actual costs and scope of 
services that FQHCs furnish compared to the 2006-based MEI. We invited 
public comment on all aspects of the FQHC market basket proposals.
6. Summary of Comments and the Associated Responses on the Proposed 
FQHC Market Basket
    We received 12 comments on the proposed FQHC market-basket. The 
following is a summary of the comments we received:
    Comment: Commenters expressed their support for the creation of a 
FQHC-specific market basket to update the FQHC PPS base payment rate 
annually. We would note that of the comments received none indicated an 
objection to the use of an FQHC market basket compared to the MEI. 
Commenters stated that the MEI is outdated and does not appropriately 
capture the cost of services that FQHCs furnish.
    Response: We appreciate the commenters support for the creation of 
the FQHC-specific market basket. As stated in the proposed rule, we 
believe that the 2013-based FQHC market basket would more accurately 
reflect the actual costs and scope of services that FQHCs furnish 
compared to the 2006-based MEI.
    Comment: Many commenters requested that we rebase the FQHC market 
basket at the earliest possible opportunity to capture new Medicare 
cost report data from the revised FQHC cost report. Commenters stated 
that CMS finalized and issued a revised Medicare FQHC cost report (Form 
CMS-224-14) required to be submitted by FQHCs for cost reporting 
periods under Medicare's PPS methodology. The commenters stated that 
the revised Medicare FQHC cost report would provide higher quality data 
than the previous cost report (Form CMS-222-92).
    Response: We appreciate the commenters request to use the most 
appropriate and up-to-date data for the development of the FQHC market 
basket. We agree with the commenters that the FQHC market basket should 
be rebased using the costs as reported under the PPS, coinciding with 
data reported on the revised FQHC cost report (Form CMS-224-14). The 
revised cost report form must be used for all cost reports that begin 
on or after October 1, 2014, which coincides with the implementation of 
the FQHC PPS. We plan to update the FQHC market basket to reflect FQHC 
costs paid under

[[Page 80401]]

the PPS when we have complete data from the revised cost report form 
and can verify that the costs reported are accurate and reliable.
    Comment: Many commenters that supported the creation of the FQHC-
specific market basket recommended some clarifications and 
modifications to the proposed market basket cost-weight methodology. 
Several commenters recommended that the healthcare staff costs for 
``Visiting Nurse'' services be included in the ``FQHC Practitioner 
Compensation'' cost category rather than in the ``Other Clinical 
Compensation'' cost category, as proposed. The commenters note that 
Chapter 13 of the Medicare Benefit Policy Manual includes ``visiting 
nurse (RN or LPN)'' as a type of practitioner that can render a 
medically necessary FQHC visit under certain conditions.
    Response: As the commenters stated, the compensation costs 
associated with ``Visiting Nurse'' services were allocated to the 
market basket cost category for ``Other Clinical Compensation'' rather 
than the market basket cost category for ``FQHC Practitioner 
Compensation.'' Commenters are correct that under certain 
circumstances, FQHCs can bill for a visit when an RN or LPN furnishes 
visiting nurse services to a homebound patient in an area with a 
shortage of home health agencies. In this situation only, the RN or LPN 
would be considered a FQHC practitioner. All other services furnished 
by a RN or LPN would be considered incident to a visit and not 
separately billable. Since most services furnished by nurses in FQHCs 
are considered incident to a FQHC visit and are not separately billable 
visits, we believe that it is prudent to keep these costs allocated to 
the cost category ``Other Clinical Compensation'' at this time.
    Additionally, only 17 FQHCs reported costs in line 4 (Visiting 
Nurse) of Worksheet A of the cost report, which is approximately 1.4 
percent of all FQHCs that submitted cost reports. Had these costs been 
allocated to ``FQHC Practitioner Compensation,'' the proposed ``FQHC 
Practitioner Compensation'' cost share weight would essentially be 
unchanged (31.9 percent if we were to include the Visiting Nurse 
Compensation costs in that category compared to the proposed 31.7 
percent). This small difference, based on a very small proportion of 
FQHC's who report this data, would not impact the growth rate of the 
FQHC market basket. Thus, we believe that changing our proposed 
classification of these expenses is not necessary at this time. We will 
consider this issue when we rebase and revise the FQHC market basket in 
the future using the revised cost report form.
    Comment: Commenters requested confirmation that compensation costs 
related to FQHC services furnished by certified nurse midwives and 
qualified practitioners of outpatient diabetes self-management training 
(DSMT) and medical nutrition therapy (MNT) are included within the 
``FQHC Practitioner Compensation'' cost category.
    Response: There are no specific identified line items on Worksheet 
A of the FQHC cost report form (CMS-222-92) for reporting these costs. 
We believe that costs associated with these services would have been 
reported in lines 9 through 11 or line 15 on Worksheet A. As explained 
in 81 FR 46379, we allocate a portion of these compensation costs to 
``FQHC Practitioner Compensation'' and ``Other Clinical Compensation'' 
by multiplying the sum of costs reported on Worksheet A lines 9 through 
11 and 15, by the ratio of ``FQHC Practitioner Compensation'' costs to 
the sum of ``FQHC Practitioner Compensation'' costs and ``Other 
Clinical Compensation'' costs. We believe that the assumption of 
distributing the costs proportionally is reasonable since there is no 
additional detail on the specific occupations these compensation costs 
represent. On the revised FQHC Medicare cost report (Form CMS-224-14), 
these costs are separately reported on lines 29 and 33 of Worksheet A. 
Therefore, when we rebase the FQHC market basket reflecting the revised 
FQHC Medicare cost report form, we will be able to more directly 
allocate these costs.
    Comment: Commenters requested clarification whether there was an 
error in the explanation of the ``nondescript administrative costs.'' 
Commenters stated that the proposed rule had listed the expenses 
reported on lines 54-56 of Worksheet A of the cost report; however, 
those particular lines capture ``costs other than FQHC'' rather than 
``administrative costs.'' The commenters stated the appropriate lines 
are 46-48 of Worksheet A for ``nondescript administrative costs,'' and 
if so, requested that we verify this to be true and revise the line 
number references in the final rule language.
    Response: We thank the commenters for noting that there was an 
error in the explanation of the ``nondescript administrative costs'' in 
the proposed rule. We would like to clarify that the ``nondescript 
administrative costs'' include expenses from lines 46-48 not lines 54-
56. The proposed rule used the correct data from the cost report, and 
therefore, no changes are necessary to the computation of the cost 
category weight. Rather, we are clarifying and correcting that the 
nondescript administrative costs include expenses reported on Worksheet 
A, lines 46-48. The expenses reported on Worksheet A, lines 54-56 were 
excluded from the total costs for FQHC expenses. We apologize for the 
confusion this may have caused and appreciate the opportunity to 
correct this language in the final rule.
    Comment: Many commenters stated that the proposed productivity 
adjustment to the FQHC market basket is not justified and that absent 
further study by CMS of FQHC services, it is premature to apply a 
productivity adjustment to the FQHC market basket. The commenters 
stated that FQHC operations are not mirror images of self-employed 
physician practice operations and the argument that the adjustment is 
similar to that used in the MEI to avoid double counting of effects of 
productivity improvements is not warranted at this time.
    Response: We respectfully disagree that a productivity adjustment 
to the FQHC market basket is not warranted at this time. As discussed 
in the proposed rule, the productivity adjustment included in the FQHC 
market basket is based on the 10-year moving average of changes in 
annual private nonfarm business (economy-wide) multifactor 
productivity. We believe that FQHC services are similar to those that 
would otherwise be provided by a primary care physician, mental health 
professional, or other clinical care provider, which have demonstrated 
the ability to achieve productivity gains consistent with the overall 
economy as stated in the development of the MEI. Therefore, in order to 
avoid the double counting of FQHC provider productivity, it is 
necessary to include a productivity adjustment to the FQHC market 
basket, consistent with inclusion of a productivity adjustment in the 
MEI that is used for physician services. We believe this rationale 
justifies the inclusion of a productivity adjustment in the FQHC market 
basket. We will continue to evaluate whether the productivity 
adjustment in the FQHC market basket (which is based on economy-wide 
productivity) is the most appropriate measure.
7. Final FQHC Market Basket and Final CY 2017 Market Basket Update
    After considering the public comments, we are finalizing the FQHC 
market basket, as proposed. We believe that the FQHC market basket, as 
proposed, more accurately reflects the actual costs and scope of 
services that FQHCs furnish relative to the MEI. We

[[Page 80402]]

did not find any technical reason to refine the cost weight methodology 
based on the comments received, but will consider some of these 
comments in the future when we rebase the market basket based on FQHC 
cost report data from the revised form CMS-224-14. We are also 
finalizing our proposal to include a productivity adjustment to the 
FQHC market basket update, as we did not find any compelling technical 
reason that we should not implement this adjustment to the FQHC market 
basket.
    Table 38 shows the final 2013-based FQHC Market Basket cost 
categories, cost weights, and price proxies.

 Table 38--Final CY 2013-based FQHC Market Basket Cost Categories, Cost
                       Weights, and Price Proxies
------------------------------------------------------------------------
                                                             2013 Cost
       FQHC cost category              Price proxy          weight (%)
------------------------------------------------------------------------
FQHC Market Basket.............  .......................           100.0
    Total Compensation.........  .......................            68.7
        FQHC Practitioner Comp.  ECI--for Total                     31.7
                                  Compensation for
                                  Private Industry
                                  Workers in
                                  Professional and
                                  Related.
        Other Clinical           ECI--for Total                      9.5
         Compensation.            Compensation for all
                                  Civilian Workers in
                                  Health Care and Social
                                  Assistance.
        Non-health Compensation  ECI--for Total                     27.4
                                  Compensation for
                                  Private Industry
                                  Workers in Office and
                                  Administrative Support.
    All Other Products.........  .......................            16.1
        Utilities..............  CPI-U for Fuels and                 1.4
                                  Utilities.
        Miscellaneous Office     CPI-U for All Items                 2.8
         Expenses.                Less Food and Energy.
        Telephone..............  CPI-U for Telephone....             1.7
        Postage................  CP-U for Postage.......             1.0
        Medical Equipment......  PPI Commodities for                 2.2
                                  Surgical and Medical
                                  Instruments.
        Medical Supplies.......  Blend: PPI Commodities              2.0
                                  for Medical and
                                  Surgical Appliances
                                  and Supplies and CPI
                                  for Medical Equipment
                                  and Supplies.
        Pharmaceuticals........  PPI Commodities for                 5.1
                                  Pharmaceuticals for
                                  Human Use,
                                  Prescription.
    All Other Services.........  .......................             9.0
        Professional,            ECI--for Total                      2.9
         Scientific & Technical   Compensation for
         Services.                Private Industry
                                  Workers in
                                  Professional,
                                  Scientific, and
                                  Technical Services.
        Administrative &         ECI--for Total                      3.4
         Facility Services.       Compensation for
                                  Private Industry
                                  Workers in Office and
                                  Administrative Support.
        Other Services.........  ECI--for Total                      2.7
                                  compensation for
                                  Private Industry
                                  Workers in Service
                                  Occupations.
    Capital....................  .......................             6.1
        Fixed Capital..........  PPI Industry--for                   4.5
                                  Lessors of
                                  Nonresidential
                                  Buildings.
        Moveable Capital.......  PPI Commodities--for                1.7
                                  Machinery and
                                  Equipment.
------------------------------------------------------------------------

    We also proposed that we would use the most recent data available 
to determine the final FQHC market basket and MFP update for CY 2017. 
Based on IGI's third quarter 2016 forecast with historical data through 
the second quarter of 2016, the final FQHC market basket increase 
factor for CY 2017 is 1.8 percent. This reflects a 2.2 percent increase 
of FQHC input prices and a 0.4-percent adjustment for productivity. For 
comparison, the MEI increase factor for CY 2017 is 1.2 percent (a 1.6 
percent MEI update and a 0.4 percent MFP adjustment); these updates 
reflect the most historical data available, with historical data 
through the second quarter of 2016.
    Table 39 shows the final 2013-based FQHC market basket updates 
compared to the proposed 2013-based FQHC market basket updates for CY 
2017.

Table 39--FQHC Market Basket Final CY 2017 Update of All Cost Categories
------------------------------------------------------------------------
                                                              CY 2017
           FQHC Cost category              CY 2017 Final     Proposed
                                            update* (%)     update  (%)
------------------------------------------------------------------------
FQHC Market Basket......................             1.8             1.7
Productivity adjustment.................             0.4             0.4
FQHC Market Basket (unadjusted).........             2.2             2.1
    Total Compensation..................             2.0             2.1
        FQHC Practitioner Compensation..             1.6             1.9
        Other Clinical Compensation.....             1.8             1.9
        Non-health Compensation.........             2.5             2.4
    All Other Products..................             3.1             2.6
        Utilities.......................            -2.5            -3.9
        Miscellaneous Office Expenses...             2.1             2.0
        Telephone.......................            -0.1             0.4
        Postage.........................             0.5             0.3
        Medical Equipment...............             1.6             1.2
        Medical Supplies................            -0.6            -0.4
        Professional Liability Insurance  ..............  ..............
        Pharmaceuticals.................             8.4             7.8
    All Other Services..................             2.1             2.0
        Professional, Scientific &                   1.5             1.5
         Technical Services.............
        Administrative & Facility                    2.5             2.4
         Services.......................

[[Page 80403]]

 
        Other Services..................             2.1             1.9
    Capital.............................             1.5             1.6
        Fixed Capital...................             2.0             2.1
        Moveable Capital................             0.1             0.1
------------------------------------------------------------------------
* Based on historical data through the 2nd quarter 2016.
For the productivity adjustment, the 10-year moving average percent
  change adjustment for CY 2017 is 0.4 percent, which is based on the
  most historical data available from BLS at the time of the final rule,
  and reflects annual MFP estimates through 2015.

C. 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) of the Act directing us to establish a program to 
promote the use of appropriate use criteria (AUC) for advanced 
diagnostic imaging services. The CY 2016 PFS final rule with comment 
period addressed the initial component of the new Medicare AUC program, 
specifying applicable AUC. In that rule we established evidence-based 
process and transparency requirements for the development of AUC, 
defined provider-led entities (PLEs) and established the process by 
which PLEs may become qualified to develop, modify or endorse AUC. The 
first list of qualified PLEs were posted on the CMS Web site at the end 
of June 2016 at which time their AUC libraries became specified AUC for 
purposes of section 1834(q)(2)(A) of the Act.
    This rule proposed requirements and processes for specification of 
qualified clinical decision support mechanisms (CDSMs) under the 
Medicare AUC program; the initial list of priority clinical areas; and 
exceptions to the requirement that ordering professionals consult 
specified applicable AUC when ordering applicable imaging services.
1. Background
    AUC 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). For purposes of this program, 
AUC are a set or library of individual appropriate use criteria. Each 
individual criterion is an evidence-based guideline for a particular 
clinical scenario. Each scenario in turn starts with a patient's 
presenting symptoms and/or condition. 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 clinical presentation.
    AUC need to be integrated as seamlessly as possible into the 
clinical workflow. CDSMs are the electronic portals through which 
clinicians would access the AUC during the patient workup. While CDSMs 
can be standalone applications that require direct entry of patient 
information, they may be more effective when they automatically 
incorporate information such as specific patient characteristics, 
laboratory results, and lists of co-morbid diseases from Electronic 
Health Records (EHRs) and other sources. Ideally, practitioners would 
interact directly with the CDSM through their primary user interface, 
thus minimizing interruption to the clinical workflow.
    Consistent with definitions of CDSM by the Agency for Healthcare 
Research and Quality (AHRQ) (http://www.ahrq.gov/professionals/prevention-chronic-care/decision/clinical/index.html), and the Office 
of the National Coordinator for Health Information Technology (ONC) 
(https://www.healthit.gov/policy-researchers-implementers/clinical-decision-support-cds), within Health IT applications, a CDSM is a 
functionality that provides persons involved in care processes with 
general and person-specific information, intelligently filtered and 
organized, at appropriate times, to enhance health and health care.
2. Previous CDSM Experience
    In the CY 2016 PFS final rule with comment period, we included a 
discussion of the Medicare Imaging Demonstration (MID), which was 
required by section 135(b) of the MIPPA, in addition to independent 
experiences of implementing AUC by several healthcare systems and 
academic medical centers. Two key aspects of that discussion remain 
relevant to the CDSM component of this program. First, AUC, and the 
CDSMs through which clinicians access AUC, must be integrated into the 
clinical workflow and facilitate, not obstruct, evidence-based care 
delivery. For instance, a CDSM may be fully integrated with or part of 
a provider's Certified EHR system, partially integrated, or entirely 
outside of it. A CDSM that is external to a provider's primary user 
interface could utilize an application program interface (API), a set 
of protocols and tools specifying how software components should 
interact, to pull relevant information into the decision support 
application and provide support back to the primary interface. It could 
also provide decision support, based on the pulled EHR data, via a 
separate interface. By adhering to common interoperability standards, 
such as the national standards advanced through certified health IT 
(see 2015 edition of certification criteria available in the Federal 
Register (80 FR 62601) and described in the Interoperability Standards 
Advisory at https://www.healthit.gov/standards-advisory), CDSMs could 
both ensure integration of patient-specific data from EHRs, and allow 
clinicians to optimize the time spent using the tool.
    Second, the ideal AUC is an evidence-based guide that starts with a 
patient's specific clinical condition or presentation (symptoms) and 
assists the clinician in the overall patient workup, treatment, and 
follow-up. Imaging would appear as key nodes within the clinical 
management decision tree.
    Other options outside of certified EHR technology exist to access 
AUC through CDSMs. Stand-alone, internet-based CDSMs are available and, 
although they will not interact with EHR data, can nonetheless search 
for and present AUC relevant to a patient's presenting symptoms or 
condition.
    In communicating an appropriateness rating to the ordering 
practitioner, some CDSMs provide a scale with numeric ratings, some 
output a red, yellow, or green light while others provide a dichotomous 
yes or no. At this time, we do not believe there is one correct 
approach to communicating the level of appropriateness to the ordering 
professional. However, section 1834(q)(4)(B) of the Act requires that 
information be reported on the claim form as to whether the service 
would or would not adhere to the specified AUC consulted through a 
particular CDSM, or whether the AUC was not applicable to

[[Page 80404]]

the service. We requested feedback from commenters regarding how 
appropriateness ratings provided by CDSMs could be interpreted and 
recorded for the purposes of this program. There are different views 
about the comprehensiveness of AUC that should be accessible within 
CDSMs. Some stakeholders believe that the CDSM should contain as 
comprehensive a collection of AUC as possible, incorporating individual 
criteria from across all specified AUC libraries. The intent would be 
for ordering professionals to avoid the frustration, experienced and 
voiced by many clinicians participating in the MID, of spending time 
navigating the CDSM only to find that no criterion for their patient's 
specific clinical condition exists.
    Other stakeholders believe, based on decades of experience rolling 
out AUC in the context of robust quality improvement programs that it 
is best to start with a CDSM that contains AUC for a few clinical areas 
where impact is large and evidence is strong. This would ensure that 
quality AUC are developed, and that clinicians and entire care teams 
could fully understand the AUC they are using, including when they do 
not apply to a particular patient.
    As we stated in the CY 2016 PFS final rule with comment period, 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 a complete AUC system developed elsewhere. We believe a 
successful program would allow flexibility, and under section 1834(q) 
of the Act, we foresee a number of sets of AUC developed by different 
PLEs, and an array of CDSMs from which clinicians may choose.
3. Priority Clinical Areas
    We established in the CY 2016 PFS final rule with comment period 
that we would identify priority clinical areas through rulemaking, and 
that these may be used in the determination of outlier ordering 
professionals (a future phase of the Medicare AUC program). The concept 
of priority clinical areas allows us to implement an AUC program that 
combines the focused and comprehensive approaches to implementation 
discussed above. Although potentially large volumes of AUC (as some 
PLEs have large libraries of AUC) would become specified across 
clinical conditions and advanced imaging technologies, we believe this 
rapid and comprehensive roll out of specified AUC should be balanced 
with a more focused approach when 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.
    As we describe earlier, CDSMs are the access point for ordering 
professionals to consult AUC. We believe the combination of the 
comprehensive and focused approaches should be applied to CDSM 
requirements as we consider a minimum floor of AUC that must be made 
available to ordering professionals through qualified CDSMs. AUC that 
reasonably address the entire clinical scope of priority clinical areas 
could establish a minimum floor of AUC to be included in qualified 
CDSMs, and the number of priority clinical areas could be expanded 
through annual rulemaking and in consultation with physicians and other 
stakeholders. This allows priority clinical areas to roll out 
judiciously, and build over time.
4. Statutory Authority
    Section 218(b) of the PAMA added a new section 1834(q) of the Act 
entitled, ``Recognizing Appropriate Use Criteria for Certain Imaging 
Services,'' which directs the Secretary to establish a new program to 
promote the use of AUC. Section 1834(q)(3)(A) of the Act requires the 
Secretary to specify qualified CDSMs that could be used by ordering 
professionals to consult with specified applicable AUC for applicable 
imaging services.
5. 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) 
identification of 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)). As we will discuss later in this preamble, 
we did not identify mechanisms for consultation by April 1, 2016 and 
will not have specified or published the list of qualified CDSMs by 
January 1, 2017; therefore, ordering professionals will not be required 
to consult CDSMs, and furnishing professionals will not be able to 
report information on the consultation, by this date.
a. Establishment of AUC
    In the CY 2016 PFS final rule with comment period, we addressed the 
first component under section 1834(q)(2) of the Act--the requirements 
and process for establishment and specification of applicable AUC, 
along with relevant aspects of the definitions under section 1834(q)(1) 
of the Act. This included defining the term PLE and finalizing 
requirements for the rigorous, evidence-based process by which a PLE 
would develop AUC, upon which qualification is based, as provided in 
section 1834(q)(2)(B) of the Act and in the CY 2016 PFS final rule with 
comment period. Using this process, once a PLE is qualified by CMS, the 
AUC that are developed, modified or endorsed by the qualified PLE are 
considered to be specified applicable AUC under section 1834(q)(2)(A) 
of the Act. We defined the term PLE to include national professional 
medical societies, health systems, hospitals, clinical practices and 
collaborations of such entities such as the High Value Healthcare 
Collaborative or the National Comprehensive Cancer Network. Qualified 
PLEs may collaborate with third parties that they believe add value to 
their development of AUC, provided such collaboration is transparent. 
We expect qualified PLEs to have sufficient infrastructure, resources, 
and the relevant experience to develop and maintain AUC according to 
the rigorous, transparent, and evidence-based processes detailed in the 
CY 2016 PFS final rule with comment period.
    A timeline and process was established for PLEs to apply to become 
qualified and the first list of qualified PLEs was published at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Appropriate-Use-Criteria-Program/index.html.
b. Mechanism for AUC Consultation
    The second major component of the Medicare AUC program is the 
specification of qualified CDSMs that could be used by ordering 
professionals for consultation with specified applicable AUC under 
section 1834(q)(3) of the Act. We envision a CDSM as an interactive 
tool that communicates AUC information to the user. Information 
regarding the clinical

[[Page 80405]]

presentation of the patient would be incorporated into the CDSM from 
another health IT system or through data entry by the ordering 
professional. At a minimum, the tool would provide immediate feedback 
to the ordering professional on the appropriateness of one or more 
imaging services. Ideally, CDSMs would be integrated within or 
seamlessly interoperable with existing health IT systems and would 
automatically receive patient data from the EHR or through an API or 
other connection. Such integration would minimize burden on 
practitioners and avoid duplicate documentation. Also useful to 
clinicians would be the ability to switch between CDSMs that can 
interoperate based on common standards.
    Section 1834(q)(3)(A) of the Act states that the Secretary must 
specify qualified CDSMs 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 CDSMs that are 
independent of certified EHR technology; and a CDSM established by the 
Secretary. The Secretary did not propose to establish a CDSM at this 
time.
    All CDSMs 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 documentation supporting 
the appropriateness of the applicable imaging service that is ordered; 
where there is more than one applicable appropriate use criterion 
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 CDSM 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 CDSMs.
    As we explained in the CY 2016 PFS proposed rule and final rule 
with comment period, implementation of many aspects of the amendments 
made by section 218(b) of the PAMA requires consultation with 
physicians, practitioners, and other stakeholders, and notice and 
comment rulemaking. We continue to believe the PFS calendar year 
rulemaking process is the most appropriate and administratively 
feasible implementation vehicle. Given the timing of the PFS rulemaking 
process, we were not able to include proposals in the PFS proposed rule 
to begin implementation in the same year the PAMA was enacted, as we 
would have had to interpret and analyze the new statutory language, and 
develop proposed plans for implementation in under one month. As we did 
prior to the CY 2016 PFS proposed rule when we met extensively with 
stakeholders to gain insight and hear their comments and concerns about 
the AUC program, we used the time prior to the CY 2017 PFS proposed 
rule to meet with many of the same stakeholders but also a new group of 
stakeholders specifically related to CDSMs. In addition, we are 
continuing our stepwise approach to implementing this AUC program. The 
first phase of the AUC program (specifying AUC including defining what 
AUC are and specifying the process for developing them) was 
accomplished through last year's CY 2016 PFS final rule with comment 
period. For this second phase, we use the CY 2017 PFS rulemaking 
process as the vehicle to establish requirements for CDSMs, and the 
process to specify qualified CDSMs, in a transparent manner that allows 
for stakeholder and public involvement. Therefore, the final CDSM 
requirements and process for CDSMs to become qualified are included in 
this CY 2017 PFS final rule.
c. AUC Consultation and Reporting
    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 qualified 
CDSM when ordering an applicable imaging service that would be 
furnished in an 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 CDSM. The statute distinguishes between 
the ordering and furnishing professional, recognizing that the 
professional who orders an applicable imaging service is usually not 
the same professional who bills Medicare for that service 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 an 
exception due to a significant hardship. Section 1834(q)(4)(D) of the 
Act specifies that the applicable payment systems for the AUC 
consultation and reporting requirements are the PFS, hospital 
outpatient prospective payment system, and the ambulatory surgical 
center payment systems.
    Since a list of qualified CDSMs is not yet available and will not 
be available by January 1, 2017, we will not require ordering 
professionals to meet this requirement by that date.
d. Identification of Outliers
    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 did not propose to implement these sections in the CY 
2017 PFS proposed rule, we proposed below a list of priority clinical 
areas which may serve as part of the basis for identifying outlier 
ordering professionals.
6. Proposals for Implementation
    We proposed to amend our regulations at Sec.  414.94, ``Appropriate 
Use Criteria for Certain Imaging Services.''
a. Definitions
    In Sec.  414.94(b), we proposed to codify and add language to 
clarify some of the definitions provided in section 1834(q) 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, we provide a description of the terms we proposed to codify to 
facilitate understanding and encouraged public comment on the AUC 
program.
    We proposed to define CDSM under Sec.  414.94(b) as an interactive, 
electronic tool for use by clinicians that communicates AUC information 
to the user and assists them in making the most appropriate treatment 
decision for a patient's specific clinical condition. A CDSM would 
incorporate specified

[[Page 80406]]

applicable AUC sets from which an ordering professional could select. A 
CDSM may be a module within or available through certified EHR 
technology (as defined in section 1848(o)(4) of the Act) or private 
sector mechanisms independent from certified EHR technology. If within 
or available through certified EHR technology, a qualified CDSM would 
incorporate relevant patient-specific information into the assessment 
of the appropriateness of an applicable imaging service.
    As prescribed in section 1834(q) of the Act and Sec.  414.94(b) of 
our regulations, the Medicare AUC program imposes requirements only for 
applicable imaging services furnished in applicable settings. Further, 
as specified in section 1834(q)(4)(D) of the Act, we proposed to amend 
our regulation at Sec.  414.94(b) to state that the applicable payment 
systems for the Medicare AUC program are the PFS under section 1848(b) 
of the Act, the prospective payment system for hospital outpatient 
department services under section 1833(t) of the Act, and the 
ambulatory surgical center payment systems under section 1833(i) of the 
Act. Applicable payment systems are relevant to implementation of 
section 1834(q)(4)(B) of the Act, entitled ``Reporting by Furnishing 
Professionals.''
    We remind readers that in PFS rulemaking for CY 2016 we defined 
applicable imaging service in Sec.  414.94(b) as an advanced diagnostic 
imaging service as defined in 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.
    The following is a summary of the comments we received on the 
definitions for CDSM and applicable payment system.
    Comment: Most comments that addressed the definitions supported our 
proposals. One commenter requested that in the definition of CDSM, CMS 
specify that it is a tool for ``ordering clinicians.''
    Response: We disagree that the regulatory definition of CDSM should 
specify exactly who can use a CDSM and believe it should continue to 
focus on the function and purpose of the tool. We would not want the 
definition to restrict use to one type of user; however, we expect that 
the ordering professional would consult the tool. We appreciate 
commenters' general support of the proposed definitions.
    After considering the comments, we have made no changes to the 
definitions and are finalizing the language at Sec.  414.94(b) as 
proposed.
b. Priority Clinical Areas
    We proposed to establish a new Sec.  414.94(e)(5) to set forth the 
initial list of priority clinical areas.
    To compile this proposed list, we performed an analysis of Medicare 
claims data using the CMS Chronic Conditions Data Warehouse (CCW) as 
the primary data source. The CCW contains 100 percent of Medicare 
claims for beneficiaries who are enrolled in the fee-for-service (FFS) 
program. Data were derived from the CCW's 2014 Part B non-institutional 
claim line file, which includes Part B services furnished during CY 
2014. This is the main file containing final action claims data for 
non-institutional health care providers, including physicians, 
physician assistants, clinical social workers, nurse practitioners, 
independent clinical laboratories, and freestanding ambulatory surgical 
centers. The Part B non-institutional claim line file contains the 
individual line level information from the claim and includes 
Healthcare Common Procedure Coding System (HCPCS) code(s), diagnosis 
code(s) using the International Classification of Diseases, Ninth 
Revision (ICD-9), service dates, and Medicare payment amount. A 
publicly available version of this dataset can be downloaded from the 
CMS Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Appropriate-Use-Criteria-Program/index.html. We encouraged stakeholders to review this dataset as a 
source that might help inform public comments related to the proposed 
priority clinical areas.
    In the CY 2016 PFS final rule with comment period, we stated that 
when identifying priority clinical areas we may consider factors such 
as incidence and prevalence of disease, the volume and variability of 
utilization of imaging services, the strength of evidence for their 
use, and applicability of the clinical area to the Medicare population 
and to a variety of care settings.
    Using the 2014 Medicare claims data referenced above, we ranked 
ICD-9 codes by the frequency with which they were used as the primary 
indication for specific imaging procedures, which in turn were 
identified by the volume of individual Current Procedural Terminology 
(CPT) codes for which payments were made in 2014. We extracted the top 
135 ICD-9 codes from this list and formed clinically-related 
categories. Next, we searched manually through an electronic list of 
all ICD-9 codes to find others that would plausibly fit into each 
clinical grouping. This process required subjective clinical judgment 
on whether a particular ICD-9 code should be included in a given 
clinical group. The top eight clinical groupings (by volume of 
procedures) are what we proposed as the initial list of priority 
clinical areas. The eight clinical areas account for roughly 40 percent 
of part B advanced diagnostic imaging services paid for by Medicare in 
2014. We are aware that some stakeholders have suggested beginning the 
AUC program with no more than five priority clinical areas while others 
have suggested a far greater number. We believed the proposed eight 
priority clinical areas strike a reasonable balance that allows us to 
focus on a significant range and volume of advanced diagnostic imaging 
services.
    We also considered extracting pulmonary embolism as a separate 
priority clinical area from the chest pain grouping based on 
stakeholder consultation and feedback. However, we decided not to 
identify pulmonary embolism separately, but asked for public comment on 
whether pulmonary embolism should be included as a stand-alone priority 
clinical area. Based on our consultations with physicians, 
practitioners and other stakeholders, as required by section 
1834(q)(3)(A) of the Act, we attempted to be inclusive when grouping 
ICD-9 codes into cohesive clinical areas. As an example of how we 
derived the priority clinical area for low back pain, we grouped 
together 10 ICD-9 codes, incorporating six from the top 135 and four 
from the manual search of all ICD-9 codes. Included in this grouping 
are the ICD-9 codes for displacement of lumbar intervertebral disc 
without myelopathy (722.10), degeneration of lumbar of lumbosacral 
intervertebral disc (722.52), intervertebral disc disorder with 
myelopathy lumbar region (722.73), post-laminectomy syndrome of lumbar 
region (722.83), lumbago (724.2), sciatica (724.3), thoracic or 
lumbosacral neuritis or radiculitis unspecified (724.4), spinal 
stenosis, lumbar region, without neurogenic claudication (724.02), 
lumbosacral spondylosis without myelopathy (721.3), and spondylosis 
with myelopathy lumbar region (721.42) which resulted in 1,883,617 
services. To see all of the priority clinical area groupings of 
diagnosis codes, a table is available on the CMS Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Appropriate-Use-Criteria-Program/index.html.

[[Page 80407]]

    Using the above methodology, we developed and proposed eight 
priority clinical areas. These reflect both the significance and the 
high prevalence of some of the most disruptive diseases in the Medicare 
population.

                    Table 40--Proposed Priority Clinical Areas With Corresponding Claims Data
----------------------------------------------------------------------------------------------------------------
                                                       Total          % Total          Total          % Total
         Proposed priority clinical area             services      services \1\      payments      payments \1\
----------------------------------------------------------------------------------------------------------------
Chest Pain (includes angina, suspected              4,435,240.00              12    $470,395,545              14
 myocardial infarction, and suspected pulmonary
 embolism)......................................
Abdominal Pain (any locations and flank pain)...    2,973,331.00               8     235,424,592               7
Headache, traumatic and non-traumatic...........    2,107,868.00               6      89,382,087               3
Low back pain...................................    1,883,617.00               5     180,063,352               5
Suspected stroke................................    1,810,514.00               5     119,574,141               4
Altered mental status...........................    1,782,794.00               5      83,296,007               3
Cancer of the lung (primary or metastatic,          1,114,303.00               3     154,872,814               5
 suspected or diagnosed)........................
Cervical or neck pain...........................    1,045,381.00               3      83,899,299               3
----------------------------------------------------------------------------------------------------------------
\1\ Percentage of 2014 Part B non-institutional claim line file for advanced imaging services from Medicare
  claims for beneficiaries who are enrolled in the fee-for-service (FFS) program (source: CMS Chronic Conditions
  Data Warehouse).

    We also engaged the CMS Alliance to Modernize Healthcare (CAMH) 
Federally Funded Research and Development Center (FFRDC), the MITRE 
Corporation (MITRE), to begin developing efficient and effective 
processes for managing current and future health technology 
assessments. MITRE generated an independent report that presents a 
summary of findings from claims data from the Medicare population and 
their utilization of advanced imaging procedures. Coupled with our 
internal analysis, this report has assisted in identification of 
proposed priority clinical areas for the Medicare AUC program for 
advanced diagnostic imaging services. Analysis and methods for this 
report are available at https://www.mitre.org/publications/technical-papers/claims-data-analysis-to-define-priority-clinical-areas-for-advanced.
    While this year we proposed priority clinical areas based on an 
analysis of claims data alone, we may use a different approach in 
future rulemaking cycles. As we specified in Sec.  414.94(e) of our 
regulations, we may consider factors other than volume when proposing 
priority clinical areas including incidence and prevalence of disease, 
variability of use of particular imaging services, strength of evidence 
supporting particular imaging services and the applicability of a 
clinical area to a variety of care settings and to the Medicare 
population.
    We encouraged public comments on this proposed initial list of 
priority clinical areas, including recommendations for other clinical 
areas that we should include among our list of priority clinical areas. 
In particular, we were interested in comments on the above methodology 
or alternate options; whether the proposed priority clinical areas are 
appropriate including information on the extent to which these proposed 
priority clinical areas may be represented by clinical guidelines or 
AUC in the future. Furthermore, we were interested in public comments, 
supported by published information, for varying levels of evidence that 
exist across, as well as within priority clinical areas.
    The following is a summary of the comments we received on the list 
of priority clinical areas which may serve as part of the basis for 
identifying outlier ordering professionals.
    Comment: Many commenters addressed the proposed list of priority 
clinical areas. Some commenters suggested that many of the proposed 
priority clinical areas were too large and each area was too broadly 
defined. Commenters expressed concerns that the proposed list does not 
permit a meaningful, focused approach. As an alternative, one commenter 
encouraged CMS to limit the number of priority clinical areas from 
eight to four. Other commenters noted that broadly defined priority 
clinical areas might result in little opportunity for a change in 
behavior of ordering professionals. Commenters supported inclusion of 
low back pain and headache in the list of priority clinical areas. One 
commenter specifically recommended that CMS refine the proposed 
clinical areas of ``low back pain'' and ``headache'' to reflect 
differences between the elderly and non-elderly populations. Other 
commenters noted the possibility of overlap between priority clinical 
areas of headache, suspected stroke, and altered mental status, and 
some commenters recommended combining such areas.
    Other commenters recommended eliminating suspected stroke, altered 
mental status, chest pain and abdominal pain, and creating a stand-
alone priority clinical area for suspected pulmonary embolism. For 
abdominal pain, commenters were concerned that there were not high 
quality AUC available to cover such a vast clinical area. For suspected 
stroke, commenters were concerned that using this area for future 
outlier calculations would not be beneficial as advanced imaging for 
these patients may be exempt from this program under the emergency 
medical conditions exception. Commenters disagreed with both suspected 
stroke and altered mental status because both could fall under other 
priority clinical areas and they noted there was a lack of high quality 
AUC available to address them.
    Some commenters encouraged and others discouraged CMS from 
considering alternative priority clinical areas. Some commenters 
generally asked CMS to refrain from considering other clinical areas 
beyond what is listed in the CY 2017 PFS proposed rule. Other 
commenters offered alternatives in both number and scope of priority 
clinical areas. Other commenters suggested including musculoskeletal 
(hip pain, knee pain, joint pain, shoulder pain, rotator cuff injury), 
other cancers (breast, prostate), right upper quadrant pain, solitary 
pulmonary nodule, pancreatitis, appendicitis, renal colic, suspected 
abdominal aortic dissection, CT for minor blunt head trauma, suspected 
cardiac ischemia, and hematuria. One commenter noted that the top ten 
conditions for which advanced imaging is requested included low back 
pain, headache, and cervical pain. Another commenter recommended that 
these priority clinical areas should be phased in at a rate of two per 
year, with examples of pulmonary embolism and low back pain (as areas 
where strength of evidence was particularly high), which echoed other 
general comments to more gradually expand the list of

[[Page 80408]]

priority clinical areas after testing and as deemed necessary.
    Response: We agree that if priority clinical areas are too broadly 
defined, it would not be consistent with our purpose to offer both 
comprehensive and focused approaches to AUC rollout into qualified 
CDSMs. We further agree that a central goal of the AUC program is to 
promote appropriate ordering of advanced diagnostic imaging services. 
Additionally we appreciate the points made by the commenters and see 
merit in some of their recommended alternatives for priority clinical 
areas as they take into account factors such as incidence and 
prevalence of disease, the variability of utilization of specific 
imaging services, the strength of evidence and AUC available for 
consultation for a particular clinical scenario, and applicability of 
each suggested alternative clinical area to the Medicare population and 
to a variety of care settings, including the emergency department.
    We agree with commenters that chest pain is a general symptom and 
too broad for a focused priority clinical area. We further agree with 
commenters that supported creating a stand-alone priority clinical area 
for suspected pulmonary embolism, as discussed in detail below, and one 
for coronary artery disease. Chest pain may be a clinical symptom of 
underlying suspected pulmonary embolism and coronary artery disease. 
There is a solid evidence base from well designed, randomized 
controlled trials supporting specific protocols and guidelines that 
consider different signs, symptoms and history associated with working 
up a patient with suspected pulmonary embolism. There is also strong 
evidence from multiple large, randomized controlled trials to guide 
imaging for coronary artery disease. We note that, according to the 
American Heart Association Statistical Update, coronary artery disease 
is the leading cause of death among men and women in the United States. 
The evidence is less robust for many other causes of chest pain. 
Therefore, based on the above, we are removing chest pain as a priority 
clinical area and finalizing suspected pulmonary embolism and coronary 
artery disease as two distinct areas.
    We recognize, along with commenters, that the proposed list of 
priority clinical areas did not include scenarios specific to 
musculoskeletal indications. As stated in the proposed rule, CMS also 
engaged MITRE to generate an independent report, which indicates that 
almost half a million advanced diagnostic imaging services were 
rendered to Medicare beneficiaries in 2014 for clinical presentations 
related to joint pain. Furthermore, we agree with commenters who 
suggested CMS consider additional clinical areas with a reasonably 
robust volume of literature on appropriate use and agree that the 
strength of evidence for imaging use and relevance to the Medicare 
population supports inclusion of hip pain and shoulder pain (to include 
suspected rotator cuff injury) in the final list of priority clinical 
areas.
    In addition to commenters' support of inclusion of low back pain 
and headache in the list of priority clinical areas, we also note that 
the MID cites clinical research demonstrating that use of clinical 
decision support was associated with a decrease in the utilization of 
lumbar MRIs for low back pain and head MRIs for headache.
    We are finalizing the proposed areas of low back pain and headache, 
as well as cancer of the lung (primary or metastatic, suspected or 
diagnosed).
    We have removed altered mental status and abdominal pain based on 
the concerns expressed by commenters summarized above, including the 
lack of strong evidence to cover the breadth of each of these areas. 
Based on the commenters' concerns we may review these areas in the 
future, possibly narrowing their scope.
    Regarding stroke, we acknowledge that evidence-based stroke 
protocols do exist, however, we believe that it is possible that an 
exception for emergency medical services may disproportionally apply to 
suspected stroke so there may be a concern for using this priority 
clinical area for future outlier calculations. Furthermore, there may 
be some overlap of the clinical areas of suspected stroke and headache. 
A strong level of evidence specific to headache is available and we 
believe headache is less likely to be impacted by the emergency medical 
services exception. Therefore, we are removing suspected stroke and 
retaining headache in the final list of priority clinical areas. We may 
consider adding suspected stroke through future rulemaking.
    In response to public comments and as supported by the additional 
information above and further discussion below, we have modified the 
list of priority clinical areas by: (1) removing chest pain, abdominal 
pain (any locations and flank pain), suspected stroke and altered 
mental status; and (2) adding coronary artery disease (suspected or 
diagnosed), suspected pulmonary embolism, hip pain and shoulder pain 
(to include suspected rotator cuff injury). We are finalizing as 
proposed the priority clinical areas of headache (traumatic and non-
traumatic), low back pain, cancer of the lung (primary or metastatic, 
suspected or diagnosed), and cervical or neck pain. The final list of 
priority clinical areas is as follows:
     Coronary artery disease (suspected or diagnosed).
     Suspected pulmonary embolism.
     Headache (traumatic and non-traumatic).
     Hip pain.
     Low back pain.
     Shoulder pain (to include suspected rotator cuff injury).
     Cancer of the lung (primary or metastatic, suspected or 
diagnosed).
     Cervical or neck pain.
    Consistent with section 1834(q) of the Act, we are not AUC 
developers, and therefore, would not produce AUC tailored to the 
elderly population. However, Sec.  414.94(c)(1) of our regulations 
requires qualified PLEs to utilize an evidentiary review process when 
developing or modifying AUC. This regulation further requires qualified 
PLEs to identify AUC that are relevant to priority clinical areas, and 
specifies that to be considered relevant, the AUC must reasonably 
address the entire clinical scope of the corresponding priority 
clinical areas. These requirements and the resulting fundamental 
process ensures that AUC are evidence-based to the extent feasible as 
required by section 1834(q)(1)(B) of the Act. Therefore, we expect that 
qualified PLEs will undertake evidence reviews of sufficient depth and 
quality to ensure that all relevant evidence-based publications in the 
peer-reviewed medical literature on trials, observational studies, and 
consensus statements are identified, considered and evaluated; and that 
such reviews are reproducible.
    We do not agree with the suggestion to reduce the total number of 
priority clinical areas we proposed in CY 2017 rulemaking, and 
reiterate that ordering professionals must consult AUC for all 
applicable imaging services, not only those falling within a priority 
clinical area. Furthermore, we anticipate that additional priority 
clinical areas will be proposed in future rulemaking, and we believe 
that Medicare beneficiaries will benefit as ordering professionals 
become familiar with specified applicable AUC relevant to all advanced 
diagnostic imaging services.
    Comment: One commenter suggested diagnosimetrics--the application 
of quantitative analysis to the art of disease diagnosis--as an 
alternative approach to clinical assessment and reassessment, which the 
commenter believed is an

[[Page 80409]]

approach that obviates the need to develop priority clinical areas.
    Response: We appreciate alternative considerations for 
implementation of the AUC program, but we disagree that utilization of 
diagnosimetrics can eliminate completely the need to establish priority 
clinical areas. We remind all commenters that we set forth the list of 
priority clinical areas not only to strike a balance between the 
focused and comprehensive approach to implementing the AUC program, but 
also to be transparent about the areas that we anticipate will serve as 
the basis for identifying outlier professionals in the future. We again 
note that consultation of AUC will be required for all advanced 
diagnostic imaging services regardless of whether they fall into a 
priority clinical area or not.
    Comment: Many commenters recommended that pulmonary embolism be 
included as a stand-alone priority clinical area, based in part on high 
strength of evidence from multiple, large multicenter, randomized 
controlled trials (RCTs), and several commenters disagreed. The 
majority of commenters in support of pulmonary embolism believed that 
it should be a priority clinical area distinct from chest pain, and 
further recommended that CMS remove or more narrowly determine any 
priority clinical area for chest pain. In particular, one commenter did 
not support inclusion of pulmonary embolism as a separate category 
stating that eight areas is an appropriate number for the first year of 
the program. Another commenter supplied published evidence that the 
decision rules for assessing risk of pulmonary embolism have not been 
shown to improve appropriate use of diagnostic imaging when compared to 
clinical judgment alone. One commenter suggested having the pulmonary 
embolism priority clinical area apply to CT angiograms only. We 
received one comment that ``shortness of breath'' rather than 
``pulmonary embolism'' be included as a stand-alone priority clinical 
area.
    Response: We appreciate the extensive input on this topic and we 
agree with the majority of commenters, and thus, are finalizing 
suspected pulmonary embolism as a priority clinical area. We not that 
qualified PLEs already have AUC for suspected pulmonary embolism that 
are based on large, multi-center, randomized controlled trials. These 
evidence-based AUC in turn are further supported by the American Board 
of Internal Medicine (ABIM) Foundation's Choosing Wisely[supreg] list 
of society recommendations.
    Comment: Some commenters advocated for the addition of lung cancer 
screening to the list of priority clinical areas. The commenters 
suggested that the inclusion of lung cancer screening would be 
beneficial as there are well-defined and evidence-based criteria 
outlining the population that benefits from screening examinations. One 
commenter remarked on the opportunity it offers for qualified PLEs and 
CDSMs to gain experience with decision support for a population 
screening test which may differ from a diagnostic test.
    Response: We agree with the commenter that it is important for 
qualified PLEs and qualified CDSMs to interface to gain experience with 
implementing specified applicable AUC into an appropriateness rating, 
specifically for advanced diagnostic imaging services. We also 
appreciate feedback on areas for which AUC have been developed. 
However, section 1834(q)(1) of the Act limits this program to promoting 
the use of AUC for advanced diagnostic imaging services, not to include 
screening tests.
    Comment: Several commenters explicitly raised concerns regarding 
the scope, number, and frequency with which the list of priority 
clinical areas would continue to grow. Many commenters noted that a 
program with too many priority clinical areas would potentially 
obstruct any meaningful focused approach. Other commenters either 
supported or offered no objections to the proposed number of priority 
clinical areas. Some commenters provided additional considerations to 
impact the selection of additional priority clinical areas including 
but not limited to the strength of evidence supporting the use or non-
use of a particular imaging service, the variability of use of a 
particular imaging service, and the representation of a given clinical 
grouping to the existing list of priority clinical areas.
    Response: We recognize these concerns and reiterate that we do not 
believe there is just one correct criterion to form the basis for 
expanding the list of priority clinical areas over time. We agree with 
commenters who encouraged us to consider the breadth and depth of 
clinical scenarios within the proposed priority clinical areas, and 
acknowledge the impact of priority clinical areas for calculation of 
outlier ordering professionals. We expect the list of priority clinical 
areas to expand over time in a judicious and stepwise manner through 
consultation with physicians and other stakeholders and through the 
annual notice and comment rulemaking process. We have demonstrated this 
in the CY 2017 PFS proposed rule, where we solicited comments on 
recommendations for additional or alternative areas to be included on 
our list of priority clinical areas. We believe that the final list of 
priority clinical areas is responsive and reflects the expressed needs 
and concerns of most commenters.
    Comment: Although several commenters generally agreed with the 
approach used to identify priority clinical areas, some expressed 
concern about the underlying methodology. Many commenters believed that 
when we provided claims data analysis and ICD-9 diagnosis codes to 
describe priority clinical areas, we only considered volume and cost of 
advanced diagnostic imaging services. Some commenters requested CMS 
include and/or remove ICD-9 diagnosis codes in one or more of the 
supplemental tables accompanying the list of priority clinical areas. 
Many commenters believed that the supplemental table encompassed what 
CMS believed to be the entire clinical scope of the proposed priority 
clinical area, while others believed that CMS did not explain what 
constitutes a priority clinical area such as low back pain. As a 
consequence, some commenters requested that CMS define priority 
clinical areas to include all applicable diagnosis codes, and map those 
diagnosis codes to the most recent ICD-10 diagnosis codes available. 
One commenter requested that CMS confirm that the data used to 
ascertain the priority clinical areas did not include services provided 
in the inpatient and emergency department settings. Another commenter 
questioned whether the inclusion of too many minor or common symptoms 
in the data gathering process would consequently weaken the 
implementation of the AUC program generally.
    Response: We equally acknowledge the commenters that agreed with 
our approach and those that raised concerns with our methodology. 
Section 414.94(e)(2) of our regulations, as finalized in the CY 2016 
PFS final rule with comment period, states that, when identifying 
priority clinical areas, we will consider incidence and prevalence of 
disease, the volume and variability of use of particular imaging 
services, and strength of evidence supporting particular imaging 
services, as well as applicability of the clinical area to a variety of 
care settings and to the Medicare population. In the CY 2017 PFS 
proposed rule, we proposed priority clinical areas based on an analysis 
of claims data, using subjective clinical judgment on whether a

[[Page 80410]]

particular ICD-9 diagnosis code should be included in a given clinical 
grouping. We remind all commenters that the supplemental table was 
provided to lend insight into the extent to which a given diagnosis 
code contributes to orders for advanced diagnostic imaging services, 
which we used to assist us in identifying proposed priority clinical 
areas. We continue to believe that the list of priority clinical areas 
should reflect both the significance and high prevalence of some of the 
most disruptive diseases in the Medicare population. In particular, the 
claims data analysis we undertook did not include services furnished in 
the inpatient setting, but did include services provided in an 
emergency department as section 1834(q)(4)(C) of the Act excludes 
applicable imaging services ordered for individuals with emergency 
conditions as defined in section 1867(e)(1) of the Act, but does not 
exclude all applicable imaging services provided in the emergency 
department from the consultation requirement under this program. We 
further agree with the commenters' observations that a high volume 
advanced diagnostic imaging service does not by itself indicate high 
rates of inappropriate testing. Therefore, we are modifying the 
proposed list of priority clinical areas to more closely align with 
feedback from commenters on the strength of evidence and AUC available 
for clinical scenarios within a given clinical area.
    Given the transition to ICD-10 in 2015 and changes in the list of 
priority clinical areas, as well as factors discussed above, we clarify 
that the supplemental table does not define the final list of priority 
clinical areas. We expect to address the role of ICD-10 diagnosis codes 
in claims based reporting, auditing and outlier identification for 
priority clinical areas with rulemaking next year. We note, however, 
that we believe that the list of priority clinical areas provides 
sufficient guidance to CDSMs as they decide whether to apply to be a 
qualified CDSM in the upcoming application cycle.
    Comment: Several commenters provided alternative considerations to 
methodically determine priority clinical areas, including ICD-10 
diagnosis codes, CPT codes, hierarchical condition categories, 
anatomical regions, variation in treatment, and quality of the 
evidence. A few commenters suggested that CMS also consider the extent 
to which the majority of clinical scenarios within a priority clinical 
area would likely fall under the emergency medical conditions 
exception, noting that there may be little impact in proposing to 
address clinical areas exempt from AUC consultation. Furthermore, some 
commenters requested that CMS exclude from priority clinical area 
consideration those clinical scenarios for which advanced imaging tests 
are rarely inappropriate, which commenters stated would reduce alert 
fatigue by ordering professionals and increase focus on clinical 
scenarios for which ordering professional behavior may be altered.
    Response: Although this year we proposed priority clinical areas 
based partly on an analysis of claims data, we also considered 
stakeholder feedback and commenters' alternative considerations. We 
acknowledge the merit of several acceptable alternative proposals and 
believe the current definition of priority clinical areas encompasses 
these considerations. We will continue to maintain close dialogue with 
physicians and other stakeholders, and may use a different approach to 
addressing priority clinical areas in future rulemaking cycles, as 
needed.
    Comment: Some commenters expressed additional concerns about the 
use of diagnosis codes to help form priority clinical areas. One 
commenter noted that using a diagnosis for suspected stroke should also 
include other diagnoses in the priority clinical area, such as facial 
numbness, slurred speech, or limb weakness. Other commenters expressed 
concerns that publishing a rigid, exact mapping of ICD diagnosis codes 
for each priority clinical area could give rise to ``gaming.'' Other 
commenters noted that addressing priority clinical areas with diagnosis 
codes is problematic because the final diagnosis code is often not 
known until the advanced imaging study is completed.
    Response: We recognize that these comments exemplify the confusion 
and concerns expressed by many commenters about the definition of each 
priority clinical area. We did not propose to set forth a diagnosis-
code based definition for each priority clinical area; rather, we will 
continue to use the definition of priority clinical areas in Sec.  
414.94(b) which includes clinical conditions, diseases or symptom 
complexes and associated advanced diagnostic imaging services 
identified by CMS through annual rulemaking and in consultation with 
stakeholders which may be used in the determination of outlier ordering 
professionals. In addition, we clarify that our submission of 
supplemental data presenting ICD-9 diagnosis codes within each proposed 
priority clinical area was intended only to explain the portion of 
Medicare claims data derived from the CCW 2014 Part B non-institutional 
claim line file for services furnished during CY 2014. We remind all 
commenters that these data were used to calculate the total services 
furnished and total payments made to those enrolled in Medicare Part B. 
We included this supplemental table to be open and transparent to 
stakeholders regarding the process by which we developed the proposed 
list of priority clinical areas. We reiterate that our use of the ICD-9 
diagnosis codes from CY 2014 claims data was solely a means for 
estimating volumes of procedures, as a stepping stone in the 
development of an initial list of priority clinical areas. In the event 
we use claims data from 2015 or later for analyses, we will use ICD-10 
codes, but will continue to assess all options for identifying and 
establishing priority clinical areas and not necessarily limit 
ourselves only to ICD diagnosis code analyses.
    We acknowledge the alternative opinions of commenters seeking to 
modify the extent of diagnosis codes in one or more priority clinical 
areas. We hope to discuss further with physicians and other 
stakeholders the relevance of mapping ICD diagnosis codes to priority 
clinical areas as we move forward in formulating the claims reporting 
implementation strategy (discussed in more detail below) and strategies 
to avoid areas of concern for commenters. We clarify that ICD-9 
diagnosis codes will not be used for claims reporting purposes in this 
program given the 2015 transition to ICD-10. We expect that the role of 
ICD-10 diagnosis codes for the purposes of claims based reporting, 
auditing and outlier identification will be addressed through 
rulemaking next year.
    Comment: Some commenters stated that AUC consultation within 
priority clinical areas include only high-quality evidence and 
recommended further consideration and discussion of the level of 
evidence available for AUC in each priority clinical area. One 
commenter requested that CMS specify a standard for the strength of any 
evidence. Many commenters offered to share their guidelines, guidance 
and other expertise around AUC with CMS, and recommended that CMS 
engage with them directly. Other commenters suggested that the proposed 
priority clinical areas more closely align with the ABIM's Choosing 
Wisely[supreg] initiative and/or the ACR's Appropriateness 
Criteria[supreg]. One commenter recommended a number of evidence-based 
guidelines for imaging of patients with traumatic cervical pain. In

[[Page 80411]]

conjunction with the evidence submitted to support one or more priority 
clinical areas, another commenter suggested only including those 
priority clinical areas for clinical scenarios for which AUC from 
multiple PLEs are available.
    Some commenters also shared with CMS publications that suggested a 
lack of evidence-based AUC for clinical scenarios that could reasonably 
fall within one or more proposed priority clinical areas. In 
particular, one commenter believed that available appropriateness 
criteria do not address altered mental status. Commenters generally 
believed that clinical scenarios providing no appropriateness rating or 
contradictory recommendations from CDSMs based on AUC using lower 
grades of evidence or expert opinion would not result in significant 
modifications in ordering professional behavior. A commenter suggested 
CMS consider the safety margin inherent in the clinical area where 
imaging for acute stroke, for example, has a narrow safety margin while 
imaging for suspected rotator cuff injury has a wider safety margin. 
Many commenters identified situations when the available high-quality 
evidence does not cover the entire clinical scope of a priority 
clinical area. In these situations, a CDSM would either cover less than 
the entire clinical scope of a priority clinical area and only 
incorporate AUC based on high-quality evidence or cover the entire 
clinical scope and in doing so incorporate AUC based on low quality 
evidence and expert opinion. These commenters cautioned against 
requiring qualified CDSMs to incorporate specified applicable AUC that 
encompass the entire clinical scope given the potential for forcing 
consultation with AUC based on lower quality evidence. As an 
alternative, a few commenters encouraged CMS to separate priority 
clinical areas into those that have high quality AUC and those that do 
not.
    Response: We agree that priority clinical areas for which there is 
little evidence would likely have little impact in changing physician 
ordering behavior, and may indeed negatively impact patient care. We 
expect qualified PLEs to identify and focus on that portion of the 
entire clinical scope within a given priority clinical area where there 
is sufficient evidence to create high quality AUC. We encourage 
qualified PLEs to consider the ``safety margins'' discussed above along 
with strength of evidence and other factors when developing or 
modifying AUC. Furthermore, we believe that qualified CDSMs, working 
with qualified PLEs, should incorporate such high quality AUC as part 
of a clinical decision tree, which includes areas where imaging is 
triggered by other tests.
    We continue to believe that evidence grading is an essential 
component of the AUC development process for all clinical areas, 
including priority clinical areas. However, we acknowledge that 
different grading systems may be more appropriate for different 
clinical areas. As such, we will not require the use of specific 
grading mechanisms and leave that decision to qualified PLEs. We 
recognize that some AUC development processes could invite public 
comment and include a wide range of experts and stakeholders on the 
multidisciplinary AUC development team. However, we will not establish 
these as requirements, and instead require under Sec.  414.94(c)(1) 
that qualified PLEs post AUC along with the process they use for 
developing and modifying AUC on their Web site in the public domain to 
allow for review by all stakeholders.
    Comment: Some commenters expressed confusion over which entity 
determines whether an exam falls within a priority clinical area for 
the ordering professional. Several commenters noted that determining 
whether an exam falls under a priority clinical area often will not be 
an easy yes-or-no decision. One commenter further expressed that this 
confusion would result in physicians being expected to know if an 
advanced imaging study falls within a priority clinical area, which 
would further confuse clinicians about which orders require 
consultation with CDSMs and which do not. Several commenters explained 
that ordering professionals may not know whether they are required to 
consult with AUC through a qualified CDSM at the time of order because 
the diagnosis is not yet known. Another commenter raised concerns that 
not all available specified applicable AUC within priority clinical 
areas, especially those developed by general hospitals or by 
professional societies, will be well suited for local adaptation, a 
particular practice, or the patients it serves. To address these 
concerns, commenters made a few recommendations to CMS. Specifically, 
commenters suggested qualified PLEs should be responsible for 
certifying whether an AUC set encompasses the entire scope of a 
priority clinical area. Additionally, commenters recommended that CMS 
develop and launch an educational campaign, including a Town Hall 
meeting.
    Response: We understand the commenters' concerns about the 
difficulty ordering professionals may have in identifying prospectively 
which clinical scenarios pertain to a priority clinical area. We remind 
commenters that ordering professionals will be required to consult 
specified applicable AUC through a qualified CDSM for all applicable 
imaging services and will not be required to determine which applicable 
imaging services fall within priority clinical areas. For the purposes 
of the AUC program, priority clinical areas will be used as part of the 
input to calculate outlier ordering professionals. We will address the 
identification of outlier ordering professionals for this program, as 
specified in section 1834(q)(5) of the Act, in future rulemaking.
    Regarding local adaptation, we believe it is important to fit AUC 
to local circumstances, while also ensuring a rigorous process for 
doing so. However, only AUC modified by qualified PLEs can become 
specified applicable AUC. Furthermore, qualified PLEs are required 
under our regulation at Sec.  414.94(c)(v) to identify each appropriate 
use criterion or AUC subset that is relevant to a priority clinical 
area. Stakeholders should expect to see such delineations on the Web 
site of the qualified PLE.
    We are not launching an educational campaign at this time because 
this program is only partially implemented. However, we believe that 
physicians and other practitioners, through continued dialogue with us, 
will continue to become more informed as implementation of this program 
proceeds, and we will continue to evaluate the programmatic and 
educational needs of ordering and furnishing professionals impacted by 
the AUC program over time.
    Comment: Many commenters expressed confusion regarding when 
consultation with specified applicable AUC will be required. Some 
commenters believed that consultation for all advanced diagnostic 
imaging services will be required, while others believed that CMS 
proposed to limit the consultation requirement to only advanced 
diagnostic imaging services within priority clinical areas. Some 
commenters recommended that physicians and other practitioners be 
required to consult AUC only within the priority clinical areas. 
Commenters believed the impact of limiting AUC consultation to only 
imaging studies falling within priority clinical areas would be a 
decrease in the consultation and reporting for ordering professionals. 
Other commenters recommended a narrower requirement for only ordering 
professionals who meet an ordering threshold or who order from a list 
of

[[Page 80412]]

specified conditions within their specialty to consult AUC for only 
priority clinical areas. While still other commenters recommended that 
ordering professionals be required to consult AUC for advanced 
diagnostic imaging services including and beyond the priority clinical 
areas. Another recommendation from commenters included requiring only 
some ordering professionals consult AUC for limited applicable imaging 
services by imaging modality. Several commenters agreed with our 
proposed definition of the applicable payment systems under which 
consultation with AUC for an advanced diagnostic imaging service would 
be paid.
    Response: We understand commenters' confusion and expect that, in 
general, the additional regulations we are finalizing in this final 
rule will provide greater clarity. Section 1834(q)(4) of the Act sets 
forth the requirement that ordering professionals must consult with 
specified applicable AUC through a qualified CDSM for an applicable 
imaging service furnished in an applicable setting and paid for under 
an applicable payment system. The applicable imaging services are not 
limited under the statute to any particular clinical area. Therefore, 
we do not have statutory authority to limit the consultation 
requirement to priority clinical areas. We reiterate that priority 
clinical areas may be used in the identification of outlier ordering 
professionals under a future component of this program. By starting to 
identify these areas now, we believe physicians and practitioners will 
have the opportunity to become familiar with AUC within identified 
priority clinical areas prior to Medicare claims for those services 
being part of the input for calculating outlier ordering professionals. 
We further believe that AUC consultation will help to improve 
appropriate utilization among all professionals and will continue to 
engage stakeholders to further this shared goal.
    Comment: Many commenters suggested that they agreed with the 
approach of CMS to use the priority clinical areas for the purposes of 
identifying outlier ordering professionals. In contrast, one commenter 
expressed that denial of medical services based on criteria designed 
solely to decrease the utilization of medical imaging runs counter to 
the underlying goal of the AUC program under section 218(b) of the 
PAMA. Commenters also generally agreed that the impact of the AUC 
program could not be fully realized until after implementation; 
therefore, many commenters urged CMS to collect at least one year of 
data from the start of the program and use it to identify priority 
clinical areas where the AUC program can help reduce variation.
    Response: Although commenters appreciated the utility in defining 
priority clinical areas for the purposes of identifying outlier 
ordering professionals, we reiterate that we have yet to propose the 
policies for the annual identification of outlier ordering 
professionals, and therefore, will revisit comments on this subject in 
the course of rulemaking for the CY 2018 PFS. We remind all commenters 
that section 1834(q)(5) of the Act explicitly requires that the 
Secretary shall use 2 years of data to identify outlier ordering 
professionals for the purposes of the AUC program.
    In response to comments, we are finalizing a modified list of 
priority clinical areas under Sec.  414.94(e)(5) of our regulations, 
making the following changes from the proposed list: (1) removed chest 
pain, abdominal pain (any locations and flank pain), suspected stroke 
and altered mental status; and (2) added coronary artery disease, 
(suspected or diagnosed), suspected pulmonary embolism, hip pain and 
shoulder pain (to include suspected rotator cuff injury). We are 
finalizing the proposed priority clinical areas of headache (traumatic 
and non-traumatic), low back pain, cancer of the lung (primary or 
metastatic, suspected or diagnosed), and cervical or neck pain without 
change.
c. CDSM Qualifications and Requirements
    We proposed to add a new Sec.  414.94(g)(1) to our regulations to 
establish requirements for qualified CDSMs. Section 1834(q)(3)(A)(iii) 
of the Act provides relative flexibility for qualified CDSMs, and 
states that they may include mechanisms that are within certified EHR 
technology, private sector mechanisms that are independent from 
certified EHR technology or mechanisms that are established by the 
Secretary.
    We believe that, at least initially, it is in the best interest of 
the program to establish CDSM requirements that are not prescriptive 
about specific IT standards. Rather, we proposed an approach that 
focuses on the functionality and capabilities of qualified CDSMs. The 
CDSM, EHR and health IT environments are constantly changing and 
improving and we want to allow room for growth and innovation. However, 
in the future, as more stakeholders and other entities including the 
ONC, AHRQ, and relevant standards development organizations come to 
consensus regarding standards for CDSMs, then we may consider pointing 
to such standards as a requirement for qualified CDSMs under this 
program. We believe standards would make it possible to achieve 
interoperability, allowing any CDSM to incorporate any standardized AUC 
and for sets of AUC to be easily interchangeable among various CDSMs. 
We will continue to work with the ONC and AHRQ to facilitate movement 
in this direction.
    Recent work under the federally-sponsored Clinical Quality 
Framework (CQF) initiative has successfully developed an integrated 
approach that harmonizes standards for electronic clinical quality 
measurement with those that enable shareable clinical decision support 
artifacts (for example, AUC) using Fast Healthcare Interoperability 
Resources (FHIR). The CQF initiative is working to support semantically 
interoperable data exchange for (1) calling a service, sending patient 
data to a service for clinical decision support guidance and receiving 
clinical decision support guidance or quality measurement results in 
return, and (2) enabling a system to consume and internally execute 
decision support artifacts. The current implementation guide supports 
both approaches and could be used to successfully execute and share AUC 
as described in this program. As this standard is considered 
sufficiently mature for widespread adoption, the ONC may consider it 
for use in future editions of certification criteria for health IT. 
While the current regulation requires no specific standard, the CMS and 
ONC are supportive of this approach and additional information is 
available at http://hl7-fhir.github.io/clinicalreasoning-module.html. 
It should be noted that there are also existing deployed standards for 
clinical decision support and these and emerging standards can be found 
in the ONC Interoperability Standards Advisory (https://www.healthit.gov/standards-advisory).
    At Sec.  414.94(g)(1), we proposed to codify in regulations the 
seven requirements for qualified CDSMs set forth in section 
1834(q)(3)(B)(ii) of the Act. The statute requires qualified CDSMs to 
make available to the ordering professional specified applicable AUC 
and the supporting documentation for the applicable imaging service 
ordered. We do not interpret this requirement to mean that every 
qualified CDSM must make available every specified applicable AUC. In 
the CY 2016 PFS final rule with comment period, we allowed for the

[[Page 80413]]

approval of massive libraries of AUC (resulting from approvals for 
qualified PLEs with comprehensive and extensive libraries), yet we 
expressed our intention to establish priority clinical areas. While 
there is a statutory requirement to consult AUC for each applicable 
imaging service, we recognize that ordering professionals may choose to 
thoroughly improve their understanding of, and focus their internal 
quality improvement (QI) programs on, those priority clinical areas; 
and these areas will in turn serve as the basis for future outlier 
calculations.
    Consistent with that approach, we proposed to add a requirement in 
Sec.  414.94(g)(1)(iii) that qualified CDSMs must make available to 
ordering professionals, at a minimum, specified applicable AUC that 
reasonably encompass the entire clinical scope of all priority clinical 
areas. We encourage and expect some CDSMs, based on the needs of the 
professionals they serve, will choose to include a far more 
comprehensive set of AUC going above and beyond the minimum set as we 
understand many ordering professionals want such comprehensive access 
to AUC. When this Medicare AUC program is fully implemented, all 
ordering professionals must consult specified applicable AUC through a 
qualified CDSM for every applicable imaging service that would be 
furnished in an applicable setting and paid for under an applicable 
payment system in order for payment to be made for the service. 
However, when identifying the outlier ordering professionals who will 
be subject to prior authorization beginning in 2020, we anticipate 
focusing on consultation with specified applicable AUC within priority 
clinical areas rather than the universe of specified applicable AUC. 
The concept of priority clinical areas will allow us to implement an 
AUC program that combines two approaches to implementation allowing 
clinicians flexibility to either engage with a rapid rollout of 
comprehensive specified applicable AUC or adopt a focused approach to 
consulting AUC. Thus, they can choose their approach and select a CDSM 
and AUC set(s) that fit their needs and preferences, while being sure 
that each qualified CDSM will include AUC that address all priority 
clinical areas.
    We further proposed to add a requirement in Sec.  414.94(g)(1)(iv) 
of our regulations that qualified CDSMs must be able to incorporate 
specified applicable AUC from more than one qualified PLE. We believe 
this approach ensures that CDSMs can expand the AUC libraries they can 
provide access to represent AUC across all priority clinical areas 
(consistent with the requirements under proposed Sec.  
414.94(g)(1)(iii)). We do not necessarily expect that a single 
qualified PLE will develop AUC addressing every priority clinical area 
domain, especially since we believe that over time and through future 
rulemaking, the list of priority clinical areas will expand and cross 
additional clinical domains. Ensuring that qualified CDSMs are not 
limited in their technology to incorporating AUC from only one 
qualified PLE will help to ensure that ordering professionals will not 
be in a position of consulting a CDSM that cannot offer them access to 
AUC that address all priority clinical areas. As stakeholders continue 
to advance CDSM technology, we look forward to standards being 
developed and widely accepted so that AUC are incorporated in a 
standardized format across CDSM platforms. Increasing standardization 
in this area will move the industry closer to the goal of 
interoperability across CDSMs and EHRs.
    We also proposed to add a requirement in Sec.  414.94(g)(1)(i) that 
specified applicable AUC and related documentation supporting the 
appropriateness of the applicable imaging service ordered must be made 
available within the qualified CDSM. For example, the ordering 
professional would have immediate access to the full appropriate use 
criterion, citations supporting the criterion and a summary of key 
evidence supporting the criterion.
    We proposed to add a requirement in Sec.  414.94(g)(1)(ii), 
consistent with section 1834(q)(3)(B)(ii)(II) of the Act, that the 
qualified CDSM must clearly identify the appropriate use criterion 
consulted if the tool makes available more than one criterion relevant 
to a consultation for a patient's specific clinical scenario. We 
believe this is important since CDSMs that choose to incorporate a 
comprehensive AUC library may be offering the ordering professional 
access to AUC from multiple qualified PLEs. In such scenarios, it is 
important that the ordering professional knows which appropriate use 
criterion is being consulted and have the option to choose one over the 
other if more than one criterion accessible within the CDSM applies to 
the scenario.
    We proposed to add a requirement in Sec.  414.94(g)(1)(v), 
consistent with section 1834(q)(3)(B)(ii)(III) of the Act, that the 
qualified CDSM must provide to the ordering professional a 
determination, for each consultation, of the extent to which an 
applicable imaging service is consistent with specified applicable AUC 
or a determination of ``not applicable'' when the mechanism does not 
contain a criterion that would apply to the consultation. This 
determination would communicate the appropriateness of the applicable 
imaging service to the ordering professional. In addition to this 
determination, we also proposed that the CDSM provide the ordering 
professional with a determination of ``not applicable'' when the 
mechanism does not contain an appropriate use criterion applicable to 
that patient's specific clinical scenario.
    We proposed to add a requirement in Sec.  414.94(g)(1)(vi), 
consistent with section 1834(q)(3)(B)(ii)(IV) of the Act, that the 
qualified CDSM must generate and provide to the ordering professional 
certification or documentation that documents which qualified CDSM was 
consulted, the name and NPI of the ordering professional that consulted 
the CDSM and whether the service ordered would adhere to applicable 
AUC, whether the service ordered would not adhere to such criteria, or 
whether such criteria was not applicable for the service ordered. We 
proposed to require under Sec.  414.94(g)(1)(vi)(A) that this 
certification or documentation must be issued each time an ordering 
professional consults the qualified CDSM. Since Medicare claims will be 
filed only for services that are rendered to beneficiaries, we will not 
see CDSM consultation information on the claim form specific to imaging 
services that are not ordered. We believe that for the CDSM to be able 
to provide meaningful feedback to ordering professionals, information 
regarding consultations that do not result in imaging is just as 
important as information on consultations that do result in an order 
for advanced imaging.
    Thus, we proposed to require under Sec.  414.94(g)(1)(vi)(B) that 
the documentation or certification provided by the qualified CDSM must 
include a unique consultation identifier. This would be a unique code 
issued by the CDSM that is specific to each consultation by an ordering 
professional. This type of unique code may serve as a platform for 
future collaboration and aggregation of consultation data across CDSMs. 
In addition, at some point in the future, this unique code may assist 
in more seamlessly bringing Medicare data together with CDSM clinical 
data to maximize quality improvement in clinical practices and to 
iteratively improve the AUC itself. We proposed in Sec.  
414.94(g)(1)(vii), consistent with section 1834(q)(3)(B)(ii)(V) of the 
Act, that the specified applicable AUC content within qualified CDSMs 
be

[[Page 80414]]

updated at least every 12 months to reflect revisions or updates made 
by qualified PLEs to their AUC sets or to an individual appropriate use 
criterion. We proposed 12 months as the maximum acceptable time frame 
for updating content. We believed that in most cases it will be 
possible to update AUC content more frequently than every 12 months, 
particularly for cloud-based CDSMs. We further proposed in Sec.  
414.94(g)(1)(vii)(A) that qualified CDSMs have a protocol in place to 
more expeditiously remove AUC that are determined by the qualified PLE 
to be potentially dangerous to patients and/or harmful if followed.
    In addition, we proposed in Sec.  414.94(g)(1)(vii)(B) that 
qualified CDSMs must make available for consultation specified 
applicable AUC that address any new priority clinical areas within 12 
months of the priority clinical area being finalized by CMS. We believe 
this would allow the CDSM sufficient time to incorporate the AUC into 
the CDSM. Thus, any new priority clinical areas finalized, for example, 
in the CY 2018 PFS final rule that would be effective January 1, 2018, 
would need to be incorporated into a qualified CDSM by January 1, 2019. 
To accommodate this time frame, we would accept a not applicable 
determination from a CDSM for a consultation on a priority clinical 
area for dates of service through the 12-month period that ends, in 
this example, on January 1, 2019. We note that all qualified CDSMs that 
are approved by June 30, 2017, should be capable of supporting AUC for 
all priority clinical areas that are finalized in the CY 2017 PFS final 
rule.
    We proposed to add a requirement in Sec.  414.94(g)(1)(viii), 
consistent with section 1834(q)(3)(B)(ii)(VI) of the Act, that the 
qualified mechanism must meet privacy and security standards under 
applicable provisions of law. Potentially applicable laws may include 
the HIPAA Privacy and Security rules.
    We proposed to add a requirement in Sec.  414.94(g)(1)(ix), 
consistent with section 1834(q)(3)(B)(ii)(VII) of the Act, that 
qualified CDSMs must provide ordering professionals aggregate feedback 
in the form of an electronic report on an annual basis (at minimum) 
regarding their consultations with specified applicable AUC. Our intent 
is to require records to be retained in a manner consistent with the 
HIPAA Security Rule. To provide such feedback, and to make detailed 
consultation information available to ordering professionals, 
furnishing professionals (when they have authorized access to the 
CDSM), auditors and CMS, we proposed in Sec.  414.94(g)(1)(x) that a 
qualified CDSM must maintain electronic storage of clinical, 
administrative and demographic information of each unique consult for a 
minimum of 6 years. We believe CDSMs could fulfill this requirement in 
a number of ways, including involving a third party in the storage of 
information, as well as for providing feedback to ordering 
professionals. We recognize that these requirements represent a minimum 
floor that clinicians may choose to expand their local QI programs.
    In the event requirements under Sec.  414.94(g)(1) are modified 
through rulemaking during the course of a qualified CDSM's 5-year 
approval cycle, we proposed in Sec.  414.94(g)(1)(xi) that the CDSM 
would be required to comply with the modification(s) within 12 months 
of the effective date of the modification.
    The following is a summary of the comments we received on CDSM 
qualifications and requirements.
    Comment: We received numerous comments both for and against 
including qualifying CDSMs that are freestanding, web-based and 
operating outside of a certified EHR environment. Some of those 
commenters pointed out CMS statements indicating that ideally a CDSM 
would be seamlessly integrated into the clinical workflow, which could 
be possible when the CDSM is completely integrated within an ordering 
professional's EHR. Those in favor of a freestanding CDSM cited the 
importance of allowing choice as there are some instances where a 
freestanding mechanism may be preferred, particularly in cases of 
practitioners who do not use EHR technology or when integration of a 
CDSM involves high costs or other problems.
    Response: Particularly in the early stages of this program, we 
believe it is important to allow for the option of a freestanding 
mechanism that is independent of EHR technology, which is supported by 
section 1834(q)(3)(A)(iii)(II) of the Act. For some ordering 
professionals, this will allow compliance with the requirements of the 
program while still affording them time to make decisions regarding 
EHR-integrated CDSMs. In addition, as we understand the current 
marketplace, it is more likely that tools available free of charge may 
initially begin as web-based tools and, we note that, in accordance 
with section 1834(q)(1)(C) of the Act and as defined in Sec.  414.94(b) 
of our regulations, an applicable imaging service is one for which 
there is one or more qualified CDSM available free of charge.
    As noted, we believe examples of CDSMs that seamlessly integrate 
with EHRs, including those that operate outside of certified EHR 
technology, such as those that operate in the cloud, will likely be 
most effective in meeting clinicians' needs. As the market continues to 
mature, we would expect to see expanded availability of easily 
affordable tools that fully integrate AUC guidance with an efficient, 
clinician-friendly workflow within the interface of the primary health 
IT system they use in providing and documenting care.
    Comment: Several comments addressed our approach to CDSM 
requirements and noted that we focused on functionalities and 
capabilities of a mechanism for flexibility as opposed to prescriptive 
and specific IT standards. Commenters overwhelmingly favored the 
approach we proposed. Commenters indicated that the current state of 
CDSM technology is varied and there are not yet accepted, mature 
standards available. Many of these commenters encouraged CMS to 
cooperate with ONC, Health Level Seven International (HL7) and other 
standards organizations to work toward identifying standards in the 
near future. Some commenters, however, pointed out that the lack of 
standards early in the program could lead to chaos in the market and 
increase costs since CDSM developers will not have a set of standards 
on which to build.
    Response: We do not believe it is possible to require standards at 
this time due to the lack of agreement among stakeholders regarding 
which technical standards should be identified. We understand that some 
CDSM developers would prefer specific guidance from us to ensure they 
are building tools that meet the needs of the program; therefore, we 
will continue to work with stakeholders like ONC, HL7 and other 
standards organizations in an attempt to identify standards in the 
future. We will continue to actively encourage and welcome the input of 
stakeholders in this matter. As we expect that standards will continue 
to develop, evolve and gain acceptance, we believe that if we were to 
establish standards now for CDSMs, they would serve only as initial 
standards and may quickly become obsolete, potentially resulting in 
confusion for CDSM developers. We recommend that developers refer to 
ONC's Interoperability Standards Advisory (see https://www.healthit.gov/standards-advisory) for the most up-to-date standards 
available, which will likely be the basis of future development.
    Comment: The majority of commenters addressed the proposal to

[[Page 80415]]

require qualified CDSMs to contain, at a minimum, AUC that encompass 
the entire clinical scope of priority clinical areas. Commenters were 
split regarding the proposed requirement. Some commenters suggested 
that establishing a minimum scope for CDSM AUC content would add cost 
and be unnecessary for CDSMs that serve specialists. They favored 
allowing qualified CDSMs to determine, along with the ordering 
practitioners they serve, what AUC content would be made available. 
Other commenters favored requiring every CDSM to contain comprehensive 
AUC. Those commenters said this was the intent of section 218(b) of the 
PAMA since ordering professionals must consult for every advanced 
diagnostic imaging order, and they believe a comprehensive AUC 
requirement would take into account the lessons learned from the MID, 
avoiding frustration of ordering practitioners who attempt to consult 
AUC for imaging services and do not find relevant AUC within their 
CDSM. Other commenters agreed in principle with the proposal to 
establish a minimum floor of AUC but expressed concerns about the way 
CMS proposed that the priority clinical areas must be addressed, 
stating that the requirement that AUC encompass the entire clinical 
scope of priority clinical areas is not preferred and would draw in AUC 
without a strong evidence base.
    Response: We understand the significance of this aspect of the 
proposal, as well as the statements made by the commenters both for and 
against the requirement of an AUC floor, or the minimum AUC that must 
be available in a qualified CDSM, related to priority clinical areas. 
We reiterate that, in alignment with statute, ordering professionals 
must consult for each advanced diagnostic imaging service ordered. 
Therefore, we believe many professionals will choose a qualified CDSM 
that best fits their ordering patterns and clinical practice. Those 
ordering a wide array of imaging services or perhaps infrequently 
ordering imaging services across a broad clinical spectrum will align 
themselves with a mechanism that fits their needs and contains 
comprehensive specified applicable AUC in order to lessen the chances 
that they find no applicable AUC when they attempt to consult for a 
specific service.
    Specialists may seek to align themselves with a qualified CDSM that 
contains AUC more exhaustive in one area of medicine to reflect the 
imaging services that they order most often.
    We continue to believe that all tools should contain the specified 
applicable AUC needed by the ordering professionals they serve, as well 
as contain specified applicable AUC related to the priority clinical 
areas, to ensure that when an ordering professional needs to consult 
AUC for an imaging service, they will not have to go outside their 
regular qualified CDSM for the consultation. We reiterate that we 
envision choices for qualified CDSMs that allow efficient access by 
ordering professionals to one or more specialty-focused specified 
applicable AUC sets along with more comprehensive specified applicable 
AUC sets. We believe the determination of which AUC sets are made 
accessible through a given CDSM should be demand-driven by ordering 
professionals, who would be choosing from a marketplace of options for 
both CDSMs and AUC, all of which meet basic CMS qualifications to 
ensure implementation of the statutory requirements established under 
section 218(b) of the PAMA.
    To balance the requirement for the minimum floor, we believe it is 
important to reconsider the extent to which specified applicable AUC 
encompass the entire clinical scope of priority clinical areas. We 
agree that requiring the entire clinical scope may not yield 
consultation of the highest quality specified applicable AUC and that 
ordering professionals, particularly specialists, may not have a need 
for specified applicable AUC addressing the entire clinical scope of a 
priority clinical area. We do not expect this requirement to be met by 
AUC that address only a narrow clinical aspect of a priority clinical 
area. We believe addressing less than the entire clinical scope should 
still result in AUC that robustly fill priority clinical areas. To 
avoid forcing the development of AUC based on poor evidence just for 
the sake of having AUC we modified this language and expect it will 
enable qualified PLEs to confidently develop AUC that represent a high 
level of evidence. Therefore, we agree with commenters' suggestions 
that we keep the AUC floor but allow the requirement to be fulfilled if 
specified applicable AUC address less than the entire scope of the 
priority clinical areas and instead reasonably address the common and 
important clinical scenarios within each priority clinical area. We 
have included this modified language in Sec.  414.94(g)(1)(iii) and 
Sec.  414.94(g)(1)(vii)(C).
    Comment: We also received comments both for and against the 
proposed requirement that qualified CDSMs have the ability to 
incorporate specified applicable AUC from more than one qualified PLE. 
Some commenters agreed with the proposal while others suggested a more 
stringent requirement that the relationship between the CDSM and at 
least two PLEs already be established and formalized prior to 
qualifying a CDSM. Other commenters were against making this capability 
a requirement. They stated that CDSMs should have the flexibility to 
establish as many or as few relationships with PLEs as needed.
    Response: We are concerned that removing the requirement for 
qualified CDSMs to have the ability to incorporate specified applicable 
AUC from more than one qualified PLE would not be in alignment with our 
intention to incorporate specified applicable AUC that reasonably 
address the common and important clinical scenarios within each 
priority clinical area. This is important since many qualified CDSMs 
will need to work with more than one qualified PLE to accomplish such a 
requirement and also to align with CMS' goal to maintain flexibility of 
qualified CDSMs to incorporate the best available AUC. We believe, for 
now, it is appropriate to keep this requirement as a capability as 
opposed to requiring that qualified CDSMs demonstrate or share with CMS 
that such contracts are in place.
    In future years, as greater consensus emerges around common 
standards for interfacing with, uploading or otherwise referencing 
content that is not already in the system being used, we expect 
incorporation of AUC from a wide range of sources to become easier. We 
encourage systems to build standards-based mechanisms to incorporate 
external AUC and anticipate that such an approach would facilitate 
meeting this requirement.
    Comment: Commenters were pleased with the requirement that the CDSM 
make available related documentation to specified applicable AUC 
supporting the appropriateness of the imaging service ordered, and 
indicated that having access to citations and evidence summaries would 
be helpful.
    Response: We agree with commenters and have revised this 
requirement at Sec.  414.94(g)(1)(i) to increase clarity and confirm 
commenters' expressed understanding that qualified CDSMs must make 
available specified applicable AUC and its related supporting 
documentation.
    Comment: We received comments in favor of requiring the CDSM to 
identify which appropriate use criterion is being consulted in the 
event the mechanism includes AUC from more than one qualified PLE. 
Additionally, we received comments regarding who

[[Page 80416]]

makes the determination of which AUC within the mechanism is to be 
consulted. Some commenters wanted more freedom for the ordering 
professional to choose at the time of the consultation which AUC should 
be consulted in the event that there is more than one. Other commenters 
were in favor of more consistency and not allowing consultation of 
different AUC for the same clinical scenario.
    Response: We agree with commenters that the capability to choose is 
critically important when more than one qualified PLE's AUC are made 
available within the qualified CDSM. However, we do not believe we 
should be involved in determining whether the qualified CDSM chooses 
which specified applicable AUC to display upon consultation or whether 
the ordering practitioner should have the ability to select the 
specified applicable AUC to consult.
    Comment: Some commenters were concerned that the qualified CDSM 
should not be required to produce documentation when the result of a 
consultation is ``not applicable.'' In other words, the CDSM should not 
make the determination as to whether AUC available in the mechanism are 
relevant to the clinical scenario encountered by the ordering 
professional. Some suggested that the ordering professional should have 
the ability to notate that the result of a consultation with a CDSM was 
``not applicable'' and that the programing required for a mechanism to 
accurately determine ``not applicable'' could be extremely difficult 
and possibly inaccurate. In contrast, other commenters believed this 
ability to produce a ``not applicable'' response was very important and 
suggested that such information should be provided back to the 
qualified PLE to encourage future development of AUC to address that 
clinical scenario. Other commenters questioned how this type of 
response from the CDSM would be implemented in a clinical workflow 
where the CDSM is embedded within the EHR system. In those situations, 
they believed it was unnecessary to interrupt the workflow of the 
ordering practitioner only to alert them that there are no AUC 
available.
    Response: Due to the statutory requirement that AUC consultation 
occur with each advanced diagnostic imaging service ordered, we agree 
with commenters that it is important for the qualified CDSM to have the 
ability to return a ``not applicable'' result. This requirement will 
apply to document consistently that a consultation occurred and that no 
applicable AUC were found. Exactly how this ``not applicable'' response 
is formulated, we believe, can be somewhat flexible. ``Not applicable'' 
status could occur either when the AUC scope does not match the patient 
or their presentation or when no guideline exists that is appropriate 
to the patient or their presentation. If this situation is the case, it 
should be documented in the clinical or metadata around the particular 
application or attempted application of AUC.
    For example, if the system only contains AUC for ``uncomplicated 
headache'' but the patient has presented with ``headache, fever, and 
altered mental status'' the practitioner could make the determination 
that no applicable AUC exists for the patient under consideration and 
document this using a text box, check box, or drop-down menu. The 
documentation that the search did not match the existing AUC and that 
the practitioner agreed that the existing AUC was not applicable should 
be retained. Furthermore, manual intervention by the practitioner might 
not be required in all cases in which the use of AUC is not applicable. 
We expect that there would be a legitimate clinical reason for 
declaring a relevant AUC ``not applicable'' to the patient and that 
this reason would be documented. Likewise, we expect that when no 
applicable AUC exists relevant to the patient that would be similarly 
documented. CDSMs should not be designed to permit the use of ``not 
applicable'' overrides without a documented reason. Ideally, systems 
would evaluate scenarios in which AUC were not available on a regular 
basis so qualified PLEs can seek to fill in these gaps. We agree with 
commenters who believe the ``not applicable'' response should be able 
to occur in the background of some qualified CDSMs, such as a qualified 
CDSM integrated within an EHR system. We do not foresee any problems 
with this method so long as documentation is produced as a result and 
the needed information is available to be provided by the ordering 
professional to the furnishing professional.
    To allow flexibility for situations in which the ordering 
professional plays a role in the determination of ``not applicable,'' 
as well as those in which such determination is completely automated 
within the CDSM, we have revised our proposals in Sec.  414.94(g)(1)(v) 
to require qualified CDSMs only to determine the extent to which the 
applicable imaging service is consistent with specified applicable AUC 
with the removal of language requiring the tool to make a determination 
of ``not applicable'' when it does not contain a criterion that would 
apply to the consultation.
    We have also revised our proposals in Sec.  414.94(g)(1)(vi) to 
allow for qualified CDSMs that are embedded seamlessly into the EHR 
system to provide documentation or certification of CDSM consultation 
without stopping the workflow of the ordering professional. This minor 
change in language requires the qualified CDSM to develop the 
documentation or certification at the time of the order but will no 
longer explicitly state that it has to be provided directly to the 
ordering professional.
    For consistency, we have made a similar change to Sec.  
414.94(g)(1)(vi)(A) to allow for the documentation or certification to 
be generated but not necessarily issued directly to the ordering 
professional. This may be important to avoid workflow disruptions when 
an ordering professional is working within their EHR environment and 
the qualified CDSM working in the background does not alert the 
ordering professional when they have placed an order that is 
appropriate.
    We have further modified Sec.  414.94(g)(1)(vi) to more clearly 
state the requirements that the certification or documentation must 
document which CDSM was consulted; the name and NPI of the ordering 
professional that consulted the CDSM; whether the service ordered would 
adhere to specified applicable AUC or whether the specified applicable 
AUC consulted was not applicable to the service ordered.
    Comment: Commenters generally favored requiring qualified CDSMs to 
issue unique consultation identifiers, with a few commenters opposed to 
the requirement until there is more interoperability. Some of the 
commenters in favor of the requirements suggested that CMS should 
establish a standard taxonomy so the identifier issued would be truly 
unique and not risk duplication across CDSMs. A subgroup of these 
commenters favored this approach to allow for CMS to match Medicare 
claims for advanced imaging services with their CDSM consultations.
    Response: Although we agree that establishing a unique consultation 
identifier with standard taxonomy could facilitate adding more robust 
data to what is available on the Medicare claim, we do not have the 
repository and format for the identifiers that would be needed. We 
would further need to establish how the identifier could be 
meaningfully appended to the Medicare claim form. As such, it is not 
feasible at this time for CMS to require qualified CDSMs to create such 
a narrowly defined identifier. We are looking into options to determine 
possible future

[[Page 80417]]

roles for that identifier. In the interim, we believe the requirement 
should remain a functionality of qualified CDSMs. Furthermore, we are 
not yet certain which standard taxonomy is best suited to the needs of 
this program. We do, however, encourage stakeholders to work together 
and welcome qualified CDSMs to determine amongst themselves if they 
should begin issuing identifiers with an embedded taxonomy. It would 
seem as though this could be valuable in the future; having one number 
that provides information related to an individual CDSM consultation.
    Comment: We received several comments regarding how frequently a 
qualified CDSM should be required to update AUC content. Some 
commenters stated that 12 months to update content was too long and we 
received the suggestion of 3 months while others were comfortable 
beginning with 12 months, but once the program is more established the 
time should be reduced. Other commenters suggested that adherence to 
the timing requirement is based primarily on the PLE and how quickly 
after updating AUC the PLE provides that updated content to the CDSM. 
Commenters also noted that the time it takes to update a CDSM is based 
on the format of the content delivered by qualified PLEs as some CDSMs 
will still have much work to do to translate the qualified PLE provided 
content for use in the CDSM.
    Response: We thank commenters for pointing out that our 12-month 
requirement for qualified CDSMs to update AUC content was unclear with 
regard to when that 12-month period would begin. We agree that the time 
should begin when the qualified PLE provides updated specified 
applicable AUC content to the qualified CDSM and have modified language 
in Sec.  414.94(g)(1)(vii). Such updates would only take place if there 
are new or updated AUC content. We understand commenters who believe a 
12-month period is too long to update specified AUC and wish to clarify 
that the time begins when the specified applicable AUC content is 
updated. We had initially selected 12 months in an attempt to allow 
CDSMs to batch updates and integrate them into the CDSM. We will 
consider shortening this time period as the program continues and as 
CDSMs gain more experience. We note that this 12-month requirement for 
updating AUC is separate from the requirement that qualified PLEs 
review AUC at least every 12 months to confirm that the AUC reflect the 
latest clinical evidence.
    Comment: Some commenters stated that having a protocol in place to 
expeditiously remove dangerous or harmful AUC is not enough and that 
this could be accomplished very quickly, even in a matter of a day.
    Response: We agree that removing potentially harmful AUC is 
extremely important. At this time, we do not believe we have enough 
information about the types of CDSMs that will seek qualification to 
know their abilities to react quickly in these situations. Again, we 
believe expeditious removal is critical but we are not able to select a 
specific period of time at this point because there may be large 
differences in capabilities when removing AUC within one day, one week, 
or one month. We expect that CDSMs will remove potentially harmful AUC 
as expeditiously as possible, and will consider this issue for future 
rulemaking. Additionally, CDSMs may have differing components within 
their protocol to expeditiously remove potentially dangerous or harmful 
AUC which could include more timely communications with users regarding 
the removal through, for example, banner notices or push notifications.
    Comment: Commenters proposed that CDSMs should contain AUC that 
address the priority clinical areas at the time they are qualified by 
CMS as opposed to allowing 12 months for CDSMs to make them available.
    Response: We disagree with this comment and believe that, given the 
timing of the CY 2017 PFS final rule when the first priority clinical 
areas will be finalized, it is appropriate to allow for 12 months from 
the date of the final rule publication for qualified CDSMs to make 
available specified applicable AUC to address the priority clinical 
areas. There would otherwise not be enough time for qualified CDSMs to 
identify the needed specified applicable AUC and make them available 
within their mechanisms by March 1, 2017--the deadline for the first 
round of CDSM applications seeking CMS qualification.
    Comment: We received comments requesting additional clarification 
regarding the privacy and security standards that CDSMs must meet with 
some commenters suggesting that CMS provide additional guidance through 
subregulatory vehicles.
    Response: We are not the appropriate regulatory authority to 
specify privacy and security standards. However, there is existing 
guidance that we believe is instructive. For those CDSMs contained 
within certified EHR technology, or for which certification is sought 
for purposes of achieving ``meaningful use'', ONC provided the 
applicable privacy and security framework in its 2015 Edition Final 
Rule Health IT Certification. See the 2015 Edition Final Rule (80 FR 
62705, October 16, 2015) describing the privacy and security 
certification framework and specifying standards. In addition, the 
privacy and security standards set forth in the Health Insurance 
Portability and Accountability Act of 1996 (HIPAA) Privacy and Security 
Rules and enforced by the Office for Civil Rights (OCR) are potentially 
applicable. CDSMs would also be subject to applicable state laws and 
regulations regarding privacy and security.
    We are finalizing our proposals without change, but will continue 
to consult with other agencies and consider whether such standards may 
be specified in the future.
    We are finalizing our proposals without change, but will continue 
to consult with other agencies and consider whether such standards may 
be specified in the future.
    Comment: Commenters favored the requirement for CDSMs to provide 
aggregate feedback to ordering professionals. Some commenters suggested 
that CMS be prescriptive regarding the format and content of the 
reports providing feedback.
    Response: We do not agree that we should establish standards in 
feedback reporting to ordering professionals at this time. We encourage 
qualified CDSMs and ordering professionals to work together to 
determine the information that would be most valuable.
    Comment: We received several comments regarding the proposed 
requirement to electronically store CDSM consultation data for a 
minimum of 6 years. Some commenters stated that 6 years is an 
appropriate amount of time to store this information while others 
disagreed, stating that 6 years is overly burdensome. Some commenters 
are seeking greater detail surrounding exactly what data is required to 
be stored while others state that consultation information should be 
backed up by a third party or registry. These commenters were 
particularly concerned that data would be lost if a CDSM ceased 
operation.
    Response: Generally, we agree that CDSM consultation data should be 
backed up to ensure that the data is not lost; however, we do not agree 
that we should be prescriptive at this time about how qualified CDSMs 
must go about ensuring their data is stored and available for 6 years. 
We believe 6 years is an appropriate amount of time across which 
ordering professionals will want to assess their ordering patterns. In

[[Page 80418]]

addition, as we discussed earlier our intent to require a unique 
consultation identifier, we believe there is the potential for 
consultation to be very valuable from a QI perspective if aggregated 
across qualified CDSMs, and provided to qualified PLEs and possibly to 
CMS. Regarding the data elements that must be stored, we have not 
required that qualified CDSMs collect specific data fields. Therefore, 
at this time, we only have a more general requirement that includes the 
storage of clinical, administrative and demographic information for 
each consultation.
    Comment: A commenter suggested that qualified CDSMs ensure that 
ordering professionals have the opportunity to access content for 
educational purposes. This would allow ordering professionals to review 
information contained within the CDSM without having to link that 
consultation with an order for advanced imaging services.
    Response: We agree that ordering professionals would benefit from 
being able to use qualified CDSMs to further their knowledge about the 
appropriateness of advanced imaging services.
    In response to public comments, we are finalizing the following 
requirements at Sec.  414.94(g)(1):
     Make available specified applicable AUC and its related 
supporting documentation.
     Identify the appropriate use criterion consulted if the 
CDSM makes available more than one criterion relevant to a consultation 
for a patient's specific clinical scenario.
     Make available, at a minimum, specified applicable AUC 
that reasonably address common and important clinical scenarios within 
all priority clinical areas identified in paragraph (e)(5) of this 
section.
     Be able to incorporate specified applicable AUC from more 
than one qualified PLE.
     Determine, for each consultation, the extent to which the 
applicable imaging service is consistent with specified applicable AUC.
     Generate and provide a certification or documentation at 
the time of order that documents which qualified CDSM was consulted; 
the name and national provider identifier (NPI) of the ordering 
professional that consulted the CDSM; whether the service ordered would 
adhere to specified applicable AUC; whether the service ordered would 
not adhere to specified applicable AUC; or whether the specified 
applicable AUC consulted was not applicable to the service ordered. 
Certification or documentation must be generated each time an ordering 
professional consults a qualified CDSM and include a unique 
consultation identifier generated by the CDSM.
     Modifications to AUC within the CDSM must comply with the 
following timeline requirements: make available updated AUC content 
within 12 months from the date the qualified PLE updates AUC; and have 
a protocol in place to expeditiously remove AUC determined by the 
qualified PLE to be potentially dangerous to patients and/or harmful if 
followed; and make available for consultation within 12 months of a 
priority clinical area being finalized by CMS specified applicable AUC 
that reasonably address common and important clinical scenarios within 
any new priority clinical area.
     Meet privacy and security standards under applicable 
provisions of law.
     Provide to the ordering professional aggregate feedback 
regarding their consultations with specified applicable AUC in the form 
of an electronic report on at least an annual basis.
     Maintain electronic storage of clinical, administrative, 
and demographic information of each unique consultation for a minimum 
of 6 years.
     Comply with modification(s) to any requirements under 
paragraph (g)(1) of this section made through rulemaking within 12 
months of the effective date of the modification.
     Notify ordering professionals upon de-qualification.
d. Process for CDSMs To Become Qualified and Determination of Non-
Adherence
    We proposed that CDSMs must apply to CMS to be specified as a 
qualified CDSM. We proposed that CDSM developers who believe their 
mechanisms meet the regulatory requirements must submit an application 
to us that documents adherence to each of the requirements to be a 
qualified CDSM.
    We proposed to require in Sec.  414.94(g)(2) that CDSM developers 
must submit applications to CMS for review that document adherence to 
each of the CDSM requirements. Applications to be specified as a 
qualified CDSM must be submitted by January 1 of a year to be reviewed 
within that year's review cycle. For example, as proposed the first 
applications would be accepted from the date of publication of the PFS 
final rule until January 1, 2017. A determination on whether the 
applicants are qualified would be made by June 30, 2017. Applications 
must be submitted electronically to [email protected]. This 
process and timeline mirror the qualified PLE application and approval 
process and timeline. As we did for qualified PLEs, we will post a list 
of all applicants that we determine to be qualified CDSMs to our Web 
site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Appropriate-Use-Criteria-Program/index.html by 
June 30. We proposed that all qualified CDSMs must reapply every 5 
years and their applications must be received by January 1 during the 
5th year that they are qualified CDSMs. It is important to note that, 
as with PLE applications, the application for qualified CDSMs is not a 
CMS form; rather it is created by the applicant. A CDSM that is 
specified as qualified for the first 5-year cycle beginning on July 1, 
2017, would be required to submit an application for requalification by 
January 1, 2022. A determination would be made by June 30, 2022, and, 
if approved, the second 5-year cycle would begin on July 1, 2022.
    An example of our proposed timeline for applications and the 
approval cycle is as follows:
     Year 1 = July 2017 to June 2018.
     Year 2 = July 2018 to June 2019.
     Year 3 = July 2019 to June 2020.
     Year 4 = July 2020 to June 2021.
     Year 5 = July 2021 to June 2022 (reapplication is due by 
January 1, 2022).
    We believe it is important for us to have the ability to remove 
from the list of specified qualified CDSMs a CDSM that we determine 
fails to adhere to any of the qualification requirements, including 
removal outside of the proposed 5-year cycle. We proposed to state 
under Sec.  414.94(h) that, at any time, we may remove from the list of 
qualified CDSMs a CDSM that fails to meet the criteria to be a 
qualified CDSM or consider this information during the requalification 
process. Such determinations may be based on public comment or our own 
review and we may consult with the National Coordinator for Health 
Information Technology or her designee to assess whether a qualified 
CDSM continues to adhere to requirements.
    We invited comments on how we could streamline and strengthen the 
approval process for CDSMs in future program years. For instance, CMS 
may consider a testing framework for CDSMs that would validate 
adherence to specific standards that enable seamless incorporation of 
AUC across CDSMs.
    The following is a summary of the comments we received on the 
process for CDSMs to become qualified and determination of non-
adherence.

[[Page 80419]]

    Comment: Some commenters requested that CMS review and approve 
qualified CDSMs more quickly. Some commenters suggested the list of 
qualified CDSMs be available by April 1, 2017, rather than June 30, 
2017, so as to allow ordering professionals more time to prepare for 
implementation of consulting and reporting requirements on January 1, 
2018. A commenter also suggested approval of certain types of systems, 
such as those intended specifically for use in the emergency 
department, be prioritized.
    Response: We recognize and appreciate the desire to more quickly 
specify the first list of qualified CDSMs. However, given the detailed 
review that will be dedicated to each application along with agency 
internal processes, qualification of CDSMs before June 30, 2017 is not 
feasible. As with qualified PLE applications, which will be under 
review at the same time, we intend to treat each applicant with the 
same level of detail and attention and will not prioritize some over 
others.
    Comment: Some commenters cited insufficient time for CDSMs to 
incorporate requirements between the release of the final CDSM 
requirements, on or around November 1, 2016, and the January 1, 2017 
due date for qualified CDSM applications. These commenters requested 
that CMS delay the deadline and accept applications later into the year 
for this first round of applicants. Due to the limited time between 
finalization of CDSM requirements and the application deadline, another 
commenter recommended that CDSMs be qualified based on their commitment 
to support required functionality, rather than an attestation that the 
existing functionality is fully implemented in a CDSM.
    Response: We recognize the challenge CDSM developers may have 
submitting applications by January 1, 2017, and have extended the 
deadline only for the first round of applications to March 1, 2017. To 
this end, CDSMs will become qualified if they provide evidence that 
supports that they meet all CDSM requirements at the time of 
application.
    We further agree with commenters that qualification should be 
available to CDSMs that demonstrate a commitment to meeting the 
requirements. CDSM applicants whose applications are received by March 
1, 2017 but who are not able to provide evidence that all requirements 
are met at the time of application will have the opportunity to receive 
preliminary qualification. Applicants eligible for a preliminary 
qualification must demonstrate a commitment to meeting the requirements 
by including expected dates by which each requirement is expected to be 
met and information documenting how they intend to meet them. 
Applicants that meet most but not all of the requirements at the time 
of application will be considered only for preliminary qualification.
    CDSMs that receive preliminary qualification must achieve full 
qualification before the implementation of the consultation and 
reporting requirements. As CDSMs move from preliminary qualification to 
full qualification upon meeting the requirements, CMS will update the 
information on the AUC Web site. For those who are not able to achieve 
full qualification by the time of program implementation, preliminary 
qualification will terminate and they will be eligible to reapply in 
the next annual application cycle. For CDSMs that received preliminary 
qualification and are later converted to full qualification status, 
their preliminary period will be included as part of their 5-year 
approval period.
    We encourage CDSMs to strive to meet all requirements by the March 
1, 2017 application submission deadline, or as soon thereafter as 
possible, in order to receive full qualification status. We believe 
this policy strikes a balance between providing sufficient time for 
CDSMs to prepare for full implementation, while also providing ordering 
professionals information on CDSMs' qualification status to assist them 
in making procurement decisions.
    Comment: Commenters recommended that CMS require CDSMs to have 
already demonstrated successful implementation of the mechanism and 
have established relationships in place with multiple PLEs whose AUC 
already populate the mechanism.
    Response: We are finalizing section 414.94(g)(2) to state that CDSM 
developers must submit applications that document adherence to each 
CDSM requirement in Sec.  414.94(g)(1). As such, we expect to receive 
applications from CDSMs that have already established these 
requirements and have experience with adhering to them. We believe that 
the final requirements largely address the above comment; however, we 
require that qualified CDSMs be able to incorporate specified 
applicable AUC from more than one qualified PLE. Therefore, we do not 
interpret this to require that qualified CDSMs must actually 
incorporate AUC from more than one qualified PLE in order to become 
qualified, provided concurrent requirements are also met.
    Comment: A commenter suggested CMS use the qualification process to 
ensure AUC specific to the needs of the elderly are incorporated into 
qualified CDSMs. This commenter further recommended CMS engage 
stakeholders with expertise in geriatrics when selecting AUC and CDSMs.
    Response: We are confident that qualified PLEs include relevant AUC 
within their libraries for the Medicare population and are supportive 
of multidisciplinary teams composed of members with expertise even 
beyond those required in Sec.  414.94(c)(1)(ii). As indicated in the CY 
2016 PFS final rule with comment period (81 FR 71106), we encourage 
teams to be larger and include other stakeholders.
    Comment: Some commenters requested that CMS make all CDSM 
applications public. Commenters also suggested that CMS interact with 
applicants to communicate any questions or issues with the application 
prior to making a qualification determination.
    Response: We appreciate the interest and contributions of all 
stakeholders as we implement this program and understand the desire to 
learn more about CDSM applicants; however, we will not systematically 
release this information. To encourage stakeholder interactions and to 
assist those seeking more information about qualified CDSMs, we intend 
to post basic information about each qualified CDSM on the AUC Web site 
once the list is finalized. This should enable stakeholders to research 
and reach out directly to qualified CDSMs to learn more about the 
mechanism in support of making well informed choices moving forward. 
During the review process, we intend to engage in the same type of 
dialogue with CDSM applicants as we have with PLE applicants. During 
the review of the first set of PLE applications, we held at least one 
conference call with each applicant, often held additional calls; and 
we also exchanged numerous emails to ensure questions and concerns from 
both parties involved, CMS and the applicant, were addressed, discussed 
and resolved as thoroughly as possible. We fully intend to engage in 
the same open and transparent process for CDSM applicants as well. We 
remind CDSM applicants that they may mark their applications as 
containing proprietary business information and we will protect that 
information to the full extent permitted by law.
    Comment: Some commenters expressed concerns regarding CDSMs that 
either fail to requalify after the first 5-year qualification period or 
are found to no longer be adherent to CDSM requirements during the 5-
year qualification period. A commenter

[[Page 80420]]

recommended that CDSMs be temporarily suspended before being 
disqualified. Other commenters recommended that CMS ensure ordering 
professionals using these mechanisms not be penalized while they seek a 
new mechanism for consultation. One commenter stated that the CDSM be 
required to notify ordering professionals of such a disqualification. 
Other commenters requested that qualification of CDSMs not be disrupted 
due to standard technical updates to CDSMs made during the 5-year 
qualification period.
    Response: We agree that CDSM qualification should not be disrupted 
due to a standard update assuming no changes are made to functionality 
that result in non-adherence to the CDSM requirements in Sec.  
414.94(g)(1). We agree that qualified CDSMs should be required to 
notify ordering professionals in the event of disqualification and have 
added this requirement under Sec.  414.94(g)(1)(xii).
    Comment: Some commenters requested that CMS extend the amount of 
time qualified CDSMs are qualified to allow for more time to prepare 
for requalification. Other commenters recommended that CMS shorten the 
qualification period to better align with the pace of change to EHR 
security and interoperability standards with those of CDSMs.
    Response: We believe that a 5-year qualification period for 
qualified CDSMs is an appropriate timeframe at this time. As the AUC 
program evolves, we could revisit this requirement through future 
rulemaking should we find that a modification is warranted.
    Comment: Some commenters suggested and supported CMS developing a 
testing framework for CDSMs, focusing especially on interoperability, 
and/or convene stakeholders for the purpose of creating such a 
framework.
    Response: We will continue to explore opportunities to develop a 
testing framework for qualified CDSMs with ONC and other standards 
groups.
    Comment: Several commenters requested that CMS provide details on 
the free CDSM tool required under section 218(b) of the PAMA. Another 
commenter stated that all qualified CDSMs should have a free version 
available.
    Response: As stated in the CY 2017 PFS proposed rule, the Secretary 
did not propose to establish any free CDSM at this time. Therefore, a 
free CDSM would need to apply for qualification just as any other CDSM. 
We disagree that all qualified CDSMs must have a free version available 
as section 1834(q)(1)(C) of the Act defines the applicable imaging 
services for which AUC consultation is required as those for which 
there is at least one free mechanism available for AUC consultation. 
There is not a requirement that every mechanism have a version 
available for free.
    In response to the comments, we have added language to Sec.  
414.94(g)(2)(ii) delineating the process and requirements to include 
preliminary qualification. The first application cycle following the 
publication of this CY 2017 PFS final rule will be extended to March 1, 
2017 for all CDSM applicants. As opposed to full qualification by which 
CDSMs have documented how all requirements are met at the time of 
application, preliminary qualification allows CDSMs to document, if not 
already met, how and when such requirements are reasonably expected to 
be met. The preliminary qualification period ends when we implement the 
consulting and reporting requirements under this program as specified 
in Sec.  414.94(g)(2)(ii)(B). We have also added Sec.  
414.94(g)(1)(xii) to require qualified CDSMs to notify ordering 
professionals upon de-qualification.
e. Consultation by Ordering Professional and Reporting by Furnishing 
Professional
    Although we continue to aggressively move forward to implement this 
AUC program, ordering professionals will not be expected to consult AUC 
using qualified CDSMs by January 1, 2017. At the earliest, the first 
qualified CDSM(s) will be specified on June 30, 2017. We anticipate 
that some ordering professionals could be able to begin consulting AUC 
through qualified CDSMs very quickly as some may already be aligned 
with a qualified CDSM.
    We expect that furnishing professionals will be required to begin 
reporting January 1, 2018. This timeframe is necessary to allow time 
for ordering practitioners who are not already aligned with a qualified 
CDSM to research and evaluate the qualified CDSMs so they may make an 
informed decision. While there will be further rulemaking next year, we 
are announcing this date because the agency expects physicians and 
other stakeholders/regulated parties to begin preparing themselves to 
begin reporting on that date. We will adopt procedures for capturing 
this information on claims forms and the timing of the reporting 
requirement through PFS rulemaking for CY 2018.
    As we expect to implement the AUC consultation and reporting 
requirements under section 1834(q)(4)(A) and (B) of the Act on January 
1, 2018, we requested feedback from the public to include a discussion 
of specific operational considerations that we should take into account 
and include in such rulemaking. For example, we noted that commenters 
could consider alternatives for reporting data on claims and for 
seeking exceptions, as discussed below. We also requested information 
on the barriers to implementation along this timeline that allows 
ordering and furnishing professionals to be prepared to consult AUC and 
report consultation information on the claims and whether separate 
rulemaking outside of the payment rule cycle would be preferred.
    Under section 1834(q)(4)(B) of the Act, Medicare claims for 
applicable imaging services furnished in applicable settings can only 
be paid under the applicable payment systems if certain information is 
included on the claim including: which qualified CDSM was consulted by 
the ordering professional for the service; whether the service, based 
on the CDSM consultation, adheres to specified applicable AUC, does not 
adhere to specified applicable AUC or whether no criteria in the CDSM 
were applicable to the patient's clinical scenario; and, the national 
provider identifier (NPI) of the ordering professional. This section 
further allows payment for these services only if the claim contains 
such information beginning January 1, 2017. To develop and 
operationalize a meaningful solution to collecting new AUC 
consultation-related information on the claims, we must diligently 
evaluate our options taking into account the vast number of claims 
impacted and the limitations of the legacy claims processing system. 
Additionally, in the case of advanced imaging services, related claims 
are already required to append certain HCPCS modifiers and G codes for 
purposes of proper payments. In the recent implementation of section 
218(a) of the PAMA, we established a HCPCS modifier for CT services 
rendered on machines that do not meet an equipment standard. It is 
important that we understand and evaluate how the additional 
requirements for AUC reporting would impact the information that is 
already required for advanced imaging services. Moving too quickly to 
satisfy the reporting requirement could inadvertently result in 
technical and operational problems that could cause delays in payments.
    Section 1834(q)(4)(C) of the Act includes exceptions that allow 
claims to be paid even though they do not include the information about 
AUC consultation by the ordering professional. We believe

[[Page 80421]]

that, unless a statutory exception applies, an AUC consultation must 
take place for every order for an applicable imaging service furnished 
in an applicable setting and under an applicable payment system. We 
further believe that section 1834(q)(4)(B) of the Act accounts for the 
possibility that AUC may not be available in a particular qualified 
CDSM to address every applicable imaging service that might be ordered; 
and thus, the furnishing professional can meet the requirement to 
report information on the ordering professional's AUC consultation by 
indicating that AUC is not applicable to the service ordered.
    We are considering the mechanisms for appending the AUC 
consultation information to various types of Medicare claims and expect 
to develop requirements for appending such information in the CY 2018 
PFS rulemaking process. We encouraged stakeholders interested in 
sharing feedback related to reporting and claims processing to do so as 
part of the comment period to inform this final rule. We were 
particularly interested in receiving feedback on, for example, whether 
the information should be collected using HCPCS level II G codes or 
HCPCS modifiers.
    The following is summary of the comments we received on 
consultation by ordering professionals and reporting by furnishing 
professionals.
    Comment: In response to our request for information about how to 
reflect AUC consultation on the Medicare claim form, we received 
extensive feedback. In particular, we requested feedback on using HCPCS 
modifiers or HCPCS Level II G codes to identify the required 
information about the consultation on the Medicare claim form. Some 
commenters recognized that these options for reporting were feasible 
and could capture all information needed for the claim. Some commenters 
noted that the number of modifiers possible on a claim form was limited 
and questioned whether all information required for reporting could be 
captured by modifies. Some commenters noted that it would be difficult 
for G codes to include all required information for reporting which 
would necessitate multiple G codes and result in greater administrative 
burden for reporting.
    Some commenters noted that modifiers and G codes were not ideal 
solutions and provided alternate suggestions. Several commenters 
addressed use of the UB04/837i for reporting. Some noted that such 
proposals would not work when more than one test is performed on the 
same date of service because the form does not allow reporting by line 
item. Others noted that the UB04/837i form would allow providers to 
report individual line item services, but limited space on the form 
prevents specific line items from being linked to other information 
like an ordering professional, diagnosis code or authorization code to 
each item.
    Many commenters recommended the use of a specific code issued by 
the CDSM that would include alphanumeric characters to represent each 
of the required elements for reporting. Commenters suggested that this 
code could be placed in field 23 (prior authorization field) of the 
837P claim form. Another commenter recommended placing a unique 
identifier in field 19 of the 1500 form. Two other suggestions included 
placing the unique identifier on both the professional component and 
technical component (or OPPS) claims, identifying field 63 on the 837i 
form, or submitting a ``dummy'' claim with the unique identifier to 
accompany all claims for applicable imaging services furnished.
    A commenter suggested that the reporting requirement should apply 
to providers who submit claims on a 155/837P because line item 
reporting is available. We also received a comment suggesting CMS could 
work with X12 to add the data to the claim more quickly through the K3 
segment of the electronic claim, which is reserved for new data 
required under legislation and regulation. A commenter suggested that 
the reporting requirements use a framework allowing for regular 
feedback to ordering professionals regarding their ordering patterns. 
Another commenter suggested a simple attestation that such information 
would be available to CMS upon request. A commenter recommended that 
codes be modified to reflect additional costs of CDSM services.
    Response: We appreciate the extensive and thoughtful information 
provided in response to our request. These comments will be 
instrumental in our development of claims reporting requirements.
    Comment: Many commenters requested the release of claims reporting 
information as quickly as possible and before rulemaking in CY 2017. 
Multiple commenters insisted that reporting requirements be provided 
before CDSMs apply for qualification as they need this information to 
design their mechanisms and comply with the program requirements. Some 
commenters requested responses to questions about precisely which codes 
will be required and their specific location on the claim form.
    Response: Although we have been actively working with components 
throughout the agency to develop and establish claims processing 
instructions and reporting details for the AUC program, given the 
complexities of the Medicare legacy claims processing systems and the 
extensive interactions necessary to properly develop and implement 
these requirements, we intend to include them in rulemaking for the CY 
2018 PFS and not earlier through subregulatory processes or alternate 
rulemaking cycles. While we appreciate that CDSMs could benefit from 
having information on claims reporting requirements, we note that the 
information to be submitted on the claim is identified in section 
1834(q)(4)(B) of the Act and CDSMs may begin preparing themselves for 
reporting the following items: (1) Which qualified CDSM was consulted 
by the ordering professional for the service; (2) whether the service, 
based on the CDSM consultation, adheres to specified applicable AUC, 
does not adhere to specified applicable AUC or whether no criteria in 
the CDSM were applicable to the patient's clinical scenario; and (3) 
the NPI of the ordering professional. We remind CDSMs that Sec.  
414.94(g)(1)(vi) requires qualified CDSMs to generate and provide a 
certification or documentation at the time of order that documents 
which CDSM was consulted; the name and NPI of the ordering professional 
that consulted the CDSM; whether the service ordered would adhere to 
specified applicable AUC or whether the specified applicable AUC 
consulted was not applicable to the service ordered. The information 
qualified CDSMs must document encompasses information required for 
claims reporting under section 1834(q)(4)(B) of the Act.
    Comment: Some commenters requested that CMS rigorously test the 
claims reporting requirements or facilitate a workgroup to engage in 
this testing before reporting requirements are established and 
effective. One commenter recommended that CMS have a way to account for 
orders that may appear to be appropriate based on AUC consultation but 
are actually duplicative and redundant.
    Response: Thank you for this suggestion.
    Comment: A commenter requested that CMS develop an appeals process, 
and share that information in a timely manner.
    Response: Appeal rights will continue to apply to claims after 
implementation of this program. Changes to the appeals process are 
outside the scope of this rule.

[[Page 80422]]

    Comment: Some stakeholders have requested CMS provide opportunities 
to involve and accept feedback from all stakeholders in the development 
of the claims reporting requirements. One commenter recommended that 
CMS create an agency-wide task force to work with claims standards 
organizations to address all demands that will be placed on the claim 
form due to AUC reporting.
    Response: We appreciate the interest by stakeholders in 
contributing to the development of these requirements. We are happy to 
receive correspondence and feedback at any time through the AUC program 
email box [email protected], and we encourage stakeholders to 
provide information to us as early as possible to help inform our 
proposals for requiring claims reporting starting January 1, 2018. We 
will continue to work with stakeholders as we develop reporting 
requirements.
    We appreciate all information shared by commenters. We will use 
this feedback to inform CY 2018 rulemaking where we expect to establish 
the requirements for reporting under the AUC program.
f. Exceptions to Consulting and Reporting Requirements
    Section 1834(q)(4)(C) of the Act provides for certain exceptions to 
the AUC consultation and reporting requirements under section 
1834(q)(4)(B) of the Act. First, the statute provides for an exception 
under section 1834(q)(4)(C)(i) of the Act where an applicable imaging 
service is ordered for an individual with an emergency medical 
condition as defined in section 1867(e)(1) of the Act. We believe this 
exception is warranted because there can be situations in which a delay 
in action would jeopardize the health or safety of individuals. Though 
we believe they occur primarily in the emergency department, these 
emergent situations could potentially arise in other settings. 
Furthermore, we recognize that most encounters in an emergency 
department are not for an emergency medical condition as defined in 
section 1867(e)(1) of the Act.
    We proposed to provide for an exception to the AUC consultation and 
reporting requirements under Sec.  414.94(i)(1) for an applicable 
imaging service ordered for an individual with an emergency medical 
condition as defined in section 1867(e)(1) of the Act. For example, if 
a patient, originally determined by the clinician to have an emergency 
medical condition prior to ordering an applicable imaging service, is 
later determined not to have had an emergency medical condition at that 
time, the relevant claims for applicable imaging services would still 
qualify for an exception. To meet the exception for an emergency 
medical condition as defined in section 1867(e)(1) of the Act, the 
clinician only needs to determine that the medical condition manifests 
itself by acute symptoms of sufficient severity (including severe pain) 
such that the absence of immediate medical attention could reasonably 
be expected to result in: placing the health of the individual (or a 
woman's unborn child) in serious jeopardy; serious impairment to bodily 
functions; or serious dysfunction of any bodily organ or part. Orders 
for advanced imaging services for beneficiaries with an emergency 
medical condition as defined under section 1867(e)(1) of the Act are 
excepted from the requirement to consult AUC. We intend through the CY 
2018 PFS proposed rule to propose more details around how this 
exception will be identified on the Medicare claim.
    The second exception is under section 1834(q)(4)(ii) of the Act for 
applicable imaging services ordered for an inpatient and for which 
payment is made under Medicare Part A. We proposed to codify this 
exception in new Sec.  414.94(i)(2). While we are including this 
exception consistent with statute, we note that if payment is made 
under Medicare Part A, the service would not be paid under an 
applicable payment system, such that the AUC consultation and reporting 
requirements under Sec.  414.94 would never apply.
    The third exception is under section 1834(q)(4)(iii) of the Act for 
applicable imaging services ordered by an ordering professional who the 
Secretary determines, on a case-by-case basis and subject to annual 
renewal, that consultation with applicable AUC would result in a 
significant hardship, such as in the case of a professional practicing 
in a rural area without sufficient Internet access. We proposed to 
codify this exception in new Sec.  414.94(i)(3) by specifying that 
ordering professionals who are granted a significant hardship exception 
for purposes of the Medicare EHR Incentive Program payment adjustment 
under Sec.  495.102(d)(4)(i), (ii), or (iii)(A) or (B) of our 
regulations would also be granted a significant hardship exception for 
purposes of the AUC consultation requirement. We proposed, to the 
extent technically feasible, that the year for which the eligible 
professional is excepted from the EHR Incentive Program payment 
adjustment is the same year that the ordering professional is excepted 
from the requirement to consult AUC through a qualified CDSM. We 
proposed not to adopt the Meaningful Use significant hardship exception 
under Sec.  495.102(d)(4)(iv)(C) as an exception for purposes of the 
AUC consultation requirement. Therefore, ordering professionals with a 
primary specialty of anesthesiology, radiology or pathology will not be 
categorically excepted from AUC consultation requirements.
    We believe there is substantial overlap between the eligible 
professionals that would seek a hardship exception under the EHR 
Incentive Program and those ordering professionals that would seek a 
hardship exception under the AUC program and, as such, this proposal 
would be administratively efficient. Using an existing program is the 
most efficient and expeditious manner to implement the significant 
hardship exception under the Medicare AUC program. We also believe it 
is the only administratively feasible option for a national significant 
hardship identification process that can be implemented by January 1, 
2018, though we intend to revisit this option for years after 2018 as 
the current EHR Incentive Program payment adjustment is set to expire 
after the 2018 payment adjustment year as the Merit-Based Incentive 
Payment System takes effect. In addition, below we discuss 
considerations for a supplemental process to account for hardships for 
ordering professionals that are not eligible to apply for a significant 
hardship under the EHR Incentive Program (for example, non-physician 
practitioners) and ordering professionals that incur a significant 
hardship outside of the EHR Incentive Program application deadline.
    The criteria for significant hardships under the EHR Incentive 
Program relate to insufficient internet connectivity, extreme and 
uncontrollable circumstances that prevent the EP from becoming a 
meaningful EHR user, practicing for less than 2 years, practicing at 
multiple locations with the inability to control the availability of 
Certified EHR Technology, lack of face-to-face or telemedicine 
interaction with patients or a primary specialty designation of 
anesthesiology, radiology or pathology. We believe that most of these 
criteria would be relevant to demonstrate a significant hardship for 
ordering professionals to consult AUC. Regarding hardship exceptions 
for certain specialty designations, based on Medicare claims data for 
advanced imaging services from the first 6 months of 2014, 
approximately 1.2 percent of those claims were for advanced imaging 
services that had been ordered by a professional with one of the three

[[Page 80423]]

primary specialty designations. While their combined ordering volume is 
small, we do not believe that categorical exclusion of certain 
specialties of which the practitioner selected as their primary 
specialty designation for Medicare enrollment would necessarily be 
appropriate under the AUC program. Since eligible professionals in 
these three specialties are categorically excepted from the EHR 
Incentive Program payment adjustment, few of them would have applied 
for an exception on the other grounds. Therefore, we must consider 
another mechanism to evaluate whether ordering practitioners with these 
medical specialties experience a significant hardship for purposes of 
the AUC program.
    We understand that there are differences between the purpose and 
timing of significant hardship exceptions for the EHR Incentive Program 
and the Medicare AUC program. Foremost, a significant hardship under 
the EHR Incentive Program is generally based on a hardship that 
occurred in a prior period, impacting meaningful EHR use that would 
affect payments in a subsequent calendar year. For example, a 
professional that submits an application in March 2017 and qualifies 
for the hardship exception under the EHR Incentive Program would be 
exempt from the EHR payment adjustment for calendar year 2018. Although 
significant hardship exceptions for the EHR payment adjustment year 
generally are based on the existence of a hardship in a prior period, 
we believe it would be appropriate for these professionals to also 
qualify for a significant hardship exception for purposes of the AUC 
consultation requirement during calendar year 2018. It is also our 
best, most efficient, administratively feasible means of determining 
significant hardships for ordering professionals for CY 2018.
    We also recognize the possibility that an ordering professional 
could suffer a significant hardship during the AUC program year, and 
therefore, is immediately unable to consult AUC. In addition, while 
again we believe there is significant overlap, there may be 
circumstances where an ordering professional is not considered to be an 
eligible professional for purposes of the Medicare payment 
adjustmentsunder the EHR Incentive Program (for example, an ordering 
professional that is not a physician). We solicited feedback from 
commenters regarding processes that could be put in place to 
accommodate ordering professionals with primary specialties that 
categorically receive significant hardship exceptions under the EHR 
Incentive Program, real-time hardships that arise during a year, and 
ordering professionals that are not eligible to apply using the EHR 
Incentive Program significant hardship exception process and need to 
seek a significant hardship exception for the purposes of the AUC 
program. We believe this would involve only a small number of ordering 
professionals. To the extent technically feasible, some possibilities 
for implementing such hardship exceptions may include Medicare 
Administrative Contractors granting hardships on a case-by-case basis 
or establishing another mechanism to allow for self-attestation of a 
significant hardship for a defined period of time (for example, a 
calendar quarter or a calendar year). We intend to propose a process in 
the CY 2018 PFS proposed rule.
    We invited the public to comment on our proposal for ordering 
professionals granted a hardship exception for the EHR Incentive 
Program for payment adjustment year 2018 to also be granted a hardship 
exception to the Medicare AUC program for those years. We proposed that 
the year the practitioner is excepted from the EHR Incentive Program 
payment adjustment is the same year that the practitioner would be 
excepted from consulting AUC.
    The following is a summary of the comments we received on the 
proposed exceptions to consulting and reporting requirements:
    Comment: Most commenters concurred that if an eligible professional 
is exempt from the EHR Incentive Program payment adjustment, then the 
ordering professional should also be exempt from AUC consultation for 
applicable imaging services. Commenters generally were concerned that 
CMS proposed a more limited set of hardship exceptions than what is 
currently available under the EHR Incentive Program. For example, we 
did not propose to allow certain medical specialty designations to be 
exempt from CDSM consultations even though they are automatically 
exempted from the EHR Incentive Program. One commenter observed that 
for the purposes of the AUC program only some EHR Incentive Program 
hardships may be applicable. One commenter suggested that the operation 
of this exceptions process be automatic for those already enrolled in 
the EHR Incentive Program hardship exception. Another commenter noted 
their observation that while making the EHR Incentive Program 
operational for the AUC program, it may not allow all ordering 
professionals (physicians and non-physician practitioners) with a 
significant hardship to seek such exceptions because the EHR Incentive 
Program is limited to physicians.
    Response: We disagree with the commenters suggesting that we 
replicate under the AUC program all hardship exceptions under the EHR 
Incentive Program, including exceptions for three medical specialty 
designations. We do not believe our program is authorized to except 
ordering professionals based on their specialty. Therefore, we have 
decided at this time to proceed with finalizing the significant 
hardship exceptions under the AUC program as proposed. We remind all 
commenters that this proposal included a significant hardship exception 
for those ordering professionals that can demonstrate inability to 
control the availability of Certified EHR Technology.
    We agree with the commenters that the agency need not create a 
separate process for granting a significant hardship exception where 
practitioner overlap is available but we understand that a separate 
process will need to be established to handle significant hardship 
requests from non-physician practitioners that order advanced imaging 
tests as they are not currently included in the EHR Incentive Program. 
However, we remind all commenters that we intend to revisit this option 
for years after 2018 as the current EHR Incentive Program payment 
adjustment is set to expire after the 2018 payment year as the Merit-
Based Incentive Payment System takes effect.
    Comment: A few commenters urged CMS to consider additional 
exceptions for ordering professionals that may encounter hardship in 
attempting to consult of specified applicable AUC for an applicable 
imaging service. The additional exceptions submitted by commenters 
included (1) ordering professionals who lack control over the 
availability of CEHRT for more than 50 percent of patient encounters, 
such as in the case of some hospital-based physicians; (2) any 
physician who does not have access to a low-cost integrated CDSM; (3) 
ordering professionals within a small practice or with a low-volume of 
advanced imaging services; (4) those who participate in either 
alternative payment models or accountable care organizations; (5) 
physicians who practice in a patient-centered medical home; (6) any 
professional using a qualified CDSM that is either disqualified or not 
re-qualified; (7) any group or institution in the process of 
implementing a new electronic medical record and billing system; (8) 
clinicians who receive a 0% weighting for the advancing care 
information performance

[[Page 80424]]

category under the MIPS; and (9) claims for patients in clinical 
trials.
    Response: We appreciate the additional feedback received about 
additional categories of hardship that could be excepted from the 
consulting and reporting requirements. Although we did not propose 
additional hardship categories outside of the EHR Incentive Program in 
this year's rule, we will take these comments into account as we 
consider hardship exceptions in the CY 2018 PFS proposed rule.
    Comment: Other commenters were not concerned with the determination 
of the hardship exceptions for ordering professionals, and instead 
raised concerns that a furnishing professional may not be able to 
accurately determine whether an ordering professional qualifies for a 
hardship exception. Another commenter proposed a potential solution to 
the other commenters' concerns and recommended to CMS that any ordering 
professional with a hardship exception should have a special NPI 
designation. Other commenters did not propose such mechanisms and 
encouraged CMS to address this concern in future rulemaking.
    Response: We will work internally to consider this concern and may 
address it in future rulemaking.
    Comment: Commenters generally supported exceptions to AUC 
consultation and reporting requirements for applicable imaging services 
ordered for an individual with an emergency medical condition; however, 
there was disagreement on how best to implement this exception. 
Commenters stated that ambiguity regarding whether an emergency medical 
condition is present could cause a delay in the delivery of emergency 
services to patients and requested clarification on the application of 
the AUC program in emergency departments and exceptions for certain 
emergency services. A few commenters offered an alternative exception 
from AUC consultation for all emergency departments. One commenter 
proposed a simple attestation process that does not further divert 
physician time away from patients. Some commenters expected that to 
operationalize this exception, any service with revenue codes in the 
range of 045X or 0516 or place of service code 23 would be exempt. 
Other commenters recognized and remarked to CMS that encounters that 
may occur outside the emergency department may also be ordered for an 
individual with an emergency medical condition. Another commenter 
explained that one problem with creating an exception for individuals 
with an emergency medical condition is that the ordering professional 
may not be in a position to make such a determination. As an 
alternative recommendation, one commenter suggested that a ``reasonable 
person'' should make the determination as to whether an emergency 
medical condition exists. The commenter states that the ``reasonable 
person'' standard is used by private health insurance coverage in 
emergency situations and would include scenarios when the patient 
himself has a reasonable belief that he has an emergency medical 
condition. A few commenters disagreed as to how many encounters in an 
emergency department are outside the definition of an emergency medical 
condition.
    Response: We do agree that exceptions granted for an individual 
with an emergency medical condition include instances where an 
emergency medical condition is suspected, but not yet confirmed. This 
may include, for example, instances of severe pain or severe allergic 
reactions. In these instances, the exception is applicable even if it 
is determined later that the patient did not in fact have an emergency 
medical condition. We appreciate the offer from stakeholders to work 
with us to determine how best to capture this exception on claims. We 
do not have a reason at this time to believe that a categorical 
exception granted to emergency departments would foster inappropriate 
use of advanced imaging services. However, we believe such a 
categorical exception would not be consistent with the statutory 
requirement under section 1834(q)(4)(C)(i) of the Act, which is framed 
in terms of individual services.
    In response to the comments, we have made no changes to the 
proposed exceptions and have finalized our proposals.
6. Summary
    Section 1834(q) of the Act includes rapid timelines for 
establishing a Medicare AUC program for advanced diagnostic imaging 
services. The number of clinicians impacted by the scope of this 
program is massive as it will apply to every physician or other 
practitioner who orders or furnishes applicable 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 broad.
    We continue to 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 CDSM 
developers. It is for these reasons we proposed to continue a stepwise 
approach, adopted through notice and comment rulemaking. We proposed 
this second component to the program to specify qualified CDSMs, 
identify the initial list of priority clinical areas, and establish 
requirements related to CDSMs, as well as consulting and reporting 
exceptions. However, we also recognize the importance of moving 
expeditiously to accomplish a fully implemented program. Under this 
proposal, the first list of qualified CDSMs will be posted no later 
than June 30, 2017, allowing ordering professionals to begin aligning 
themselves with a qualified CDSM. We expect that furnishing 
professionals will be required to begin reporting AUC information 
starting January 1, 2018, and will address this requirement through PFS 
rulemaking for CY 2018, including how to report that information on 
claims.
    In summary, we proposed definitions of terms and processes 
necessary to implement the second component of the AUC program. We 
invited the public to submit comments on these proposals. We were 
particularly seeking comment on the proposed priority clinical areas 
and the requirements that must be met by CDSMs to become qualified. We 
believe the proposed requirements for qualified CDSMs will allow for 
flexibility so mechanisms can continue to reflect innovative concepts 
in decision support and develop customer-driven products to ultimately 
provide information to the ordering professional in such a manner that 
will maximize appropriate ordering of advanced diagnostic imaging while 
seamlessly integrating into workflow. As the stakeholders continue to 
move to a place of consensus-based standards deemed ready for 
deployment, we may become more prescriptive in future requirements for 
CDSMs. We also solicited comment on the exceptions to the requirements 
to consult applicable AUC using CDSMs.
    The following is a summary of the other of the comments we received 
specific to the Medicare AUC program but not directly related to our 
proposals.
    Comment: Overall, commenters expressed their general support for 
the use of AUC in diagnostic imaging.
    Response: We appreciate the support and stakeholder involvement 
throughout the implementation process.
    Comment: Most commenters supported our staged approach to 
implementing this program and most commenters supported the longer time 
period before requiring ordering

[[Page 80425]]

professionals to consult AUC in qualified CDSMs and furnishing 
professionals to report consultation information on claims. Many 
commenters requested additional time to comply with the consultation 
and reporting requirements under this program. Some recommended an 
additional 6-months until July 1, 2018, and others encouraged waiting 
until 2019 noting that providers will not have time to choose a CDSM 
once the qualified CDSM list is posted by June 30, 2017. Many 
commenters urged us to allow for 18 months between the release of the 
list of qualified CDSMs and the start of the reporting requirement. 
Commenters also supported additional time for implementation by stating 
that the program implementation date should be dictated by the 
availability of CDSMs, their integration into EHR systems, physician 
readiness, and sufficient testing. One commenter suggested, in the 
absence of additional time, we could ask physicians to annually attest, 
subject to audit, that they are consulting a CDSM prior to ordering 
relevant advanced imaging services.
    Response: We appreciate the challenges that the aggressive 
timeline, established in section 218(b) of the PAMA, creates for all of 
us, and have taken steps to alleviate these challenges by phasing in 
components of this program as necessary for meaningful implementation. 
We continue to expect that furnishing professionals will be required to 
begin reporting January 1, 2018, and will address this requirement 
through PFS rulemaking for CY 2018.
    Comment: One commenter cautioned CMS to ensure ordering 
professionals and furnishing professionals are not penalized due to 
phase-in of the consulting and reporting requirements under the AUC 
program or any other quality program.
    Response: We do not foresee any situations where professionals 
would be penalized as a result of our decision to phase in the 
consulting and reporting requirements.
    Comment: Several commenters noted that practitioners will have to 
comply with the requirements of the Merit-Based Incentive Payment 
System (MIPS) (under the Quality Payment Program) at the same time they 
will have to comply with the AUC consultation and reporting 
requirements which is overly burdensome. Some commenters recommended 
alignment of the AUC program with the Quality Payment Program 
requirements so as not to further increase burden on practitioners, and 
one commenter recommended alignment of the AUC program with MIPS rather 
than creating a standalone AUC program.
    Response: We will continue to explore avenues for alignment of the 
AUC program and the Quality Payment Program. CMS issued a final rule 
with comment period to implement the QPP, including MIPS. The rule can 
be accessed at https://qpp.cms.gov/education.
    Comment: Some commenters requested that CMS confirm that consulting 
and reporting will be required starting January 1, 2018, and stated 
that due to the availability of CDSMs and AUC, this start date is 
reasonable and feasible. One commenter expressed concern with the 
January 1, 2018 implementation date for consultation and reporting due 
to the cost and patient harm resulting from inappropriate imaging. The 
commenter urged CMS to work diligently to implement these requirements 
as quickly as is feasible. Another commenter suggested using a pilot 
period or starting voluntary consulting and reporting on January 1, 
2018, during which information on the Medicare claim would not be 
considered for outlier determinations. Some commenters also suggested 
that the program first start with health systems and larger group 
practices and be rolled out to smaller settings over time.
    Response: We continue to expect that furnishing professionals will 
be required to begin reporting January 1, 2018, and will address this 
requirement through PFS rulemaking for CY 2018.
    Comment: Some commenters requested that CMS continue to implement 
the AUC program through rulemaking separate from the PFS so as to 
establish more programmatic components sooner, particularly related to 
consulting and reporting requirements and how this information will be 
documented on Medicare claims. Other commenters stated that the PFS is 
the appropriate cycle for establishing the AUC program and is important 
to ensure all stakeholders are aware of proposals and have the 
opportunity to comment.
    Response: We believe that the PFS is the most appropriate 
rulemaking vehicle for implementing the AUC program and will continue 
to use the PFS annual rulemaking process to establish future 
components.
    Comment: Many comments were submitted specific to qualified PLEs. 
Commenters requested both clarification and modifications to the 
definition of PLE finalized through rulemaking in the CY 2016 PFS final 
rule with comment period. Specifically, some commenters requested that 
we clarify that radiology benefit management (RBM) companies cannot be 
involved in any way with qualified PLEs and in the development of 
specified applicable AUC. Some commenters further stated that RBMs 
should not be involved because they do not use the same rigorous AUC 
development process as medical specialty societies, clinicians and 
providers and are focused on limiting utilization rather than assisting 
providers in making optimal medical decisions. Other commenters 
requested that we better explain the third party interaction 
permissible between qualified PLEs and RBMs.
    Response: As finalized in the CY 2016 PFS final rule with comment 
period, the definition of PLE refers to organizations comprised 
primarily of providers or practitioners who, either within the 
organization or outside of the organization, predominantly provide 
direct patient care. This definition of PLE includes health care 
collaboratives and other similar organizations such as the National 
Comprehensive Cancer Network and the High Value Healthcare 
Collaborative. We further clarify that qualified PLEs may collaborate 
with third parties that they believe add value to their development of 
AUC, provided such collaboration is transparent. It is our expectation 
that PLEs will develop or modify AUC consistent with all regulations in 
Sec.  414.94(c)(1). If commenters are interested in learning more about 
the AUC development process of any individual qualified PLE, then we 
remind the commenters that qualified PLEs disclose the parties external 
to the organization when such parties have involvement in the AUC 
development process.
    Comment: Another commenter noted that the definition of qualified 
PLE restricts independent, evidence-based content solutions from 
inclusion. The commenter further requested that we remove language from 
the preamble they believe adds criteria to the definition of PLE. 
Specifically they requested removal of language discussing expectations 
of qualified PLEs ``to have sufficient infrastructure, resources, and 
the relevant experience to develop and maintain AUC. . .'' and 
identified this language as an ``evolving definition'' that is ``highly 
problematic'' and requested revision to more accurately reflect the 
language in the CY 2016 PFS final rule with comment period.
    Response: We are not changing the requirements of qualified PLEs 
and disagree that the cited language adds criteria to the existing 
definition of PLE. The language in the background section of the CY 
2017 PFS proposed rule

[[Page 80426]]

referenced above is not intended to build upon or provide more criteria 
to the definition of PLE in Sec.  414.94(b). In fact this language was 
being used to describe the requirements of qualified PLEs under Sec.  
414.94(c)(1) and not to further explain the definition of PLE.
    Comment: Some commenters requested that we provide more information 
about qualified PLEs and facilitate interactions between qualified PLEs 
and other stakeholders perhaps in the form of a tool or resource 
containing more detailed information or by coordinating a meeting for 
qualified PLEs and other stakeholders to interact.
    Response: We do not believe we are best equipped to facilitate 
stakeholder interactions as suggested; however, we will continue to 
build out the information on the AUC Web site to enable stakeholders to 
research and reach out directly to qualified PLEs to learn more about 
their AUC libraries and processes.
    Comment: A commenter requested that we wait to implement the AUC 
program until a broader list of qualified PLEs is available.
    Response: On June 30, 2016, a list of 11 qualified PLEs was posted 
to the AUC Web site (https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Appropriate-Use-Criteria-Program/index.html). Together these qualified PLEs include a large volume of 
AUC and we do not agree that it is necessary to wait to implement the 
program to further expand the list of qualified PLEs. Furthermore, we 
expect more applications from organizations seeking specification as 
qualified PLEs for 2017 so we expect the list to grow again in June of 
2017.
    Comment: Several commenters requested that all applications 
submitted by organizations seeking qualification as a PLE be made 
public.
    Response: We appreciate the interest and contributions of all 
stakeholders as we implement this program and understand the desire to 
learn more about qualified PLEs, however we will not systematically 
release this information. To encourage stakeholder interactions and to 
assist those seeking more information about qualified PLEs, we posted 
general information about each qualified PLE on the AUC Web site. We 
intend to add more information about each qualified PLE to the AUC Web 
site which should enable stakeholders to research and reach out 
directly to qualified PLEs. We remind PLE applicants that they may mark 
their applications as containing proprietary business information and 
we will protect that information to the fullest extent permitted by 
law.
    Comment: In response to our request for feedback regarding how 
appropriateness ratings provided by CDSMs could be interpreted and 
recorded for the purposes of this program, we received numerous 
comments. Commenters identified several ways appropriateness ratings 
are presented in CDSMs including: binary yes, appropriate or no, not 
appropriate; color coded using green for appropriate, yellow for may be 
appropriate and red for not appropriate; numerical ranges from 1 
through 9/10 where 1-3 are not appropriate, 4-6 may be appropriate and 
7-9/10 are appropriate, and a combination of color coded and numerical 
ratings. Commenters also used varying terminology including not 
appropriate, rarely appropriate, may be appropriate, usually 
appropriate, indicated and not indicated. Commenters recommended that 
appropriateness ratings that are not in a binary form need to be 
translated into binary values, only values equivalent to not 
appropriate equal no and values equal to may be appropriate and 
appropriate equal yes. Some commenters recommended that CDSMs be 
required to present appropriateness ratings in binary formats as this 
information will be required on the claim, while others stated that a 
binary appropriateness rating should not be required. Some commenters 
recommended CMS define standards for appropriateness ratings.
    Response: We appreciate the extensive and thoughtful information 
provided in response to our request. These comments will be 
instrumental in operationalizing the AUC program.
    Comment: We received numerous comments addressing the future 
outlier determinations. Many commenters agreed with using priority 
clinical areas to inform the outlier identifications. Other commenters 
questioned how we will be able to identify outliers starting in 2020 
when priority clinical areas include AUC that conflict with one 
another. Some commenters suggested that outlier determinations be based 
upon the percentage of orders for which AUC consultation resulted in a 
recommendation of 1-3 (based on the 1-9 appropriateness level 
determinations). More specifically, ordering professionals ``with an 
ordering pattern in `Red Rate' percentage two standard deviations 
higher than the median should be considered outliers.'' One commenter 
suggested that the outlier calculation use AUC compliance for priority 
clinical areas as the numerator and total AUC as the denominator. Some 
commenters encouraged us to focus outlier identification where wide 
variance in appropriate imaging patterns appears. Commenters also 
recommended that ordering professionals should be made aware of 
ordering patterns before being subject to prior authorization under the 
AUC program.
    Some commenters opposed a strict application of all priority 
clinical areas for the purposes of outlier identification. Commenters 
requested that only ordering professionals with ordering patterns 
significantly misaligned with AUC be subject to prior authorization. 
Commenters also requested criteria used to make outlier determination 
be adjusted over time to allow for innovation in ordering. One 
commenter requested that ordering professionals not be subject to AUC 
consultation and prior authorization at the same time.
    Response: We appreciate the extensive and thoughtful information 
provided in response to our request. We will consider these comments 
when determining how to operationalize the outlier determination 
component of this program.
    Comment: Some commenters recommended that we require data 
submission to CMS directly or to a third party registry. Such reporting 
would enable professionals to track ordering patterns, especially in 
relation to priority clinical areas and subsequent outlier 
determinations.
    Response: We will consider this recommendation as we implement the 
future components of this program.
    Comment: Several comments focused on the communication for the 
image order from ordering professionals to furnishing professionals. 
Some commenters requested we include requirements in the final rule, 
and some requested that we require electronic communications. 
Commenters recommended that the furnishing professional be allowed to 
consult specified applicable AUC through a qualified CDSM if the 
ordering professional fails to provide consultation information to the 
furnishing professional to avoid claims denials. Others suggested that 
furnishing professionals be able to identify whether an ordering 
professional is considered an outlier under the AUC program and others 
recommended we develop a verification mechanism that would be required 
of the ordering professional.
    Response: We are not establishing requirements regarding the 
communication of the imaging order from the ordering professional to 
the

[[Page 80427]]

furnishing professional. These professionals currently send and receive 
orders successfully via various vehicles (within EHR, fax, etc.), and 
we do not believe it is appropriate at this time to place further 
constraints or requirements on the systems for communications between 
these professionals. We also note that section 1834(q)(4) of the Act 
clearly specifies that AUC consultation is required for ordering 
professionals and does not provide for instances where consultation by 
furnishing professionals is an acceptable alternative, even if only for 
the purpose of avoiding claims denials. We do not believe the statute 
affords us the authority to allow furnishing professionals to consult 
in lieu of or in the absence of consultation by ordering professionals. 
For all other purposes, we remind commenters that furnishing 
professionals are not specifically prohibited from consulting specified 
applicable AUC through a CDSM.
    Comment: Some commenters requested clarification regarding the role 
of local coverage determinations (LCDs) and national coverage 
determinations (NCDs) under the AUC program. Commenters requested that 
CMS identify whether LCDs and NCDs take precedent over specified 
applicable AUC, or if advanced diagnostic imaging orders that are 
considered appropriate based on consultation with specified applicable 
AUC would be covered under Medicare if such order was not covered by an 
LCD or NCD. Some commenters requested that AUC be the only criteria for 
medical necessity of advanced imaging services and other commenters 
insisted that we instruct MACs to retire LCDs for advanced imaging 
services once the AUC program is implemented. One commenter also 
recommended that we instruct qualified PLEs to adhere to NCD 
requirements when developing AUC.
    Response: At this time we consider LCDs and NCDs to be active and 
binding policies detailing the criteria upon which Medicare coverage or 
non-coverage is based. For the purposes of this program, consulting 
with AUC is not a replacement for a determination of medical necessity. 
Consultation with AUC that conflict with an LCD or NCD does not modify 
the applicability of the LCD or NCD. Specified applicable AUC do not 
override LCDs or NCDs.
    Comment: Some commenters stated that the disproportionate burden of 
the AUC program is on primary care physicians. Many commenters noted in 
general the additional burden, both administratively and financially, 
the AUC program will create for providers. While other commenters 
stated that the added burden is outweighed by the cost savings and 
quality improvements resulting from a properly implemented AUC program 
and is significantly less than traditional prior authorization 
programs.
    Response: We understand that primary care physicians will be 
significantly impacted by the AUC program and have acknowledged this 
throughout implementation of this program. We are making every effort 
to implement a program that does not impart excess levels of burden but 
still includes all statutorily required provisions and is designed to 
achieve goals of the PAMA.
    Comment: Some commenters noted that since AUC consultation 
information will be required on the claim for the imaging service 
ordered, only the furnishing professional, often including the hospital 
where imaging services are provided, will be held accountable if AUC 
are not consulted. Because the ordering professional is required to 
consult and their action, or inaction, impacts payment for the 
furnishing professional, commenters stated that we should find a way to 
hold the ordering professional accountable as well.
    Response: The fourth component of the AUC program in section 
1834(q)(5) of the Act includes the identification of outlier ordering 
professionals, which we believe will distinguish and provide 
consequences for those ordering professionals that fail to comply with 
AUC. Through facilitation of a prior authorization requirement for such 
identified professionals, as specified under section 1834(q)(6) of the 
Act, we believe we will fulfill the shared goal of assisting both 
ordering and furnishing professionals in making the most appropriate 
treatment decisions for Medicare beneficiaries. Although we did not 
propose to implement these sections in the CY 2017 PFS proposed rule, 
we continue to expect that consultations with physicians, practitioners 
and other stakeholders will serve as part of the process to hold 
accountable outlier ordering professionals, and believe that such 
dialogues will yield meaningful results. We recognize that this 
response does not address those ordering professionals that 
consistently fail to consult AUC at all, and we will continue to 
discuss internally the extent to which such professionals would be 
impacted by this AUC program and other Medicare programs.
    Comment: Some commenters requested that we ensure that AUC 
consultation requirements do not create issues with patient access to 
care due to the additional administrative burden this program will 
place on providers. Commenters also requested that we ensure that AUC 
consultations do not interfere with physicians' clinical judgment when 
treating patients.
    Response: We disagree with the idea that AUC consultation creates 
new barriers for Medicare beneficiaries, and believe that while 
technology itself cannot improve care coordination or patient outcomes, 
the use of that technology can be a tool for practitioners to use in 
working toward improving care for Medicare beneficiaries. To this end, 
CDSMs can provide efficiencies in administrative processes which 
support clinical effectiveness, leveraging automated patient safety 
checks, supporting clinical decision making, enabling wider access to 
health information for patients, and allowing for dynamic communication 
between providers. We believe that as ordering professionals continue 
to engage with qualified PLEs, qualified CDSMs and CMS, AUC 
consultations will complement the practice of medicine.
    Comment: Some commenters questioned the overall approach we are 
taking in implementing this program. Commenters noted that the program 
should not be set in place until it is determined that use of AUC 
actually improves utilization of diagnostic imaging. Other commenters 
reiterated their opposition to using the AUC consultation requirement 
to withhold payment for rendered services.
    Response: Section 1834(q) of the Act as amended by section 218(b) 
of the PAMA identifies specific requirements for the implementation of 
the Medicare AUC program. The program must be implemented and must 
include all detailed components in the statute. We believe the approach 
we are taking is consistent with the requirements in the PAMA.
    Comment: Some comments focused on requests for practitioner and 
patient education efforts. Commenters requested that we educate 
practitioners and allow for adequate time to do so. Another commenter 
recommended that we inform patients on the AUC program and explain both 
the need for the program and supposed benefits. This commenter also 
recommended that we encourage other payers to use the same criteria as 
the Medicare AUC program to avoid additional administrative burden on 
providers. This commenter recommended that we inform clinicians of the 
expected cost associated with compliance with the AUC program 
requirements.

[[Page 80428]]

    Response: We plan to develop and provide educational materials 
about the AUC program before implementation of this program. We also 
expect many stakeholders will work to educate and inform providers and 
the public and other interested parties about the program. We do not 
have control over what other payers choose to implement and do not have 
cost projections associated with implementation of this program at this 
time as they relate to regulations yet to be proposed through notice 
and comment rulemaking.
    Comment: One commenter noted that different terminology is used in 
the two proposed rules with the CY 2017 OPPS proposed rule using the 
term ``imaging supplier'' and the CY 2017 PFS proposed rule using 
``furnishing professional.'' The commenter noted that the PAMA uses the 
term ``furnishing professional'' and asks that CMS use consistent 
terminology for the parties furnishing the radiology service and more 
clearly define the parties/entities that would fall into the standard 
term.
    Response: We understand commenters' confusion. All components of 
the Medicare AUC program are being implemented through the PFS. The use 
of ``imaging supplier'' in the OPPS is not relevant to the AUC program. 
Under the AUC program and as specified in section 1834(q)(1) of the 
Act, the term ``furnishing professional'' is defined as 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 which we codified in Sec.  414.94(b) as discussed in the CY 
2016 PFS final rule.
    Comment: Several commenters made various recommendations and 
suggestions regarding the development of AUC, the type of AUC that 
should be used under this program and their involvement in identifying 
and/or developing AUC for use under this program.
    Response: We remind readers that through the CY 2016 PFS final rule 
with comment period, we established new Sec.  414.94 and included 
requirements regarding the development of AUC and who can be qualified 
to develop, modify and endorse AUC. We will not be developing specified 
applicable AUC for consultation under this program. Rather specified 
applicable AUC, that ordering professionals will be required to 
consult, are those developed, modified or endorsed by qualified PLEs. 
The first list of qualified PLEs was released in June of 2016 and can 
be found on the CMS AUC program Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Appropriate-Use-Criteria-Program/index.html.
    Comment: Many commenters communicated their appreciation of efforts 
by CMS to actively engage with stakeholders to implement this program 
as mandated by the section 218(b) of the PAMA amending section 1834(q) 
of the Act. Other commenters asked how they can become involved and 
when CMS will reach out directly to them.
    Response: We have found the extensive interactions we have had with 
a wide range of stakeholders over the past several years to be highly 
instrumental and essential to the development of this program. Many 
stakeholders reached out to us from early on and we have reached out to 
other organizations when issues particularly relevant to their areas of 
focus arise. We have also expanded our stakeholder interactions through 
numerous conferences and meetings held by various organizations. 
Furthermore we receive regular email inquiries that create an open 
dialogue with more stakeholders and are always happy to interact with 
any individual or organization with an interest in the AUC program. The 
best way to contact the CMS AUC Team is through the AUC program 
resource box: [email protected]. We check the resource box 
regularly and respond to all inquiries.
    These additional comments will assist us in further building out 
the AUC program as we move into the next component for implementation 
in future rulemaking and have not resulted in any changes to our 
proposals. We have discussed above, throughout the preamble, our 
changes in response to public comment. We thank the public for their 
comments and appreciate the detailed feedback and recommendations from 
stakeholders. We believe the changes based on public comments have 
improved the identified priority clinical areas and the qualified CDSM 
requirements and process for qualification. We are finalizing without 
change the proposals for the determination of non-adherence and the 
exceptions under this program. We will continue to post information on 
our Web site for this program accessible at www.cms.gov/Medicare/Quality-Initiatives/Patient-Assessment-Instruments/Appropriate-Use-Criteria-Program.

D. Reports of Payments or Other Transfers of Value to Covered 
Recipients: Summary of Public Comments

1. Background
    In the February 8, 2013 Federal Register (78 FR 9458), we published 
the ``Transparency Reports and Reporting of Physician Ownership or 
Investment Interests'' final rule (Open Payments Final Rule) which 
implemented section 1128G of the Act, as added by section 6002 of the 
Affordable Care Act. Under section 1128G(a)(1) of the Act, 
manufacturers of covered drugs, devices, biologicals, and medical 
supplies (applicable manufacturers) are required to submit, on an 
annual basis, information about certain payments or other transfers of 
value made to physicians and teaching hospitals (collectively called 
covered recipients) during the course of the preceding calendar year. 
Section 1128G(a)(2) of the Act requires applicable manufacturers and 
applicable group purchasing organizations (GPOs) to disclose any 
ownership or investment interests in such entities held by physicians 
or their immediate family members, as well as information on any 
payments or other transfers of value provided to such physician owners 
or investors. The Open Payments program creates transparency around the 
nature and extent of relationships that exist between drug, device, 
biologicals and medical supply manufacturers, and physicians and 
teaching hospitals (covered recipients and physician owner or 
investors). The implementing regulations are at 42 CFR part 402, 
subpart A, and part 403, subpart I.
    In addition to the Open Payments final rule, we issued final 
regulations in the CY 2015 PFS final rule with comment period (79 FR 
67758) that revised the Open Payments regulations. Specifically, we: 
(1) Deleted the definition of ``covered device''; (2) removed the 
continuous medical education (CME) exclusion; (3) expanded the marketed 
name reporting requirements to biologicals and medical supplies; and 
(4) required stock, stock options, and any other ownership interests to 
be reported as distinct forms of payment.
    Since the publication and implementation of the Open Payments Final 
Rule and the CY 2015 PFS, various stakeholders have provided feedback 
to us regarding a variety of aspects of the Open Payments program. As a 
result, we have identified areas of the rule that might benefit from 
revision or subregulatory clarification. To consider the views of all 
stakeholders,

[[Page 80429]]

in the CY 2017 PFS proposed rule (81 FR 46395 through 46396), we 
solicited public comments regarding policy and operational issues 
related to the Open Payments program.
    Examples of subject matter areas for which we solicited public 
comments included: (1) Expansion of the nature of payment categories; 
(2) length of continued reporting obligations; (3) length of time in 
which Open Payments data remains relevant to users; (4) mandatory 
registration for applicable manufacturers and GPOs; (5) pre-vetting of 
payment information with physicians and teaching hospitals prior to 
submission; (6) definition of a teaching hospital; (7) new teaching 
hospital reporting elements; (8) option for early or continuous data 
submission; (9) the impact of mergers, acquisitions, and other business 
dealings on reporting; (10) clarification on the definitions of 
ownership and investment interest terms; and (11) definition of, and 
collection of data from, Physician Owned Distributors (PODs).
    In response to our solicitation, we received 136 timely comments, 
95 of which were deemed relevant to the solicitation in that they 
suggested matters to consider in future rulemaking and system 
enhancements. The majority of the comments focused on:
     Expanding or clarifying the nature of payment categories 
enumerated in Sec.  403.904(e)(2).
     Changing the continued reporting obligation to a specific 
period of time, such as 5 years after the payment or transfer of value 
was made.
     Publishing or refreshing the Open Payments data so that it 
is accessible to stakeholders for an appropriate period of time, such 
as 5 years or the number of years in which an applicable manufacturer 
or GPO is required to report.
     Streamlining the Open Payments registration process and 
maintaining voluntary registration for those applicable manufacturers 
or GPOs that do not report.
     Requiring applicable manufacturers and GPOs to pre-vet 
financial information with physicians and teaching hospitals before it 
is reported to Open Payments.
     Clarifying the regulatory definition of a teaching 
hospital.
     Adding non-public data elements that allow additional 
detail about the specific recipient or department of a teaching 
hospital that received a payment or transfer of value.
     Expanding the timeframe in which the Open Payments program 
can accept data submissions from applicable manufacturers and GPOs, 
such as by implementing multiple submission windows.
     Implementing flexible reporting requirements so that 
applicable manufacturers and GPOs can properly and easily represent 
changes resulting from mergers, acquisitions, and other business 
dealings.
     Clarifying the definition of PODs and how Open Payments 
requirements apply to PODs.
    These comments, submitted by a variety of parties, broadly 
supported our effort to engage the program's stakeholders before 
revising or creating new reporting requirements. We appreciate the 
commenters' views and recommendations and we will consider the public 
comments received in the future through possible rulemaking or 
publication of subregulatory guidance. No Open Payments program changes 
are being proposed or finalized within this final rule.

E. Release of Part C Medicare Advantage Bid Pricing Data and Part C and 
Part D Medical Loss Ratio (MLR) Data

1. Overview of Proposed Rule
    In the CY 2017 PFS proposed rule (81 FR 46162) we proposed to 
release certain data related to the bids submitted annually by Medicare 
Advantage Organizations (MAOs) and certain Medical Loss Ratio (MLR) 
data submitted annually by MAOs and Part D plan sponsors. In general, 
we proposed to release the data submitted by MAOs in the Medicare 
Advantage (MA) Bid Pricing Tool (BPT), subject to a 5-year delay; and 
to release data submitted by MAOs and Part D sponsors in accordance 
with MLR requirements, subject to an 18-month delay. In both cases, the 
proposed release is subject to specified exclusions.
2. Release of Bid Pricing Data
a. Summary of Proposed Rule
    The proposed rule included a discussion of both the statutory and 
regulatory authority for collecting bids, as well as an overview of how 
the information is collected. Each year, MAOs submit bids to CMS for 
participation in the Medicare Advantage program. Information from these 
bids is primarily collected through the MA BPT, which was developed by 
CMS. The data collected in the BPT demonstrates the actuarial bases of 
the plan bid. Each MA plan bid is an estimate of the plan's revenue 
requirement to cover plan benefits for a projected population, 
including benefit costs net of cost-sharing, non-benefit expenses, and 
gain/loss margin.
    The following summary describes the types of data collected in the 
BPT, which we described in greater detail in the proposed rule at 81 FR 
46397-99:
     Base period experience data.
     Trend assumptions.
     Manual rates and credibility assumptions.
     Projected allowed costs.
     Effective value of a plan's cost-sharing.
     Projected administrative expenses and information related 
to the plan's gain/loss margin.
     Plan-specific bid and benchmark, based on projected 
enrollment and risk scores.
     Beneficiary rebate and beneficiary premium for the plan.
     Rebate allocations to MA mandatory supplemental benefits 
and buy down of the Part D basic premium, the Part D supplemental 
premium, and/or the Part B premium.
     Actuarial pricing elements for any optional supplemental 
benefit packages.
    In addition to these categories of data collected in the BPT, MAOs 
must submit supporting documentation to substantiate the actuarial 
basis of pricing and an actuarial certification of the bid.
    We described the proposed regulatory changes to allow for the 
release of MA bid pricing data, along with the manner in which we 
proposed to make the release. We proposed to codify the requirements 
for release of MA bid pricing data by adding new Sec.  422.272 to 
subpart F of part 422. We proposed to release to the public each year, 
after the first Monday in October, MA bid pricing data for MA plan bids 
that we accepted or approved for a contract year at least 5 years prior 
to the upcoming calendar year, subject to specific exclusions described 
in proposed Sec.  422.272(c). We proposed to amend the regulation text 
at Sec.  422.504 by adding a new paragraph (n)(2), which would require 
that an MAO acknowledge the release of MA bid pricing data as provided 
in Sec.  422.272 as a mandatory contract provision; we also proposed 
certain technical changes to Sec.  422.504(n). The proposed rule did 
not discuss these changes to Sec.  422.504(n) in detail as part of the 
proposal to release MA bid data, but they were reflected in the 
proposed regulation text at 81 FR 46471. Specifically, we proposed to 
move the existing provisions regarding the release of summary CMS 
payment data at existing paragraph (n) to paragraph (n)(1) and to 
redesignate the existing paragraphs (n)(1)(i) through (iv) and (n)(2) 
as (n)(1)(i)(A) through (D) and (n)(1)(ii), respectively.

[[Page 80430]]

    We also described the data that would be subject to exclusion from 
release. We proposed not to include any Part D bid pricing data, or any 
information pertaining to the Part D prescription drug bid amount for 
an MA plan offering Part D benefits. We also proposed to exclude any 
narrative information included in the MA BPT, MSA BPT, and ESRD-SNP BPT 
regarding base period factors, manual rates, cost-sharing methodology, 
optional supplemental benefits, or other topics for which narratives 
are required by us under Sec.  422.254. We proposed to exclude 
supporting documentation that is provided outside of the BPT template. 
We proposed to exclude any information identifying Medicare 
beneficiaries or other individuals. Regarding other individuals, we 
explained that our proposal would exclude the names and contact 
information of certifying actuaries and MAO contacts from the releases. 
Finally, we proposed to exclude any bid review correspondence between 
us or our contractors and the MAO.
    We detailed the rationale for the proposed releases. We discussed 
how the release of this data is in support of the Administration's 
commitment to transparency. We indicated that release of MA bid pricing 
data could support public research into the MA program that could 
support the agency's goals for the program, including the delivery of 
better healthcare. We also suggested the data release would promote 
public accountability of the program.
    We also addressed past and ongoing attempts to achieve release of 
this data under the Freedom of Information Act, 5 U.S.C. 552 (FOIA). We 
have received several requests under the FOIA for the type of MA bid 
pricing data we proposed to release. Under the FOIA, we are required to 
make available any data released under the FOIA that the agency 
determines are likely to become the subject of subsequent requests, or 
that have been requested by three or more requesters. As a result of 
one such FOIA request, we have already released publicly a limited set 
of MA bid pricing data. This data, from 2011, is available at https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/DataRequests.html. This data was posted in June 2013.
    We solicited comments on the scope of the proposed release of MA 
BPT worksheets and data elements. We were particularly interested in 
comments on whether the MA bid pricing data we proposed to release 
contains proprietary information, and if so, we requested detailed 
explanations of good cause for its redaction from public availability 
and suggestions for what safeguards might be implemented to 
appropriately protect those portions of the data. We noted that 
detailed explanations should contain specific examples which show how 
this information disclosure could cause substantial competitive harm to 
MAOs. Specific examples should have (1) cited the particular 
information proposed to be released and explained how that information 
differs from publicly available data; (2) pointed to the particular 
entity or entity type that could gain an unfair competitive advantage 
from the information release; and (3) fully explained the mechanism by 
which the release of that particular information would create an unfair 
competitive advantage for that particular entity. Similarly, we were 
interested in comments that our proposed scope for release was too 
narrow and unnecessarily protects data that is not confidential and 
should not be protected.
    We also solicited comments on the proposed 5-year delay and its 
effect with respect to any competitive disadvantages to MAOs that could 
result from the disclosure of MA bid pricing data. We solicited 
comments on whether a shorter period would suffice to protect MAOs from 
competitive harm associated with the disclosure of confidential 
commercial information or if a longer period is necessary to adequately 
protect the information.
b. Comments
    We received 30 comments from the public, some in support and some 
in opposition to our proposed release of MA bid pricing data. We 
reviewed these comments closely, and we appreciate the concerns 
identified in comments on our proposed release. These comments are 
addressed below.
    Comment: About half of the commenters expressed support for the 
proposal to release MA bid pricing data.
    Response: We appreciate the support.
    Comment: A number of commenters stated that the release of MA bid 
pricing data would result in substantial competitive harm to MAOs and 
to the MA program. Commenters expressed concern that release of plan-
level financial data, even with the 5-year delay, would provide current 
and future competitors with sensitive information such as gain/(loss) 
margin and the profitability of serving beneficiary populations in 
specific markets, which could expose business strategies, reduce 
innovation, and undermine the functioning of a competitive marketplace. 
These commenters stated that the detailed claims cost, cost sharing, 
and utilization information collected in the MA BPT could be used by a 
competitor to derive not only future bid amounts in the aggregate, but 
also to derive components of future bids for specific benefits 
contained in the bid. Some commenters remarked that this could incent 
the gaming of bids, cause MAOs to exit markets, and create 
disincentives for new market entrants.
    Response: We share the commenters' interest in the continued 
success of the MA program. In recent years, enrollment has grown while 
plan quality has demonstrated continued improvement. Our goal is to 
continue to make the MA program a strong and healthy one.
    As discussed in the proposed rule, we believe this disclosure is 
consistent with Presidential directives to make information available 
to the public, and with our goals of allowing public evaluation of the 
MA program, encouraging research into better ways to provide health 
care, and reporting to the public regarding federal expenditures and 
other statistics involving this program. Analysis of this data could 
inform future bidding and payment policies. Further, releasing MA bid 
pricing data, particularly in conjunction with information already 
released under Sec.  422.504(n), will provide insight into the use of 
public funds for the MA program, providing appropriate transparency 
about the administration of the program.
    We discussed the need to balance these goals with the need to 
protect the proprietary information of the MAOs that submit this bid 
pricing information to us. Our proposed time lag of 5 years prior to 
the upcoming calendar year was an important element in our decision to 
release the MA bid pricing data.
    As part of our efforts to balance our mission to effectively 
administer federal health care programs and increase data transparency 
with MAOs' proprietary interests, we requested that commenters who 
oppose release of MA bid pricing data provide a ``detailed explanation 
of good cause'' for the redaction of some or all MA bid data from 
public release. As noted in section III.E.2.a of this final rule 
(``Summary of Proposed Rule''), we stated that detailed explanations 
should contain specific examples which show how this information 
disclosure could cause substantial competitive harm to MAOs. Specific 
examples should have (1) cited the particular information proposed to 
be released and explained how that information differs from publicly 
available data; (2) pointed to the particular entity or entity type 
that could gain an unfair competitive advantage from the information 
release;

[[Page 80431]]

and (3) fully explained the mechanism by which the release of that 
particular information would create an unfair competitive advantage for 
that particular entity (81 FR 46402).
    We believe that commenters did not provide data analysis that met 
this requested standard of specificity to help us determine that 
release of the data as proposed would cause unfair competitive harm or 
negative consequences for the MA program. We did not receive specific 
examples that illustrated how the structure of a particular healthcare 
market (for example, a particular county or multi-county healthcare 
market), combined with universal access to certain 5-year-old data 
elements in the MA BPT, could create an unfair competitive advantage.
    A number of commenters expressed concern about the use of MA bid 
pricing data to reverse-engineer provider payment rates, stating that 
this could cause competitive harm, especially in highly consolidated 
markets in which there are a limited number of providers for a specific 
service. A few commenters stated that a provider might determine 
whether its payment rates were higher or lower than the average in such 
a consolidated market (especially for MA bids for single-county MA 
plans) by comparing its negotiated rate to the average unit price 
reported in the BPT, in order to increase its leverage in future 
negotiations with the MAO.
    We understand this concern and appreciate the sensitivity of the 
negotiations between private health plans and healthcare providers. We 
discuss these comments a greater length below. However, as discussed in 
more detail throughout this final rule, we believe that the 5-year 
delay in the release of MA bid pricing data would make any information 
about payment rates that could be obtained from an examination of plan 
bids stale and no longer commercially sensitive.
    Finally, in 2013, we released certain 2009 actual costs (worksheet 
1) from the 2011 MA bid pricing data, as required by the U.S. District 
Court for the District of Columbia in Biles v. Dep't of Health and 
Human Services, 931 F. Supp. 2d 211 (D.D.C. 2013). (Discussion of this 
case is at 81 FR 46403 of the proposed rule.) Given that this 
information has been released to the public, and we have not been made 
aware of any instances of competitive harm, we do not see any reason 
why the release of 5-year-old data could cause competitive harm.
    In the absence of any evidence or analysis demonstrating that 
competitive harm would result from the proposed release of MA bid 
pricing data, and in consideration of the important policy goals that 
we believe will be served by publicly releasing MA bid pricing data, 
discussed above, we are finalizing our proposal to release MA bid 
pricing data after a 5-year delay, subject to certain specified 
exclusions.
    Comment: A few commenters expressed skepticism that the release of 
MA bid pricing data will cause competitive harm to MAOs, and stated 
that there is no real competition among MAOs for government approval of 
bids because we approve multiple reasonable bids. Another commenter 
stated that if MA bid pricing data is publicly released, there cannot 
be competitive harm or unfair commercial gain because each MAO would 
have the same information about its competitors and would be equally 
capable of using that information. The commenter stated that such 
symmetrical access to data obviates the potential for any unfair 
commercial gain for one MAO over another, and that only asymmetric 
disclosure can be a condition for substantial competitive harm.
    Response: We do not agree entirely with the comments stating that 
the public release of MA bid pricing data cannot cause competitive harm 
or unfair commercial gain. We note that the public release of MA bid 
pricing data could give new market entrants information on competitors' 
MA plan bids while such information about their own bid(s) would not 
have been released, allowing them to potentially benefit from 
asymmetric disclosure. However, we believe that our proposed time lag 
of 5 years prior to the upcoming calendar year is an important element 
in mitigating competitive harm to MAOs or the potential for unfair 
commercial gain for new market entrants when releasing MA bid pricing 
data.
    Comment: Many commenters stated that MA bid pricing data could be 
used to calculate an MA plan's negotiated provider payment rates. 
Several commenters cited a Federal Trade Commission (FTC) letter (at 
https://www.ftc.gov/system/files/documents/advocacy_documents/ftc-staff-comment-regarding-amendments-minnesota-government-data-practices-act-regarding-health-care/150702minnhealthcare.pdf) stating that the 
public disclosure of competitively sensitive pricing information may be 
used in an anticompetitive manner that increases costs and adversely 
impacts consumers. The commenters stated that when a provider knows 
that another provider is receiving a higher payment rate for a service, 
the provider will demand at least the same rate as the higher-paid 
provider, thereby raising the ``price floor'' for the service. Some 
commenters stated that with knowledge of MA bid pricing data, lower-
priced providers would negotiate for known higher rates, and that 
providers may be less likely to agree to lower-cost arrangements if the 
details will be shared with their competitors, which leads to higher 
unit prices for healthcare services across the MA program and thus 
higher total costs.
    Several commenters also described, at a general level, various 
methods for reverse engineering provider payment rates using certain 
information that MAOs submit in their bids. A few commenters stated 
that the release of an MA plan's average historical cost per unit could 
be used to calculate negotiated rates by service category and market, 
particularly where health care markets are highly concentrated.
    Response: A negotiated rate between an MAO and a provider 
(facility, physician, or other provider) refers to the payment rate 
that an MAO has established by contract with a provider. Typically 
negotiated rates are specified at a unit of payment such as per person 
per month, per diem rate, per service rate, or a global capitation rate 
(for example, a physician is paid a negotiated rate for managing all 
services received by a beneficiary under a specific health plan).
    We do not have access to these negotiated rates between an MAO and 
its contracted network of providers, so we cannot determine how closely 
an entry in the BPT may represent negotiated rates in provider 
contracts. Since payment figures in the MA BPTs are grouped into 
general service categories (such as ``Inpatient Facility'' and 
``Skilled Nursing Facility'') and represent average costs across 
multiple providers, beneficiaries, services, and sites of service, we 
believe that the BPT information is unlikely to give more than high-
level insight into contractual negotiated rates.
    Even if reverse engineering of provider rates were possible, the 5-
year delay renders that information even less competitively useful or 
relevant. We do not believe that any commenters established that a 
provider who uses MA bid data to estimate the negotiated rate that a 
competitor was receiving 5 years earlier would be greatly advantaged by 
this information.
    Delivery of health care is constantly evolving and MAOs are 
continually seeking ways to gain efficiency in providing care. For 
example, the number of providers, the cost of services, and utilization 
patterns associated with an MAO are very likely to change over a 5-year 
period; we believe that these changes--particularly

[[Page 80432]]

as the health care industry moves toward alternative payment 
methodologies--mitigate any risk associated with reverse engineering of 
historical payment rates. As such, we remain unconvinced that releasing 
this information has potential to cause harm to the marketplace as a 
whole or to the competitive position of MAOs.
    Comment: Some commenters stated that our proposal to release 
multiple years of data initially, followed by the release of more 
recent bid data on an annual basis, would make it possible for 
providers and competitors to analyze cost trends, which could inform 
negotiations and adversely impact competition by providing insight into 
profit objectives and growth strategies. One commenter noted that the 
Biles court indicated that its conclusion (that the MA bid pricing data 
requested by the plaintiff could be released without impacting market 
conditions) was specific to the request for a single year's data, and 
that a request for second year's data that could be trended creates a 
distinguishable factual situation that requires a new and separate 
analysis. 931 F.Supp.2d at 227 n.22. The commenter stated that, if the 
proposal to release bid data after a 5-year delay is finalized, we 
should deny FOIA requests for more recent data, both because this data 
is precluded under Exemption 4 as ``trade secrets and commercial or 
financial information obtained from a person [that is] privileged or 
confidential,'' and because this data could be analyzed in combination 
with the bid data that we are proposing to release after a 5-year delay 
to potentially reveal competitively sensitive trend information. 
Finally, one commenter stated that we did not explain the rationale for 
our assumption that the MA bid data is no longer commercially sensitive 
after 5 years.
    Response: We appreciate the commenters' concerns about how bid data 
for multiple years can both reveal actual trends in the past and can be 
trended into the future to predict an MAO's projected gains and losses, 
which could give competitive insight into business strategies. However, 
as we stated in the proposed rule at 81 FR 46400, we believe that our 
proposed 5-year delay renders multi-year comparisons of pricing trends 
less relevant to the current year of MA plan pricing.
    We selected a 5-year delay, in part, due to the requirements 
associated with projected margins in the bids submitted by MAOs, 
particularly when the margin is projected to be negative. MAOs with 
negative margins in their bids are expected to achieve profitability 
within 5 years (that is, bids should not have negative margins for more 
than 4 consecutive years). Absent the 5-year delay, we were concerned 
that the public might be able to use this margin rule to deduce 
competitively sensitive information from a plan's bids.
    We also believe that 5 years is sufficient time for competitively 
sensitive bid data to become no longer competitively sensitive. The 
time lag represents a buffer between the development and implementation 
of pricing strategies that can be distilled from multiple years of data 
and the observed relationship and trend from 1 year to the next, and we 
believe that this buffer mitigates any competitive disadvantage that 
might otherwise result from the disclosure of multiple years of bid 
data. As an example, we noted that an MAO looking to enter a new market 
is significantly less likely to gain an unfair commercial advantage 
from being able to examine and trend 5-year-old bid pricing data than 
if the MAO were able to examine and trend more recent bid pricing data 
(81 FR 46400).
    We continue to believe that the proposed exclusion of MA BPT 
narrative fields and supporting documentation is appropriate because 
MAOs provide information in narrative fields and supporting 
documentation that is commercially sensitive information in a way that 
the cost and enrollment estimates in the BPT are not. MA BPT narrative 
fields and supporting documentation can include sensitive information 
such as multi-year regional or national-level information on an MAO's 
approach to cost-sharing methodology or projection factors, which can 
provide insight into longer-term strategies, or they may include 
information on provider contracting, such as fee schedules or summaries 
of provider contract terms. Provider contract terms and actual fee 
schedules, for example, would be more competitively sensitive than the 
estimated provider payment rates that could be generated from 5-year-
old bid figures at the broad service level categories in the MA BPT. In 
addition, we believe that supporting documentation could cause 
misinterpretation of the MA bid pricing data that we proposed to 
release. We proposed to release only the MA bid pricing data for MA 
plan bids that were accepted or approved by CMS. However, MAOs often 
upload multiple versions of each plan bid in response to our requests 
for further information or corrections. Given the volume of supporting 
documentation submitted by MAOs, it may be difficult for a member of 
the public to identify clearly which documents support the final 
accepted version of the bid. We proposed, and finalize here, that these 
documents will not be included in the data that we release under this 
rule.
    We agree that more recent MA bid data is more competitively 
sensitive than bid data that is at least 5 years old, and we recognize 
that, even if the release of bid pricing data for a single, more recent 
year would not itself create a risk of substantial competitive harm, 
there could be an increased likelihood of substantial competitive harm 
resulting from the release of a more recent year's bid pricing data 
when that data can be analyzed in combination with publicly-released 
bid data for previous years and trended forward to predict current or 
future bids.
    If a FOIA request is received, we will follow our ordinary FOIA 
procedures and not release data the agency determines are trade 
secrets, or commercial or financial information protected by Exemption 
4 to the FOIA (5 U.S.C. 552(b)(4)). We also note that we do not view 
data releases made under the authority of the new Sec.  422.272 as FOIA 
releases. These releases are discretionary disclosures of data to the 
public, rather than in response to a request under the FOIA. Section 
422.272 permits the release of data, but does not require it. As noted 
in the proposed rule (81 FR 46396-97), we believe that these releases 
are consistent with the principles of transparency in government that 
underlie the FOIA and that regular release of this data might mitigate 
the number of FOIA requests and the associated need for repeated 
analyses of this data.
    Comment: A number of commenters suggested that bid pricing data is 
inherently proprietary, and therefore, should not be released. A few 
commenters stated that pricing data is confidential, proprietary 
information covered by Exemption 4 of the FOIA.
    Response: We disagree with the commenters. Absent detailed 
analytical evidence, which we solicited in the rulemaking process but 
did not receive, as discussed above, we do not believe the release of 
bid pricing data on a 5-year lag poses a threat of competitive harm.
    Specifically, regarding the comment that MA bid pricing data is 
proprietary and covered by Exemption 4 of the FOIA, we restate here 
that we are finalizing our proposal to expand the basis and scope of 
our regulations on MA bidding to incorporate section 1106(a) of the Act 
(42 U.S.C. 1306(a)), which authorizes disclosure of information filed 
with this agency in accordance with regulations adopted by

[[Page 80433]]

the agency. A substantive regulation issued following rulemaking 
provides the legal authorization for government officials to disclose 
commercial information that would otherwise be required to be kept 
confidential in accordance with 18 U.S.C. 1905. See Chrysler Corp. v. 
Brown, 441 U.S. 281, 306-08 (1979). We note as well that under 45 CFR 
401.105(a), we have adopted a regulation that permits publication and 
release of data that would not be exempt from disclosure under the FOIA 
or prohibited from disclosure under other law, even if a request has 
not been submitted.
    Comment: Many commenters offered alternative ideas for what MA bid 
pricing data to release. These commenters stated that the data should 
be aggregated above the level of the MA plan bid, such as at the 
contract level because it would be more difficult to reverse-engineer 
provider payment rates and other proprietary information. Another 
commenter suggested releasing only an aggregate financial measure that 
reflects the sum of non-benefit expenses and gain/(loss) margin. Some 
commenters recommended additional data exclusions, for example, that 
all plan-level financial data should be excluded because it would 
provide current and potential future competitors with proprietary, 
competitively sensitive information such as profitability of specific 
beneficiary populations. One commenter stated that information used to 
project an MA plan's revenues and costs, such as enrollment and 
population projections, should not be released at granular levels (for 
example, county-level details). Commenters stated their concern that 
the 5-year timeline we proposed for releasing the MA bid data is too 
short, and one commenter stated that bid data should be released only 
after 10 years and that any release after that time exclude all plan-
identifying information.
    Response: We appreciate the concerns raised by the commenters. 
However, based on our analysis of the comments we received, we did not 
find that any commenter provided sufficiently detailed evidence of 
competitive harm associated with the release of any of the fields 
proposed for release after the proposed 5-year delay. As such, we do 
not consider these exclusions or any further aggregation of bid data to 
be necessary.
    Comment: Several commenters recommended that the MA bid pricing 
data not be released to the public on the CMS Web site, but be made 
available through other mechanisms. One commenter suggested that, to 
avoid any competitive use of the MA bid pricing data, the data should 
be released only through the ResDAC portal for researchers as Research 
Identifiable Files (RIFs). Another commenter urged us to aggregate the 
MA bid pricing data and release it through our established methodology 
of public data release, the Public Use File (PUF), which generally can 
be understood by technical audiences after a review of supporting 
documentation.
    Response: We appreciate the recommendation that the bid pricing 
data be released through ResDAC. CMS' Research Data Assistance Center 
(ResDAC at www.resdac.org) is a critical part of the Administration's 
commitment to transparency, and has been a valuable resource for 
researchers (in releasing RIFs) and the public (in releasing PUFs). 
However, we do not agree that this release should be through the ResDAC 
resource or require the signing of a Data Use Agreement (DUA) that 
restricts use and disclosure of the data (which is required for use of 
RIFs). Because commenters did not identify a specific competitive harm 
associated with the public release of the bid data, we will publish it 
without restriction on the CMS Web site (www.cms.gov), subject to the 
exclusions as finalized in this rule.
    Comment: Several commenters stated that bid pricing data should not 
be released because such data is not useful to beneficiaries, and it 
has a high risk of being misinterpreted. One commenter stated that 
beneficiaries will likely find bid data confusing and less informative 
than our Star Ratings, which are considered a more accessible and 
straightforward measure by which to compare plan value and quality. One 
commenter stated that we should refrain from releasing bid data to the 
public ``until there is a proven case that the release would lead to 
improvements in the quality of care overall in the Medicare program.''
    Response: We appreciate the concerns that were raised regarding the 
possibility that the bid data we proposed to release could be 
misinterpreted. We intend to release with each year's bid data the BPT 
instructions and data dictionary for that year to minimize confusion 
and the possibility of misinterpretation of the data. Further, as noted 
in the proposed rule at 81 FR 49396, we anticipate that researchers, as 
well as other members of the public will have use for this information 
and that research based on the data may provide important insights for 
future MA policy development and for developing health care policy. 
Disclosing MA bid pricing data will allow the public to better 
understand how public dollars are spent in the MA program. 
Beneficiaries may or may not seek to use this data to make plan choices 
and we did not identify that as a specific reason for the release of MA 
bid pricing data.
    Comment: Some commenters stated that the release of the MA bid 
pricing data would likely result in an increase in the cost of MA plan 
basic benefits and supplemental services (for example, dental benefits) 
as MAOs respond to a new competitive situation. Commenters stated that 
this would harm beneficiaries because it will cause MA plans to offer 
fewer supplemental benefits, increase cost-sharing, or both.
    Response: We expect that the MA program will continue providing 
affordable and comprehensive health plan options to Medicare 
beneficiaries. We did not receive any detailed analysis to demonstrate 
that releasing 5-year-old MA bid pricing data is likely to have the 
harmful impact on beneficiaries raised by the commenters.
    Comment: Commenters expressed support for our proposal to not 
release Part D bid pricing data. Two commenters argued against the 
release of Part D bid pricing or manufacturer's rebate data, and one 
commenter stated that the release of Part D bid pricing or rebate data 
would violate the Takings Clause of the U.S. Constitution, as well as 
the Part D noninterference clause (section 1860D-11(i) of the Act). One 
commenter expressed concern that our broad interpretation of our 
authority to release MA bid data through notice-and-comment rulemaking 
could cause us to ignore legal barriers to the release of Part D 
pricing data.
    Response: We appreciate the support. Since we proposed to exclude 
Part D bid data from our proposed release of MA bid pricing data and 
are finalizing those exclusions in this final rule, we consider the 
comments arguing against the release of Part D bid pricing and rebate 
data to be beyond the scope of the proposed rule. To the extent that 
these comments support the exclusion in our rule, we appreciate the 
support.
    Comment: Several commenters expressed support for the proposed 
release of MA bid pricing data, but stated that the 5-year lag in 
release was too long for timely analysis that would still be beneficial 
to informing future policymaking and reforms. Some commenters stated 
that MA organizations are paid with public funds to provide a public 
benefit, and transparency should outweigh the concern of competitive 
harm, in part because there is limited competition in the program in 
that we approve multiple

[[Page 80434]]

reasonable bids, not merely the lowest bidders. Some commenters also 
stated that significant changes in the health care landscape can occur 
over the course of 5 years, and bid pricing data that is 5 years old 
will constrain researchers' ability to do meaningful policy analysis. 
Finally, one commenter suggested a 3-year lag instead of a 5-year lag 
in release of MA bid pricing data.
    Response: We appreciate the comments, and the interest in having 
access to more recent data. Through notice and comment rulemaking, we 
have sought to balance an interest in transparency with the need to 
protect proprietary information. We received comments on both sides of 
this issue, and have reviewed these comments critically. In this case, 
we believe it is important to maintain the 5-year delay we originally 
proposed. As discussed above, data more recent than 5 years old may 
impose substantial competitive harm on market participants, such as by 
providing an unfair competitive advantage to new market entrants, who 
could use more recent data to determine current pricing arrangements 
between existing plans and providers and undermine their negotiation 
strategies. Such information would not be similarly available about new 
market entrants to existing plans.
    Comment: One commenter stated that, if we release MA bid data 
without including MAO names or plan IDs, it is likely that some plan 
sponsors with unique internal cost structures will be publicly 
identifiable while other competitors may not be identifiable, giving 
certain plan sponsors serious competitive advantage over others.
    Response: All MA plan sponsors will be identifiable in the bid data 
that we will release through the field labeled ``Organization Name.'' 
While there are some organization names in MA bids that differ from the 
name of the parent organization, a link can be established through an 
internet search if a member of the public is interested in making that 
connection.
    Comment: Several commenters expressed skepticism about the 
necessity of using bid data for health policy research. One commenter 
stated that the proposed bid data release is unnecessary for purposes 
of ensuring program oversight or development of health policy; the 
commenter noted that MA bids are already subject to our review and 
approval and a bid audit process, and MedPAC analyzes bid data and 
issues an annual report describing program-wide trends. Another 
commenter expressed skepticism about the ability of researchers to use 
the data we proposed to release in an effective, appropriate way; the 
commenter supported our proposed exclusion of narrative information 
from the proposed release of MA bid pricing data but argued that 
researchers would find it extremely challenging if not impossible to 
fully understand a plan's bid without this excluded information. 
Finally, one commenter noted that we have made available on our Web 
site MA bid data that was requested under the FOIA, and asked whether 
this data had proven useful to researchers.
    Response: As stated in the proposed rule, we believe that 
facilitating public research using MA bid pricing data could lead to 
better understanding of the costs and utilization trends in MA and 
support future policymaking for the MA program. We do not believe that 
it is possible for one researcher or one set of researchers to address 
all policy questions regarding the MA program. We expect that a wide 
range of research studies could complement the work published by 
MedPAC. We believe that MA bid data could be useful to researchers even 
without access to the narrative fields or supporting documentation, and 
we have not received any comments that demonstrate convincingly or with 
specific examples to change our position.
    Finally, regarding the usefulness of currently available MA bid 
pricing data to researchers, one commenter pointed to research 
conducted by Dr. Brian Biles on behalf of the Commonwealth Fund, and 
his work to examine costs in MA. We believe that the data may be 
accessed again in the future for further research.
    After consideration of the public comments received, we are 
choosing to finalize the proposed MA bid pricing data release, codified 
at Sec.  422.272, and the proposed contractual acknowledgment of the 
release, codified at Sec.  422.504(n)(2), without modification. We also 
finalize our proposal to amend Sec.  422.504 by moving the existing 
provisions regarding the release of summary CMS payment data at 
existing paragraph (n) to paragraph (n)(1) and redesignating existing 
paragraphs (n)(1)(i) through (iv) and (n)(2) as (n)(1)(i)(A) through 
(D) and (n)(1)(ii), respectively. We appreciate the concerns raised by 
some commenters, and we believe that these concerns are addressed by 
our decision to delay our release of MA bid data by 5 years and to 
exclude certain information from release, as discussed above. We 
continue to believe that the release of MA bid pricing data is 
consistent with the Administration's directives regarding the 
transparency of program data, and will support public research that can 
potentially strengthen the program.
    While we are not modifying any of the proposed exclusions, we note 
that we will withhold certain fields within the BPT where necessary to 
comply with our current cell size suppression policy. This policy 
stipulates that no cell (for example, admissions, discharges, patients, 
services, etc.) 10 or less may be displayed. For example, a plan with 
more than 11 enrollees may have fewer than 11 beneficiaries who receive 
benefits that fall under one of the BPT's service categories. The 
policy is designed and implemented in order to protect against 
disclosure of individually identifiable data as our analysis has 
indicated the potential to identify individuals where the information 
in the cell is based on 10 or fewer individuals. We interpret the 
regulation text in this final rule (that protects against and excludes 
from these disclosures ``information that could be used to identify 
Medicare beneficiaries or other individuals'') to support this 
suppression policy. Further, to the extent that the suppression policy 
is revised in the future for these purposes to apply to cell sizes 
based on more than 10 individuals, we will apply that updated policy 
under this rule. In order for our release of MA bid pricing data to be 
consistent with our cell size suppression policy, we may determine that 
certain fields in the BPT should be withheld or redacted.
c. Summary of Proposed Technical Change and Response to Public Comments
    We proposed to amend Sec.  422.250 on the basis and scope of the MA 
program to add a reference to section 1106 of the Act. As discussed in 
the proposed rule (81 FR 46396), section 1106(a) of the Act (42 U.S.C. 
1306(a)) addresses requirements, including rulemaking, for the agency 
to release information filed with it by outside parties.
    We received a few comments on the proposed technical change, 
summarized below with our response.
    Comment: A few commenters expressed concern that we proposed 
releasing MA bid pricing data in the CY 2017 PFS proposed rule, rather 
than through a Part C and D rulemaking process. The commenters stated 
that this approach increased the likelihood that many stakeholders 
would have been unaware of our proposal in time to provide detailed 
analysis of the impacts of the proposed data releases, and one 
commenter suggested reissuing this proposal in a Parts C and D 
rulemaking.

[[Page 80435]]

    Response: The Administrative Procedure Act (APA) and section 1871 
of the Act generally require that rules be published in the Federal 
Register in proposed form, with a basis and purpose statement 
explaining the proposal, and then published in the Federal Register in 
final form, with revisions based on comments received, and responses to 
such comments. There is no requirement governing how proposed or final 
rules are packaged or organized, as long as the public is given proper 
notice. The proposed rule (81 FR 46162) clearly listed all Parts of the 
Medicare regulations that would be affected by the proposed regulations 
(including part 422) and its title included a reference to release of 
Medicare Advantage data (``. . . Medicare Advantage Pricing Data 
Release; Medicare Advantage and Part D Medical Low [sic] Ratio Data 
Release . . .''), so there was adequate notice to the public of the 
content of the proposed rule. That fully satisfies the requirements of 
the APA and section 1871 of the Act.
    The presence of this rider was clearly discussed in the title of 
the proposed rule, and was also discussed in the Fact Sheet we released 
to the public at the time of the rule's display. We received many 
comments from across the industry, including a number of comments from 
MAOs and their trade associations. This further demonstrates that 
adequate notice was provided.
    After consideration of the public comments we received on the 
proposed technical amendment, we are finalizing the amendment as 
proposed.
3. Release of MLR Data
a. Summary of Proposed Rule
    The proposed rule provided background on the Part C and Part D 
Medical Loss Ratio requirements, including the statutory and regulatory 
authority. An MLR is expressed as a percentage, generally representing 
the percentage of revenue used for patient care rather than for such 
other items as administrative expenses or profit. In the May 23, 2013 
final rule (78 FR 31284), we codified the MLR requirements for MAOs and 
Part D sponsors in the regulations at 42 CFR part 422, subpart X, and 
part 423, subpart X, respectively.
    For contracts beginning in 2014 or later, MAOs and Part D sponsors 
are required to report their MLRs and are subject to financial and 
other penalties for failure to meet the statutory requirement that they 
have an MLR of at least 85 percent (see Sec.  422.2410 and Sec.  
423.2410). Section 1857(e)(4) of the Act requires several levels of 
sanctions for failure to meet the 85 percent minimum MLR requirement, 
including remittance of funds to CMS, a prohibition on enrolling new 
members, and ultimately contract termination.
    Under the regulations at Sec.  422.2410 and Sec.  422.2460, with 
respect to MAOs, and Sec.  423.2410 and Sec.  423.2460, with respect to 
Part D sponsors, for each contract year, each MAO and Part D sponsor is 
required to submit a report to us, in a timeframe and manner that we 
specify, which includes the data needed to calculate and verify the MLR 
and remittance amount, if any, for each contract. For each contract 
year beginning in 2014 or later, MAOs and Part D sponsors are required 
to enter their MLR data and upload their MLR Reports to our Health Plan 
Management System (HPMS). The MLR Report is on our Web site at https://www.cms.gov/Medicare/Medicare-Advantage/Plan-Payment/medicallossratio.html, accompanied by instructions on how to populate 
the Report.
    In the proposed rule, we summarized the information collected in 
conjunction with the MLR requirement. We described the categories of 
information, including:
     Revenue.
     Claims.
     Federal and State Taxes and Licensing or Regulatory Fees.
     Health Care Quality Improvement Expenses.
     Non-claims Costs.
     Member Months.

We also described the process used to calculate the MLR with this 
information, including the numerator and denominator.

    We explained the proposed regulatory changes to provide for the 
release of Part C and Part D MLR data, along with the manner in which 
we proposed to make the release. We proposed to codify the new 
requirements for the release of Part C and Part D MLR data by adding 
new regulations at Sec.  422.504 (related to contract terms) and Sec.  
422.2490 (related to the details of the MLR data release) of part 422, 
with respect to Part C MLR data, and Sec.  423.505 (related to contract 
terms) and Sec.  423.2490 (related to the details of the MLR data 
release) of part 423, with respect to Part D MLR data. We proposed to 
define Part C MLR data at Sec.  422.2490(a), and Part D MLR data at 
Sec.  423.2490(a), as the data the MAOs and Part D sponsors submit to 
us in their annual MLR Reports, as required under existing Sec.  
422.2460 and Sec.  423.2460. At Sec.  422.2490(b) and Sec.  
423.2490(b), we proposed certain exclusions to the definitions of Part 
C MLR data and Part D MLR data, respectively. We proposed at Sec.  
422.2490(c) and Sec.  423.2490(c) to release the Part C MLR data and 
Part D MLR data, respectively, for each contract for each contract 
year, no earlier than 18 months after the end of the applicable 
contract year.
    We proposed to amend the regulation text at Sec.  422.504 by adding 
a new paragraph (n)(2), which would require that an MAO acknowledge the 
release of Part C MLR data as provided in Sec.  422.2490 as a mandatory 
contract provision. We also proposed to amend the regulation text at 
Sec.  423.505(o) by adding a new paragraph (o)(2), which would require 
that a Part D sponsor acknowledge the release of Part D MLR data as 
provided in Sec.  423.2490 as a mandatory contract provision. We 
proposed certain technical changes to Sec.  422.504(n) and to Sec.  
423.505(o). The proposed rule did not discuss these changes to Sec.  
422.504(n) and Sec.  423.505(o) in detail as part of the proposal to 
release Part C and Part D MLR data, but they were reflected in the 
proposed regulation text at 81 FR 46471-72. Our proposed technical 
changes to Sec.  422.504(n) are described in section III.E.2.a of this 
final rule (``Summary of Proposed Rule''). With respect to Sec.  
423.505(o), we proposed to move the existing provisions regarding the 
release of summary CMS payment data at existing paragraph (o) to 
paragraph (o)(1) and to redesignate the existing paragraphs (o)(1) 
through (5) as (o)(1)(i) through (v).
    We also explained the rationale for the proposed data release. As 
with our release of MA bid pricing data, discussed in section III.E.2.b 
of this final rule (``Comments''), our release of Part C and Part D MLR 
data is consistent with Administration initiatives to improve federal 
management of information resources by increasing data transparency and 
access to federal datasets. We also noted in the proposed rule that we 
already publicly release MLR data that issuers of commercial health 
plans submit each year as required by section 2718 of the Public Health 
Service Act. This data is listed publicly at https://www.cms.gov/CCIIO/Resources/Data-Resources/mlr.html. In releasing Part C and Part D MLR 
data, we are seeking to align with the disclosure of commercial MLR 
data.
    Finally, we discussed our belief that Part C and Part D MLR data 
could be a valuable tool for consumers, researchers, and the public. We 
believe that the release of this data will facilitate public evaluation 
of the MA and Part D programs by providing insight into the efficiency 
of health insurers' operations. In addition, we believe that the 
release of certain MLR

[[Page 80436]]

data will provide beneficiaries with information that can be used to 
assess the relative value of Medicare health and drug plans. We 
acknowledged in the proposed rule that the commercial MLR varies from 
the Part C and Part D MLR in certain ways. For example, commercial MLR 
data is collected from issuers at the state level, aggregated by 
market, while Part C and Part D MLR data is collected at the contract 
level. Although the data is reported differently, we do not believe 
these differences are significant enough to merit a different approach 
to the public disclosure of data.
    We also believe that the availability of Part C and Part D MLR data 
will enhance the competitive nature of the MA and Part D programs. The 
proposed access to data will support potential new plan sponsors in 
evaluating their participation in the Part C and Part D programs and 
will facilitate the entry into new markets of existing plan sponsors. 
With knowledge of historical MLR data, new business partners might 
emerge, and better business decisions might be made by existing 
partners. As a result, we believe that releasing Part C and Part D MLR 
data as proposed is both important and appropriate for the effective 
operation of these programs.
    Further, we believe that the release of Part C and Part D MLR data, 
as described in this final rule, strikes the appropriate balance 
between our goals for the release of Part C and Part D MLR data and 
safeguarding information that could be commercially sensitive or 
proprietary. Costs in the MLR numerator are aggregated across 
providers, beneficiaries, and sites of service. Costs and revenues are 
further aggregated across all plans under the contract. We do not 
believe that there is a realistic possibility that the MLR data we 
release could be disaggregated or reverse engineered to reveal 
commercially sensitive or proprietary information.
    We described the data we proposed to exclude from the public 
release. We stated that we would exclude the following four categories 
of data from release: narrative information, plan-level information 
(Part C MLR data and Part D MLR data that we will release is aggregated 
at the contract level), any information identifying beneficiaries or 
other individuals, and any MLR review correspondence.
    First, at proposed Sec.  422.2490(b)(1) and Sec.  423.2490(b)(1), 
we proposed to exclude from release any narrative information that MAOs 
and Part D sponsors submit to support the amounts that they include in 
their MLR Reports, such as descriptions of the methods used to allocate 
expenses. MAOs and Part D sponsors are required to describe the methods 
they used to allocate expenses, including incurred claims, quality 
improvement expenses, federal and state taxes and licensing or 
regulatory fees, and other non-claims costs. A detailed description of 
each expense element is provided, including how each specific expense 
meets the criteria for the type of expense in which it is categorized. 
MAOs and Part D sponsors may provide information that is pertinent to 
more than the individual MA or Part D contract for which the MLR Report 
is being submitted (see, for example, Sec.  422.2420(d)(1)(ii) and 
Sec.  423.2420(d)(1)(ii), which requires that expenditures that benefit 
multiple contracts, or contracts other than those being reported, be 
reported on a pro rata share), such as an MAO's or Part D sponsor's 
approach to setting payment rates in contracts with providers, or its 
strategies for investing in activities that improve health quality. We 
proposed to exclude this narrative information because we believe that 
it is more competitively sensitive than the contract-level figures that 
are used to populate the non-narrative fields in the MLR Report. We are 
concerned that MAOs and Part D sponsors would be reluctant to submit 
narrative descriptions that include information that they regard as 
proprietary or confidential if they know that it will be disclosed to 
the public, which could impair our ability to assess whether their 
allocation methods are appropriate.
    Second, at proposed Sec.  422.2490(b)(2) and Sec.  423.2490(b)(2), 
we proposed to exclude from release any plan-level information that 
MAOs and Part D sponsors submit in their MLR Reports. Some of the plan-
level data in MAO's and Part D sponsors' MLR Reports is also included 
in their plan bids as base period experience data, such as plan IDs, 
plan member months, and Medicaid per member per month gain/loss. As 
discussed in our proposal to release certain MA bid pricing data, we 
believe bid data would no longer be competitively sensitive after 5 
years; however, we do not believe that bid data becomes no longer 
competitively sensitive within the 18-month timeframe for our proposed 
release of MLR data. Therefore, we proposed to exclude from release 
plan-level data that is included as base period experience data in plan 
bids. We also proposed to exclude the plan-level information submitted 
in MLR Reports because we do not regard it as relevant to the purposes 
of our proposed release of Part C and Part D MLR data, which include 
giving the public access to data that can be used to evaluate the 
efficiency of MAOs and Part D sponsors and providing enrollees with 
information that can be used to compare the relative value of health 
plans. For example, our proposed release excludes MAOs' and Part D 
sponsors' responses to questions in the MLR Report that ask whether 
each plan under a contract is a Special Needs Plan for beneficiaries 
who are dually eligible for both Medicare and Medicaid (D-SNP), or 
whether the plan's defined service area includes counties in one of the 
territories.
    Third, at proposed Sec.  422.2490(b)(3) and Sec.  423.2490(b)(3), 
we proposed to exclude from release any information identifying 
Medicare beneficiaries or other individuals. This exclusion was 
proposed for the same reason we proposed to exclude similar information 
from MA bid submission data that will be released: we believe that it 
is important to protect the privacy of individuals identified in these 
submissions, particularly Medicare beneficiaries. We explained that, 
consistent with our longstanding data release policy for protecting 
individually identifiable information, if a data field in the MLR 
Report for an MA or Part D contract is calculated based on figures 
associated with fewer than 11 enrollees (or 132 member months, assuming 
each individual is counted for 12 months), we would suppress all the 
data from such fields in the public release file for that contract.
    Regarding other individuals, we require that MAOs and Part D 
sponsors provide in their MLR Reports the names and contact information 
of individuals who can answer questions about the data submitted in an 
MLR Report. We proposed to exclude this information from release. We do 
not believe that the release of this information serves the purposes of 
our proposed release of certain MLR data, which are to provide the 
public with data that can be used to evaluate MA and Part D contracts' 
efficiency, and to provide beneficiaries with information that can be 
used to compare the relative value of Medicare plans. Further, release 
of this identifying and contact information appears to be an 
unnecessary intrusion into information about private individuals.
    Fourth, at proposed Sec.  422.2490(b)(4) and Sec.  423.2490(b)(4), 
we proposed to exclude from release any MLR review correspondence. In 
the course of the MLR review process, our reviewers may engage in 
correspondence with MAOs and Part D sponsors in order to validate 
amounts included in their MLR Reports. Such correspondence may include

[[Page 80437]]

requests for evidence of amounts reported to us. Responses to these 
requests could include proprietary or confidential information, such as 
MAOs' and Part D sponsors' negotiated rates of reimbursement. We 
believe that such information is more competitively sensitive than the 
contract-level figures that are used to populate the non-narrative 
fields in the MLR Report. Further, we are concerned that, if we were to 
publicly release this correspondence, it could cause MAOs and Part D 
sponsors to be less forthcoming in the information provided to us or 
our reviewers, which would impede our access to information that would 
we could use to verify the information submitted by MAOs and Part D 
sponsors.
    We proposed to release the MLR data specified in this rule for each 
MA and Part D contract on an annual basis no earlier than 18 months 
after the end of the contract year to which the MLR data applies. We 
proposed to follow the commercial MLR approach in making the data we 
receive in MLR Reports available to the public. For Part C and Part D 
MLR reporting, the data is due about 12 months after the end of the 
contract year. After we receive MAOs' and Part D sponsors' MLR Reports, 
we anticipate that it will take approximately 6 months for us to review 
and finalize the data submitted by MAOs and Part D sponsors.
    We recognize that the 18-month time lag time for the release of 
Part C and Part D MLR data differs from the 5-year delay used for the 
release of MA bid pricing data (discussed in section III.E.2.a of this 
final rule (``Summary of Proposed Rule'')). This difference in the 
length of the delay that applies to each of these data releases 
reflects key differences between the MA bid pricing data that we 
proposed to release in accordance with Sec.  422.272 and the Part C and 
Part D MLR data that we proposed to in accordance with Sec.  422.2490 
and Sec.  423.2490. Most importantly, the Part C and Part D MLR data 
that we proposed to release is aggregated at the contract level, and we 
are excluding any plan-level data. The MA bid pricing data that we 
proposed to release includes plan-level information. We believe that 
contract-level information is sufficiently aggregated such that it 
would be difficult to obtain an unfair competitive advantage from its 
review. For example, we do not believe it is possible to reverse-
engineer provider rates from contract-level information.
    Finally, we proposed to amend Sec.  422.2400, which identifies the 
basis and scope of the MLR regulations for MAOs, and Sec.  423.2400, 
which identifies the basis and scope of the MLR regulations for Part D 
sponsors, to add a reference to section 1106 of the Act, which governs 
the release of information gathered in the course of administering our 
programs under the Act.
    We solicited comment on the release of MLR data as outlined above. 
We also solicited comment on whether the Part C and Part D MLR data we 
proposed to release contain proprietary information, and if so, what 
safeguards might be appropriate to protect those data, such as 
recommended fields to be redacted, the minimum length of time that such 
data remains commercially sensitive, and any suggestions for publishing 
aggregations of Part C and Part D MLR data in lieu of publishing the 
MLR data as submitted by MAOs and Part D sponsors. We invited 
commenters to provide analysis and explanations to support comments 
that information should be protected for a longer--or shorter--period 
of time so that we could properly evaluate our proposal in adopting a 
final rule. Analysis and explanations were requested to (1) cite the 
particular information proposed to be released and explain how that 
information differs from publicly available data; (2) point to the 
particular entity or entity type that could gain an unfair competitive 
advantage from the information release; and (3) fully explain the 
mechanism by which the release of that particular information would 
create an unfair competitive advantage for that particular entity. We 
requested this level of detail in order to substantiate the positions 
taken by commenters and to better inform our rulemaking and decisions 
(81 FR 46403).
b. Comments
    The following is summary of the comments we received on our 
proposed regulatory changes providing for the release of Part C and 
Part D MLR data.
    Comment: Several commenters expressed support for our proposal to 
release Part C and Part D MLR data, noting the benefits of transparency 
and advancing research, and improving healthcare delivery, as well as 
the cost of healthcare. A number of commenters also stated that release 
of Part C and Part D MLR data would help beneficiaries make informed 
choices when choosing between health plans. Two commenters added that 
releasing Part C and Part D MLR data would allow the public to see how 
MAOs and Part D sponsors administer Medicare and supplemental benefits 
in an effective and efficient manner.
    Response: We appreciate the support.
    Comment: Some commenters suggested that Part C and Part D MLR data 
would be unhelpful to the public, including researchers and 
beneficiaries, because it could be misconstrued. A few commenters 
stated that release of Part C and Part D MLR data as proposed would 
lead to misinterpretation and inappropriate comparisons across MA or 
Part D contracts, causing erroneous conclusions and misinformed policy 
decisions. Many commenters questioned whether the MLR data would be 
valuable or useful to Medicare beneficiaries.
    Response: We appreciate the concerns raised. However, we continue 
to believe that releasing the MLR data is consistent with the 
Administration's commitment to transparency. In addition, while 
Medicare beneficiaries have multiple tools available to assist them in 
evaluating MA and Part D plans, we continue to believe that 
beneficiaries should have the opportunity to review Part C and Part D 
MLR information as an additional tool. We continue to believe that 
making the MLR data available to the research community will spur 
research that could support the goals of federal policymakers. 
Furthermore, we believe it is important to mirror the transparency 
created by the commercial MLR to the extent possible. As commercial MLR 
data is already being released, our proposal to release Part C and Part 
D MLR data is the next step in maintaining consistency.
    Comment: Some commenters indicated that the commercial MLR data 
that we release each year is substantively different from the Part C 
and Part D MLR data, making the decision to release Part C and Part D 
MLR data one that should not be tied to the current disclosure of 
commercial MLR data. Two commenters noted that because the MLR Reports 
for MAOs and Part D sponsors are contract-based and MLR Reports for 
issuers in the commercial market are state-based, the Part C and Part D 
MLR Reports could be confusing to consumers and subject to 
misinterpretation.
    Response: We acknowledge that there are differences between Part C 
and Part D MLR data and commercial MLR data. However, we do not believe 
these differences are substantial enough to merit withholding the Part 
C and Part D MLR data from public consumption when commercial MLR data 
is released annually. Although there are some differences between how 
the Part C and Part D MLR is reported in comparison with the commercial 
MLR, in all cases, the data is used to produce a final MLR

[[Page 80438]]

ratio, and we continue to believe that this data can be a valuable tool 
for beneficiaries and researchers, as discussed earlier in this rule.
    Comment: Several commenters expressed support for our proposed 
exclusions of certain data from our proposed release of Part C and Part 
D MLR data, stating that aggregation and exclusions would help 
safeguard against the release of proprietary information.
    Response: We appreciate the support.
    Comment: Several commenters stated that the proposed release of 
Part C and Part D MLR data would cause significant competitive harm to 
plans in the MA and Part D markets through the disclosure of 
confidential and proprietary information. Some commenters suggested the 
data in the proposed release could provide insight into a plan's 
strategies related to provider agreements, pricing, or quality 
improvement activities.
    Response: We appreciate the concerns raised by the commenters with 
respect to protecting proprietary information. We take very seriously 
the need to safeguard proprietary and confidential business information 
shared with the agency for purposes of participation in the MA and Part 
D programs. However, we do not believe that the information included in 
the proposed MLR release represents a threat to the competitive 
position of MAOs and Part D sponsors particularly as comparable data is 
already released for commercial plans. Through the comment period and 
rulemaking process, we provided MAOs and Part D sponsors the 
opportunity to offer specific, detailed examples of how the release of 
MLR data could lead to competitive harm. We do not believe any of the 
commenters provided such examples. Further, we believe that the 
exclusions described in the final rule will help protect plans' 
proprietary information.
    However, to address concerns raised by commenters, we are expanding 
the data that would be subject to exclusion. First, we are revising our 
proposed exclusion of plan-level data at proposed Sec.  422.2490(b)(2) 
and Sec.  423.2490(b)(2) to state that we will not be releasing any MLR 
data submitted for contracts that consist of only one plan. Contract-
level data for single-plan contracts is equivalent to plan-level data, 
which we regard as more competitively sensitive because it is at a 
lower level of aggregation. In expanding the exclusion at proposed 
Sec.  422.2490(b)(2) and Sec.  423.2490(b)(2) to include MLR data 
submitted for single-plan contracts, we are confirming our commitment 
not to release any plan-level MLR data. Second, we are excluding from 
release any MLR data for a contract in a contract year that the 
contract is determined to be non-credible, as defined in accordance 
with Sec.  422.2440(d) for MA contracts and Sec.  423.2440(d) for Part 
D contracts. Although, as we explain more fully below, we are adopting 
this new exclusion of non-credible contracts' MLR data for reasons 
other than the protection of proprietary information, we expect that 
this exclusion will address concerns about competitive harm for MAOs or 
Part D sponsors operating contracts with limited enrollment.
    Comment: Several commenters asked us to aggregate the data further 
or expand the list of exclusions before release, in order to protect 
plans' proprietary and confidential information. One commenter 
suggested that we limit the release of MLR data to the aggregate 
categories that we listed in the preamble of the proposed rule at 81 FR 
46404 (that is, ``Revenue,'' ``Claims,'' ``Federal and State Taxes and 
Licensing or Regulatory Fees,'' ``Health Care Quality Improvement 
Expenses,'' and ``Non-Claim Costs'') and the MLR calculation itself, 
without releasing the data for the component fields that make up each 
of these categories. Another commenter requested that we exclude any 
part of the MLR substantiation, including but not limited to the 
narrative included in the substantiation. In addition, we received two 
comments requesting that we not release Part C and Part D MLR data at a 
more granular level than the contract level. This would exclude the 
``Plan-Specific Data'' section of the MLR Report. Another commenter 
stated that if we believe it is important for the public to further 
understand the breakdown of how revenue is spent, then we could 
consider releasing only the percent of revenue associated with incurred 
claims, quality improvement activities, and Part B premium rebates, in 
order to limit potential competitive harm.
    Response: We appreciate the concerns raised by commenters, along 
with the proposed alternatives. We believe that the list of exclusions 
provided in the final rule is sufficient to protect plans against 
competitive harm. Where possible, we have sought to mirror the release 
policies for the commercial MLR, and we are not aware of any evidence 
demonstrating that the release of commercial MLR data has caused any 
competitive harm. We have also broadened the data subject to exclusion, 
as discussed above.
    Comment: Several commenters urged us to not release Part C or Part 
D MLR data for single-plan contracts. One commenter requested further 
clarification regarding the plan-level information that we are 
proposing to exclude. The commenter asked that we state whether plan-
level means at the plan benefit package (PBP) level or something else.
    Response: We appreciate the comments submitted, and have expanded 
the data exclusions to not release data for single-plan contracts, 
since single-plan contract level data is functionally the same as plan-
level data. The exclusion of plan-level data would also apply to data 
that is captured by the section of the MLR Report that is labeled 
``Plan-Specific Data.'' We described the information collected in this 
section of the MLR Report in the proposed rule at 81 FR 46404. We 
explain above why the release of plan-level data that is as recent as 
18 months old could cause substantial competitive harm.
    Comment: One commenter expressed concern about the release of MLR 
data for contracts with a limited number of beneficiaries. This 
commenter suggested that we not release data for a contract in a year 
that the contract does not meet the minimum credibility threshold of 
2,400 member months for MA contracts or 4,800 member months for Part D 
contracts.
    Response: We agree with the commenter's concern about releasing 
Part C and Part D MLR data for contracts that have non-credible 
experience. We believe that publishing the MLR data for a contract in a 
contract year in which it has non-credible experience may be misleading 
and cause incorrect assumptions. As such, we have added an exclusion to 
our proposed release of Part C and Part D MLR data to specify that we 
will not release the MLR data for a contract in any contract year in 
which the contract is determined to be non-credible. This exclusion is 
added at Sec.  422.2490(b)(5), with respect to Part C MLR data, and at 
Sec.  423.2490(b)(5), with respect to Part D MLR data.
    Currently, MA contracts are considered to be non-credible if they 
have fewer than 2,400 member months, and Part D contracts are 
considered non-credible if they have fewer than 4,800 member months. In 
the February 23, 2013 proposed rule (78 FR 12428, 12438-40), we 
explained our rationale for taking into account the number of enrollees 
under a contract when assessing Part C and Part D MLRs, stating, ``To 
avoid requiring MA organizations and Part D sponsors to pay remittances 
due to random claim variation, rather than due to their underlying 
pricing and benefits structure, it is necessary to assess MLRs

[[Page 80439]]

on sufficient numbers of member months for statistical credibility.'' 
In excluding from release MLR data submitted for contracts with non-
credible experience, we recognize that these contracts' MLRs are more 
vulnerable to the effects of random variations in claims experience and 
may fail to reflect their efficiency or relative value. We wish to 
release MLR data that accurately and meaningfully reflects the value of 
MA and Part D plans; we do not believe that pro-active public release 
of MLR Reports for contracts that have non-credible experience furthers 
that goal. Therefore, we are finalizing the rule with an exclusion for 
any MLR data submitted for a contract in a year that the contract is 
determined to be non-credible.
    Comment: A small number of commenters asked that we only release 
the final MLR for MA and Part D contracts (that is, the ratio that is 
calculated by dividing the MLR numerator by the MLR denominator), 
instead of the additional data included with MLR submissions. They 
stated that this would fulfill our goal of increased transparency, 
while protecting beneficiaries and researchers from drawing incorrect 
conclusions, and would safeguard confidential and proprietary 
information that could hurt competition.
    Response: We appreciate the suggestion. Given that we already 
release annually the MLR data submitted by commercial plans, we believe 
that it would be inconsistent to release only the final MLR for MA and 
Part D contracts. As previously discussed, we do not believe that 
differences between the Part C and Part D MLRs and the commercial MLR 
are significant enough to merit a different approach to the public 
disclosure of data.
    We have proposed appropriate exclusions and safeguards to protect 
proprietary business strategies. Completely excluding other information 
would not be consistent with the Administration's commitment to 
transparency.
    Comment: Several commenters expressed support for our proposal to 
release MLR data on an annual basis no earlier than 18 months after the 
end of the contract year to which the MLR data applies. A few 
commenters stated that the proposed 18-month delayed release of MLR 
data would help balance the need for transparency and the potential for 
competitive harm.
    Response: We appreciate the support.
    Comment: We received one comment encouraging us to consider 
releasing MLR data that is more recent, and therefore, more useful to 
beneficiaries and researchers.
    Response: We appreciate the commenter's concern. The decision to 
follow an 18-month delay was not intended only for the purpose of 
protecting proprietary interests. Part C and Part D MLR data is 
typically not collected until the end of the year following the 
contract year (for example, contract year 2014 data was not collected 
until December 2015). We must then review all submitted data for 
completeness and accuracy before determining whether MLRs are final. We 
continue to believe that the 18-month delay is appropriate, given these 
operational constraints.
    Comment: Several commenters expressed concern that 18 months was 
not a sufficient period of time to ensure the release of data would not 
cause competitive harm. One commenter pointed out that because our 
revenue settlement is 8 months after the close of the year, and Part C 
and Part D MLR Reports are submitted at the end of that calendar year, 
MLR data would end up being released only 6 months after the data is 
filed with CMS, not the 18 months envisioned by the policy. Another 
commenter stated that data generally does not change significantly from 
year-to-year or across plans within a contract, and therefore, neither 
aggregation at the contract level nor an 18-month delay of release will 
provide sufficient protection. Several commenters asked that we release 
Part C and Part D MLR data using the same 5-year delay that was 
proposed for the release of bid data. A few commenters added that 
releasing such competitively sensitive information sooner than the 5-
year lag could potentially injure plans and the program by harming 
competition among MA plans and driving up costs.
    Response: We believe that the proposed 18-month delay of release of 
Part C and Part D MLR data will balance the need to make sure the data 
is complete with the desire to provide beneficiaries and researchers 
with data that is meaningful and helpful in plan selection and 
research. We selected a 5-year delay for bid pricing data because much 
of that data is collected at the plan level. Part C and Part D MLR data 
is aggregated to the contract level, and also includes a more limited 
range of information. Further, as we have noted, we do not believe that 
there will be competitive harm to MAOs or Part D plan sponsors as a 
result of the release of MLR reports as provided under this rule. 
Contract-level data is, as described above, sufficiently aggregated to 
avoid creating an unfair competitive advantage for particular entities, 
such as new market entrants, who would have access to such data without 
having to release such data themselves. It is not likely that entities, 
such as new market entrants, could use aggregated data to reverse-
engineer pricing strategies, payments rates, or other competitively 
sensitive information.
    Comment: One commenter urged us to utilize established public data 
release methodologies for the release of Part C and Part D MLR data. A 
few commenters also asked that we only release data through ResDAC to 
researchers.
    Response: Through the Administration's continued commitment to 
transparency, we have significantly increased the amount of Medicare 
data available to the public in recent years, in part through the 
ResDAC portal. While we agree that ResDAC is a valuable resource, we 
believe that it is more appropriate in this instance to post the data 
directly to our Web site (cms.gov) for broader consumption. Because the 
data is aggregated to the contract level, we do not believe there is a 
significant risk associated with making the data more widely available.
    Comment: A few commenters expressed concern that we proposed 
releasing Part C and Part D MLR data in the CY 2017 PFS proposed rule, 
rather than through a Part C and Part D rulemaking process. The 
commenters stated that this approach increased the likelihood that many 
stakeholders would have been unaware of our proposal in time to provide 
detailed analysis of the impacts of the proposed data releases, and one 
commenter suggested reissuing this proposal in a Parts C and D 
rulemaking.
    Response: The Administrative Procedure Act (APA) and section 1871 
of the Act generally require that rules be published in the Federal 
Register in proposed form, with a basis and purpose statement 
explaining the proposal, and then published in the Federal Register in 
final form, with revisions based on comments received, and responses to 
such comments. There is no requirement governing how proposed or final 
rules are packaged or organized, as long as the public is given proper 
notice. The proposed rule here clearly listed all Parts of the Medicare 
regulations that would be affected by the proposed regulations 
(including parts 422 and 423) and its title included a reference to 
release of Medicare Advantage and Part D data (``. . . Medicare 
Advantage Pricing Data Release; Medicare Advantage and Part D Medical 
Low [sic] Ratio Data Release

[[Page 80440]]

. . .''), so there was adequate notice to the public of the content of 
the proposed rule (81 FR 46162). That fully satisfies the requirements 
of the APA and section 1871 of the Act.
    The presence of this rider was clearly discussed in the title of 
the rule and in the Fact Sheet that we released publicly at the time of 
the rule's display. We received 26 comments on our proposed release of 
Part C and Part D MLR data from across the industry, including a number 
of comments from MAOs, Part D sponsors, and their trade associations. 
This further demonstrates that adequate notice was provided.
    We also proposed to amend Sec.  422.2400, which identifies the 
basis and scope of the MLR regulations for MAOs, and Sec.  423.2400, 
which identifies the basis and scope of the MLR regulations for Part D 
sponsors, to add a reference to section 1106 of the Act, which governs 
the release of information gathered in the course of administering our 
programs under the Act. After consideration of public comments received 
on the technical changes, we are finalizing these technical changes to 
Sec.  422.2400 and Sec.  423.2400 as proposed.
    After reviewing the comments we received, we are choosing to 
finalize the proposed MLR data release with two modifications. First, 
we will revise the exclusion at Sec.  422.2490(b)(2), with respect to 
Part C MLR data, and at Sec.  423.2490(b)(2), with respect to Part D 
MLR data, to exclude from release any MLR data submitted for a single-
plan contract. Second, we add a new exclusion at Sec.  422.2490(b)(5), 
with respect to Part C MLR data, and at Sec.  423.2490(b)(5), with 
respect to Part D MLR data, to exclude from release any MLR data 
submitted for a contract in a contract year for which the contract is 
determined to be non-credible, as defined in accordance with Sec.  
422.2440(d) for MA contracts and Sec.  423.2440(d) for Part D 
contracts. We continue to believe that the release of MLR data is 
consistent with the Administration's directives regarding the 
transparency of program data, and we support public research that can 
potentially strengthen the program.

F. Prohibition on Billing Qualified Medicare Beneficiary Individuals 
for Medicare Cost-Sharing

    As we stated in the CY 2017 proposed rule, we remind all Medicare 
providers (including providers of services defined in section 1861 of 
the Act and physicians) that federal law prohibits them from collecting 
Medicare Part A and Medicare Part B deductibles, coinsurance, or 
copayments, from beneficiaries enrolled in the Qualified Medicare 
Beneficiaries (QMB) program (a Medicaid program which helps certain 
low-income individuals with Medicare cost-sharing liability). In July 
2015, we released a study finding that confusion and inappropriate 
balance billing persist notwithstanding laws prohibiting Medicare cost-
sharing charges for QMB individuals, Access to Care Issues Among 
Qualified Medicare Beneficiaries (QMB) (``Access to Care'') https://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-and-Medicaid-Coordination/Medicare-Medicaid-Coordination-Office/Downloads/Access_to_Care_Issues_Among_Qualified_Medicare_Beneficiaries.pdf.
    These findings underscore the need to re-educate providers about 
proper billing practices for QMB enrollees.
    In 2013, approximately 7 million Medicare beneficiaries were 
enrolled in the QMB program. State Medicaid programs are liable to pay 
Medicare providers who serve QMB individuals for the Medicare cost-
sharing. However, as permitted by federal law, states can limit 
provider payment for Medicare cost-sharing to the lesser of the 
Medicare cost-sharing amount, or the difference between the Medicare 
payment and the Medicaid rate for the service. Regardless, as stated in 
the CY 2017 proposed rule, Medicare providers must accept the Medicare 
payment and Medicaid payment (if any, and including any permissible 
Medicaid cost sharing from the beneficiary) as payment in full for 
services rendered to a QMB individual. Medicare providers who violate 
these billing prohibitions are violating their Medicare Provider 
Agreement and may be subject to sanctions. (See sections 1902(n)(3), 
1905(p), 1866(a)(1)(A), and 1848(g)(3) of the Act.)
    Additionally, as we stated in the CY 2017 proposed rule, Medicare 
providers should take steps to educate themselves and their staff about 
QMB billing prohibitions and to exempt QMB individuals from 
impermissible Medicare cost-sharing billing and related collection 
efforts. For more information about these requirements, steps to 
identify QMB patients and ways to promote compliance, see https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/se1128.pdf.
    Given that original Medicare providers may also serve Medicare 
Advantage enrollees, we again note that the CY 2017 Medicare Advantage 
Call Letter reiterates the billing prohibitions applicable to dual 
eligible beneficiaries (including QMBs) enrolled in Medicare Advantage 
plans and the responsibility of plans to adopt certain measures to 
protect dual eligible beneficiaries from unauthorized charges under 
Sec.  422.504(g). (See pages 181-183 at https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Announcement2017.pdf).
    Although we did not solicit comments on this statement of current 
law and policy, we appreciate the comments received, which included 
comments from national beneficiary advocacy organizations, and 
professional, insurance, and medical billing associations.
    Comment: Commenters concurred that confusion and improper QMB 
billing problems remain pervasive and affirmed their negative toll on 
beneficiaries. Commenters were supportive of CMS's expanded efforts to 
educate providers regarding QMB billing rules to reduce the incidence 
of improper QMB billing. Some commenters also noted that Medicare 
providers encounter difficulties discerning which patients are QMBs and 
advised CMS to adopt strategies to help providers ascertain this 
information. Additionally, one commenter noted that the variation in 
state policies to pay providers for Medicare cost-sharing fuels 
confusion, frustration and compliance problems.
    Response: We continue to pursue opportunities to educate providers 
and welcome partnering with commenters and others in these efforts. 
Currently, Medicare providers must determine a patient's QMB status 
through information from State Medicaid agencies, including online 
eligibility systems and beneficiary identification cards. We are 
actively exploring additional mechanisms for Medicare providers to 
readily identify the QMB status of patients.

G. Recoupment or Offset of Payments to Providers Sharing the Same 
Taxpayer Identification Number

1. Overview and Background
    Medicare payments to providers and suppliers may be offset or 
recouped, in whole or in part, by a Medicare Administrator Contractor 
(MAC) if the MAC or CMS has determined that a provider or supplier has 
been overpaid. Historically, we have used the Medicare provider billing 
number or National Provider Identifier (NPI) to recoup overpayments 
from Medicare providers and suppliers until these debts were paid in 
full or eligible for referral to the Department of Treasury (Treasury) 
for further collection action under the Debt

[[Page 80441]]

Collection Improvement Act of 1996 and the Digital Accountability and 
Transparency Act of 2014. Once an overpayment is referred to Treasury, 
the Treasury's Debt Management Services uses various tools to collect 
the debt, including offset of federal payments against entities that 
share the same provider Taxpayer Identification Number (TIN). Hence, 
Treasury has the ability to collect our overpayments using the provider 
TIN and we pay a fee for every collection made.
    On March 23, 2010, the Affordable Care Act (ACA) was enacted. 
Section 6401(a)(6) of the Affordable Care Act established a new section 
1866(j)(6) of the Act. Section 1866(j)(6) of the Act allows the 
Secretary to make any necessary adjustments to the payments to an 
applicable provider of services or supplier to satisfy any amount due 
from an obligated provider of services or supplier. The statute defines 
an applicable provider of services or supplier (applicable provider) as 
a provider of services or supplier that has the same taxpayer 
identification number as the one assigned to the obligated provider of 
services or supplier. The statute defines the obligated provider of 
services or supplier (obligated provider) as a provider of services or 
supplier that owes a past-due overpayment to the Medicare program. For 
purposes of this provision, the applicable and obligated providers must 
share a TIN, but may possess a different billing number or National 
Provider Identifier (NPI) number than one another.
    For example, a health care system may own a number of hospital 
providers and these providers may share the same TIN while having 
different NPI or Medicare billing numbers. If one of the hospitals in 
this system receives a demand letter for a Medicare overpayment, then 
that hospital (Hospital A) will be considered the obligated provider 
while its sister hospitals (Hospitals B and C) will be considered the 
applicable providers. This authority allows us to recoup the 
overpayment of the obligated provider, Hospital A, against any or all 
of the applicable providers, Hospitals B and C, with which it, Hospital 
A, shares a TIN.
2. Provisions of the Proposed Regulations
    If CMS or a Medicare contractor has decided to put into effect an 
offset or recoupment, then Sec.  405.373(a) requires the Medicare 
contractor to notify the provider or supplier in writing of its 
intention to fully or partially offset or recoup payment and the 
reasons for the offset or recoupment. Currently, the written demand 
letter sent by the Medicare contractor to a provider or supplier serves 
as notification of the overpayment and intention to recoup or offset if 
the obligated provider, Hospital A, fails to repay the overpayment in a 
timely manner.
    With the passage of section 1866(j)(6) of the Act, the requirements 
in Sec.  405.373(a) could be interpreted to require the Medicare 
contractor to provide notification to both the obligated provider, 
Hospital A, and the applicable provider, Hospital B, of its intention 
to recoup or offset payment. Because we don't think it is necessary to 
provide separate notice to both the obligated provider and the 
applicable provider, we proposed to amend the notice requirement in 
Sec.  405.373. Specifically, we proposed to create a new paragraph (f) 
in Sec.  405.373 to state that Sec.  405.373(a) does not apply in 
instances where the Medicare Administrative Contractor intends to 
offset or recoup payments to the applicable provider of services or 
supplier to satisfy an amount due from an obligated provider of 
services or supplier when the applicable and obligated provider of 
services or supplier share the same Taxpayer Identification Number.
    Before the effective date of this rule, we intend to notify all 
potentially affected Medicare providers of the implementation of 
section 1866(j)(6) of the Act through Medicare Learning Network (MLN) 
or MLN Connects Provider eNews article(s). We also intend to update the 
current Internet Only Manual instructions including, the Medicare 
Financial Management Manual, and the addition of clarifying language in 
the demand letters issued to obligated providers. We believe these 
actions would provide adequate notice to providers and suppliers 
sharing a TIN, if they choose, provide the opportunity to implement a 
tracking system of Medicare overpayments on the corporate level for the 
affected providers. We also believe these actions are sufficient 
because of Treasury's analogous practice of offsetting using a TIN 
without furnishing notice to all potentially affected providers and 
suppliers. It has been a long standing practice for Treasury to offset 
federal payments using the TIN and Treasury currently does not issue a 
notice of intent to recoup or offset to applicable providers and 
suppliers when Treasury recoups CMS overpayments.
    Additionally, in our review of Sec.  405.373(a) and (b), we 
proposed to replace the terms intermediary and carrier with the term 
Medicare Administrative Contractor as intermediaries and carriers no 
longer exist.
    The following is a summary of the comments we received on 
recoupment or offset of payments to providers sharing the same taxpayer 
identification number.
    Comment: One commenter disagreed with our assertion that there is 
no need for its contractors to notify either party when such a 
recoupment will be made. The commenter recommended that CMS should not 
finalize its proposal to eliminate notice to the applicable provider 
and the obligated provider in the event of a recoupment of an 
overpayment.
    Response: We continue to believe it is not necessary to provide 
separate notice to both the obligated provider and the applicable 
provider. We believe that updating the Medicare Financial Management 
Manual, as well as including clarifying language in the demand letters 
issued will provide sufficient notification to providers and suppliers 
sharing a TIN. In addition, we believe the publication of this rule and 
notification through a Medicare Learning Network article provides 
sufficient notice to providers and suppliers sharing the same TIN and 
allows these providers and suppliers sufficient time to implement a 
tracking system of Medicare overpayments on a corporate level, should 
they choose. Finally, offsetting using a TIN without furnishing notice 
to all potentially affected providers and suppliers is a long standing 
practice used by Treasury to collect Medicare overpayments.
    Comment: One commenter recommended CMS recoup payments based upon 
the combination of the TIN and individual NPI.
    Response: We do not believe the intent of section 1866(j)(6) of the 
Act is to use a combination of the TIN and individual NPI to offset 
Medicare overpayments. We view section 1866(j)(6) of the Act as giving 
the agency the authority to recoup payments from an applicable provider 
or supplier that are due from an obligated provider or supplier that 
shares the same TIN. Accordingly, we will finalize the rule as 
proposed.

H. Accountable Care Organization (ACO) Participants Who Report 
Physician Quality Reporting System (PQRS) Quality Measures Separately

    The Affordable Care Act gives the Secretary authority to 
incorporate reporting requirements and incentive payments from certain 
Medicare programs into the Shared Savings Program, and to use 
alternative criteria to determine if payments are warranted.

[[Page 80442]]

Specifically, section 1899(b)(3)(D) of the Act affords the Secretary 
discretion to incorporate reporting requirements and incentive payments 
related to the physician quality reporting initiative (PQRI), under 
section 1848 of the Act, including such requirements and such payments 
related to electronic prescribing, electronic health records, and other 
similar initiatives under section 1848, and permits the Secretary to 
use alternative criteria than would otherwise apply (under section 1848 
of the Act) for determining whether to make such payments.
    Current Shared Savings Program regulations at Sec.  425.504(c) do 
not allow eligible professionals (EPs) billing through the Taxpayer 
Identification Number (TIN) of an Accountable Care Organization (ACO) 
participant to participate in PQRS outside of the Shared Savings 
Program, and these EPs and the ACO participants through which they bill 
may not independently report for purposes of the PQRS apart from the 
ACO. This policy was designed to ease reporting burden for individual 
EPs and group practices and promote integration of providers and 
suppliers within the ACO in order to help achieve the Shared Savings 
Program goals of improving quality and coordination of care. While over 
98 percent of ACOs satisfactorily report their quality data annually, 
if an ACO fails to satisfy the PQRS reporting requirements, the 
individual EPs and group practices participating in that ACO will 
receive the PQRS payment adjustment along with the automatic VM 
downward payment adjustment.
    We proposed to amend the regulation at Sec.  425.504 to permit EPs 
that bill under the TIN of an ACO participant to report separately for 
purposes of the 2018 PQRS payment adjustment when the ACO fails to 
report on behalf of the EPs who bill under the TIN of an ACO 
participant. Specifically, we proposed to remove the requirement at 
Sec.  425.504(c)(2) so that, for purposes of the reporting period for 
the 2018 PQRS payment adjustment (that is, January 1, 2016, through 
December 31, 2016), EPs who bill under the TIN of an ACO participant 
have the option of reporting separately as individual EPs or group 
practices. If the ACO fails to satisfactorily report on behalf of such 
EPs or group practices, we proposed to consider this separately 
reported data for purposes of determining whether the EPs or group 
practices are subject to the 2018 PQRS payment adjustment. We also 
proposed to amend Sec.  425.504(c)(2) to apply only for purposes of the 
2016 payment adjustment. We proposed revised requirements for the 2017 
and 2018 PQRS payment adjustments under the Shared Savings Program at 
Sec.  425.504(d). We refer readers to section III.K.1.e. of this final 
rule for a more detailed discussion of the proposed revisions to the 
requirements at Sec.  425.504 and the policies that are being finalized 
in this final rule.
    In the proposed rule, we noted that the registration deadline for 
participating in the PQRS Group Practice Reporting Option (GPRO) is 
June 30 of the applicable reporting period. Since affected EPs are not 
able to register for the PQRS GPRO by the applicable deadline for the 
2018 PQRS payment adjustment, we proposed that such EPs would not need 
to register for the PQRS GPRO for the 2018 PQRS payment adjustment, but 
rather could mark the data as group-level data in their submission. 
Thus, we proposed to eliminate a registration process for groups 
submitting data using third party entities. When groups submit data 
utilizing third party entities, such as a qualified registry, qualified 
clinical data registry (QCDR), direct Electronic Health Record (EHR) 
product, or EHR data submission vendor, we are able to obtain group 
information from the third party entity and discern whether the data 
submitted represents a group-level submission or an individual-level 
submission once the data is submitted. In addition, we proposed that an 
affected EP may utilize the secondary reporting period either as an 
individual EP using one of the registry, QCDR, direct EHR product, or 
EHR data submission vendor reporting options or as a group practice 
using one of the registry, QCDR, direct EHR product, or EHR data 
submission vendor reporting options. We noted that this would exclude, 
for individual EPs, the claims reporting option and, for group 
practices, the Web Interface and certified survey vendor reporting 
options.
    Furthermore, we recognized that certain EPs are similarly situated 
with regard to the 2017 PQRS payment adjustment, which will be applied 
beginning on January 1, 2017. We stated that we believe it is 
appropriate and consistent with our stated policy goals to afford these 
EPs the benefit of this proposed policy change. Accordingly, as noted 
above, we proposed to permit EPs that bill through the TIN of an ACO 
participant to report separately for purposes of the 2017 PQRS payment 
adjustment if the ACO failed to report on behalf of the EPs who bill 
under the TIN of an ACO participant. Specifically, we proposed to 
remove the requirements at Sec.  425.504(c)(2) so that, for purposes of 
the reporting period for the 2017 PQRS payment adjustment, EPs who bill 
under the TIN of an ACO participant have the option of reporting 
separately as individual EPs or group practices. As noted in this final 
rule, we proposed to amend Sec.  425.504(c)(2) to apply only for 
purposes of the 2016 payment adjustment. We proposed to include the 
revised requirements for the 2017 and 2018 PQRS payment adjustments 
under the Shared Savings Program at Sec.  425.504(d). We refer readers 
to the discussion of this proposal and the final policies that we are 
adopting in section III.K.1.e. of this final rule.
    The previously established reporting period for the 2017 PQRS 
payment adjustment is January 1, 2015, through December 31, 2015. To 
allow affected EPs that participate in an ACO to report separately for 
purposes of the 2017 PQRS payment adjustment, we proposed at Sec.  
414.90(j)(1)(ii) to establish a secondary PQRS reporting period for the 
2017 PQRS payment adjustment for individual EPs or group practices who 
bill under the TIN of an ACO participant if the ACO failed to report on 
behalf of such individual EPs or group practices during the previously 
established reporting period for the 2017 PQRS payment adjustment. We 
proposed that this option would be limited to EPs that bill through the 
TIN of an ACO participant in an ACO that failed to satisfactorily 
report on behalf of its EPs and would not be available to EPs that 
failed to report for purposes of PQRS outside the Shared Savings 
Program.
    In addition, we proposed that these affected EPs may utilize the 
secondary reporting period either as an individual EP using the 
registry, QCDR, direct EHR product, or EHR data submission vendor 
reporting options or as a group practice using one of the registry, 
QCDR, direct EHR product, or EHR data submission vendor reporting 
options. We noted that this would exclude, for individual EPs, the 
claims reporting option and, for group practices, the Web Interface and 
certified survey vendor reporting options.
    We note that the registration deadline for the participating in the 
PQRS GPRO is June 30 of the applicable reporting period. Since the 
applicable deadline for the 2017 PQRS payment adjustment has passed, we 
proposed that such EPs would not need to register for the PQRS GPRO for 
the 2017 PQRS payment adjustment, but rather would be able to report as 
a group practice via the registry, QCDR, direct EHR product, or EHR 
data submission vendor reporting options. Therefore, we proposed at 
Sec.  414.90(j)(4)(v) that sections

[[Page 80443]]

Sec.  414.90(j)(8)(ii), (iii), and (iv) would apply to affected EPs 
reporting as individuals using this secondary reporting period for the 
2017 PQRS payment adjustment. In addition, we proposed at Sec.  
414.90(j)(7)(viii) that sections Sec.  414.90(j)(9)(ii), (iii), and 
(iv) would apply to affected EPs reporting as group practices using 
this secondary reporting period for the 2017 PQRS payment adjustment. 
Further, we proposed at Sec.  414.90(k)(4)(ii) that Sec.  414.90(k)(5) 
would apply to affected EPs reporting as individuals or group practices 
using this secondary reporting period for the 2017 PQRS payment 
adjustment.
    We also proposed that the secondary reporting period for the 2017 
PQRS payment adjustment would coincide with the reporting period for 
the 2018 PQRS payment adjustment (that is, January 1, 2016 through 
December 31, 2016). In addition, for operational reasons and to 
minimize any additional burden on affected EPs (who are already 
required to report for CY 2016 for purposes of the 2018 PQRS payment 
adjustment), we proposed to assess the individual EP or group 
practice's 2016 data using the applicable satisfactory reporting 
requirements for the 2018 PQRS payment adjustment (including, but not 
limited to, the applicable PQRS measure set). We invited comment on any 
2018 requirements that might need to be modified when applied for 
purposes of the 2017 PQRS payment adjustment.
    As a result, individual EP or group practice 2016 data could be 
used with respect to the secondary reporting period for the 2017 PQRS 
payment adjustment or for the 2018 PQRS payment adjustment or for both 
payment adjustments if the ACO in which the affected EPs participate 
failed to report for purposes of the applicable payment adjustment. We 
explained that we believe this change to our program rules is necessary 
for affected individual EPs and group practices to be able to take 
advantage of the additional flexibility proposed for the Shared Savings 
Program (81 FR 46426 through 45427). If an affected individual EP or 
group practice decides to use the secondary reporting period for the 
2017 PQRS payment adjustment, we explained that this EP or group 
practice should expect to receive a PQRS payment adjustment for 
services furnished in 2017 until CMS is able to determine that the EP 
or group practice satisfactorily reported for purposes of the 2017 PQRS 
payment adjustment. First, we would need to process the data submitted 
for 2016. Second, we would need to determine whether or not the 
individual EP or group practice met the applicable satisfactory 
reporting requirements for the 2018 PQRS payment adjustment. Third, we 
would need to update the individual EP or group practice's status so 
that the EP or group practice stops receiving a negative payment 
adjustment on claims for services furnished in 2017 and reprocess all 
claims that were previously paid. In addition, as discussed in the 
proposed rule, the EP or group practice would also avoid the automatic 
downward VM adjustment, but would not qualify for an upward adjustment 
since the ACO failed to report (81 FR 46446).
    Since EPs and group practices taking advantage of this secondary 
reporting period for the 2017 PQRS payment adjustment will have missed 
the deadline for submitting an informal review request for the 2017 
PQRS payment adjustment, we proposed that the informal review 
submission periods for these EPs or group practices would occur during 
the 60 days following the release of the PQRS feedback reports for the 
2018 PQRS payment adjustment.
    We requested comments on these proposals.
    The following is summary of the comments we received on ACO 
participants who report PQRS quality measures separately.
    Comment: The majority of commenters supported CMS's proposal to 
allow affected EPs or group practices to use CY 2016 as a secondary 
reporting period for purposes of the 2017 PQRS payment adjustment, in 
which case such EPs or group practices should expect to receive a PQRS 
payment adjustment for services furnished in 2017 until CMS is able to 
determine that the EP or group practice satisfactorily reported for 
purposes of the 2017 PQRS payment adjustment. In addition, the 
commenters supported CMS's proposal to allow EPs or group practices 
that bill under the TIN of an ACO participant to report separately for 
purposes of the PQRS payment adjustment if the ACO fails to report on 
their behalf; the commenters believed this proposal provides 
flexibility for EPs and group practices to avoid penalties under PQRS 
and VM when ACOs fail to report the data. Another commenter supported 
the proposal to retain the requirement that an ACO satisfactorily 
report on behalf of the EPs who bill under the TIN of an ACO 
participant for purposes of the PQRS payment adjustment. One commenter 
stated that they appreciated the elimination of the registration 
process for groups using third party entities.
    Response: We would like to clarify that the elimination of the GPRO 
registration process would only apply to EPs and groups that 
participate in ACOs that fail to report on their behalf.
    Comment: One commenter stated that affected EPs or group practices 
would not be aware that the ACO did not satisfactorily report for 
purposes of the 2018 PQRS payment adjustment and, absent such 
information, would not choose to report outside the ACO during the CY 
2016 reporting period. Another commenter noted that many EPs in an ACO 
will not report data separately during the reporting period if they are 
operating under the assumption that their ACO is reporting on their 
behalf. In addition, other commenters urged CMS to invest in strategies 
to prevent these situations from occurring in the first place, such as 
providing ACOs with more frequent feedback on their reporting 
compliance throughout the year.
    Response: We expect that any ACO that is unable to meet 
satisfactory reporting requirements for any reason would inform the EPs 
participating in the ACO in a timely and transparent manner to allow 
the EPs to report separately using the registry, QCDR, direct EHR or 
EHR data submission vendor reporting options. Therefore, if an EP or 
group practice has reason to believe their ACO may not report on their 
behalf in 2016, they have the ability to report separately for purposes 
of the 2018 PQRS payment adjustment. In regards to providing ACOs with 
more frequent feedback on their reporting compliance, we provide many 
opportunities for ACOs to monitor their progress toward the 
satisfactory reporting requirement while the Web Interface is open for 
data collection. Throughout the data collection period, and when the 
ACO has finished its abstraction, ACOs may use reports available in the 
Web Interface to confirm whether or not the Web Interface reporting 
requirements have been met. Leading up to the data collection period 
and during the data collection period, we provide frequent reminders to 
ACOs on the importance of reporting and how to satisfactorily report. 
We also provide targeted outreach to ACOs who have not entered data 
into the Web Interface in the final weeks of the data collection 
period, in an effort to ensure that all ACOs completely report.
    Comment: One commenter acknowledged the difficulty in adding a 
second reporting period for affected EPs and group practices, and 
therefore, urged flexibility on the part of CMS to determine a way to 
provide an

[[Page 80444]]

additional reporting period in 2017 for purposes of the 2018 PQRS 
payment adjustment for EPs and group practices that participate in ACOs 
that fail to report for purposes of the 2018 PQRS payment adjustment. 
Another commenter encouraged CMS to allow affected EPs and group 
practices to report PQRS data separately during the year following the 
CY 2016 reporting period in order for them to avoid penalties during 
the 2018 payment year.
    Response: As discussed in section III.K.1.e. of this final rule, we 
are finalizing our proposal to remove the requirement at Sec.  
425.504(c)(2) so that, for purposes of the reporting periods for the 
2017 and 2018 PQRS payment adjustments, EPs who bill under the TIN of a 
Shared Savings Program ACO participant have the option of reporting 
separately as individual EPs or group practices. We disagree with the 
commenter's suggestions to establish a secondary reporting period for 
the 2018 PQRS payment adjustment, in addition to the 2017 PQRS payment 
adjustment. We believe there is adequate time for EPs or group 
practices to report separately for the 2018 payment adjustment given 
that this final rule will be issued more than a month prior to the end 
of the reporting period for the 2018 payment adjustment (that is, 
January 1, 2016 through December 31, 2016).
    Comment: Several commenters stated their support for CMS's 
recognition of the individual commitment to quality improvement of EPs 
in ACOs and CMS's proposals that would enable them to avoid penalties 
in situations where their ACO fails to meet satisfactory reporting 
requirements. The commenters stated that individual EPs and group 
practices are not in direct control of decisions or actions taken by 
the larger ACO, and therefore, should not be penalized. In fact, the 
commenters stated that many EPs do not even know they are part of an 
ACO and prefer instead to report more directly relevant measures, such 
as those available through a QCDR. As an alternative to giving these 
EPs another opportunity to report data, a few commenters believed that 
EPs should instead be held harmless or provided a waiver from a 
negative payment adjustment if the ACO fails to report.
    Response: We appreciate the commenters' support. However, we do not 
believe that EPs should be held harmless or provided a waiver if the 
ACO fails to report on their behalf. As discussed above, we believe it 
is reasonable and appropriate to expect that any ACO that is unable to 
meet satisfactory reporting requirements for any reason would inform 
the EPs participating in the ACO in a timely and transparent manner to 
allow the EPs to report separately using the registry, QCDR, direct EHR 
or EHR data submission vendor reporting options. However, if an EP or 
group practice has reason to believe their ACO may not report on their 
behalf in 2016, they have the ability to report separately for purposes 
of the 2018 PQRS payment adjustment. In addition, by permitting EPs and 
group practices to report separately from the ACO in such cases, we are 
giving them flexibility to report more directly relevant measures if 
they so choose.
    Comment: One commenter supported CMS's proposal to allow affected 
EPs to report separately via a registry, QCDR, direct EHR or EHR data 
submission vendor.
    Response: We appreciate the commenter's support for our proposal.
    Comment: One commenter recommended that for the CY 2016 reporting 
period: (1) In cases where measures data are submitted by both the EP 
and the ACO, the best performance should be counted and the EP should 
be eligible for a positive payment adjustment; or (2) in cases where 
the EP does not opt to report outside the ACO, and the ACO fails to 
report, the EP should receive a neutral payment adjustment (that is, 
the EP should be held harmless from a negative payment adjustment and 
be ineligible for a positive payment adjustment).
    Response: PQRS only assesses whether or not an EP or group practice 
satisfactorily reported quality data or satisfactorily participated in 
a QCDR. PQRS does not apply positive payment adjustments or adjust 
payments based on an EP or group practice's performance on the quality 
measures. However, the VM does apply positive payment adjustments and 
adjust payments based on the EP or group practice's performance. We 
refer readers to section III.L.3.b. of this final rule for a discussion 
of the VM policies in this scenario.
    Comment: One commenter stated that reporting the previous year's 
data is burdensome, particularly for registry measures. The commenter 
believed that requiring EPs to report separately from the ACO 
effectively penalizes the EP for the ACO's error. Instead, the 
commenter suggested that CMS impose a negative payment adjustment on 
the ACOs when they fail to report. For the 2017 PQRS payment 
adjustment, the commenter recommended that affected EPs be held 
harmless by receiving no payment adjustment. The commenter stated that 
retroactive reporting would be burdensome to the EPs and would require 
information reported using QCDRs and EHRs to simultaneously meet the 
reporting requirements and measures of multiple years.
    Response: We would like to clarify that we are not requiring 
affected EPs or group practices to report the previous year's data. EPs 
or group practices that are taking advantage of the secondary reporting 
period for the 2017 PQRS payment adjustment would be reporting data 
from CY 2016 and would be assessed using the applicable reporting 
requirements for the 2018 PQRS payment adjustment (including, but not 
limited to, the applicable PQRS measure set). In addition, we note that 
the PQRS payment adjustment does not apply to ACOs, and therefore, we 
cannot impose a negative payment adjustment on the ACOs when they fail 
to satisfactorily report.
Out of Scope Comments
    We received a few comments for this section that are out of scope 
for this final rule. We received comments pertaining to the following: 
(1) Support for CMS' proposal that EPs participating in an ACO under 
the Shared Savings Program that satisfy the CQM reporting component of 
meaningful use for the Medicare EHR Incentive Program when the EP 
extracts data necessary for the ACO to satisfy the quality reporting 
requirements under the Shared Savings Program from CEHRT and when the 
ACO reports the ACO GPRO measures through the CMS Web Interface; (2) 
recommendation that under MIPS, CMS use the PQRS data (either submitted 
by the ACO or separately by the ACO participant) which would generate 
the highest score for the quality performance category; and (3) 
requested guidance in the final rule for EPs, such as rehabilitation 
therapists, who are currently subject to PQRS, but will not be subject 
to MIPS until 2021 at the earliest.
    After consideration of the comments received regarding our proposed 
policies for EPs and group practices participating in ACOs that report 
PQRS quality measures separately from the ACO, we are finalizing the 
policies as proposed. At Sec.  414.90(j)(1)(ii), we are finalizing our 
proposal to establish a secondary PQRS reporting period for the 2017 
PQRS payment adjustment for individual EPs or group practices who bill 
under the TIN of an ACO participant if the ACO failed to report on 
behalf of such individual EPs or group practices during the previously 
established reporting period for the 2017 PQRS payment adjustment. This 
option is limited to EPs and group practices that bill through the TIN 
of an

[[Page 80445]]

ACO participant in an ACO that failed to satisfactorily report on 
behalf of its EPs and would not be available to EPs and group practices 
that failed to report for purposes of PQRS outside the Shared Savings 
Program. We are finalizing our proposal that these affected EPs may 
utilize the secondary reporting period either as an individual EP or as 
a group practice using one of the registry, QCDR, direct EHR product, 
or EHR data submission vendor reporting options. We are also finalizing 
our proposal that such EPs do not need to register for the PQRS GPRO 
for the 2017 PQRS payment adjustment. In addition, we are finalizing at 
Sec.  414.90(j)(4)(v) our proposal that sections Sec.  
414.90(j)(8)(ii), (iii), and (iv) would apply to affected EPs reporting 
as individuals using this secondary reporting period for the 2017 PQRS 
payment adjustment. Further, we are finalizing at Sec.  
414.90(j)(7)(viii) our proposal that sections Sec.  414.90(j)(9)(ii), 
(iii), and (iv) would apply to affected EPs reporting as group 
practices using this secondary reporting period for the 2017 PQRS 
payment adjustment. We are finalizing at Sec.  414.90(k)(4)(ii) our 
proposal that Sec.  414.90(k)(5) would apply to affected EPs reporting 
as individuals or group practices using this secondary reporting period 
for the 2017 PQRS payment adjustment. We are finalizing our proposal 
that the secondary reporting period for the 2017 PQRS payment 
adjustment would coincide with the reporting period for the 2018 PQRS 
payment adjustment (that is, January 1, 2016 through December 31, 
2016). In addition, we are finalizing a policy under which we will 
assess the individual EP or group practice's 2016 data using the 
applicable satisfactory reporting requirements for the 2018 PQRS 
payment adjustment (including, but not limited to, the applicable PQRS 
measure set). If an affected individual EP or group practice decides to 
use the secondary reporting period for the 2017 PQRS payment 
adjustment, the EP or group practice should expect to receive a PQRS 
payment adjustment for services furnished in 2017 until we are able to 
determine that the EP or group practice satisfactorily reported for 
purposes of the 2017 PQRS payment adjustment. Further, we are 
finalizing our proposal that the informal review submission periods for 
these EPs or group practices would occur during the 60 days following 
the release of the PQRS feedback reports for the 2018 PQRS payment 
adjustment.

I. Medicare Advantage Provider Enrollment

1. Background
a. General Overview
    The Medicare program is the primary payer of health care for 
approximately 54 million beneficiaries and enrollees. Section 1802(a) 
of the Act permits beneficiaries to obtain health services from any 
individual or organization qualified to participate in the Medicare 
program. Providers and suppliers furnishing items or services must 
comply with all applicable Medicare requirements stipulated in the Act 
and codified in the regulations. These requirements are meant to 
promote quality care while protecting the integrity of the program. As 
a major component of our fraud prevention activities, we have increased 
our efforts to prevent unqualified individuals or organizations from 
enrolling in Medicare.
    The term ``provider of services'' is defined in section 1861(u) of 
the Act as a hospital, a critical access hospital (CAH), a skilled 
nursing facility (SNF), a comprehensive outpatient rehabilitation 
facility (CORF), a home health agency (HHA), or a hospice. The term 
``supplier'' is defined in section 1861(d) of the Act as, unless 
context otherwise requires, a physician or other practitioner, facility 
or other entity (other than a provider of services) that furnishes 
items or services under title XVIII of the Act. Other supplier 
categories may include, for example, physicians, nurse practitioners, 
and physical therapists.
    Providers and suppliers that fit into these statutorily defined 
categories may enroll in Medicare if they meet the proper screening and 
enrollment requirements. This final rule will require providers and 
suppliers in MA organization networks and other designated plans 
(hereafter including MA-PD plans, FDRs, PACE, Cost HMOs or CMPs, 
demonstration programs, pilot programs, locum tenens suppliers, and 
incident-to suppliers) to be enrolled in Medicare in an approved 
status. We generally refer to an ``approved status'' as a status 
whereby a provider or supplier is enrolled in, and is not revoked from, 
the Medicare program. For example, a provider or supplier that has 
submitted an application, but has not completed the enrollment process 
with their respective Medicare Administrative Contractor (MAC), is not 
enrolled in an approved status. The submission of an enrollment 
application does not deem a provider or supplier enrolled in an 
approved status. A provider or supplier that is currently revoked from 
Medicare is not in an approved status. Out-of network or non-contract 
providers and suppliers are not required to enroll in Medicare to meet 
the requirements of this final rule with respect to furnishing items 
and services to MA enrollees.
b. Background
    To receive payment for a furnished Medicare Part A or Part B 
service or item, or to order, certify, or prescribe certain Medicare 
services, items, and drugs, a provider or supplier must enroll in 
Medicare. The enrollment process requires the provider or supplier to 
complete, sign, and submit to its assigned Medicare contractor the 
appropriate Form CMS-855 enrollment application. The CMS-855 
application form captures information about the provider or supplier 
that is needed for CMS or its contractors to screen the provider or 
supplier, verify the information provided, and determine whether the 
provider or supplier meets all Medicare requirements. This screening 
prior to enrollment helps to ensure that unqualified individuals and 
entities do not bill Medicare and that the Medicare Trust Funds are 
accordingly protected. Data collected and verified during the 
enrollment process generally includes, but is not limited to: (1) Basic 
identifying information (for example, legal business name, tax 
identification number); (2) state licensure information; (3) practice 
locations; and (4) information regarding ownership and management 
control.
    We strive to further strengthen the provider and supplier 
enrollment process to prevent problematic providers and suppliers from 
entering the Medicare program. This includes, but is not limited to, 
enhancing our program integrity monitoring systems and revising our 
provider and supplier enrollment regulations in 42 CFR 424, subpart P, 
and elsewhere, as needed. With authority granted by the Act, including 
provisions in the Affordable Care Act, we have revised our provider and 
supplier enrollment regulations by issuing the following:
     In the February 2, 2011 Federal Register (76 FR 5861), we 
published a final rule with comment period titled, ``Medicare, 
Medicaid, and Children's Health Insurance Programs; Additional 
Screening Requirements, Application Fees, Temporary Enrollment 
Moratoria, Payment Suspensions and Compliance Plans for Providers and 
Suppliers.'' This final rule with comment period implemented major 
Affordable Care Act provisions, including the following:

[[Page 80446]]

    ++ A requirement that institutional providers and suppliers must 
submit application fees as part of the Medicare, Medicaid, and CHIP 
provider and supplier enrollment processes.
    ++ Establishment of Medicare, Medicaid, and CHIP provider and 
supplier risk-based enrollment screening categories and corresponding 
screening requirements.
    ++ Authority that enabled imposition of temporary moratoria on the 
enrollment of new Medicare, Medicaid, and CHIP providers and suppliers 
of a particular type (or the establishment of new practice locations of 
a particular type) in a geographic area.
     In the April 27, 2012 Federal Register (77 FR 25284), we 
published a final rule titled, ``Medicare and Medicaid Programs; 
Changes in Provider and Supplier Enrollment, Ordering and Referring, 
and Documentation Requirements and Changes in Provider Agreements.'' 
The rule implemented another major Affordable Care Act provision and 
required, among other things, that providers and suppliers that order 
or certify certain items or services be enrolled in or validly opted-
out of the Medicare program.
    ++ This requirement was expanded to include prescribers of Medicare 
Part D drugs in the final rule published in the May 23, 2014 Federal 
Register (79 FR 29844) titled, ``Medicare Program; Contract Year 2015 
Policy and Technical Changes to the Medicare Advantage and the Medicare 
Prescription Drug Benefit Programs.''
    Through improved processes and systems, since March 2011 we have:
     Saved over $927 million by revoking Medicare Part A and B 
providers and suppliers that did not comply with Medicare requirements;
     Avoided over $2.4 billion in costs by preventing further 
billing from revoked and deactivated Medicare Part A and B providers 
and suppliers;
     Deactivated more than 543,163 Medicare Part A and B 
providers and suppliers that did not meet Medicare enrollment 
standards;
     Revoked enrollment and billing privileges under Sec.  
424.535 for more than 34,888 Medicare Parts A and B providers and 
suppliers that did not meet Medicare enrollment standards, and
     Denied 4,949 applications for providers and suppliers in 
Medicare Parts A and B that did not meet Medicare enrollment standards 
within a recent 12-month period.\14\
---------------------------------------------------------------------------

    \14\ Taken from Shantanu Agrawal, M.D. testimony to Congress on 
July 22, 2015 http://www.aging.senate.gov/imo/media/doc/CMS%20_Agrawal_7_22_15.pdf.
---------------------------------------------------------------------------

    The public may review the Annual Report to Congress on the Medicare 
and Medicaid Integrity Programs each year for more information on 
program integrity efforts, including how we calculate savings to the 
Medicare and Medicaid programs. The Department of Health and Human 
Services (HHS), Office of Inspector General (OIG), Government 
Accountability Office (GAO), and other federal agencies routinely 
review Medicare's provider and supplier enrollment processes and 
systems, including a recent study stating that ``as part of an overall 
effort to enhance program integrity and reduce fraud risk, effective 
enrollment-screening procedures are essential to ensure that ineligible 
or potentially fraudulent providers or suppliers do not enroll in the 
Medicare program.'' (GAO-15-448) The enrollment screening authorities 
granted in the Affordable Care Act and used to prevent and detect 
ineligible or potentially fraudulent providers and suppliers from 
enrolling in the Medicare program are working to protect beneficiaries 
and the Medicare Trust Funds.
    Under applicable provisions of the Tax Equity and Fiscal 
Responsibility Act (TEFRA) of 1982, Medicare began to pay health plans 
on a prospective risk basis for the first time. The Balanced Budget Act 
of 1997 (BBA) modified these provisions and established a new Part C of 
the Medicare program, known as Medicare+Choice (M+C), effective January 
1999. As part of the M+C program, the BBA authorized us to contract 
with public or private organizations to offer a variety of health plan 
options for enrollees, including both traditional managed care plans 
(such as those offered by HMOs, as defined in section 1876 of the Act) 
and new options not previously authorized.
    The M+C program was renamed the Medicare Advantage (MA) program 
under Title II of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (MMA) (Pub. L. 108-173), which was enacted on 
December 8, 2003. The MMA updated the choice of plans for enrollees 
under MA and changed how benefits are established and payments are 
made. In addition, Title I of the MMA established the Medicare 
prescription drug benefit (Part D) program and amended the MA program 
to allow most types of MA plans to offer prescription drug coverage.
    All Medicare health plans, with the exception of PACE 
organizations, operating in geographic areas that we determine to have 
enough qualified providers and suppliers with which to contract in 
order for enrollees to have access to all Medicare Part A and Part B 
services, must develop a network of qualified providers and suppliers 
that meet our network adequacy standards. As a condition of contracting 
with us, the health plans' contracted network of providers and 
suppliers must be approved by us as part of application approval (Sec.  
417.406). PACE organizations must furnish comprehensive medical, 
health, and social services that integrate acute and long-term care in 
at least the PACE center, the participant's home, or inpatient 
facilities, and must ensure accessible and adequate services to meet 
the needs of its participants.
    Individuals receiving care through MA organizations are typically 
referred to as enrollees, while in other parts of the Medicare program, 
benefit recipients are referred to as beneficiaries. This rule does not 
change the proper meaning of either term; however, for ease of reading, 
the terms ``beneficiary'' and ``enrollee'' are used synonymously 
throughout the preamble of this final rule.
2. Provisions of the Proposed Regulation
a. Need for Regulatory Action
    This final rule will require providers or suppliers that furnish 
health care items or services to a Medicare enrollee who receives his 
or her Medicare benefit through an MA organization to be enrolled in 
Medicare and be in an approved status. The term ``MA organization'' 
refers to both MA plans and also MA plans that provide drug coverage, 
otherwise known as MA-PD plans. This final rule creates consistency 
with the provider and supplier enrollment requirements for all other 
Medicare (Part A, Part B, and Part D) programs. We believe that this 
final rule is necessary to help ensure that Medicare enrollees receive 
items or services from providers and suppliers that are fully compliant 
with the requirements for Medicare enrollment and that are in an 
approved enrollment status in Medicare. This final rule will assist our 
efforts to prevent fraud, waste, and abuse and to protect Medicare 
enrollees by carefully screening all providers and suppliers, 
especially those that potentially pose an elevated risk to Medicare, to 
ensure that they are qualified to furnish Medicare items and services. 
Out-of-network or non-contract providers and suppliers are not required 
to enroll in Medicare to meet the requirements of this final rule.

[[Page 80447]]

    We consider provider and supplier enrollment to be the gateway to 
the Medicare program and to beneficiaries. Requiring enrollment of 
those that wish to furnish items or services to MA beneficiaries gives 
us improved oversight of the providers and suppliers treating 
beneficiaries and the Medicare Trust Funds dollars spent on their care. 
However, Medicare has not historically had direct oversight over all 
providers and suppliers in MA organizations. We note that Sec.  422.204 
requires MA organizations to conduct screening of their providers. We 
believe that we, through our enrollment processes, can further ensure 
that only qualified providers and suppliers treat Medicare 
beneficiaries by conducting rigorous screening and rescreening of 
providers and suppliers that includes, for example, risk-based site 
visits and, in some cases, fingerprint-based background checks. We also 
have access to information and data not available to MA organizations, 
making oversight to ensure compliance with all federal and state 
requirements more robust. We also continually review provider and 
supplier enrollment information from multiple sources, such as judicial 
and law enforcement databases, state licensure databases, professional 
credentialing sources, and other systems of record. In short, we 
collect and carefully review and verify information prior to the 
provider's or supplier's enrollment and, of great importance, continue 
this monitoring throughout the period of enrollment. Section 422.204, 
on the other hand, neither requires MA organizations to, for instance, 
review a provider or supplier's final adverse action history (as 
defined in Sec.  424.502), nor to verify a provider or supplier's 
practice location, ownership, or general identifying information.
    We believe that MA organization enrollees should have the same 
protections against potentially unqualified or fraudulent providers and 
suppliers as those afforded to beneficiaries under the fee-for-service 
(FFS) and Part D programs. Indeed, Medicare beneficiaries and 
enrollees, the Medicare Trust Funds, and the program at large, are at 
risk when providers and suppliers that have not been adequately 
screened, furnish, order, certify, or prescribe Medicare services and 
items and receive Medicare payments. For instance, a network provider 
with a history of performing medically unnecessary tests, treatments, 
or procedures could threaten enrollees' welfare, as could a physician 
who routinely overprescribes dangerous drugs. Lack of sufficient 
oversight could also result in improper Medicare payments, harming the 
Medicare Trust Funds and taxpayers. Requiring enrollment allows us to 
have proper oversight of providers and suppliers, making it more 
difficult for these types of providers and suppliers to enroll in 
Medicare and remain enrolled in Medicare. Furthermore, it allows us to 
remove a enrolled provider or supplier that does not comply with our 
rules across Medicare (Part A, Part B, MA, and Part D).
    Information regarding a provider or supplier's enrollment status is 
housed in our enrollment repository called the Provider Enrollment, 
Chain and Ownership System (PECOS). A link to that information is 
located on the CMS Web site. Initial data show a large percent of MA 
providers and suppliers are already enrolled in Medicare. We do not 
believe that this final rule will have a significant impact on MA 
organizations' ability to establish networks of contracted providers 
and suppliers that meet CMS' MA network requirements. However, we 
solicited industry comment on the potential impact of this final rule 
on MA organizations ability to establish or maintain an adequate 
networks of providers and suppliers. To clarify, this rule only 
requires the enrollment of providers and suppliers that are of a 
provider or supplier type eligible to enroll in Medicare. 
Categorically- eligible providers and suppliers unable to meet the 
specific enrollment requirements are not exempt from this rule. For 
example, if a clinical social worker cannot meet an education 
requirement as required by Sec.  410.73, the clinical social worker 
cannot enroll because he or she fails to meet program requirements. 
Therefore, this clinical social worker may not provide items and 
services to beneficiaries that receive items and services through FFS, 
MA, MA-PD, PACE, and Cost plans, as well as demonstration and pilot 
programs, regardless of whether the provider or supplier is listed on a 
specific claim for payment.
    We believe that preventing questionable providers or suppliers from 
participating in the MA program and removing existing unqualified 
providers and suppliers will help ensure that fewer enrollees are 
exposed to risks and potential harm, and that taxpayer monies are spent 
appropriately. Such a policy will also help comply with the GAO's 
recommendation that we improve our provider and supplier enrollment 
processes and systems to increase the protection of all beneficiaries 
and the Medicare Trust Funds. (GAO-15-448). The additional resources 
and oversight that we provide in our processes for enrolling providers 
and suppliers will enhance and complement the screening processes that 
MA organizations already are required to perform.
b. Statutory Authority
    The following are the principal legal authorities for these 
provisions:
     Section 1856(b) of the Act provides that the Secretary 
shall establish by regulation other standards for Medicare+Choice 
organizations and plans consistent with, and to carry out, this part. 
In addition, section 1856(b) states that these standards supersede any 
state law or regulation (other than those related to licensing or plan 
solvency) for all MA organizations.
     Sections 1102 and 1871 of the Act, which provide general 
authority for the Secretary to prescribe regulations for the efficient 
administration of the Medicare program.
     Section 1866(j) of the Act, which provides specific 
authority with respect to the enrollment process for providers and 
suppliers in the Medicare program.
3. Major Provisions
    Given the foregoing and the need to safeguard the Medicare program 
and its enrollees, we are finalizing most provisions included in the 
proposed rule, with limited exceptions and explained herein.
    Although existing regulations at Sec.  422.204 address basic 
requirements for MA provider credentialing, we are finalizing the 
requirement in Sec.  422.204(b)(5) to require plans to verify that they 
are compliant with the provider and supplier enrollment requirements. 
We believe this addition would help facilitate MA organizations' 
compliance.
    In Sec. Sec.  422.222, 417.478, 460.50, 460.70, and 460.71 we are 
finalizing the provisions requiring providers and suppliers to enroll 
in Medicare and be in an approved status in order to provide health 
care items or services to a Medicare enrollee who receives his or her 
Medicare benefit through an MA organization. This requirement would 
apply to network providers and suppliers; first-tier, downstream, and 
related entities (FDR); providers and suppliers participating in the 
Program of All-inclusive Care for the Elderly (PACE); suppliers in Cost 
HMOs or CMPs; providers and suppliers participating in demonstration 
programs; providers and suppliers in pilot programs; locum tenens 
suppliers; and incident-to suppliers. Based on a comment we received, 
we made a change from the proposed rule when

[[Page 80448]]

finalizing a specific provision relating to the PACE program. 
Commenters were concerned that the requirement to update PACE program 
agreements with the name and NPIs of all enrolled providers and 
suppliers was extremely burdensome based on the nature of the 
agreements and it imposed more of a burden than was established for 
other plans and programs required to comply with this rule. Instead of 
requiring PACE organizations to update the program agreement with the 
name and NPI of all providers and suppliers (Sec.  460.32), we added 
language to Sec.  460.70 and Sec.  460.71 that better reflect the 
enrollment requirements imposed on MA organizations. We agree that we 
can achieve the same program integrity goals, without the added burden 
of having PACE organizations reflect this information in the program 
agreement. Based on a comment we received, we also moved the 
requirement for PACE that was included in 422.222 and relocated it to 
better align with the PACE program. The requirements remain the same; 
however, the enrollment requirements are now contained in part 460.
    We are finalizing the provisions in Sec.  422.510, Sec.  422.752, 
Sec.  460.40, and Sec.  460.50 stating that organizations and programs 
that do not ensure that providers and suppliers comply with the 
provider and supplier enrollment requirements may be subject to 
sanctions and termination. Considering the serious risks to the 
Medicare program and enrollees from fraudulent or unqualified providers 
and suppliers, we believe that these are actions may be appropriate.
    Current rules allow MA organizations to contract with different 
entities to provide services to beneficiaries. These contracted 
entities are referred to as first-tier, downstream, and related 
entities or FDRs, as defined in Sec.  422.500. FDRs must enroll to 
comply with this rule.
    PACE is a Medicare and Medicaid program that helps people meet 
their health care needs in the community instead of going to a nursing 
home or other care facility, wherein a team of health care 
professionals works with participants and their families to make sure 
participants get the coordinated care they need. A participant enrolled 
in PACE must receive Medicare and Medicaid benefits solely through the 
PACE organization. To ensure consistency within our programs, we 
believe that our provider and supplier enrollment requirements should 
extend to this program.
    Medicare Cost HMOs or CMPs are a type of Medicare health plan 
available in certain areas of the country. Some Cost HMOs or CMPs only 
provide coverage for Part B services. Cost HMOs or CMPs do not include 
Part D. These plans are either sponsored by employer or union group 
health plans or offered by companies that do not provide Part A 
services.
    Demonstrations and pilot programs, also called research studies, 
are special projects that test improvements in Medicare coverage, 
payment, and quality of care. They usually operate only for a limited 
time for a specific group of people and may only be offered only in 
specific areas. Providers and suppliers in these programs would not be 
exempt from the requirements of this final rule.
    In Sec. Sec.  422.224 and 460.86, we are finalizing the prohibition 
on MA, PACE, the other designated programs and organizations from 
paying individuals or entities that are excluded by the OIG or revoked 
from the Medicare program. These provisions also require MA, PACE, the 
other designated programs and organizations to notify the enrollee and 
the excluded or revoked provider or supplier that payment shall not be 
made. We are not, however, finalizing a first time allowance for 
payment. Based on further analysis, we believe a first time payment 
allowance would violate existing statute. However, we believe that 
beneficiaries are adequately protected in these situations based upon 
regulatory protections afforded at 42 CFR 1001.1901(b) and Sec.  
424.555(b) that preclude OIG excluded individuals and entities, as well 
as revoked, deactivated, or Medicare enrollment denied providers or 
suppliers from recouping payment from beneficiaries. We continue to 
believe such excluded or revoked individuals and entities pose a 
significant risk to enrollees and the Medicare program and should not 
receive federal dollars, even if payment is made through an 
intermediary such as an MA organization. Based upon the inclusion of 
PACE in Sec.  422.222 in the proposed rule, and our relocating the PACE 
requirement to part 460, the application of the prohibition to pay 
excluded and revoked providers and suppliers also needs to be 
separately designated. Therefore, in this final rule, the sections 
applicable to not paying excluded or revoked providers and suppliers is 
now designated in Sec.  460.86.
    In Sec.  422.501(c)(2), we are finalizing language requiring MA 
organization applications to include documentation demonstrating that 
all applicable providers and suppliers are enrolled in Medicare in an 
approved status. We believe that this will assist CMS in the MA 
organization application process by requiring MA organizations to 
provide assurance that the designated providers and suppliers are 
properly screened and enrolled in Medicare.
    In Sec.  422.504(a)(6), we are finalizing language with respect to 
contract conditions. MA organizations must agree to comply with all 
applicable provider requirements in subpart E of this part, including 
provider certification requirements, anti-discrimination requirements, 
provider participation and consultation requirements, the prohibition 
on interference with provider advice, limits on provider 
indemnification, rules governing payments to providers, and limits on 
physician incentive plans. In Sec.  422.504(a)(6), we are finalizing 
the extension of this requirement to suppliers. In this same section, 
we also are finalizing the requirement for MA organizations to comply 
with the provider and supplier enrollment requirements referenced in 
Sec.  422.222. We believe these revisions would help facilitate the MA 
organizations' compliance with Sec.  422.222. In Sec. Sec.  
422.504(i)(2)(v), 417.484, 460.70, and 460.71, we are finalizing 
provisions that require MA organizations, Cost plans, and PACE 
organizations to require all FDRs and contracted entities to agree to 
comply with the provider and supplier enrollment provision.
    Finally, the provisions are effective the first day of the next 
plan year that begins 2 years from the date of publication of the CY 
2017 PFS final rule. For PACE organizations, these requirements will be 
effective the first day of the calendar year that is 2 years after the 
publication of this final rule.
    We believe this would give all stakeholders sufficient time to 
prepare for these requirements. We are unable to impose new 
requirements on MA organizations mid-year, and therefore, must wait to 
make these rules effective.
    The following is a summary of the comments we received on MA 
provider enrollment.
Enrollment File
    Comment: A commenter expressed concern that CMS' requirements for 
plan validation are overly burdensome. The commenter noted that, as a 
condition of contracting with CMS, an MA organization would have to 
agree to provide documentation that all providers and suppliers in the 
MA or MA-PD plan who could enroll in Medicare were indeed enrolled. 
Believing that the providers themselves should be involved in this 
process, the commenter stated that providers should submit the required 
documentation to CMS (as in the FFS program) and that

[[Page 80449]]

CMS should in turn maintain a ``source of truth'' document for audit 
and compliance purposes. The commenter stated that provider information 
can change frequently and become outdated; without a ``source of 
truth'' to confirm a provider's enrollment in Medicare, the commenter 
said, unintended consequences could arise.
    Response: We do not agree that this requirement is overly 
burdensome. We have made compliance simple by providing a file of 
enrolled providers and suppliers. We maintain all provider enrollment 
information in PECOS, our enrollment repository. In an effort to 
provide MA organization with the necessary information, an online, 
public file listing enrolled providers and suppliers has already been 
made available to MA organizations and will continue to be updated at a 
frequency to be determined and announced through established processes 
such as a Medicare Learning Network (MLN) article. We believe this 
approach will provide MA organizations with sufficient access to the 
necessary provider enrollment information for the relevant requirements 
under this final rule. In addition, providers and suppliers will be 
required to submit documentation to a CMS contractor, consistent with 
current Medicare enrollment processes.
    Comment: Several commenters asked how CMS will communicate provider 
and supplier information to individual MA organizations so that they 
can remain compliant with our proposed requirement. Another commenter 
asked how CMS will verify the inclusion or exclusion of enrolled 
providers and suppliers. Several commenters stated that if CMS 
finalizes its proposed requirement, it must grant the MA organizations 
full access to PECOS so they can confirm a provider's or supplier's 
enrollment status. A commenter recommended that CMS make publicly 
available a list of all Medicare revocations, including the date and 
reason for the revocation. Several commenters suggested that MA 
organizations be given access to PECOS or some other means of verifying 
an MA provider's or supplier's enrollment in Medicare. This would, they 
contended, reduce the burden on the plans and help ensure the plans' 
compliance with the requirements of Sec.  422.222.
    Response: We have created a public file that will be regularly 
updated with provider and supplier enrollment information at a 
frequency to be determined and announced through established processes 
such as a MLN article. As mentioned previously, we believe this is an 
efficient and sufficient approach to providing information to plans, 
and we do not believe that MA organizations need full access to PECOS 
to obtain the information necessary to comply with this final rule. 
Regarding revoked providers, providers or suppliers that are revoked 
from the program will not be included in the enrollment file because 
they are not validly enrolled.
    Comment: A commenter asked how CMS will communicate with MA 
organizations if it revokes a provider's or supplier's enrollment and 
what steps the MA organization would be required to take in response to 
the revocation.
    Response: We will periodically update our enrollment file made 
available to MA organizations. Providers or suppliers that are revoked 
from the program will not be included in the enrollment file because 
they are not validly enrolled. MA organizations will be expected to 
check the enrollment file to ensure all providers and suppliers are 
validly enrolled and may not have an unenrolled provider and supplier 
in their network. As we move toward implementation, we will provide 
subregulatory guidance with respect to revoked providers and suppliers.
    Comment: A commenter asked whether our proposed enrollment 
requirement represents a mere clarification of Sec.  422.204(b)(2)(i), 
which outlines the provider credentialing process, or constitutes a new 
and expanded process that MA organizations must address in their 
policies and contracting processes. If it is the latter, the commenter 
requested specific information on the ``source of truth'' and the 
method for MA organizations to verify this information (for example, 
whether MA organizations will have to confirm the enrollment statuses 
of providers and suppliers via a CMS Web site or whether CMS will 
furnish a list of enrolled providers and suppliers to the MA 
organizations).
    Response: This requirement is not a mere clarification of Sec.  
422.204(b)(2)(i) but imposes additional requirements on plans to ensure 
that their providers and suppliers are screened and enrolled in 
Medicare. These requirements are an expansion of Sec.  
422.204(b)(2)(i). Verification of enrollment can be found by accessing 
the online enrollment file we have provided to the public, which will 
be updated to reflect changing enrollment data.
Authority and Burden
    Comment: A commenter suggested that CMS estimate the number of 
providers and suppliers that furnish care to Medicare beneficiaries 
through an MA organization only and not through the Medicare FFS 
program and that CMS include this figure and the associated cost in its 
regulatory burden and Paperwork Reduction Act estimates.
    Response: We appreciate the opportunity to clarify that these are 
the exact figures reflected in the proposed rule and in this final rule 
in the regulatory burden and Paperwork Reduction Act sections.
    Comment: A commenter asked that CMS: (1) Monitor the impact of 
these requirements on MA organization networks and physician enrollment 
and, if negative effects are found, to either roll-back the requirement 
or implement appropriate changes; (2) create realistic implementation 
timeframes and comprehensive outreach plans; and (3) establish 
beneficiary financial protections during the transition. Another 
commenter recommended that CMS improve its enrollment processes so that 
those affected can enroll in a timely manner.
    Response: We appreciate the commenters' suggestions and will take 
these suggestions into consideration as we move forward with 
operational plans.
    Comment: A commenter asked whether CMS has conducted a preliminary 
assessment of the potential nationwide impact this requirement.
    Response: We have made that assessment, and it is reflected in our 
Regulatory Impact Analysis.
    Comment: A commenter sought clarification on how the provisions of 
Sec.  422.222 would improve program integrity and quality of care.
    Response: This final rule would assist our efforts to prevent 
fraud, waste, and abuse and to protect Medicare enrollees by carefully 
screening all providers and suppliers, especially those that 
potentially pose an elevated risk to Medicare, to ensure that they are 
qualified to furnish Medicare items and services. These requirements 
are not a clarification of Sec.  422.204(b)(2)(i), but impose 
additional requirements on plans to ensure that their providers and 
suppliers are screened and enrolled in Medicare. Requiring enrollment 
of those that wish to furnish items or services to MA beneficiaries 
gives us improved oversight of the providers and suppliers treating 
beneficiaries and the Medicare Trust Fund dollars spent on their care. 
Prior to this rule, Medicare did not have direct oversight over all 
providers and suppliers furnishing items and services to enrollees of 
MA organizations. Section 422.204 requires MA organizations to conduct 
screening of their providers. We believe that we can, through our 
enrollment processes, conduct more robust verification of the

[[Page 80450]]

information provided during enrollment so that only qualified providers 
and suppliers treat Medicare beneficiaries by conducting rigorous 
screening and rescreening of providers and suppliers, risk-based site 
visits and fingerprint-based background checks. We also have access to 
information and data not available to MA organizations, making 
oversight to ensure compliance with all federal and state requirements 
more robust. These checks prevent certain providers and suppliers from 
furnishing items and services to beneficiaries, such as a doctor 
convicted of a felony for abusing patients. While we are hopeful that 
licensing boards would take action to prevent providers and suppliers 
such as this from lawfully providing services to patients in the 
future, we cannot always rely on the boards to take the action we 
believe is appropriate when serving beneficiaries. We believe that MA 
organization enrollees should have the same protections against 
potentially unqualified or fraudulent providers and suppliers as those 
afforded to beneficiaries under the FFS and Part D programs. Our 
program integrity concerns are furthered by having the ability to 
easily consolidate data across all lines of Medicare to see billing 
patterns and schemes for a particular provider or supplier. For 
example, a network provider with a history of performing medically 
unnecessary tests, treatments, or procedures could threaten enrollees' 
welfare, as could a physician who routinely overprescribes dangerous 
drugs. This could also result in improper Medicare payments, harming 
the Medicare Trust Funds and taxpayers. A benefit of enrolling all 
providers and suppliers in Medicare is the ability to remove a provider 
or supplier for failure to meet our requirements or violates federal 
rules and regulations. Not only is the provider or supplier unable to 
bill a particular MA organization, but they also may not bill any other 
plan, bill Medicare, order and certify Medicare items and services, or 
prescribe Part D drugs.
    Comment: A commenter opposed our proposed enrollment requirement, 
stating that it would be redundant in that all payers have rigorous 
screening and rescreening processes, as well as programs to ensure 
quality and cost effectiveness. The commenter also stated that: (1) 
physician quality data is transparent and made available through payer 
Web sites and portals to provide members with the opportunity to choose 
highly rated qualified physicians; and (2) MA plans should be 
responsible for ensuring that they are enrolling the most qualified 
physicians into their networks. In addition, the commenter encouraged 
CMS to ensure that health plans are consulting the OIG exclusion list 
to guarantee that physicians who have been convicted of crimes are not 
in the MA networks.
    Response: We appreciate the commenter's concerns; however, we 
respectfully disagree and believe that our enrollment screening 
processes (for example, risk-based site visits and fingerprint-based 
background checks) help to ensure that qualified providers and 
suppliers treat Medicare beneficiaries. We conduct rigorous screening 
and rescreening of providers and suppliers. We also have access to 
information and data that is not available to MA organizations, which 
enhances enrollment screening and helps ensure that providers and 
suppliers are in compliance with all federal and state requirements. 
Moreover, we also continually review provider and supplier enrollment 
information from multiple sources, such as judicial, law enforcement, 
state licensure, professional credentialing, and other databases for 
which MA organizations do not have access. In short, we collect and 
verify information prior to the provider's or supplier's enrollment 
and, of great importance, continue this monitoring throughout the 
period of enrollment. Section 422.204, on the other hand, neither 
requires MA organizations to, for instance, review a provider or 
supplier's final adverse action history (as defined in Sec.  424.502), 
nor to verify a provider or supplier's practice location, ownership, or 
general identifying information.
    Comment: A commenter questioned the need for our proposal by 
stating that CMS did not provide empirical evidence of problems in MA 
for which our enrollment requirement would be appropriate or fully 
address the proposal's impact on network adequacy and potential 
downstream beneficiary access issues. The commenter stated that the 
requirement is a FFS solution developed for FFS program integrity 
issues and is improper for the MA program. The commenter urged CMS to 
withdraw the proposal and work with plans to develop solutions that are 
better applicable to the MA program. Another commenter suggested that 
CMS cite the specific OIG or GAO reports that recommend that MA 
providers and suppliers be enrolled in Medicare FFS and furnish 
evidence that our proposed requirement would improve care for MA 
beneficiaries.
    Response: We believe that the vulnerabilities identified by the GAO 
(GAO-15-448) provide sufficient justification to impose this 
requirement. Based upon our analysis of unenrolled providers and 
suppliers that only provide services for MA organizations and do not 
bill Medicare FFS, we do not believe there will be network adequacy 
issues or beneficiary access issues. Regarding the commenter's concern 
that Medicare enrollment and screening is a FFS solution and is 
improper for the MA program, we note that MA organizations' 
requirements for screening providers and suppliers are similar to 
Medicare screening and enrollment in that MA organizations have 
requirements to, for example, perform site visits, check licensure, and 
to complete background checks. However, MA organizations have 
discretion in administering their screening and verification 
procedures. The Medicare enrollment process is much more robust and 
provides heightened consistency to the MA organizations' screening 
processes and also allows for screening using databases that are not 
available to MA organizations.
    As discussed in the preamble, a recent GAO study stated that ``as 
part of an overall effort to enhance program integrity and reduce fraud 
risk, effective enrollment-screening procedures are essential to ensure 
that ineligible or potentially fraudulent providers or suppliers do not 
enroll in the Medicare program.'' (GAO-15-448) This study's 
recommendations did not specifically recommend MA provider and supplier 
enrollment; however, these new provisions are part of an overall plan 
to ensure standard screening for those providers and suppliers treating 
MA beneficiaries. Evidentiary support for improved care for 
beneficiaries can be seen by reviewing the Annual Report to Congress on 
the Medicare and Medicaid Integrity Programs, which gives more 
information on program integrity efforts and administrative actions. 
This report demonstrates statistical evidence of the judicial and 
administrative actions taken against providers and suppliers, such as, 
licensure suspensions, felony convictions, and Medicare revocations.
    Comment: A commenter recommended that CMS identify the types of 
oversight it currently uses to ensure that MA organizations do not have 
unlicensed or fraudulent providers and suppliers participating in their 
network.
    Response: These regulatory requirements are specified at Sec.  
422.204 and impose obligations on plans.
    Comment: A commenter recommended that CMS streamline and improve 
the enrollment process before implementing its proposed MA enrollment 
requirements. Another

[[Page 80451]]

commenter urged CMS to administer the enrollment requirements in a 
manner that limits the burden on physician practices as much as 
possible.
    Response: We appreciate the commenters' concerns and have taken 
steps to make the enrollment process as streamlined as possible, but we 
do not believe that implementation should be delayed. The application 
process, especially for physicians and physician practices, requires 
the provision of basic information that should be easily obtained, such 
as name, NPI, practice locations, licensure number, criminal history, 
and education. We do not believe that furnishing this information will 
be overly burdensome for providers and suppliers. Moreover, this 
information provides great value in assessing the risk to beneficiaries 
and the program. Consequently, we decline to delay the requirements in 
this rule.
    Comment: A commenter urged CMS to work with plans so that an 
informed assessment of the potential impact of our proposed 
requirements can be developed before the rule is finalized.
    Response: We remain committed to working with plans to help them 
understand and be compliant with these requirements; however, we 
decline to delay implementation. We have reviewed all public comments 
and considered the potential impacts provided by commenters and 
internal stakeholders prior to finalizing this rule.
    Comment: Several commenters opposed CMS' proposal. One commenter 
stated that it represents a regulatory overreach and asked CMS to cite 
the legal authority for the proposal, explain our justification for the 
proposal, and identify the specific problem the proposal is intended to 
resolve. The commenter stated that CMS did not furnish evidence that MA 
providers are unqualified or fraudulent and suggested that CMS provide 
examples of where (1) an MA provider or supplier was not licensed to 
practice medicine and where the MA organization did not take the 
appropriate action to terminate the provider or supplier; (2) CMS has 
taken a compliance action against an MA organization for failing to 
exclude unlicensed or fraudulent providers or suppliers from their 
network; and (3) CMS imposed civil money penalties or sanctions on an 
MA organization for its failure to protect its members from unlicensed 
or fraudulent providers or suppliers. Other commenters stated that the 
proposed requirement would be overly burdensome on plans and providers.
    Response: Our legal authority is based upon section 1856(b) of the 
Act, which provides that the Secretary shall establish by regulation 
other standards for Medicare+Choice organizations and plans 
``consistent with, and to carry out, this part.'' In addition, section 
1856(b) of the Act states that these standards supersede any state law 
or regulation (other than those related to licensing or plan solvency) 
for all MA organizations. We have also relied on sections 1102 and 1871 
of the Act, which provide general authority for the Secretary to 
prescribe regulations for the efficient administration of the Medicare 
program. Section 1866(j) of the Act gives us specific authority with 
respect to the enrollment process for providers and suppliers in the 
Medicare program.
    Our justification for broadening our enrollment requirements is 
based upon a desire for MA organization enrollees to have the same 
protections against potentially unqualified or fraudulent providers and 
suppliers as those afforded to beneficiaries under the FFS and Part D 
programs. We believe that robust screening is fundamentally important 
to promote quality of care. Medicare beneficiaries and enrollees, the 
Medicare Trust Funds, and the program at large, are at risk when 
providers and suppliers that have not been adequately screened furnish, 
order, certify, or prescribe Medicare services and items and receive 
Medicare payments. Requiring enrollment allows us to have proper 
oversight of providers and suppliers, making it more difficult for 
these types of providers and suppliers to enroll in Medicare and remain 
enrolled in Medicare. Furthermore, it allows us to remove a provider or 
supplier that does not comply with our rules across Medicare (Part A, 
Part B, MA, and Part D).
    We believe the GAO report cited herein provides specific examples 
and evidence of our need to standardize the enrollment process and take 
advantage of the information available to Medicare that the MA 
organizations cannot access. We believe the enrollment file provides an 
efficient way for the plans to ensure that providers and suppliers are 
enrolled, which will minimize burden on plans.
    Comment: A commenter expressed concern that some of the operational 
challenges encountered in CMS' implementation of the Part D prescriber 
enrollment requirement could also occur during implementation of a 
similar requirement in MA. The commenter urged CMS to implement its MA 
enrollment requirement in a manner that avoids such issues. 
Specifically, the commenter urged CMS to improve application processing 
timeframes, test file protocols, and file layouts while developing a 
mechanism to require providers to update their taxonomy codes.
    Response: We appreciate this comment and will continue our ongoing 
work to minimize burden on MA organizations, as well as providers and 
suppliers, while ensuring that an effective and efficient enrollment 
process, as well as outreach and education efforts, exist to 
operationalize the requirements under this final rule.
    Comment: A commenter expressed concern that certain contractual 
arrangements that are currently required for SNFs under Medicare Parts 
A and B might be disallowed under the proposed rule. The commenter 
stated that SNFs are statutorily required under consolidated billing to 
submit charges for certain ancillary services, such as rehabilitation 
therapy and portable x-ray services as a part of the nursing facility's 
institutional claim; that is, Medicare Part B requires that the nursing 
facility bill Medicare for these services. The commenter sought 
clarification on the question of contractual disallowance, given the 
proposed rule's objectives of achieving consistency between MA and 
Medicare Parts A and B and whether such ancillary service providers 
must enroll as Medicare providers.
    Response: This rule does not address the payment arrangements 
described by the commenter. We note that Part A and B providers and 
suppliers are already required to enroll in Medicare. These provisions 
only provide for requirements for the Medicare enrollment of MA 
organization providers and suppliers and prohibition of payment in 
certain circumstances such as an OIG exclusion or Medicare revocation.
Plan Noncompliance
    Comment: A commenter contended that sanctioning or terminating 
plans for non-compliance with our enrollment requirements is too 
aggressive. The commenter stated that plans will need to ensure that 
systems are updated with current provider information and that new 
information can be received and reviewed in a timely manner. The 
commenter stated that legitimate errors could arise throughout the 
process, and that rather than immediately sanction or terminate a plan 
(which would have negative consequences on its members), CMS should 
instead put into place a process for remediation. Plans that are 
consistently found to be in non-compliance with the rules, the 
commenter said, should face enforcement action, but first time 
``offenders'' should be given the

[[Page 80452]]

opportunity to work through challenges with both CMS and providers.
    Response: We will work with MA organizations and all other 
stakeholders as we move forward with implementation. We have discretion 
in determining the appropriate action to take for noncompliant plans, 
such that any remedial actions or penalties imposed on plans that do 
not comply with the requirements of this rule will be the result of 
thorough analysis of all relevant factors. Furthermore, we have 
provided the stakeholders with more than 2 years to make the changes 
necessary to accommodate this requirement.
    Comment: A commenter asked whether beneficiary complaints about the 
MA organization due to the impact of the enrollment requirement (for 
example, the beneficiary can no longer receive covered services from a 
non-enrolled provider) will affect a plan's Star Rating. The commenter 
believed it would be unfair to penalize plans that are merely 
attempting to comply with CMS' enrollment requirement.
    Response: We do not expect the requirements of this final rule to 
have a significant impact on Star Ratings, given the relatively few 
number of providers and suppliers that need to enroll to meet the 
requirements of this rule. Issues regarding the potential impact that 
beneficiary complaints have on plans' Star Ratings will be addressed by 
CMS in future guidance. Furthermore, any remedial actions or penalties 
imposed on MA organizations that do not comply with the requirements of 
this rule will be the result of thorough analysis of all relevant 
factors.
    Comment: A commenter sought clarification as to the extent an MA 
organization may be subject to contract termination, intermediate 
sanctions, or civil monetary penalties.
    Response: It is difficult to predict, prior to our enforcement of 
these provisions, how and when we will use these sanctions. We cannot 
yet assess plans' compliance with this requirement and the steps they 
will take to become compliant. We will consider issuing guidance in the 
future related to this rule.
    Comment: Several commenters expressed concern about the potential 
penalties for plans that do not adhere to our enrollment requirements. 
One commenter stated that data or other system issues might prevent 
plans from having complete and accurate information about a provider's 
or supplier's status at a certain point in time. The commenter added 
that it may be critical for beneficiaries to retain access to a 
provider for continuity of care, that plans should not be sanctioned 
for ensuring that beneficiaries are protected in these cases, and that 
appropriate exceptions would need to be developed.
    Response: We will work with MA organizations and all other 
stakeholders as we move forward with implementation. We have discretion 
in determining the appropriate action to take for noncompliant plans, 
such that any remedial actions or penalties imposed on plans that do 
not comply with the requirements of this rule will be the result of a 
thorough analysis of all relevant factors. Furthermore, we have 
provided the stakeholders with more than 2 years to make the changes 
necessary to accommodate this requirement.
Clarification and Exemptions
    Comment: A commenter recommended that CMS explain whether a DMEPOS 
supplier that services Medicare beneficiaries through an MA 
organization, a cost contract plan under section 1876 of the Act, or a 
health care pre-payment plan under section 1833 of the Act will be 
subject to surety bonding, accreditation, and other DMEPOS provisions 
contained in the Medicare FFS program. The commenter also asked how CMS 
will address access-to-care issues when such DMEPOS suppliers are 
unable to comply with Sec.  424.57 and Sec. Sec.  424.500-424.570. 
Another commenter recommended that CMS clarify whether Part A providers 
serving Medicare beneficiaries through an MA organization, a section 
1876 cost contract plan, or a section 1833 health care pre-payment plan 
must obtain a CMS survey or accreditation to enroll in Medicare FFS.
    Response: All providers and suppliers that enroll in Medicare are 
subject to the Medicare enrollment requirements, as assigned by their 
provider or supplier type. For example, provider and supplier types 
subject to surety bonding are required to obtain a surety bond to 
complete the enrollment process. There are no exceptions to the 
enrollment requirements based on this rule. If a CMS survey or 
accreditation is required for a particular provider or supplier type, 
it must comply in order to enroll. We do not anticipate any issues with 
regard to access to care based on the relatively small number of 
providers and suppliers that need to enroll to meet the requirements of 
this rule. If there are access to care issues, the plans will follow 
established protocols to ensure all beneficiaries have access to needed 
items and services.
    Comment: A commenter requested more explicit definitions of the 
terms ``provider'' and ``supplier,'' particularly in the context of 
Medicare-Medicaid plans (MMPs), which the commenter stated would not 
otherwise qualify for Medicare enrollment but furnish needed services 
to MMP members; the commenter believed that such providers should be 
excluded from our proposal.
    Response: As stated in the preamble of the rule, those terms are 
defined in sections 1861(u) and 1861(d) of the Act. We are only 
requiring enrollment for providers and suppliers that are 
categorically-eligible to enroll in Medicare. This rule is not 
requiring MMP plans to enroll.
    Comment: A commenter recommended that CMS clarify whether our 
proposal applies to providers and suppliers furnishing services to a 
Medicare beneficiary through the Railroad Retirement Board or the 
Indirect Payment Procedure (IPP) under Sec.  424.66 and, if so, that 
CMS adjust the regulatory impact analysis accordingly.
    Response: This particular rule is not applicable to the Railroad 
Retirement Board or the IPP.
    Comment: A commenter requested clarification as to whether the 
proposed requirements add MA provider enrollment burdens that extend 
beyond the current FFS enrollment process requirements.
    Response: No, the enrollment requirements do not extend beyond our 
current requirements. Providers and suppliers that are already enrolled 
in Medicare for purposes of billing the Medicare program, rather than 
enrolled to order, refer, certify, or prescribe, have met the 
enrollment requirements for this rule and are compliant. Part A 
providers and suppliers that are validly enrolled in the Medicare 
program do not need to separately enroll to meet the requirements of 
this rule. In-network providers and suppliers that are not already 
enrolled in Medicare and that are currently providing services to MA 
enrollees will need to enroll in Medicare to continue to provide those 
services to MA enrollees.
    Comment: A commenter asked how our proposed requirement applies to 
providers and suppliers for MMPs. The commenter stated that these plans 
might have atypical providers and suppliers that would be unable to 
enroll in Medicare but provide needed care to MMP members. The 
commenter recommended that such providers be excluded from this 
requirement.
    Response: This rule specifies requirements for providers and 
suppliers that provide services to beneficiaries enrolled in MA, MA-PD,

[[Page 80453]]

PACE, and Cost plans, as well as demonstration and pilot programs. The 
requirements also apply to FDRs, locum tenens, and incident-to 
suppliers. To the extent that MMPs are MA or MA-PD plans they would be 
subject to these requirements. We are not providing any exemptions and 
are only requiring enrollment in Medicare for providers and suppliers 
that are categorically-eligible to enroll in Medicare.
    Comment: A commenter asked whether providers associated with FDRs 
would need to be enrolled in Medicare, even if they are not directly 
engaged in providing services to plan members. The commenter cited the 
example of dentists and expressed concern that a requirement for 
dentists to enroll in Medicare to participate in an MA network would 
threaten beneficiary access to a supplemental dental benefit that many 
members have as part of their MA benefit package. In general, the 
commenter urged CMS to clarify which providers are affected by the 
provision, and how providers associated with FDRs are to be treated in 
this respect.
    Response: FDRs, such as dentists, will need to enroll to meet the 
requirements of this rule. All providers and suppliers that are 
categorically-eligible to enroll in Medicare must enroll in Medicare in 
an approved status in order to meet the requirements of this final 
rule. A determination as to whether a provider or supplier is eligible 
to enroll will be based on the type of provider or supplier. For 
example, if an audiologist works for a PACE organization or an FDR, he 
or she would need to enroll in Medicare because an audiologist is a 
type of provider or supplier eligible to enroll. Furthermore, section 
1861(ll)(4)(B) of the Act states that a qualified audiologist must have 
a masters or doctoral degree in audiology, among other requirements. If 
the audiologist cannot enroll because he or she fails to meet program 
requirements, such as this educational requirement, he or she may not 
enroll in the program or provide services to beneficiaries enrolled in 
programs under this final rule. It does not mean that providers and 
suppliers, that are of the type of providers or suppliers eligible to 
enroll in Medicare, are exempt from enrolling because they cannot or do 
not meet the necessary requirements for their specific provider or 
supplier type to enroll in Medicare. Providers and suppliers that 
cannot or do not meet the enrollment requirements may not provide items 
and services to beneficiaries that receive items and services through 
FFS, MA, MA-PD, PACE, and Cost plans, as well as demonstration and 
pilot programs.
    Comment: A commenter asked whether there would be a grandfathering 
provision or grace period for un-enrolled MA providers and suppliers.
    Response: We believe that the effective date of the provisions of 
this rule and length of time we have allowed for plans to comply with 
these provisions provides enough time for providers and suppliers to 
enroll. We do not believe that providing a grace period or a 
grandfathering provision would serve the goals of ensuring consistent 
screening.
    Comment: A commenter recommended that CMS clarify proposed Sec.  
422.222 to state that enrollment in Medicare in an ``approved status'' 
includes providers and suppliers that are deactivated for lack of 
claims submission.
    Response: Providers and suppliers that are deactivated are not 
considered in an approved status. Deactivated providers and suppliers 
may reactivate their enrollment by contacting their Medicare 
Administrative Contractor and following the applicable reactivation 
procedures which are set forth in our enrollment regulations at Sec.  
424.540(b).
    Comment: A commenter recommended that the proposed MA enrollment 
requirement for in-network providers and suppliers extended to out-of-
network providers; the commenter believed this would help ensure that 
all MA beneficiaries have access to fully screened and qualified 
providers and suppliers.
    Response: We appreciate the commenter's support and suggestion. 
Because we did not propose an expansion to out-of-network providers and 
suppliers, we are not able to finalize that in this rule. We proposed 
including only in-network providers and suppliers in this rule to 
ensure only a minimal impact to beneficiaries. We may consider future 
rulemaking to address the commenter's concerns.
    Comment: A commenter requested clarification as to whether the 
proposed enrollment requirement extends to employees and contracted 
services furnished through properly enrolled and approved Medicare 
providers of services, including SNFs; that is, whether such employees 
or contractual professionals or agencies of providers meet the 
definition of FDRs. The commenter stated that, under FFS Medicare, 
there is no requirement that professional employees or contracted 
professionals or agencies of a properly enrolled provider of services, 
such as a SNF, must be independently enrolled in FFS. Another commenter 
asked whether MA organizations will be responsible for ensuring that 
the entire staff or all the employees of such organizations (including 
nurses, medical students, interns and residents of a facility or other 
ancillary personnel, others in a provider's office, or in an inpatient 
setting that the MA organization does not directly contract with for 
the provision of services) are enrolled. Another commenter recommended 
that these requirements be limited to MA first tier contracted 
providers and facilities that provide basic Medicare A, B, and D 
benefits and that the scope of those needed to enroll be scaled back 
significantly.
    Response: We are using the definitions for first-tier, downstream, 
and related entities in Sec.  422.500. The MA organizations will be 
responsible for ensuring that the providers and suppliers that are 
required to enroll, are indeed enrolled.
    Comment: A commenter sought clarification as to whether the rule 
would extend existing requirements for Part A and B providers to MA 
organization networks, rather than requiring expanded screening for 
subcontracted providers.
    Response: The rule extends Parts A and B enrollment requirements to 
MA organization networks including other providers and suppliers, such 
as FDRs.
    Comment: A commenter stated that because Medicare FFS does not 
offer a dental benefit, CMS should not require MA organizations to 
adhere to the standard of mandating that dentists enroll as MA 
suppliers in order to provide dental care to MA beneficiaries. Another 
commenter sought clarification concerning the impact of the enrollment 
requirement on supplemental providers that are not covered by Medicare 
Part A or Part B. The commenter cited the example of dental services, 
which are often included as part of a supplemental services package; 
the commenter asked whether dentists who are in-network with MA 
organizations would be required to enroll in Medicare. The commenter 
urged CMS to consider (1) whether extending its enrollment requirement 
to dentists and other affected supplemental service providers is in the 
best interest of beneficiaries and (2) delaying such a requirement for 
providers of supplemental services until CMS gains experience and 
understands the effects of the requirement on Part A and Part B 
providers, and can make any modifications needed to ensure access.
    Response: We appreciate the commenter's recommendations; however, 
we are committed to ensuring that beneficiaries receive items and 
services from providers and suppliers that are the categorical types of

[[Page 80454]]

providers and suppliers eligible to enroll, that are subject to uniform 
screening processes, including when receiving dental services or other 
services not covered by Medicare in Part A or Part B.
    Comment: A commenter stated that our proposed requirement is too 
broad, citing as examples its application to locum tenens suppliers and 
incident-to suppliers. In particular, the commenter stated that MA 
beneficiaries may receive covered Medicare services from non-
contracting and/or out-of-network providers in the case of a local or 
regional preferred provider organization (PPO), or from hospitals and 
physicians not under contract with the MA organization for urgent or 
emergency services; MA organizations, the commenter stated, generally 
have no relationships to physician staffing organizations for 
correctional facilities or government and military facilities, yet they 
are listed as having the MA requirements apply to them. The commenter 
contended that this is a requirement that appears to be placed on MA 
organizations, rather than on the traditional Medicare program, but 
that MA organizations cannot be, and should not be, required to carry 
out functions that may belong to the Medicare program overall. If 
Medicare wants to widen its scope of providers enrolled in Medicare for 
the purpose of expanding its program integrity program, the commenter 
stated, Medicare's enrollment efforts should be housed in a single 
source or database, not merely in MA organizations.
    Response: The rule specifically applies to network providers and 
suppliers, including locum tenens and incident-to suppliers. We are 
unsure of what the commenter means by stating that the MA organizations 
are required to carry out functions that belong to the Medicare 
program. Consistent with existing enrollment practices, enrollment will 
be completed by our MACs, and all enrollment data will be housed in our 
enrollment repository, PECOS. Information on a provider or supplier's 
enrollment status will be available on a public file for ease of access 
to the plans. We do not agree that the application of this rule is too 
broad. We have limited the provisions to in-network providers and 
suppliers. Furthermore, we believe it is important that all 
beneficiaries have the benefits of being treated by providers and 
suppliers that have been adequately screened by the Medicare program.
    Comment: A commenter stated that the proposed rule could be 
misconstrued as treating all FDRs as Medicare providers and suppliers, 
thus requiring them to enroll in Medicare; the commenter cited as an 
example PBMs, which do not provide covered health care services but 
instead arrange for their provision. The commenter encouraged CMS to 
make clear that only those entities that meet the definition of a 
Medicare ``provider'' or ``supplier'' would be required to enroll in 
Medicare in order to provide services to MA beneficiaries.
    Response: This provision does not change enrollment parameters 
concerning the types of providers and suppliers eligible to enroll in 
Medicare. The commenter is correct that only providers and suppliers 
meeting those statutory definitions will be required and allowed to 
enroll in Medicare.
    Comment: Concerning the term ``Medicare-covered services'' as 
referenced in the rule, a commenter sought clarification as to whether 
the enrollment requirement only applies to providers and suppliers of 
Medicare Part A, B, MA, and D covered benefits and not to other 
services potentially offered by an MA organizations, such as routine 
eye care services, dental services, wellness programs, and other non-
Medicare covered services.
    Response: To clarify, we did not use the term ``Medicare-covered 
services'' in either the preamble or the regulation text with respect 
to these specific provisions of the rule. However, we expect all 
providers and suppliers that are categorically-eligible to enroll in 
Medicare and that fall under the requirements of this rule, to enroll 
in Medicare if they wish to participate in the MA program. This 
includes providers and suppliers of dental, eye care, and other 
supplemental services.
    Comment: Several commenters recommended that CMS exclude pharmacies 
from the MA enrollment requirement, stating that pharmacies are 
excluded from the Part D prescriber enrollment requirement. Other 
commenters stated that Part D sponsors and their FDRs are equipped to 
perform the necessary vetting and credentialing with respect to 
pharmacy providers, which, one commenter contended, was the rationale 
for excluding pharmacies from the Part D enrollment requirement. The 
commenter stated that the same considerations apply in the MA program 
and added that applying the proposed requirement to pharmacies would 
create costly, burdensome, and potentially disruptive redundancies 
without commensurate benefits.
    Response: We decline to exempt pharmacies or other individuals or 
entities that fall within the framework of this rule. We believe that 
requiring enrollment in Medicare serves a valuable purpose in 
protecting beneficiaries and safeguarding the Trust Funds and will help 
reduce the burden on MA organizations as we move forward with 
operationalizing this policy. However, we note that we currently do not 
have a process in place to enroll pharmacies for the purpose of 
dispensing drugs, except in very limited circumstances, such as for 
Part B drugs. We are working on operationalizing such a process for 
network pharmacies in MA-PD plans that do not provide only those 
limited Part B benefits to enroll in Medicare to be able to comply with 
this rule. We recognize that plans can be compliant only to the extent 
that our enrollment requirements and processes in place allow at any 
given time.
    Comment: A commenter asked whether our proposed requirement will 
impact coverage determinations. The comment stated that, with respect 
to the Part D enrollment requirement, there is uncertainty regarding 
the actions that Part D sponsors must take upon receiving a coverage 
determination request from a non-enrolled prescriber or beneficiary 
regarding a claim that is denied solely because of that enrollment 
requirement.
    Response: This rule establishes requirements that services provided 
to Medicare beneficiaries by MA organizations must be provided by 
providers and suppliers that are enrolled in Medicare. This rule does 
not address any other criteria affecting coverage determinations.
    Comment: A commenter requested that CMS exempt emergency medicine 
physicians from the enrollment requirements. The commenter added that 
if this were not feasible, CMS at a minimum should: (1) establish a 
provision similar to Sec.  423.120(c)(6) that would allow CMS to 
provide reimbursement for covered items, services or drugs ordered, 
certified, referred or prescribed by emergency medicine physicians on a 
provisional basis (for example, for a period of 90-days from the date 
of service); and (2) exclude from the enrollment requirements those 
providers whose enrollment applications are pending with the Medicare 
Administrative Contractor (MAC).
    Response: We have not provided for any exemptions; however, we have 
a provision in Sec.  422.224 that provides for allowances for some 
payments for emergency or urgently needed services, as defined in Sec.  
422.113. We also appreciate the suggestion that we exclude providers 
and suppliers with pending applications from our requirements. We 
believe that the rule

[[Page 80455]]

furnishes sufficient time for providers and suppliers to enroll to meet 
the requirements of this rule and decline to provide an exemption in 
these circumstances.
    Comment: A commenter asked for more information regarding the 
providers and suppliers that are covered under this proposal; the 
commenter specifically sought clarification regarding providers and 
suppliers that are not currently subject to credentialing (such as 
hospital-based providers) and only provide supplemental benefits that 
are not part of the basic benefits under Medicare Parts A and B.
    Response: Regarding the commenter's inquiry, neither category of 
provider would be exempt from the requirements of this provision simply 
based on those factors. If a provider or supplier falls into the 
categories articulated in the rule, there will be no exemptions 
provided.
Concerns for Beneficiaries
    Comment: A commenter stated that if CMS terminates a contract with 
an MA organization for failing to meet provider enrollment requirements 
or payment prohibitions, CMS should allow impacted patients to continue 
with their physicians on an in-network basis until the next enrollment 
period, with the physician's consent. The commenter said that 
effectively requiring a beneficiary to find a new provider in the 
middle of an enrollment period with little advanced notice could be 
extremely disruptive and harmful to the enrollee's health.
    Response: We will follow existing protocols and rules regarding 
beneficiary care if CMS terminates a contract with an MA organization. 
Beneficiary care and access are always of the highest concern when 
determining contract action. Furthermore, we have access to tools other 
than contract termination to ensure MA organizations are compliant with 
this rule.
    Comment: A commenter expressed concern about the potential 
financial impact on beneficiaries if a provider or supplier requests 
payment (1) for multiple beneficiaries at once, or (2) for Medicare 
beneficiaries after notification that the provider or supplier is 
revoked from Medicare. The commenter recommended that CMS clarify that 
beneficiaries would not be financially responsible in these cases. 
Overall, the commenter urged CMS to ensure that beneficiaries are 
financially protected and do not lose access to care during the 
transition phase as providers enroll in Medicare.
    Response: As we work towards the implementation date, we will 
continue to monitor beneficiary impact. The public should be aware of 
the provisions in Sec.  422.224 regarding prohibition of payment for 
excluded or revoked individuals or entities. This rule also does not 
change beneficiaries' ability to ask for a coverage determination prior 
to receiving an item or service if they are unsure of a provider or 
supplier's enrollment status. The issue of beneficiary liability 
resulting from an OIG exclusion is addressed in 42 CFR 1001.1901(b). 
The issue of beneficiary liability resulting from revoked providers and 
suppliers, deactivated providers and suppliers, or enrollment denials 
is addressed in Sec.  424.555(b). Any needed additional clarification 
of this provision will be provided in subregulatory guidance.
    Comment: A commenter noted the provision to prohibit MA 
organizations from paying individuals or entities that are excluded by 
the OIG or revoked from Medicare. Citing the requirement that the MA 
organization in such cases must notify the physician and the 
beneficiary that no future payment will made beyond the first one, the 
commenter stated that the notification may only reach the beneficiary 
after numerous services have been provided and billed. The commenter 
expressed concern that either the beneficiary or the physician would be 
without reimbursement or payment for the subsequent services provided 
before notification was received.
    Response: We understand the concerns of the commenter and do 
believe it is important for MA organizations and the other programs and 
plans that fall within the context of this rule to notify beneficiaries 
and providers and suppliers that payments will not be made. However, 
after further analysis, we are not able to finalize the first time 
payment provision that was proposed because all payments to excluded 
individuals or entities is prohibited. Beneficiaries have the ability 
to ask for a coverage determination prior to receiving an item or 
service if they are unsure of a provider or supplier's enrollment 
status. The issue of beneficiary liability resulting from an OIG 
exclusion is addressed in Sec.  1001.1901(b). The issue of beneficiary 
liability resulting from revoked providers and suppliers, deactivated 
providers and suppliers, or enrollment denials is addressed in Sec.  
424.555(b). All individuals and entities that are excluded or revoked 
are notified of their exclusion or revocation status, and therefore, 
should not request or receive payment for items or services that 
violate federal law.
    Comment: A commenter stated that CMS must assess the impact of our 
proposed requirement on beneficiaries. The commenter specifically asked 
how the requirement will be explained to beneficiaries and whether 
beneficiaries themselves will have to pay for services obtained from a 
non-enrolled provider (for example, an out-of-network PPO provider) if 
they were unaware of the enrollment requirement.
    Response: As we work towards the implementation date, we will 
continue to assess beneficiary impact, though we believe that based on 
the low number of providers and suppliers that need to enroll, this 
impact will be small. This rule applies to in-network providers and 
suppliers and other providers and suppliers listed herein. This rule 
does not modify existing rules on out-of-network providers and 
suppliers; however, the public should be aware of the provisions in 
Sec.  422.224 regarding prohibition of payment for excluded or revoked 
individuals or entities. This rule also does not change beneficiaries' 
ability to ask for a coverage determination prior to receiving an item 
or service if they are unsure of a provider or supplier's enrollment 
status.
Operations
    Comment: A commenter stated that CMS should engage in robust 
provider and practice education to ensure that enrollment updates are 
implemented efficiently and without complication.
    Response: We appreciate the suggestion and will incorporate this 
into our operational plan.
    Comment: A commenter asked CMS to address the claims and coding 
technical components that CMS will implement for our proposed 
requirement.
    Response: We will issue subregulatory guidance that addresses this 
issue.
    Comment: A commenter asked CMS to clarify the components of its 
provider education campaign.
    Response: We will issue subregulatory guidance detailing 
educational efforts in the future as we move forward in 
operationalizing this program.
    Comment: A commenter suggested that CMS explain how it will 
communicate provider and supplier information to individual MA 
organizations so that the latter can remain compliant with our 
requirements and identify the types of enforcement actions it will take 
against an MA organization that permits an unenrolled provider or 
supplier to furnish care in an MA setting. The commenter asked us to 
list all of the

[[Page 80456]]

enforcement actions imposed against MA providers and suppliers based on 
the provider being unqualified or fraudulent.
    Response: We will continue to provide outreach and education to the 
provider and supplier community about these enrollment requirements and 
will work with our stakeholders, including MA organizations, to assist 
them in ensuring compliance. Specific operational plans and guidance 
are forthcoming as we move towards operationalizing this policy. 
Regarding enforcement actions, we have provided a number of options and 
have discretion when determining the appropriate action to take for 
noncompliant plans. Those specific sanctions and contract actions are 
in existing policy.
    Comment: A commenter supported our proposed requirement to notify 
the enrollee when the provider's or supplier's enrollment is revoked 
from Medicare but encouraged CMS to ensure that such notices are 
consumer-friendly. Another commenter urged CMS to furnish additional 
details on how plans are to operationalize these new requirements in a 
format that allows plans to provide feedback on the proposed processes.
    Response: We appreciate the commenter's support and will use the 
suggestion to help operationalize this policy.
    Comment: Regarding proposed Sec.  422.224, a commenter asked 
whether ``first time allowance'' for payment is a requirement or is at 
the discretion of the MA organization.
    Response: After further legal analysis, we have determined that we 
lack the authority to allow a first time payment granted in the 
proposed Sec.  422.224. Therefore, MA organizations have no discretion 
and may not pay an individual or entity that is excluded by the OIG or 
revoked from the Medicare program.
    Comment: Regarding proposed Sec.  422.501, a commenter sought 
clarification regarding the method of submission and the frequency of 
checks, and how this process differs from the current standard 
attestation process.
    Response: Further information and direction on this provision will 
be issued in subregulatory guidance.
    Comment: Stating that the proposed requirement contains no 
specifications for how often plans would be required to confirm the 
status of a network provider, a commenter sought clarification on the 
following issues: (1) Whether a plan has met its obligations under the 
proposed requirements if, for example, the plan confirms the provider's 
enrollment status before signing the provider to a 5-year contract for 
network participation; (2) if the provider fails to notify the MA 
organization of changes to its Medicare enrollment status, whether the 
plan is responsible for all payments made to the provider beginning as 
of the date of disenrollment; (3) if a provider's Medicare enrollment 
status changes and the plan removes the provider from its network, 
whether and what consequences would ensue if this results in the plan 
failing network adequacy requirements; and (4) whether there are 
requirements concerning continuity of care with respect to providers 
that lose Medicare status.
    Response: The requirements of this rule require that after the 
effective date, MA and MA PD plans must ensure that only enrolled 
providers and suppliers are providing services to Medicare 
beneficiaries who are enrolled in their plans. We have developed 
informational tools--the list of enrolled providers and suppliers 
referenced in several places throughout this rule--that further support 
plans' ability to meet these requirements and not rely on notification 
by providers in ensuring compliance. Based on the small number of 
providers and suppliers that need to enroll to comply with the 
provisions of this rule, we do not believe this requirement will cause 
network adequacy issues. As to the frequency with which the plans will 
be expected to update their records, further guidance will be provided 
as we operationalize this requirement; however, it is anticipated that 
the plans will be expected to update their records with the same 
frequency that the applicable online files are updated. This rule does 
not require providers and suppliers to notify the plans, as the 
enrollment status on the file will change. This rule also does not 
change any rules regarding continuity of care.
    Comment: A commenter sought clarification regarding whether CMS' 
use of the term ``enrollment'' indicated enrollment in the Medicare 
program through PECOS or an MA organization's enrollment of health 
professionals for the purpose of identifying them as legitimate health 
professionals on claims. The commenter expressed concern that if 
Medicare enrollment is required without a concomitant requirement that 
the MA organization enroll the provider or supplier, CMS risks 
perpetuating the concealment of certain types of health professionals. 
Citing the example of physician assistants, the commenter stated that 
when an MA organization requires that a physician's assistant bill 
under a physician's name, the physician's assistant becomes a 
``hidden'' provider, which the commenter stated is contrary to CMS' 
goal of proper attribution to the health professional who furnished the 
service. The commenter stated that MA organization should be required 
to enroll relevant health professionals, including physician's 
assistants, and mandate the inclusion of the appropriate professional's 
NPI on a claim.
    Response: The term ``enrollment'' is specific to enrollment in 
Medicare. The enrollment data repository is PECOS. We believe the 
commenter is referring to incident-to services. Incident-to suppliers 
and locum tenens suppliers are also required to enroll in Medicare, 
meaning that the supplier actually furnishing the service, not only the 
billing supplier, must be enrolled. We believe that this is an 
important step in addressing the concerns of the commenter and may 
consider future rulemaking to further prevent the scenario offered by 
the commenter.
Network Adequacy
    Comment: A commenter expressed concern that the enrollment 
requirement would unduly burden physical therapists, which could harm 
access to physical therapy services as MA organizations struggle to 
find physical therapy providers for their networks.
    Response: This rule seeks to ensure that beneficiaries receive care 
from providers and suppliers that have been uniformly screened. We have 
found relatively few physical therapists that are not already enrolled 
in Medicare. Therefore, we do not believe this will have an impact on 
network adequacy.
    Comment: A commenter recommended that CMS proceed with its 
enrollment requirement for only a limited number of providers and 
suppliers at first, specifically, for those provider types for which MA 
organizations are required to maintain adequate networks, as specified 
in the Health Services Delivery Guidance that CMS issues each contract 
year.
    Response: We believe the requirements should be implemented 
simultaneously and have structured our efforts to accomplish that task. 
As we have stated throughout this rule, we think the timeframe afforded 
plans for compliance coupled with the relatively small number of 
providers and suppliers that are not already enrolled in Medicare will 
allow plans to ensure that all necessary providers and suppliers can be 
enrolled and there are no access issues.
    Comment: A commenter requested clarification regarding what MA 
organizations must do if the termination

[[Page 80457]]

of providers or suppliers from the plan's network results in network 
adequacy deficiencies.
    Response: Based on the small number of providers and suppliers that 
need to enroll to comply with the provisions of this rule, we do not 
believe this requirement will cause network adequacy issues. However, 
MA organizations should use existing resources and processes to address 
any network adequacy concerns.
    Comment: A commenter stated that the administrative steps involved 
in enrolling in Medicare will deter some physicians from entering into 
MA arrangements, thereby potentially impacting the plan's network 
adequacy and beneficiary access to care.
    Response: The vast majority of providers and suppliers providing 
services in the MA program are already enrolled in Medicare. Based on 
the number of providers and suppliers needing to enroll to become 
compliant with this requirement, we do not anticipate this impacting 
network adequacy and access to care.
PACE
    Comment: A commenter asked whether the requirements that are 
applicable to FDR entities of MA organizations will also apply in the 
context of PACE organizations.
    Response: The requirements for FDR entities also apply to PACE 
organizations.
    Comment: A commenter stated that our proposals should not be 
applied to the PACE program for several reasons. First, the proposed 
requirements are duplicative of exclusion screening requirements 
established by the OIG, which are often reinforced by state screening 
requirements. Second, PACE organizations are already Medicare-certified 
provider entities responsible for the comprehensive medical, health and 
social well-being of their PACE participants; existing regulations 
under part 460 have requirements in place concerning these policies. 
The commenter stated that PACE is a different model of care from MA 
organizations. The latter are insurers while PACE programs are 
Medicare-certified provider entities that are directly responsible for 
the care of Medicare and Medicaid beneficiaries. At a minimum, the 
commenter stated, PACE organization personnel (for example, employees 
and contractors) should be exempt from the enrollment requirement; the 
burden of requiring the enrollment of staff members, the commenter 
contended would be enormous. Another commenter suggested that CMS 
clarify in the final rule how its MA enrollment policies do not 
inadvertently exclude long-term services and supports (LTSS) caregivers 
who cannot presently bill Medicare directly. Another commenter also 
expressed concern about the rule's effect on LTSS caregivers.
    Response: This rule only requires the enrollment of providers and 
suppliers that are of a type this are eligible to enroll. Staff members 
that are not of a provider or supplier type that is eligible to enroll, 
are not subject to this rule. A determination on if a provider or 
supplier is eligible to enroll will be based on the type of provider or 
supplier. For example, if a clinical social worker works for a PACE 
organization, he or she would need to enroll in Medicare because a 
clinical social worker is a type of provider or supplier eligible to 
enroll. Furthermore, Sec.  410.73(a) defines clinical social worker and 
states they must have a masters or doctoral degree in social work, 
among other requirements. If the clinical social worker cannot enroll 
because he or she fails to meet program requirements, such as this 
educational requirement, he or she may not enroll in the program or 
provide services to beneficiaries enrolled in programs under this final 
rule, such as the PACE program. It does not mean that providers and 
suppliers, that are of the type of providers or suppliers eligible to 
enroll in Medicare, are exempt from enrolling because they cannot or do 
not meet the necessary requirements for their specific provider or 
supplier type to enroll in Medicare. Providers and supplier that cannot 
or do not meet the enrollment requirements may not provide items and 
services to beneficiaries that receive items and services through FFS, 
MA, MA-PD, PACE, and Cost plans, as well as demonstration and pilot 
programs. We have decided to finalize the proposal to include PACE 
organizations in this rule because we believe it is in the best 
interest of the beneficiaries to receive items and services from 
Medicare providers and suppliers that are subject to the same screening 
requirements. The screening efforts mentioned by the commenter are not 
duplicative to any other process, specifically OIG and state screening. 
We have access to information and authority for keeping certain 
providers and suppliers out of the program that are not available to 
these entities. Additionally, while it may be true that PACE 
organizations are Medicare-certified provider entities, the individual 
providers and suppliers have not been required to enroll. We do not 
anticipate that this rule will have a significant impact on LTSS 
caregivers because of the relatively small number of providers and 
suppliers that need to enroll. Furthermore, some of the LTSS caregivers 
are not of a provider or supplier type that is eligible to enroll in 
Medicare.
    Comment: A commenter expressed concern about our proposal to amend 
Sec.  460.32 to require that the PACE program agreement include the 
name and NPI of providers and suppliers reflecting enrollment in 
Medicare. The commenter stated that the program agreement is a three-
way agreement between CMS, the state, and the PACE organization, and 
that any change to the agreement would require the three parties to 
reenter and resign the document. The commenter contended that this 
would prove burdensome because new agreements would have to be signed 
each time a provider or supplier enters or departs a contractual 
relationship with a PACE organization. The commenter recommended that 
CMS (1) devise an alternative approach, or (2) require PACE 
organizations to furnish this information only on an annual basis; 
concerning the latter, the commenter said that this would not absolve 
PACE organizations from ensuring that all contracted providers and 
suppliers, but would reduce the reporting burden. Another commenter 
shared these concerns and added that uninterrupted access to PACE 
services should be ensured.
    Response: We understand the operational concerns and thank the 
commenters. Based on this concern, we have reduced the burden this 
requirement would have imposed on PACE organizations by aligning the 
requirements to the provisions applicable to MA organizations. We have 
removed the requirement in 42 CFR 460.32 and simply added Sec. Sec.  
460.70 and 460.71. We believe this change will ensure that PACE 
organizations employ and contract with enrolled providers and suppliers 
without the additional burden of having the parties update the program 
agreement.
    Comment: A commenter recommended that any enrollment regulatory 
requirements imposed on PACE organizations be made in part 460 and that 
such requirements have the same specificity and precision as the 
regulation changes proposed for part 422.
    Response: We believe the appropriate requirements have been 
reflected in part 460.
Other Comments
    Comment: A number of commenters supported our proposal to require

[[Page 80458]]

providers or suppliers who furnish health care items or services to an 
MA beneficiary be enrolled in Medicare in an approved status. A 
commenter stated that many MA organizations already have this 
requirement in place, and supported our efforts to standardize this 
practice across all organizations.
    Response: We appreciate the commenters' support.
    Comment: A commenter disagreed with the use of the term 
``intermediary'' being applied to MA organizations. The commenter 
stated that MA organizations are state licensed, risk-bearing entities 
that contract with CMS to provide Medicare Part A, B, and D benefits 
and services. An intermediary, the commenter stated, is a Medicare 
Administrative Contractor that bears no risk but is under contract with 
CMS to pay Medicare covered claims and perform other functions for CMS. 
The commenter sought greater clarification on this issue.
    Response: We used intermediary as a general term to describe an 
entity that holds a position between CMS and the provider and supplier 
communities; we did not mean ``intermediary'' as the former contractor 
entity that paid Medicare claims in the past before there were MACs. As 
the public is likely aware, we do not pay providers and suppliers 
directly in the MA program. We appreciate the opportunity to clarify.
    Comment: Several commenters requested that CMS delay the 
implementation of the MA enrollment requirement. They generally stated 
that a delay would give all stakeholders (for example, MA 
organizations, providers, suppliers, beneficiaries, and CMS) adequate 
time to prepare for the requirement. They added that the delay would 
enable CMS to resolve certain issues encountered in the Part D 
enrollment process so they are avoided in the MA enrollment process. 
Some commenters stated that CMS must establish an implementation plan, 
provide operational and technical guidance (including clarity around 
FDRs), and develop a comprehensive education and outreach strategy for 
relevant stakeholders, and that a delay would give CMS time to perform 
these activities. Several commenters recommended that the requirement 
be implemented at the same time as the Part D enrollment requirement, 
with one commenter specifically suggesting an effective date in CY 2020 
for both requirements. Other commenters recommended an effective date 
for the MA enrollment requirement of least 3 years from the date of 
this final rule; several commenters suggested 4 years from the date of 
this rule.
    Response: We believe that the 2019 implementation date is 
appropriate and takes into account the concerns raised by the 
commenters. We thank the comments for the suggestions regarding 
operational planning and will take them into consideration as we issue 
future guidance.
    Comment: A commenter contended that an increasing number of 
physician practices may provide most or all of their Medicare services 
to MA patients. The commenter encouraged CMS to develop means by which 
such physicians can remain enrolled, for purposes of furnishing MA 
services, without having to submit Part B claims.
    Response: If the commenter is concerned about possible 
deactivations due to 12 consecutive months of non-billing, we can say 
that although Sec.  424.540(a)(1) is part of our regulatory authority, 
its use is limited due to the expansion of our enrollment requirements 
in Medicare that extend beyond billing Parts A and B. We have thousands 
of providers and suppliers enrolled in Medicare that do not submit 
claims for payment, such as providers and suppliers ordering and 
certifying certain items and services and prescribers of Part D drugs. 
Thus, systematic deactivations for 12 consecutive months of non-billing 
would not be appropriate for providers and suppliers that enrolled 
exclusively for purposes unrelated to billing the Medicare program. We 
are mindful of the scenario described as we operationalize this rule.
Scope
    Comment: A commenter asked CMS to clarify the MA enrollment 
requirement's relationship to the Part D prescriber enrollment rule and 
the latter's implementation date.
    Response: The Part D prescriber enrollment requirement states that 
nearly all prescribers of Part D drugs must be enrolled in Medicare or 
validly opted-out. The requirement in this rule is that providers and 
suppliers that provide services to Medicare beneficiaries in MA 
organizations or MA-PD plans, including FDRs, must be enrolled in 
Medicare. These are separate requirements; therefore, the 
implementation date for the Part D prescriber rule is outside the scope 
of this rule.
    Comment: A commenter asked CMS to clarify the benefits of increased 
opportunities for private practice physical therapists to become in-
network providers under MA organizations.
    Response: We believe this request is outside the scope of the rule.
    Comment: A commenter asked whether CMS is collaborating with state 
Medicaid agencies to discuss implementation issues related to a similar 
enrollment requirement on the Medicaid side; the commenter indicated 
that such discussions could assist CMS in effectively implementing the 
MA enrollment requirement.
    Response: On May 6, 2016, we published the ``Medicaid and 
Children's Health Insurance Program (CHIP) Programs; Medicaid Managed 
Care, CHIP Delivered in Managed Care, and Revisions Related to Third 
Party Liability'' final rule (81 FR 27498) that includes requirements 
for providers and suppliers that provide services to Medicaid 
beneficiaries in a managed care setting to be screened and enrolled in 
Medicaid. We collaborate regularly with state Medicaid agencies when 
operationalizing rules and appreciate the commenter's suggestion.
    Comment: A commenter asked whether the enrollment requirements 
apply to providers that are participating in special CMS initiatives, 
such as Accountable Care Organizations initiatives and, if not, why 
not, and which entity in these initiatives would be held accountable as 
to their participating providers and suppliers are enrolled in 
Medicare. The commenter stated that it would be reasonable to have this 
requirement extend beyond the MA and Part D programs.
    Response: We believe this comment is outside the scope of this 
rule.
    Comment: One commenter expressed support for requiring MA network 
providers to publicly report quality data in a manner consistent with 
Part A and B providers, specifically, requiring these providers to 
submit administrative data sets to CMS such as claims and encounter 
data in a manner consistent with Medicare Part A and B programs. The 
commenter stated that there currently is little insight as to the 
quality, volume, and utilization patterns of beneficiaries who elected 
MA coverage.
    Response: We appreciate this comment but believe it is outside the 
scope of this rule.
    Comment: One commenter, while supporting our proposed requirement, 
made two recommendations. The first was that CMS should use the MA 
enrollment requirement as an opportunity to begin deeming providers for 
general compliance training as well. The second was that CMS should 
obtain the demographic data for providers at the point of enrollment 
into Medicare

[[Page 80459]]

and require providers to supply CMS with updates; plans would be 
expected to use the most up-to-date information CMS has on file for 
providers when updating the directories. This would create a provider 
demographic repository, which the commenter believed would help ensure 
consistency between CMS and MA records.
    Response: We believe these comments are outside the scope of this 
rule.
    Comment: A commenter recommended that CMS explain whether providers 
and suppliers participating in a section 1876 cost contract plan, a 
section 1833 health care prepayment plan, the Railroad Retirement 
Board, or an Indirect Payment Procedure (IPP) entity that does not 
treat Medicare FFS beneficiaries, are subject to the $500 application 
fee.
    Response: We believe this comment is outside the scope of this 
final rule.

J. Expansion of the Diabetes Prevention Program (DPP) Model

1. Summary
    This final rule finalizes our proposal to expand the duration and 
scope of the Diabetes Prevention Program (DPP) model test, which we 
refer to as the Medicare Diabetes Prevention Program (MDPP) expanded 
model.\15\ The MDPP expanded model aims to prevent the onset of type 2 
diabetes among Medicare beneficiaries diagnosed with pre-diabetes. 
Services available through the MDPP expanded model are MDPP services, 
which will be furnished in community and health care settings by 
coaches, such as trained community health workers or health 
professionals. The MDPP expanded model is a Center for Medicare and 
Medicaid Innovation (Innovation Center) model that is being expanded in 
duration and scope under section 1115A(c) of the Act and will be 
covered as an additional preventive service under Medicare.
---------------------------------------------------------------------------

    \15\ Centers for Medicare & Medicaid Services, Proposed Rules, 
``Proposed Expansion of the Diabetes Prevention Program (DPP) 
Model,'' Federal Register 81, no. 136 (July 15, 2016): 46413-46418, 
https://www.federalregister.gov/documents/2016/07/15/2016-16097/medicare-program-revisions-to-payment-policies-under-the-physician-fee-schedule-and-other-revisions.
---------------------------------------------------------------------------

    We received approximately 700 timely pieces of correspondence 
containing multiple comments on the MDPP expanded model. We note that 
some of these public comments were outside of the scope of the proposed 
rule. Summaries of the public comments that are within the scope of the 
proposed rule and our responses to those public comments are set forth 
in the various sections of this final rule under the corresponding 
heading.
    Commenters ranged from professional organizations, health plans, 
advocacy groups, individual physicians, and numerous individuals who 
have direct experience with the National Diabetes Prevention Program 
(National DPP), and expressed overwhelming support for this model 
expansion. Commenters raised key considerations as well.
    Because the MDPP expanded model will be implemented through at 
least two rounds of rulemaking, we have chosen in this final rule to 
finalize aspects of this model expansion that will enable organizations 
to prepare for enrollment. This includes finalizing the framework for 
expansion and finalizing details of the MDPP benefit, beneficiary 
eligibility criteria, and MDPP supplier eligibility criteria and 
enrollment policies.
    We are finalizing our proposal to expand the duration and scope of 
the DPP model test as proposed. We are also finalizing our proposal to 
designate MDPP services as ``additional preventive services'' as 
defined by section 1861(ddd) of the Act. We are finalizing our proposal 
to use the Secretary's waiver authority under section 1115A(d)(1) of 
the Act to waive two requirements of the benefit category of additional 
preventive services: the requirement in section 1861(ddd)(1)(B) of the 
Act that the services be recommended by a grade of A or B from the 
United States Preventive Services Task Force (USPSTF) and the 
requirement of section 1861(ddd)(2) of the Act that the Secretary make 
the determinations required under section 1861(ddd)(1) of the Act using 
the National Coverage Determination (NCD) process.
    We are finalizing our proposal that the MDPP core benefit is 12 
consecutive months and consists of at least 16 weekly core sessions 
over months 1-6 and at least six monthly core maintenance sessions over 
months 6-12, furnished regardless of weight loss. Eligible 
beneficiaries will have access to ongoing maintenance sessions after 
the MDPP core benefit if they achieve and maintain the required minimum 
weight loss of five percent. We are adding definitions of ``maintenance 
session bundle'' and ``maintenance of weight loss'' to help provide 
clarity. We are revising the definition of ``CDC-approved core 
curriculum'' to remove specific curriculum topic names. We are also 
revising the session duration requirement to specify that any session 
must have a duration of approximately one hour.
    We are finalizing the beneficiary eligibility criteria and our 
referral policy as proposed.
    We are finalizing the proposed high screening level for MDPP 
supplier enrollment, the requirement for coaches to obtain National 
Provider Identifiers (NPIs), and for DPP organizations to submit a 
roster of coach NPIs and other coach information upon applying for 
enrollment. We are modifying our proposal regarding the enrollment of 
existing Medicare providers or suppliers, and are requiring all DPP 
organizations, regardless of any existing enrollment in Medicare, to 
enroll in Medicare as MDPP suppliers in order to furnish and bill for 
MDPP services.
    We are not finalizing our proposal that organizations that deliver 
DPP virtually or through remote technologies will be eligible to 
furnish MDPP services to future rulemaking. We intend to address 
policies related to the delivery of virtual MDPP services in future 
rulemaking. We are also not finalizing the definition of preliminary 
recognition. We intend to seek comment on recognition standards in 
future rulemaking.
    We are also deferring certain policies, specifically related to 
payment, use of coach information during enrollment and monitoring, and 
other program integrity safeguards to future rulemaking. In particular, 
specific policies regarding monitoring and enforcement actions for 
supplier enrollment require future rulemaking. Because we are not 
implementing such requirements in this rule, we cannot begin any 
enrollment for organizations seeking to enroll as MDPP suppliers until 
after the next round of rulemaking is complete in 2017. We intend to 
begin supplier enrollment before the model expansion becomes effective 
on January 1, 2018. We intend for organizations to be able to apply to 
enroll as MDPP suppliers at the conclusion of the next round of 
rulemaking. We may issue subregulatory guidance to assist in this 
preparation before subsequent rulemaking is finalized. We will address 
public comments on sections of the proposed rule we sought comment on, 
including payment, quality reporting, and program integrity, in future 
rulemaking.
    The MDPP expanded model will become effective nationwide beginning 
on January 1, 2018. We will continue to evaluate this expanded model 
test.
2. Background
    In January 2015, the Administration announced the vision of 
``Better Care, Smarter Spending, Healthier People'' with emphases on 
improving the way

[[Page 80460]]

providers are paid, improving and innovating in care delivery, and 
sharing information to support better decisions, and that set goals for 
payments made through alternative payment models and tied to quality or 
value. In March 2016, the United States Department of Health and Human 
Services (HHS) announced that an estimated 30 percent of Medicare 
payments are tied to alternative payment models that reward the quality 
of care over quantity of services provided to beneficiaries, nearly a 
year ahead of schedule.
    Diabetes affects more than 25 percent of Americans aged 65 or older 
\16\ and its prevalence is projected to increase approximately 2 fold 
for all U.S. adults (ages 18-79) by 2050 if current trends 
continue.\17\ Additionally, the risk of progression to type 2 diabetes 
in an individual with pre-diabetes is 5-10 percent per year, or 5-20 
times higher than in individuals with normal blood glucose.\18\ Care 
for Americans aged 65 and older with diabetes accounts for roughly $104 
billion annually, and these costs are growing.\19\ In total, we 
estimate that Medicare will spend $42 billion more in the single year 
of 2016 on fee-for-service, non-dual eligible, over age 65 
beneficiaries with diabetes than it would spend if those beneficiaries 
did not have diabetes--$20 billion more for Part A, $17 billion more 
for Part B, and $5 billion more for Part D. On a per-beneficiary basis, 
this disparity is just as clear. In 2016 alone, Medicare will spend an 
estimated $1,500 more on Part D prescription drugs, $3,100 more for 
hospital and facility services, and $2,700 more in physician and other 
clinical services for those with diabetes than those without 
diabetes.\20\
---------------------------------------------------------------------------

    \16\ Centers for Medicare & Medicaid Services, ``Chronic 
Conditions Among Medicare Beneficiaries, Chartbook: 2012 Edition,'' 
Centers for Medicare & Medicaid Services, 2012, https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/chronic-conditions/downloads/2012chartbook.pdf.
    \17\ James Boyle, et al., ``Projection of the Year 2050 Burden 
of Diabetes in the US Adult Population: Dynamic Modeling of 
Incidence, Mortality, and Pre-Diabetes Prevalence,'' Population 
Health Metrics 8, no. 29 (2010): 1-12.
    \18\ X Zhang et al., ``A1C Level and Future Risk of Diabetes: A 
Systematic Review,'' Diabetes Care 33, no. 7 (2010): 1665-1673.
    \19\ James Boyle, et al., ``Projection of the Year 2050 Burden 
of Diabetes in the US Adult Population: Dynamic Modeling of 
Incidence, Mortality, and Pre-Diabetes Prevalence,'' Population 
Health Metrics 8, no. 29 (2010): 1-12.
    \20\ Erkan Erdem and Holly Korda, ``Medicare Fee-For-Service 
Spending for Diabetes: Examining Aging and Comorbidities,'' Diabetes 
& Metabolism 5, no. 3 (2014); The Boards of Trustees: Federal 
Hospital Insurance and Federal Supplementary Medical Insurance Trust 
Funds, ``2016 Annual Report of the Boards of Trustees of the Federal 
Hospital Insurance and Federal Supplementary Medical Insurance Trust 
Funds,'' Centers for Medicare & Medicaid Services, 2016, https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/downloads/tr2016.pdf.; and CMS 
estimates.
---------------------------------------------------------------------------

    Fortunately, type 2 diabetes is typically preventable with 
appropriate lifestyle changes. The National DPP, administered by the 
Centers for Disease Control and Prevention (CDC), is an evidence-based 
intervention targeted to individuals with pre-diabetes, meaning those 
with blood sugar that is higher than normal but not yet in the diabetes 
range. The National DPP is a structured health behavior change program 
delivered in community and health care settings by trained community 
health workers or health professionals. The National DPP consists of 16 
intensive core sessions of a CDC-approved curriculum in a group-based 
setting that provides practical training in long-term dietary change, 
increased physical activity, and problem-solving strategies for 
overcoming challenges to sustaining weight loss and a healthy 
lifestyle. After the 16 core sessions, monthly maintenance sessions 
help to ensure that the participants maintain healthy behaviors. The 
primary goal of the intervention is to reduce incidence of type 2 
diabetes by achieving at least 5 percent average weight loss among 
participants. To learn more about the National DPP, please visit http://www.cdc.gov/diabetes/prevention/lifestyle-program/index.html.
    In 2012, the Innovation Center awarded a Health Care Innovation 
Award (HCIA) to The Young Men's Christian Association (YMCA) of the USA 
(Y-USA) to test whether DPP services could be successfully furnished by 
non-physician, community-based organizations to Medicare beneficiaries 
diagnosed with pre-diabetes and therefore at high risk for development 
of type 2 diabetes (referred to hereafter as the DPP model test). The 
DPP model test has been conducted under the authority of section 1115A 
of the Act, which 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.
    Between February 2013 and June 2015, the Y-USA, in partnership with 
17 local YMCAs, the Diabetes Prevention and Control Alliance, and seven 
other non-profit organizations, enrolled a total of 7,804 Medicare 
beneficiaries into the model. Enrolled beneficiaries represented a 
diverse demographic across the eight states of Arizona, Delaware, 
Florida, Indiana, Minnesota, New York, Ohio, and Texas. According to 
the second year independent evaluation report of the DPP model test, 
Medicare beneficiaries demonstrated high rates of participation and 
sustained engagement in the Diabetes Prevention Program. Approximately 
83 percent of recruited Medicare beneficiaries attended at least four 
core sessions and approximately 63 percent completed nine or more core 
sessions. The first and second independent evaluation reports are 
available on the Innovation Center's Web site at https://innovation.cms.gov/initiatives/Health-Care-Innovation-Awards/.
3. Requirements for Expansion
    Section 1115A(c) of the Act provides the Secretary of the U.S. 
Department of Health and Human Services (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) of the Act: (1) The Secretary determines that the model 
expansion is expected to either reduce 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 
program spending; and (3) The Secretary determines that the expansion 
would not deny or limit the coverage or provision of benefits.
     Improved Quality of Care without Increased Spending: The 
DPP model test was designed to improve care through diabetes-related 
preventive services in community- and primary-care based settings. 
Weight loss is a key indicator of success among persons enrolled in a 
DPP due to the strong association between weight loss and reduction in 
the risk of diabetes.\21\ According to the second year independent 
evaluation of the DPP model test, those beneficiaries who attended at 
least one core session lost an average of 7.6 pounds while 
beneficiaries who attended at least four core sessions lost an average 
of 9 pounds. Body Mass Index (BMI) was reduced from 32.9 to 31.5 among 
Medicare beneficiaries that attended at least four core sessions. The 
evaluation

[[Page 80461]]

also demonstrated a statistically significant reduction in inpatient 
admissions following the intervention. Based on these findings and 
results from other DPP evaluations demonstrating the effectiveness of 
DPP programs in preventing diabetes onset in non-Medicare 
beneficiaries, some of which were over 65, the Secretary determined 
that expansion of the DPP model test is expected to improve the quality 
of patient care for Medicare beneficiaries without increasing spending.
---------------------------------------------------------------------------

    \21\ RF Hamman et al., ``Effects of Weight Loss with Lifestyle 
Intervention on Risk of Diabetes,'' Diabetes Care 29, no. 9 (2006): 
2102-2107.
---------------------------------------------------------------------------

     Impact on Medicare Spending: The CMS Chief Actuary 
(referred to hereafter as the Chief Actuary) has certified that 
expansion of the DPP model test would not result in an increase in 
Medicare spending. The Chief Actuary has determined that DPP is likely 
to reduce Medicare expenditures if made available to eligible Medicare 
beneficiaries based on historical evidence from evaluations of the DPP 
model test and other DPPs. In addition, to evaluate the longer-term 
impact of the expanded model, the Chief Actuary developed a model to 
estimate lifetime per participant savings of a Medicare beneficiary 
receiving DPP services.
    The full Chief Actuary Certification is available at https://www.cms.gov/Research-Statistics-Data-and-Systems/Research/ActuarialStudies/Downloads/Diabetes-Prevention-Certification-2016-03-14.pdf.
     No Alteration in Coverage or Provision of Benefits: The 
MDPP model expansion would make MDPP services available to 
beneficiaries in addition to existing Medicare services, and 
beneficiaries receiving MDPP services would retain all benefits covered 
in traditional Medicare. Therefore, the Secretary has determined that 
expansion of the DPP model test would not deny or limit the coverage or 
provision of Medicare benefits for Medicare beneficiaries.
    The following is a summary of the comments received and our 
responses.
    Comment: Commenters were overwhelmingly in favor of the proposed 
expansion and Medicare covering the MDPP services as an additional 
preventive service. Many commenters offered personal stories of their 
battles with type 2 diabetes, or caring for those with type 2 diabetes, 
and expressed gratitude toward the agency for proposing to cover the 
benefit to prevent future beneficiaries from the challenges posed by 
type 2 diabetes. Commenters encouraged us to consider ways to increase 
beneficiary awareness and lower barriers to access. Several commenters 
expressed their desire to assist us in further development of the model 
expansion. Commenters also encouraged us to continue to align with the 
CDC Diabetes Prevention Recognition Program Standards and Operating 
Procedures (CDC DPRP Standards) on various policies such as supplier 
requirements, recognition status, and required minimum weight loss 
percentage. Another commenter recommended that we reimburse for 
technology such as the continuous glucose monitor. Some commenters 
encouraged us to continue to take steps toward more preventive models. 
One commenter disagreed altogether with the proposed MDPP model 
expansion, stating it allows another high risk supplier type into the 
Medicare program.
    Response: We appreciate the commenters' suggestions to increase 
beneficiary awareness of the benefit, and look forward to exploring 
ways we can achieve our shared aims through stakeholder engagement and 
communications efforts, such as updates to the Medicare & You Handbook. 
We also hope to engage the public and MDPP stakeholders in further 
developments and any adjustments we make through future rulemaking, 
subregulatory guidance, or other guidance, as appropriate. We 
appreciate the comments to test more preventive models and to pay for 
technology that could be used in connection with the MDPP expanded 
model, but those are outside the scope of what we proposed to expand, 
and we decline to include them in the MDPP model expansion. We disagree 
with the commenter who believed we should not expand the DPP model 
test. We describe later in this rule some of the enrollment policies 
that are intended to protect against the risks introduced by the new 
supplier class. Additionally, we intend to propose specific program 
integrity policies in future rulemaking.
    Comment: A few commenters expressed concerns that the MDPP model 
expansion will set a flawed precedent for future model expansions. For 
example, two commenters expressed concerns that the Secretary's 
determination that the MDPP model expansion would improve the quality 
of care is not substantiated by the evidence, and asked for more 
discussion of how the MDPP expansion will improve other elements within 
quality of care, such as patient experience.
    Response: We are undertaking the MDPP model expansion in a manner 
consistent with the statutory requirements of section 1115A(c) of the 
Act. Therefore we do not agree that expansion of the DPP model test 
sets a flawed precedent. We also note that the specific data, analyses, 
and other factors informing the MDPP expansion are unique to this 
particular model. For example, different approaches to actuarial 
modeling may be required for a preventive service payment and service 
delivery model as compared to a payment model focused on treatment. We 
expect to take into account the specific aspects of each model when 
evaluating it for expansion. We found that the DPP model test has been 
shown to reduce risk of type 2 diabetes through weight loss and 
behavior change. The second year independent evaluation of the DPP 
model test also found statistically significant reductions in inpatient 
and emergency room visits and robust engagement by beneficiaries. 
Expansion of the DPP model test will give eligible beneficiaries access 
to MDPP services, which are evidence-based, to improve their health. 
The Secretary has determined that by improving health outcomes, as 
measured by participation in the DPP and weight loss, the MDPP expanded 
model will improve beneficiaries' quality of care. Weight loss is a key 
indicator of success among persons enrolled in the DPP as it predicts 
the reduced incidence of type 2 diabetes.\22\ According to the second 
year independent evaluation of the DPP model test, which included 6,874 
Medicare beneficiaries, those beneficiaries who attended at least one 
core session lost an average of 7.6 pounds while beneficiaries who 
attended at least four core sessions lost an average of nine pounds. 
BMI was reduced from 32.9 to 31.5 among Medicare beneficiaries that 
attended at least four core sessions.
---------------------------------------------------------------------------

    \22\ RF Hamman et al., ``Effects of Weight Loss with Lifestyle 
Intervention on Risk of Diabetes,'' Diabetes Care 29, no. 9 (2006): 
2102-2107.
---------------------------------------------------------------------------

    Comment: Regarding the Chief Actuary's certification, some 
commenters expressed appreciation that the determination was made 
available to the public several months before the proposed rule. One 
commenter also asked us to clarify if, and how, stakeholders can engage 
with the certification process in the event that there are outstanding 
questions of methodology and model assumptions. Two commenters 
criticized the Chief Actuary's consideration of findings in addition to 
the DPP model test, such as other DPPs in the National DPP, in making 
the certification. A commenter stated that the Chief Actuary certified 
the expansion of a model that is different than the tested model, which 
the commenter viewed as contrary to the statute. MedPAC expressed 
concern that the MDPP expanded model would

[[Page 80462]]

expand far beyond the structure of the initial model test. One 
commenter expressed concern that this determination was made based on a 
preliminary, 2-year evaluation.
    Response: We appreciate commenters' interest in the certification 
process. The CMS Office of the Actuary, led by the Chief Actuary, 
functions in accordance with professional standards of actuarial 
independence. The statute does not require that in certifying an 
expansion the Chief Actuary may consider data only from the model 
evaluation; rather, the statute requires only that the evaluation be 
taken into consideration.
    The Chief Actuary also reviewed data from other sources besides the 
model evaluations in certifying the Pioneer Accountable Care 
Organization (ACO) Model, the first Innovation Center model determined 
eligible for expansion. In April 2015, the Chief Actuary certified that 
expansion of the Pioneer ACO Model, as it was tested in the model's 
first 2 years, would reduce net program spending. The Chief Actuary 
used historical evidence from the formal evaluation of the Pioneer ACO 
Model as well as the Chief Actuary's independent internal analysis of 
financial impacts. The Chief Actuary's certification of the Pioneer ACO 
Model is available at https://www.cms.gov/Research-Statistics-Data-and-Systems/Research/ActuarialStudies/Downloads/Pioneer-Certification-2015-04-10.pdf. The Secretary also determined that expansion would not limit 
coverage or benefits, and that expansion would maintain or improve 
patient care without increasing spending. While the Pioneer ACO Model 
has not been expanded through section 1115A(c) of the Act, CMS has 
incorporated successful design elements of the Pioneer ACO Model into 
the Medicare Shared Savings Program.
    The statute does not require that an expanded model test be 
identical to the initial model test. Indeed, section 1115A(c) of the 
Act authorizes the Secretary to expand (including implementation on a 
nationwide basis) the duration and the scope of a model being tested 
under subsection (b) or a demonstration project under section 1866C of 
the Act through rulemaking. The rulemaking requirement indicates that 
the expansion is to be subject to public comment, which, in turn, 
indicates that the expansion can and should be modified as appropriate 
to reflect the outcome of the rulemaking process. In addition, we 
expect that we will need to modify some design features in nearly all 
cases of expanded model tests, by virtue of the shift in duration or 
scope. For example, a nationwide expansion may require different 
policies and operations to manage large-scale provider enrollment or 
payment than does the initial model test. The Chief Actuary certified 
expansion of the DPP model test understanding that the expansion would 
include specific changes driven by policies and operations necessary in 
bringing the model to a national scale. As the expansion's full design 
is implemented in future rulemaking, the Chief Actuary will assess 
whether such expansion will reduce or not increase net program 
spending, and will update the certification as appropriate.
    Comment: Some commenters supported the determination that the DPP 
model expansion would not deny or limit the coverage or provision of 
Medicare benefits for Medicare beneficiaries as the MDPP expanded model 
makes additional services available to eligible beneficiaries. Two 
commenters asked that in future model expansions we assess the impact 
of a model on patient access to covered items and services based on a 
broad evaluation of the direct and indirect barriers to care that may 
result from a model's expansion.
    Response: We appreciate the commenters' support regarding the 
determination that the expansion of the DPP model test would not deny 
or limit the coverage or provision of Medicare benefits. We will apply 
the statutory criteria for expanding a model on an individual basis and 
will take the particular features of each model into account when 
making any determinations.
    Comment: Several commenters encouraged us to continue to collect 
data and evaluate the impact of the expanded model test.
    Response: We will continue to evaluate this expanded model test as 
indicated in the proposed rule. Using an evaluation design that could 
include a before and after assessment and or matched comparison groups, 
we will examine the impact of the model on utilization of services and 
cost of care, particularly whether the model has had an impact on the 
development of diabetes, and other health consequences of diabetes. We 
will also examine the expanded model's impact on changes in health 
metrics, such as weight loss.
    In general, evaluations of Innovation Center models address the 
impact of the models on use of services and the quality of care 
provided, relative to a comparison group, using CMS administrative data 
and relevant beneficiary experience data when available. Utilization 
measures can be used to monitor whether beneficiaries are receiving the 
services that would be expected given beneficiaries' health status. The 
comparison group generally consists of beneficiaries who are similar to 
the beneficiaries receiving services under the model, and are often 
matched on underlying health status and other important 
characteristics, including whether the beneficiary is part of another 
model test. We intend to apply additional information on the evaluation 
in the future. We will continue to assess whether the MDPP expanded 
model is expected to improve the quality of care without increasing 
spending, reduce spending without reducing the quality of care, or 
improve the quality of care and reduce spending, and we will terminate 
or modify the MDPP expanded model if the expanded model is not expected 
to meet these criteria.
4. Expansion of the Diabetes Prevention Program Model
    We proposed to expand the duration and scope of the DPP model test 
under section 1115A(c) of the Act, and we proposed to refer to this 
expanded model as the MDPP. In this section of this final rule, we are 
finalizing a framework for the MDPP expanded model. We intend to engage 
in additional rulemaking in 2017, to establish additional requirements 
of the MDPP expanded model. We solicited comment on all of the 
proposals below and on other policy or operational issues that need to 
be considered in implementing this expansion.
a. Designation of MDPP Services as Additional Preventive Services Under 
Section 1861(ddd) of the Act
    We proposed to designate MDPP services as ``additional preventive 
services'' available under Medicare Part B. Section 1861(ddd) of the 
Act defines ``additional preventive services'' as services (other than 
screening or other preventive services or personalized prevention plan 
services described in other sections of the Act) that identify medical 
conditions or risk factors, and that the Secretary determines, using 
the National Coverage Determination (NCD) process, are (A) reasonable 
and necessary for the prevention or early detection of an illness or 
disability; (B) recommended with a grade of A or B by the United States 
Preventive Services Task Force (USPSTF); and (C) appropriate for 
individuals entitled to benefits under Part A or enrolled in Part B.
    We believe that MDPP services are consistent with the types of 
additional preventive services that are appropriate

[[Page 80463]]

for Medicare beneficiaries. In particular, we believe that MDPP 
services meet the requirements of section 1861(ddd)(1)(A) of the Act 
(that is, that they are reasonable and necessary for the prevention or 
early detection of an illness or disability) because they are 
specifically designed to prevent pre-diabetes from advancing into type 
2 diabetes and their effectiveness is supported by the evaluations of 
the DPP model test.
    We proposed to use the Secretary's waiver authority under section 
1115A(d)(1) of the Act to waive two requirements of the benefit 
category of additional preventive services. MDPP services do not meet 
the requirement in section 1861(ddd)(1)(B) of the Act in that MDPP 
services have not been recommended with a grade of A or B by the 
USPSTF, and thus a waiver of that requirement is necessary. We proposed 
to use the Secretary's waiver authority to waive this requirement with 
respect to MDPP services.
    We proposed to waive the requirement of section 1861(ddd)(2) of the 
Act that the Secretary make the determinations required under section 
1861(ddd)(1) of the Act using the NCD process. We proposed to waive 
this requirement because applying the NCD process to the MDPP model 
expansion is inappropriate, and thus the waiver is necessary. The 
creation of a new supplier class is necessary for coaches to furnish 
MDPP services, which the NCD process was not designed to address.
    Since Medicare cost-sharing does not apply to additional preventive 
services, MDPP services would not be subject to Medicare cost-sharing.
    We solicited comment on these proposals.
    The following is a summary of the comments we received on 
designating MDPP services as additional preventive services and our 
responses.
    Comment: While some commenters supported the Secretary's use of the 
waiver authority provided by section 1115A(d)(1) of the Act in 
expansion of the DPP model test, a few commenters stated that the 
statute does not permit the Secretary to waive statutory or regulatory 
requirements when a model is expanded under section 1115A(c) of the 
Act. These commenters stated that any use of waiver authority in an 
expanded model is not made ``with respect to testing models described 
in subsection (b).'' As a consequence, these commenters stated, the 
Secretary lacks the authority to waive the provisions of section 
1861(ddd) of the Act proposed in the proposed rule.
    Response: We disagree with the commenters. Section 1115A(d)(1) of 
the Act authorizes the Secretary to waive certain requirements as may 
be necessary solely for purposes of carrying out this section with 
respect to testing models described in subsection (b). We believe that 
the phrase ``described in subsection (b)'' is simply a reference that 
describes the models that are authorized under subsection (b), and that 
the waiver authority extends to expanded models because they continue 
to be models described in subsection (b). The language of section 
1115A(c) of the Act itself supports this view because it gives the 
Secretary authority to expand the duration and scope of a model that is 
being tested under subsection (b).
    Therefore, in our view, the Secretary is authorized to waive 
requirements of Title XI, Title XVIII, and sections 1902(a)(1), 
1902(a)(13), 1902(m)(2)(A)(iii), and 1934 of the Act (other than 
subsections (b)(1)(A) and (c)(5) of such section) in connection with 
expanded model tests. As the MDPP model expansion is an expansion of 
the duration and scope of a model described in and tested under 
subsection (b), the Secretary may waive Medicare requirements as 
necessary for the purposes of the expanded model.
    Comment: Many commenters believed that the Secretary's waiver of 
section 1861(ddd)(1)(B) of the Act, which requires that a benefit must 
be recommended with a grade of A or B by the USPSTF, is unnecessary. 
These commenters stated that the USPSTF issued guidance in October 2015 
entitled Abnormal Blood Glucose and Type 2 Diabetes Mellitus: 
Screening, which provided a B rating for intensive behavioral 
counseling interventions for patients with abnormal blood glucose based 
on National DPP clinical trial evidence. This recommendation is 
available at https://www.uspreventiveservicestaskforce.org/Page/Document/RecommendationStatementFinal/screening-for-abnormal-blood-glucose-and-type-2-diabetes. Because of this recommendation, these 
commenters suggested, the Secretary does not need to waive the 
requirement in section 1861(ddd)(1)(B) of the Act.
    Response: While the interventions mentioned in the USPSTF's 
recommendation bears some similarity to the expanded DPP model test, 
and provides evidence to support DPPs generally, there are differences 
between the USPSTF's recommendation and the design of the MDPP expanded 
model, both as initially tested and as we have proposed to expand it. 
We believe these differences make USPSTF's recommendation inapplicable 
to MDPP, and therefore the waiver is necessary.
    In particular, the specific USPSTF recommendation cited by 
commenters is for ``adults aged 40 to 70 years who are overweight or 
obese who are seen in primary care settings,'' which does not include 
Medicare beneficiaries over 70 who would be eligible for MDPP services 
or the furnishing of MDPP services by a community service organization.
    While the USPSTF recommendation discussed by the commenters does 
not match with the elements of the MDPP model expansion, we do note 
that the recommendation supports the principle of the MDPP expanded 
model. In addition, we have spoken to the USPSTF about its 
recommendation and shared the findings of the evaluation of the model 
in case the USPSTF would like to reconsider its recommendation.
    Similarly, we note that in 2014, the Community Preventive Services 
Task Force (CPSTF), a ``sister entity'' to the USPSTF that is focused 
on population-based interventions, issued a recommendation for 
Diabetes: Combined Diet and Physical Activity Promotion Programs to 
Prevent Type 2 Diabetes Among People at Increased Risk, specifically 
recommending ``combined diet and physical activity promotion programs 
for people at increased risk of type 2 diabetes based on strong 
evidence of effectiveness in reducing new-onset diabetes.'' The CPSTF 
recommendation is available at https://www.thecommunityguide.org/findings/diabetes-combined-diet-and-physical-activity-promotion-programs-prevent-type-2-diabetes. We believe that the MDPP expanded 
model is consistent with the CPSTF recommendation.
    Comment: One commenter suggested that the Secretary should not 
waive the National Coverage Determination (NCD) process required by 
section 1861(ddd)(2) of the Act. One commenter suggested that it is 
irrelevant that the NCD process does not address the creation of a new 
supplier class. This commenter also suggested that the statute does not 
require CMS to implement an additional preventive service via the NCD 
process; all it requires is that CMS make the three determinations that 
are prerequisites for additional preventive service status using the 
NCD process. This commenter also stated that the timing of the NCD 
process will not hinder this expansion, suggesting that we have the 
discretion to expedite the NCD process. Another commenter suggested 
that waiving the NCD process is unnecessary because the

[[Page 80464]]

creation of a supplier class is not hindered by the NCD process.
    Response: We disagree that waiving requirements of section 
1861(ddd)(2) of the Act is unnecessary. In particular, we disagree with 
the commenters who believe that using the NCD process would not create 
timing challenges for the MDPP expanded model. To the contrary, we 
believe that the use of the NCD process is inappropriate for the MDPP 
expanded model.
    The MDPP expanded model necessitates the creation of a new supplier 
class that must be able to enroll in Medicare so that it may furnish 
MDPP services as of the effective date of the expanded model. We are 
establishing the new supplier class through rulemaking, in conjunction 
with the model expansion. Contrary to commenters' assertions, using the 
NCD process to designate MDPP services as additional preventive 
services would create significant timing challenges, given that we need 
to expand the model and establish the MDPP supplier class through 
rulemaking. If we were to use the NCD process to determine that MDPP 
services are additional preventive services, we would not be able to 
begin covering MDPP services on the date the NCD was issued, even if it 
were issued simultaneously with the effective date of a final rule 
establishing the supplier class. This is because in order to align the 
effective dates, we would have had to issue a final rule establishing 
the MDPP supplier class 60 days before we determined that MDPP services 
were covered by Medicare. Were we to instead issue an NCD 
simultaneously with the release of a final rule establishing a new 
supplier class, the benefit would be unavailable for a period of time 
after the NCD's effective date because of the 60-day delay in 
effectiveness of the final rule plus time needed thereafter to process 
MDPP supplier enrollment applications. Because we cannot allow MDPP 
suppliers to enroll specifically to provide a service that is not yet a 
Medicare service, we find that it is necessary for purposes of 
expanding the MDPP model to waive the requirements of section 
1861(ddd)(2) of the Act. This rulemaking establishes MDPP services as 
additional preventive services that will become available after there 
is sufficient time to enroll MDPP suppliers to furnish those services, 
which allows us to avoid timing and logistics problems while also 
providing the public with the opportunity to comment in a manner 
similar to the NCD process.
    Comment: Commenters overwhelmingly supported the proposal to not 
hold beneficiaries responsible for cost sharing for MDPP services. A 
few commenters asked us to clarify that beneficiaries would not have to 
pay cost-sharing, particularly because they were concerned that cost 
sharing would restrict beneficiary access.
    Response: MDPP services are additional preventive services under 
section 1861(ddd) of the Act and therefore, consistent with section 
1833(a)(1)(W) of the Act, are not subject to the Medicare Part B 
coinsurance or deductible.
    Final Decision: We finalize our proposal to expand the duration and 
scope of the DPP model test as proposed. We finalize our proposal to 
designate this benefit as an additional preventive service according to 
section 1861(ddd) of the Act as proposed, and we also finalize our 
proposals to waive the requirements of sections 1861(ddd)(1)(B) and 
(ddd)(2) of the Act as proposed.
b. Timing of the Expansion of the Medicare Diabetes Prevention Program 
Model
    We proposed that the expansion of the duration and scope of the DPP 
model test would become effective on a nationwide basis beginning on 
January 1, 2018. Expanding the DPP model test is a complex undertaking, 
which could be approached in different ways, such as expanding the 
scope of the DPP model test nationally in its first year of 
implementation or expanding the duration and scope using a phase-in 
approach. The phase-in approach could expand MDPP initially for a 
period of time in certain geographic markets or regions or among a 
subpopulation of MDPP suppliers, with the goal of addressing technical 
issues prior to broader expansion. We solicited comment on whether to 
expand the scope of the DPP model test nationally or use a phase-in 
approach, and if phased-in, what factors we should consider in the 
possible selection of initial phased-in MDPP suppliers.
    Comment: We received many comments related to the timing of the 
MDPP expansion. Commenters overwhelmingly supported nationwide 
expansion of the DPP model test on January 1, 2018, over a phase-in 
approach. Several commenters, including MedPAC, supported a phase-in 
approach, to allow CMS to address program integrity issues before 
nationwide expansion. Some commenters made suggestions for where and 
with which providers to phase the benefit in if CMS were to adopt the 
phase-in approach. Others asked for clarification on what criteria 
would be used to determine the details of a phased-in approach.
    Response: We believe that nationwide expansion of the scope of the 
model would allow the greatest access to the MDPP services for 
beneficiaries. We also acknowledge the concerns that the MDPP expanded 
model introduces a new service and a new supplier type to the Medicare 
program, and we will prioritize beneficiary safety and the need to 
consider program integrity concerns in our implementation of this 
expansion.
    MDPP services will be available to eligible beneficiaries beginning 
on January 1, 2018, subject to additional rulemaking on issues such as 
payment for the service. However, as a factual matter, eligible 
beneficiaries' access to MDPP services will increase over time as more 
organizations seek and receive CDC DPRP recognition, enroll in Medicare 
as MDPP suppliers, and therefore furnish MDPP services. As of October 
2016, more than 1,000 organizations have pending or full recognition 
from the CDC DPRP to provide DPP services. As described in section 
III.J.7.a. of this final rule, these organizations will have to meet 
certain standards before becoming eligible to enroll as a Medicare 
supplier. This will provide a de facto phase in that will allow us to 
gain experience with the MDPP expanded model with fewer organizations 
initially who meet the supplier eligibility criteria, and more over 
time as supplier enrollment increases.
c. Other Comments on the Expansion of the Medicare Diabetes Prevention 
Program Model
    Comment: A few commenters expressed concern that MDPP suppliers 
should be coordinating with primary care providers or other physicians, 
and a few commenters did not support the MDPP expanded model because 
they believed it would further fragment the health care system.
    Response: We appreciate and respect the concern regarding 
coordination with the clinical care system, and we encourage MDPP 
suppliers to promptly communicate with the beneficiary's health care 
providers as appropriate with the beneficiary's consent to promote care 
coordination. We also expect that some clinicians will furnish MDPP 
services on behalf of organizations that have or will obtain CDC DPRP 
recognition and enroll in Medicare as MDPP suppliers. However, we did 
not propose specific rules or requirements around coordination with 
primary care providers or other health care entities for the purposes 
of this

[[Page 80465]]

MDPP expanded model because the DPP model test did not require this 
level of coordination. We also want to provide organizations with the 
flexibility they need to effectively coordinate care with physicians 
while decreasing the administrative burden of offering the services. We 
will take these comments into consideration as we finalize various 
aspects of MDPP in future rulemaking.
    Comment: One commenter suggested the use of mobile application-
based technology with built in incentives for beneficiaries.
    Response: We appreciate the suggestion and we will consider it as 
we engage in future rulemaking.
    Comment: A few commenters recommended they be allowed to apply 
Diabetes Self-Management Training (DSMT) to beneficiaries with pre-
diabetes. One commenter suggested that CMS merge DSMT and MDPP because 
core training elements are identical.
    Response: While we acknowledge that there may be similarities 
between the two benefits, DSMT and MDPP have different eligibility 
criteria and goals. Beneficiaries with a type 2 diabetes diagnosis have 
different needs than those with pre-diabetes. We therefore do not 
believe we should merge these benefits.
    Comment: Several commenters recommended that we add MDPP services 
to the personalized prevention plan offered as part of the Medicare 
Annual Wellness Visit (AWV). A few commenters expressed disagreement 
with the focus on weight loss, citing fitness and physical activity, 
metabolic and behavioral markers, and other alternatives that CMS 
should consider as outcomes for value-based payments.
    Response: We did not test the other indicators that commenters 
recommended such as fitness, metabolic activity and behavioral markers. 
We will make adjustments through rulemaking, as necessary, if through 
our continuing evaluation we find that such adjustments are warranted. 
One of the elements of the AWV is for the health professional to 
furnish personalized health advice to the beneficiary, and a referral, 
as appropriate, to health education or preventive counseling services 
or programs. An eligible beneficiary can be referred for MDPP services 
as part of a personalized prevention plan. We reiterate, however, that 
we did not propose to require that beneficiaries obtain a referral for 
MDPP services, though as discussed in section III.J.7.c. of this final 
rule, referrals are permitted.
    Comment: Some commenters suggested using the term ``delay'' rather 
than ``prevent'' diabetes, and others suggested using the name National 
Diabetes Prevention Program (National DPP), rather than MDPP, citing 
confusion in the market of payers that currently cover DPP for their 
members.
    Response: We believe prevention of type 2 diabetes is the goal of 
the MDPP expanded model even though some beneficiaries may still be 
diagnosed with type 2 diabetes, so we decline to change the name to 
reference a ``delay'' in diabetes onset. We also believe MDPP is the 
appropriate name for this expanded model because there are differences 
between MDPP and the National DPP, such as the age of the beneficiaries 
served, beneficiary eligibility criteria, and the DPP organization or 
MDPP supplier eligibility criteria.
5. MDPP Benefit Description
    We proposed the MDPP core benefit to be 12-months of sessions using 
a CDC-approved DPP curriculum, consisting of at least 16 core sessions 
furnished over a range of 16 to 26 weeks (that is, the first 6 months) 
and at least 6 monthly core maintenance sessions over weeks 27-52 
(second 6 months). We proposed that beneficiaries who complete the 12-
month core benefit, and achieve and maintain a required minimum weight 
loss of 5 percent from the first core session, in accordance with the 
CDC Diabetes Prevention Recognition Program Standards and Operating 
Procedures (CDC DPRP Standards), would be eligible for monthly ongoing 
maintenance sessions for as long as the weight loss is maintained. The 
CDC DPRP Standards are available at http://www.cdc.gov/diabetes/prevention/pdf/dprp-standards.pdf. We proposed to require each MDPP 
core and maintenance session (both core and ongoing) be at least one 
hour in duration. We proposed that the MDPP expanded model will use the 
CDC-approved curriculum. Details pertaining to the content of both the 
core sessions and maintenance sessions, as set by the CDC, are 
available at http://www.cdc.gov/diabetes/prevention/pdf/curriculum_toc.pdf.
    We proposed that during the first 6 months (weeks 1-26) of the MDPP 
core benefit, each of the 16 core sessions must address a different 
curriculum topic included on the list of 16 curriculum topics, ensuring 
all topics are addressed by the end of the 16 sessions. We proposed 
that the second 6 months (weeks 27-52) of the MDPP core benefit must 
include at least one core maintenance session furnished in each of the 
6 months (for a minimum of six sessions), and all core maintenance 
sessions must address different topics. We proposed that ongoing 
maintenance sessions adhere to the same curriculum requirements as the 
core maintenance sessions.
    We solicited comment on these proposals.
    The following is a summary of the comments received and our 
responses.
    Comment: Several commenters suggested that we clarify whether MDPP 
suppliers must furnish MDPP services in the second 6 months of the core 
benefit (the core maintenance sessions) or Medicare payment for 
services furnished in the second 6 months of the core benefit without 
achievement of the required 5 percent weight loss. The commenters 
recommended that we allow MDPP suppliers to document and bill for 
achievement of beneficiary weight loss at any time during the first 
year, rather than during only the first 6 months. One commenter 
suggested that CMS clarify if there is a minimum or maximum number of 
beneficiaries that an MDPP supplier must/may serve.
    Response: We clarify that core maintenance sessions in the second 6 
months are furnished as part of the 12-month core benefit, regardless 
of weight loss. We refer readers to section III.J.7.b. of this final 
rule for discussion of the requirement that organizations maintain CDC 
DPRP recognition to enroll in Medicare to bill for furnishing MDPP 
services. The CDC DPRP Standards require that DPP-eligible individuals 
be able to access the core maintenance sessions, regardless of weight 
loss, in order for an organization to maintain CDC DPRP recognition. 
Therefore, we are finalizing our proposal that the MDPP core benefit is 
a 12-month program that consists of at least 16 weekly core sessions, 
over months 1-6, and at least 6 monthly core maintenance sessions over 
months 6-12, furnished regardless of weight loss. We are making 
corresponding changes to the regulations text to address when the MDPP 
core benefit will be available. We intend to address payment for MDPP 
services in future rulemaking. We will not require a minimum or maximum 
number of beneficiaries at this time, recognizing that MDPP suppliers 
will vary in capacity and mode of delivery. However, we will monitor 
for signs of adverse selection of beneficiaries and propose specific 
program integrity requirements in future rulemaking, as appropriate.
    Comment: Numerous commenters expressed general support for ongoing 
maintenance sessions after the 12-month core benefit and recommended 
that CMS allow beneficiaries access to ongoing maintenance sessions if 
they achieve the required 5 percent weight

[[Page 80466]]

loss any time during the 12-month core benefit. A few commenters 
recommended that CMS clarify the definition of maintenance of weight 
loss, noting that it is common for individuals to lose, regain, and 
lose weight again. One commenter recommended that beneficiaries whose 
weight increases during the maintenance period should have up to 3 
months to bring their weight back to the maintenance level. Another 
commenter requested clarification on when and how MDPP suppliers should 
track weight on an ongoing basis to ensure a beneficiary qualifies for 
maintenance sessions, and whether beneficiaries should be weighed every 
month to qualify.
    Several commenters recommended allowing beneficiaries who did not 
achieve and maintain the required 5 percent weight loss to still be 
able to access the ongoing maintenance sessions. The commenters stated 
various reasons, including that weight loss of less than 5 percent is 
clinically relevant and also reduces type 2 diabetes risk; the evidence 
base suggests greater impact on onset of diabetes through re-enrolling 
beneficiaries who are regaining weight than through continuing the 
service for those who can maintain weight loss; weight regain is common 
due to metabolic adaptation or receding behavior changes; discontinuing 
the service for beneficiaries who do not lose weight will discourage 
them and increase their risk for diabetes; the opportunity to provide a 
safe environment of recovery for individuals who have a binge-eating 
disorder; and that the intervention will still reduce diabetes among 
beneficiaries who are unable to achieve or maintain weight loss. 
Additionally, commenters stated that exclusion from maintenance 
sessions for beneficiaries who do not achieve the required weight loss 
would be punitive, particularly for beneficiaries who need the 
additional support to achieve the desired weight loss goal. Some 
commenters suggested that MDPP expanded model risks perpetuating health 
inequities because low-income beneficiaries who need MDPP services the 
most struggle disproportionately to achieve the required weight loss 
and will not be able to access ongoing maintenance sessions.
    One commenter suggested that CMS use an aggregate, not individual, 
5 percent weight loss across a supplier's beneficiaries to align with 
the CDC DPRP Standards and promote ongoing maintenance session 
eligibility for populations that experience difficulty achieving the 5 
percent weight loss due to socioeconomic or demographic factors. 
Another recommendation was to allow participants within 2 percentage 
points of the minimum weight loss to have their maintenance sessions 
covered to account for weight gain during extenuating circumstances 
(for example, falling ill or other circumstances that interfere with 
weight loss).
    Several commenters recommended that access to ongoing maintenance 
sessions, and payments for maintenance session attendance, depend not 
on the 5 percent weight loss, but instead on attendance of monthly 
maintenance sessions. Other commenters suggested that payment should be 
linked to alternative measures rather than weight loss, such as A1C, 
waist measurement, and knowledge tests.
    Response: As noted previously, MDPP eligible beneficiaries are 
eligible to access core maintenance sessions in the second 6 months of 
the 12-month core benefit regardless of weight loss. MDPP eligible 
beneficiaries are eligible to access ongoing maintenance sessions after 
the 12 month core benefit if the beneficiary achieves and maintains the 
required minimum weight loss percentage. We understand that 
beneficiaries' weight may fluctuate after meeting the 5 percent 
required weight loss. We are defining maintenance of weight loss, which 
allows a beneficiary to access ongoing maintenance sessions, as 
achieving the required minimum weight loss from baseline weight at any 
point during each 3 months of core maintenance or ongoing maintenance 
sessions. In other words, a beneficiary can access the next three 
months of ongoing maintenance sessions if the beneficiary achieved 
maintenance of weight loss at any point during the previous three 
months of maintenance sessions. As mentioned in comments, 3 months is 
the appropriate interval because it aligns with the proposed payment 
structure that pays for each three maintenance sessions attended with 
maintenance of weight loss. A beneficiary's weight must be measured and 
recorded during every core session and maintenance session the 
beneficiary attends. In response to comments, we are also adding a 
definition for maintenance session bundle to refer to each 3-month 
interval of core maintenance or ongoing maintenance sessions. Each 
bundle must include at least one maintenance session per month, for a 
minimum of three sessions in each bundle.
    We acknowledge some commenters' desire for CMS to cover ongoing 
maintenance sessions for beneficiaries who do not achieve and maintain 
the required 5 percent weight loss. The requirement that eligible 
beneficiaries must maintain 5 percent weight loss is consistent with 
the weight loss goal tested in the DPP model test, and was factored 
into the Secretary's determination to expand the model and the Chief 
Actuary's certification that MDPP expansion would not result in an 
increase of Medicare spending. We are not changing the requirement that 
beneficiaries must maintain the 5 percent minimum weight loss in order 
to receive ongoing maintenance sessions. We acknowledge commenters' 
concerns regarding potential unintended consequences if the MDPP 
expanded model results in low-income or other disadvantaged populations 
having less access to ongoing maintenance sessions. We may consider 
making adjustments as appropriate if, through our monitoring and 
evaluation and through tribal consultation, we find that such 
adjustments are warranted to address disparities in access.
    We disagree with a commenter's suggestion that we use an aggregate, 
not individual, 5 percent weight loss for ongoing maintenance session 
eligibility. We do not believe aggregate weight loss is an appropriate 
application for individuals' eligibility for ongoing maintenance 
sessions. We believe it is unfair to deny a beneficiary access to 
ongoing maintenance sessions if the beneficiary achieves 5 percent or 
more weight loss but happens to attend MDPP sessions with other 
beneficiaries who gain or do not lose the minimum weight. Aggregate 
weight loss can be arbitrary because there is no minimum or maximum 
number of beneficiaries per MDPP supplier, and there is no way to 
ensure equal access to the benefit. It decreases a beneficiary's 
incentive to meet the weight loss goal in order to access ongoing 
maintenance sessions and a suppliers' incentive to actively help each 
beneficiary to meet that weight loss goal, particularly if a few people 
lost a large percent of their weight. The goal of the DPP model test is 
at least 5 percent weight loss for each individual, which is expected 
to lead to a reduction in the incidence of diabetes. We do not have 
data to support an expanded model that does not require the achievement 
and maintenance of the minimum weight loss. We clarify that 
beneficiaries have access to the MDPP core benefit regardless of weight 
loss. This provides all eligible beneficiaries with access to 12 months 
of MDPP services, without cost-sharing, to achieve the target weight 
loss. We believe the incentive to achieve the target weight loss would 
be diluted for

[[Page 80467]]

beneficiaries if they could access the ongoing maintenance sessions 
regardless of weight loss.
    Comment: Commenters recommended limiting the number of years of 
payment for ongoing maintenance sessions due to the limited 
administrative and operational capability of many MDPP suppliers to 
provide ongoing maintenance sessions in perpetuity. A few commenters 
opposed payment for ongoing maintenance sessions at all, stating that 
indefinite monthly maintenance sessions extend beyond what is supported 
by scientific research. The commenters recommended additional review of 
clinical effectiveness and cost implications of payment for ongoing 
maintenance sessions, suggesting that we study the optimal number of 
maintenance sessions for beneficiaries who achieve and maintain the 
required weight loss. One commenter recommended that we eliminate 
ongoing maintenance sessions or make them voluntary for MDPP suppliers 
to furnish. The commenter noted the potential difficulty of assembling 
enough ongoing maintenance session attendees to cover a supplier's 
costs due to factors such as beneficiary attrition or schedule 
variation and administrative burdens associated with documenting 
beneficiary eligibility. The commenter also suggested that we clarify 
whether MDPP suppliers can offer and charge beneficiaries directly for 
additional services, such as health coaching beyond MDPP services or 
counseling to beneficiaries who regain weight and are no longer 
receiving MDPP services.
    One commenter recommended that we clarify whether beneficiaries 
must participate with the same coach or group of beneficiaries upon the 
transition from the core benefit to ongoing maintenance sessions. 
Another commenter recommended that CMS use different terminology for 
the ongoing maintenance sessions after the 12-month core benefit 
because it is confusing that the core maintenance sessions in the 
second 6 months are also called maintenance sessions.
    Response: We believe it is important for CMS to cover ongoing 
maintenance sessions after the 12-month core benefit to better equip 
beneficiaries to maintain healthy lifestyle changes and prevent type 2 
diabetes. As part of the expanded model, MDPP suppliers are required to 
provide eligible beneficiaries access to ongoing maintenance sessions. 
We acknowledge commenters' concern regarding the sustainability of 
ongoing maintenance sessions in perpetuity, and we intend to propose a 
limit to the duration of ongoing maintenance sessions in future 
rulemaking. As acknowledged by several commenters, continued 
participation by an individual in a DPP after year 3 has been generally 
untested, and we intend to take this into consideration when we address 
a limit in future rulemaking.
    In response to comments on the provision of services outside of 
MDPP, the MDPP model expansion only includes MDPP services. We note the 
distinction between core maintenance sessions and ongoing maintenance 
sessions is important in that core maintenance sessions are a part of 
the core benefit and are accessible to all eligible beneficiaries, 
while ongoing maintenance sessions require beneficiaries to maintain 
weight loss after the 12 month core benefit. As mentioned in section 
III.J.6. of this final rule, we defer questions of beneficiary 
attribution, such as how to address beneficiaries who switch suppliers 
upon the transition from the core benefit to ongoing maintenance 
sessions, to future rulemaking.
    Comment: Numerous commenters supported the use of CDC's DPRP 
Standards for the MDPP curriculum. Several commenters suggested that we 
permit MDPP suppliers to furnish any CDC-approved curriculum, rather 
than requiring the use of a particular curriculum. Commenters stated 
that CDC regularly updates its suggested curriculum, as well as reviews 
and approves alternative curricula that are submitted with an 
organization's application for CDC DPRP recognition. Commenters 
requested clarification on whether suppliers may use the 2016 CDC 
Prevent T2 Curriculum or the 2012 CDC-developed curriculum, both of 
which are permitted by the CDC DPRP Standards. Commenters recommended 
that CMS clarify whether CMS would need to undergo a rule change if CDC 
makes changes to the curriculum.
    Commenters also suggested clarification on the curriculum topics 
that MDPP suppliers should follow for ongoing maintenance sessions, as 
the National DPP curriculum only specifies content for what is 
analogous to the MDPP core benefit. Other commenters recommended 
allowing MDPP suppliers to use the CDC-approved DPP curriculum in 
another language or making the curriculum more culturally sensitive. 
Commenters suggested changes to the curriculum, such as shifting the 
focus away from calorie counting, emphasizing physical activity and 
exercise goals, training coaches to handle emotional issues and 
offering oral hygiene sessions.
    One commenter suggested we consider ways to embed the curriculum 
into the Diabetes Self-Management Training (DSMT) benefit.
    Response: We agree with commenters that MDPP suppliers should be 
permitted to, consistent with their CDC DPRP recognition, use any 
curriculum approved by the CDC. The CDC-preferred curriculum is 
available at http://www.cdc.gov/diabetes/prevention/lifestyle-program/curriculum.html. We note that if a DPP organization chooses to use a 
different curriculum, it must send the curriculum to the CDC DPRP so it 
can be evaluated to ensure that it covers similar content and is 
consistent with the current evidence base. To mitigate confusion 
surrounding the use of specific topic names, we will remove specific 
curriculum topics from the regulations text and instead specify that 
the sessions must be furnished consistent with any CDC-approved 
curriculum. We believe this change also will make it unnecessary for us 
to undertake rulemaking to address regular CDC curriculum updates. This 
will reduce the risk that MDPP suppliers would need to have two 
separate curricula, one for their Medicare beneficiaries and one for 
the rest of their enrollees, which could be unnecessarily burdensome.
    For the ongoing maintenance session curriculum, we are requiring 
that MDPP suppliers use a CDC-approved curriculum. The purpose of 
ongoing maintenance sessions is to reinforce and revisit what was 
learned and practiced in the core benefit, so beneficiaries can 
maintain healthy behavioral changes and weight loss. Coaches can offer 
any of the curriculum topics except for the introductory sessions. We 
support the use of culturally sensitive curricula based on the MDPP 
supplier's population and furnishing MDPP services in languages other 
than English. If the CDC approves a curriculum that has adjustments to 
address language barriers or cultural differences, the MDPP supplier 
can use the curriculum. We remind organizations that the policies and 
procedures of approved curricula must ensure accessibility to persons 
with disabilities, persons with limited English proficiency, and other 
populations in compliance with HHS civil rights non-discrimination 
regulations, including those implementing section 504 of the 
Rehabilitation Act of 1973, Title VI of the Civil Rights Act, section 
1557 of the Patient Protection and Affordable Care Act, and Title IX of 
the Education Amendments of 1972, as amended. More information is 
available at http://www.hhs.gov/civil-rights. With respect to embedding 
the DPP curriculum into DSMT, we decline to adopt this

[[Page 80468]]

recommendation. As noted previously, DSMT and MDPP services, though 
similar, serve different purposes and are for individuals with 
different needs.
    Comment: Some commenters recommended that CMS modify the session 
duration requirement from ``at least one hour'' to align with the CDC 
DPRP Standards of ``each session must be of sufficient duration to 
convey the session content--or approximately one hour in length.'' 
Commenters stated that the time it takes to complete a curriculum topic 
depends on the number of attendees, how the services are furnished, 
beneficiaries' assessed need, the curriculum topic, and the approach to 
the curriculum, and the one-hour requirement would be too rigid and too 
long for many CDC-recognized organizations. Other commenters 
recommended we focus on completion of modules in the required 
curriculum, not session-based time standards, since module completion 
requires active participation and the ability to turn learning into 
action, while a time-based standard does not correlate with impact on 
outcomes. Some commenters stated that value-based care de-emphasizes 
the amount of time involved with furnishing a given service and focuses 
on the results achieved.
    Response: We agree with commenters that the one-hour requirement 
may be too rigid when compared against CDC-approved DPP curricula that 
vary in approach and mode of delivery. We agree that ``approximately 
one-hour in duration'' is an appropriate requirement for in-person 
sessions because completion of a curriculum topic may vary depending on 
factors such as number of attendees, how the program is delivered, 
beneficiaries' assessed need, the curriculum topic, and the approach to 
the curriculum. We do not believe the CDC DPRP Standard that ``each 
session must be of sufficient duration to convey the session content'' 
is an auditable requirement, and therefore, we decline to adopt it for 
MDPP because, as noted in the proposed rule, having auditable 
requirements is a critical component of our program integrity efforts. 
For these reasons, we are amending our regulations to specify that 
sessions must be ``approximately one-hour in duration.''
    Final Decision: After consideration of the public comments 
received, we are finalizing the proposal that the MDPP core benefit is 
a 12 consecutive month program that consists of at least 16 weekly core 
sessions over months 1-6 and at least six monthly core maintenance 
sessions over months 6-12, furnished regardless of weight loss. We are 
also finalizing the proposal that beneficiaries have access to ongoing 
maintenance sessions after the 12-month core benefit if they achieve 
and maintain the required minimum weight loss of 5 percent. We are 
modifying the regulations in Sec.  410.79 to add the definition of 
``maintenance session bundle'' to refer to each 3-month interval of 
core maintenance or ongoing maintenance sessions, with at least one 
maintenance session delivered in each of the 3 months. We are also 
adding the definition of ``maintenance of weight loss'' to clarify that 
maintenance of weight loss is achieving the required minimum weight 
loss from baseline weight at any point during each 3-month core 
maintenance or ongoing maintenance session bundle. We are revising the 
definitions of the CDC-approved core curriculum to remove specific 
curriculum topic names and to indicate MDPP suppliers must use any CDC-
approved curriculum. We are revising the session duration to specify 
that sessions must have a duration of approximately one hour. We are 
also making minor technical changes to the proposed definitions to 
improve clarity.
6. Beneficiary Eligibility
a. MDPP Eligible Beneficiaries
    We proposed that coverage of MDPP services would be available for 
beneficiaries who meet all of the following criteria: (1) Are enrolled 
in Medicare Part B; (2) have, as of the date of attendance at the first 
core session, a body mass index (BMI) of at least 25 if not self-
identified as Asian or a BMI of at least 23 if self-identified as 
Asian. The CDC DPRP Standards have defined a lower BMI for self-
identified Asian individuals based on data that show Asians develop 
abnormal glucose levels at a lower BMI; (3) have, within the 12 months 
prior to attending the first core session, a hemoglobin A1c (HgA1c) 
test with a value between 5.7 and 6.4 percent, or a fasting plasma 
glucose of 110-125 mg/dL, or a 2-hour post-glucose challenge of 140-199 
mg/dL (oral glucose tolerance test); (4) have no previous diagnosis of 
type 1 or type 2 diabetes with the exception of a previous diagnosis of 
gestational diabetes; and (5) does not have end-stage renal disease 
(ESRD).
    Comment: MedPAC commented that the proposed eligibility 
requirements may be too broad and could result in the inclusion of 
beneficiaries who meet the stated eligibility criteria but have other 
conditions such as dementia or frailty that could render a weight loss 
program inappropriate.
    Response: We appreciate the views of commenters, including MedPAC. 
We are considering ways to monitor for MDPP suppliers who consistently 
bill for session attendance and not weight loss, and intend to address 
this in our program integrity and payment proposals in future 
rulemaking. We recognize that performing mental capacity assessment 
prior to enrollment would be difficult and create an additional burden 
for MDPP suppliers. We will consider how to address the issue of 
beneficiaries who are eligible to receive MDPP services, but for whom 
MDPP may not be clinically appropriate, in future rulemaking, as 
necessary.
    Comment: Many commenters stated that differences between the MDPP 
expanded model's proposed eligibility criteria and the National DPP 
eligibility criteria will cause confusion for providers and 
beneficiaries. Commenters specifically noted that the BMI cut off for 
National DPP eligibility is 24 kg/m\2\ and 22 kg/m\2\ for those self-
identified as Asian, whereas the proposed BMI cut offs for the MDPP 
expanded model are 25 kg/m\2\ and 23 kgm\2\ for those self-identified 
as Asian. Commenters also noted the differences in the blood test 
criteria for the fasting plasma glucose test between the National DPP 
(range is 100-125 mg/dL) and MDPP expanded model (range is 110-125 mg/
dL). Commenters who pointed out these differences recommended that CMS 
align its eligibility criteria with CDC's eligibility criteria.
    Several commenters also supported the lower BMI threshold for self-
identified Asians.
    Response: We agree with commenters that there are differences 
between the MDPP beneficiary eligibility criteria and National DPP 
eligibility criteria, which may be a source of confusion for suppliers, 
providers and beneficiaries. However, we proposed a BMI cut off for 
non-Asians of 25 kg/m\2\ because this was the cut off used in the DPP 
model test. In addition, the generally accepted clinical definition of 
overweight is a BMI of 25.0--29.9 in adults over age 20.\23\ We 
proposed a lower BMI cut off for self-identified Asians of 23 kg/m\2\ 
which is endorsed by the American Diabetes Association and aligns with 
the CDC DPRP Standards which allow for a lower BMI in self-identified 
Asians

[[Page 80469]]

consistent with the latest research.\24\ In summary, the evidence used 
to make the certification determination indicated that individuals who 
fall into the 100-110mg/dL range for fasting plasma glucose and those 
with BMIs of 24 kg/m\2\ (22 kg/m\2\ for Asians) or less have lower risk 
for developing type 2 diabetes. We have chosen to focus on the highest 
risk population, and therefore the Chief Actuary's analysis for 
certification focused on this population.25 26
---------------------------------------------------------------------------

    \23\ Centers for Disease Control and Prevention, ``Healthy 
Weight,'' Centers for Disease Control and Prevention, 2015, https://www.cdc.gov/healthyweight/assessing/bmi/adult_bmi/index.html.
    \24\ William Hsu et al., ``BMI Cut Points to Identify At-Risk 
Asian Americans for Type 2 Diabetes Screening,'' Diabetes Care 38, 
no. 1 (2015): 150-158.
    \25\ Gregory Nichols et al., ``Trends in Diabetes Incidence 
Among 7 Million Insured Adults, 2006-2011: the SUPREME-DM Project,'' 
American Journal of Epidemiology 181, no. 1 (2015): 32-39.
    \26\ DH Morris et al., ``Progression Rates from HbA1c 6.0-6.4% 
and Other Prediabetes Definitions to Type 2 Diabetes: a Meta-
Analysis,'' Diabetologia 56, no. 7 (2013): 1489-1493.
---------------------------------------------------------------------------

    Comment: Several commenters stated that Medicare currently does not 
cover the HgA1c test for people without diabetes. These commenters 
recommended that the HgA1c test be covered with no cost-sharing under 
Medicare for those seeking to receive MDPP services. Commenters 
suggested the precedent of Diabetes Self-Management Training (DSMT) 
requiring HgA1c as a diagnostic test for DSMT eligibility, and that the 
test is covered for this purpose. Commenters recommended a parallel 
coverage determination should be made for the MDPP expanded model. One 
commenter stated that the oral glucose tolerance test should be covered 
if it is being considered as one of the eligibility tests.
    Response: CDC standards for eligibility, which align with the 
American Diabetes Association definition for pre-diabetes, include an 
option for demonstrating eligibility using an HgA1c test and we 
proposed to adopt these eligibility standards for the MDPP expanded 
model. However, the blood tests that are permitted to be used to 
demonstrate MDPP eligibility are not covered as part of the MDPP 
services and occur before the start of the beneficiary's participation 
in MDPP. We did not propose to cover HgA1C tests for purposes of 
screening for pre-diabetes, but we note that the other blood tests that 
can be used to demonstrate eligibility for MDPP services, the oral 
glucose tolerance test and fasting plasma glucose test, are covered for 
pre-diabetes screening under Medicare. To cover HgA1C tests for 
purposes of screening for pre-diabetes, we would first need to make a 
separate coverage determination.
    Comment: Commenters requested clarity on how suppliers would verify 
that beneficiaries meet certain eligibility criteria. Specifically, 
commenters asked how suppliers would determine whether a Medicare 
beneficiary has had a prior diagnosis of type 1 or type 2 diabetes, or 
whether they have already used the benefit. Commenters requested 
clarity that beneficiaries would be able to self-report their history 
of gestational diabetes to become eligible for MDPP. Commenters also 
encouraged us to explain what documentation MDPP suppliers will be 
required to collect from participants who are presenting MDPP-
qualifying blood test results to confirm eligibility. Commenters also 
suggested allowing beneficiaries to complete an eligible risk 
questionnaire in lieu of the qualifying lab tests for up to 50 percent 
of their participants as this would align with the current CDC DPRP 
Standards for eligibility. Commenters suggested using other types of 
criteria such as family history, hypertension, high cholesterol, and 
high triglycerides, to determine eligibility among patients for whom 
abnormal blood glucose values are not available. One commenter 
requested that we clarify the timeframe in which the BMI and blood 
tests must occur to qualify for participation, such as whether the 
beneficiary has to have a qualifying BMI either when the blood tests 
were completed or upon enrollment. Other commenters requested guidance 
on whether the blood tests have to come from a lab or primary care 
physician or if the supplier can provide HgA1c finger pricks to 
determine eligibility. Commenters also asked if proof of lab work is 
required or if documentation of the values is sufficient. MedPAC 
commented that beneficiaries should receive blood tests by a provider 
other than the MDPP supplier as a safeguard to prevent fraud.
    Response: The following eligibility criteria can be self-reported: 
Asian ethnicity; no history of type 1 or type 2 diabetes; and no 
previous receipt of MDPP services. We cannot verify self-reported 
eligibility criteria when beneficiaries begin receiving MDPP services. 
We will know which beneficiaries are participating in MDPP when the 
MDPP supplier submits claims with beneficiary identifiers. In our next 
round of rulemaking we intend to propose specific policies and 
requirements to protect MDPP suppliers from furnishing services that 
may not be covered by Medicare in cases where the beneficiary's 
eligibility for MDPP services is assessed based on self-reported 
eligibility criteria that cannot be verified prospectively. We clarify 
that beneficiaries can participate in MDPP regardless of a history of 
gestational diabetes (so long as they do not have a history of type 1 
or type 2 diabetes), but must also meet the other criteria such as 
qualifying BMI and blood test results.
    We believe the requirement to obtain blood test results is 
important for maintaining program integrity, and use of risk 
questionnaires presents opportunities for invalid and unreliable data 
reporting. The DPP model test required blood test results as part of 
its eligibility criteria to show a beneficiary has pre-diabetes, and 
therefore we are requiring blood tests for MDPP eligibility. In 
considering how to expand the DPP model test, we relied on eligibility 
criteria that was either tested in the initial DPP model test and/or 
set forth by the American Diabetes Association or World Health 
Organization, and we do not intend to include additional eligibility 
criteria at this time.
    Regarding comments about the timeframe of eligibility tests and 
required documentation: We did not propose specific requirements for 
how or where blood test results may be obtained as we do not want to 
create unnecessary obstacles for beneficiaries and MDPP suppliers. An 
MDPP supplier may administer an HgA1c finger prick to determine 
eligibility. We note that Medicare only covers the fasting plasma 
glucose test and the oral glucose tolerance test when the beneficiary 
has a referral from his or her primary care physician or qualifying 
provider. Similarly, we did not propose specific documentation methods 
beyond our proposal that MDPP suppliers maintain records that document 
each beneficiary's eligibility status. We will consider whether it is 
necessary or appropriate to establish specific documentation standards 
in future rulemaking.
    Comment: Commenters requested guidance on how to handle 
beneficiaries who are diagnosed with diabetes during the screening 
process or while receiving MDPP services. Commenters recommended we 
work with CDC to develop a protocol of how to address beneficiaries who 
receive a diagnosis of diabetes while being screened for or while 
receiving MDPP services. Several commenters stated that this protocol 
should ensure participants receive proper care and a referral into a 
DSMT program.
    Response: We reiterate that beneficiaries who are diagnosed with 
diabetes before they begin receiving MDPP services, such as during the 
enrollment process, based on their lab

[[Page 80470]]

results or history of type 1 or type 2 diabetes are not eligible 
beneficiaries. These beneficiaries may be eligible for other types of 
diabetes-related care under Medicare, such as DSMT.
    We did not propose an eligibility policy for beneficiaries who 
receive a diagnosis of diabetes while receiving MDPP services. However, 
we agree with commenters that a protocol needs to be developed to 
ensure beneficiaries who are diagnosed with diabetes while receiving 
MDPP services are receiving the proper care for their condition. We 
intend to address this issue in future rulemaking.
    Comment: A number of commenters requested that we include 
populations beyond those that meet the eligibility criteria, such as 
all Medicare beneficiaries, Medicaid beneficiaries, those with ESRD and 
those who have been diagnosed with type 1 or type 2 diabetes. 
Additionally, one commenter suggested that beneficiaries who do not 
meet the BMI criteria, but have a family history of diabetes and 
motivation to receive MDPP services, should be able to do so.
    Response: We believe that beneficiaries who meet the eligibility 
criteria that we proposed are the most appropriate population to access 
MDPP services because these beneficiaries are among the highest risk 
within the pre-diabetic population for developing diabetes. Targeting 
lower risk beneficiaries is not consistent with the model that we are 
expanding. Beneficiaries with type 1 or type 2 diabetes do not meet the 
eligibility criteria for MDPP but may be eligible for services such as 
Medicare's obesity counseling benefit and DSMT. We do not believe MDPP 
is appropriate for those with ESRD because beneficiaries with ESRD have 
more complex dietary requirements that are better addressed by 
dieticians and other health care professionals.
    We appreciate the commenters' interest in Medicaid coverage. 
However, this model expansion pertains only to Medicare beneficiaries, 
though we note that Medicaid beneficiaries who are also Medicare 
beneficiaries are eligible if they meet the MDPP beneficiary 
eligibility requirements. We encourage states to work with the Center 
for Medicaid & CHIP Services (CMCS) to discuss options to cover 
diabetes preventive services within the Medicaid program.
    Final Decisions: We are finalizing the beneficiary eligibility 
criteria as proposed. These criteria are set forth in Sec.  410.79.
b. Limitations on Coverage
    We proposed that beneficiaries who meet the beneficiary eligibility 
criteria would be able to receive MDPP services only once in their 
lifetime.
    Comment: Many commenters asked CMS to allow exceptions to the once 
per lifetime restriction based on significant life events. Commenters 
recommended that CMS allow beneficiaries to access the benefit again 
after a certain period of time (for example, 6 months or 1 year) and to 
allow beneficiaries to access MDPP services at least two times in their 
lifetime. Several commenters suggested the lifetime benefit policy may 
be unfair due to extenuating circumstances that may arise throughout 
the core benefit, such as hospitalization or death of a loved one.
    Commenters also requested clarity on how we may handle attribution 
if beneficiaries switch suppliers. One commenter believed there may be 
operational implications of managing this benefit across hundreds of 
suppliers should participants change suppliers or elect to withdraw 
from MDPP while it is underway and re-enroll at a later date. The 
commenter recommended that we issue guidelines on how MDPP suppliers 
should address changes, particularly with respect to beneficiary 
eligibility and billing and reimbursement.
    Response: We understand concerns regarding the potential for life 
events to disrupt the beneficiary's receipt of MDPP services. However, 
the MDPP expansion is designed to generate savings for the Medicare 
program by preventing individuals with pre-diabetes from developing 
type 2 diabetes. We believe the once per lifetime restriction is 
necessary in order to generate enough savings to offset the cost of 
delivering MDPP services.
    We are finalizing the policy that eligible beneficiaries can 
participate in MDPP only once in their lifetimes. However, we 
acknowledge the commenters' concerns, and plan to address any 
exceptions to the once per lifetime restriction in future rulemaking as 
appropriate. As we did not propose to restrict eligible beneficiaries' 
choice of MDPP suppliers, we are confirming that they will be able to 
change suppliers at any time; however, because beneficiary attribution 
directly relates to payment, we will consider the comments on how to 
address attribution and its attendant effect on payment in developing 
proposals for future rulemaking.
    Final Decision: We will finalize limitations on coverage of MDPP as 
proposed. The MDPP core benefit is available only once per lifetime per 
MDPP eligible beneficiary, and ongoing maintenance sessions are 
available only if the MDPP eligible beneficiary has achieved 
maintenance of weight loss. These limitations are specified in Sec.  
410.79.
c. Referrals
    The DPP currently allows community-referral such as by Y-USA and 
self-referral of patients, in addition to referral by physicians and 
other health care practitioners, if the patient presents DPP-qualifying 
blood test results that the DPP organization keeps on record. We 
proposed to similarly permit beneficiaries who meet our eligibility 
criteria to obtain MDPP services by self-referral, community-referral, 
or health care practitioner-referral.
    The following is a summary of the comments received and our 
responses.
    Comment: Commenters generally supported our proposal allowing for 
self-referral, community-referral, or health care practitioner referral 
to obtain MDPP services, although MedPAC expressed concern that MDPP 
services could be inappropriately used and suppliers could initiate 
services without a referral. Commenters suggested that we broaden the 
types of providers eligible to make referrals to MDPP suppliers. For 
example, a commenter recommended clarification of what types of 
provider referrals would be permitted for MDPP and recommended that 
such providers include nurse practitioners to broaden program access; 
another commenter suggested that we will be able to increase access to 
and streamline beneficiary access to MDPP services by allowing 
community-based organizations to refer beneficiaries. Many commenters 
recommended that we promote referrals from MDPP suppliers to 
psychologists to help address psychosocial components of their care. 
Other commenters opposed a physician referral requirement. One 
commenter opposed the requirement of blood tests as part of referral 
pathway. Some commenters recommended that we explicitly state that MDPP 
services will be paid for when ordered/referred by non-physician 
practitioners. A commenter recommended that we require non-clinician 
health care MDPP suppliers to ask beneficiaries about their usual 
source of care and mandate that MDPP suppliers share results with the 
beneficiary's self-identified primary care physician.
    Response: We agree with commenters that there should be broad 
program access, which is why we are not requiring any specific type of 
referral for this expanded model test. With respect

[[Page 80471]]

to the comments on program integrity, we will take these comments into 
consideration in future rulemaking, as discussed in section III.J.8.b. 
of this final rule. We agree with commenters and clarify that non-
physician practitioners can order or refer eligible beneficiaries for 
MDPP services. We understand the value of coordinating results from the 
MDPP with a beneficiary's primary care provider, however, we will not 
require this type of coordination because we believe it creates an 
additional burden for this new supplier type that will discourage DPP 
organizations from enrolling in Medicare as MDPP suppliers. 
Additionally, the MDPP suppliers have no reimbursement mechanism for 
coordinating services with primary care physicians, specialists or 
other providers. The value-based payment proposed for the MDPP expanded 
model affords no compensation for coordination among providers. We are 
concerned that holding MDPP suppliers to a higher service coordination 
standard than other Medicare suppliers and providers may negatively 
impact MDPP supplier capacity. We do not believe it is appropriate to 
address referrals from MDPP suppliers to other providers in this 
expansion because suppliers may or may not employ providers with the 
credentials to make referrals to other providers, and we believe this 
is beyond the parameters of the MDPP expanded model.
    Final Decision: We are finalizing the procedure for referrals to 
MDPP as proposed.
7. Enrollment of MDPP Suppliers
a. MDPP Supplier Enrollment Requirements
    We proposed that any organization with preliminary or full CDC DPRP 
recognition would be eligible to apply for enrollment in Medicare as an 
MDPP supplier beginning on or after January 1, 2017. This proposal 
would promote timely enrollment of CDC-recognized organizations before 
the MDPP expanded model becomes effective on January 1, 2018. We 
proposed that MDPP suppliers would be subject to the enrollment 
regulations set forth in 42 CFR part 424, subpart P.
    Organizations seeking to enroll in Medicare to become MDPP 
suppliers would be subject to screening under Sec.  424.518. We 
proposed that potential MDPP suppliers be screened according to the 
high categorical risk category defined in Sec.  424.518(c) because the 
MDPP expanded model allows organization types that are new to Medicare 
to enroll. We also believe that MDPP suppliers have some similarities 
to home health agencies, a provider screened according to the high 
categorical risk category, because non-licensed personnel may furnish 
MDPP services in a non-clinical setting, such as at Y-USA.
    We proposed that existing Medicare providers and suppliers that 
wish to bill for MDPP services would have to inform us of that 
intention and satisfy all other requirements, such as preliminary or 
full CDC DPRP recognition, but would not need to enroll a second time. 
These existing Medicare providers and suppliers would be eligible to 
bill for MDPP services furnished on or after January 1, 2018. We also 
considered an alternative approach where existing Medicare providers 
and suppliers would have to submit a separate enrollment application 
(including any applicable enrollment application fee) and be separately 
screened to be eligible to bill for MDPP services. This alternative 
would enable all organizations furnishing MDPP services to have the 
same classification as MDPP suppliers and undergo the same application 
requirements. Under this option, should an entity have an issue related 
to their MDPP enrollment, for example, falsely attesting to beneficiary 
weight loss, CMS would have discretion to apply revocation to its MDPP 
enrollment, rather than affecting their broader enrollment in Medicare.
    We proposed to require that all MDPP suppliers comply with 
applicable Medicare supplier enrollment, program integrity, and payment 
rules. These regulations include, but are not limited to, time limits 
for filing claims (Sec.  424.44), requirements to report and return 
overpayments (Sec.  401.305), and procedures for suspending, offsetting 
or recouping Medicare payments in certain situations (Sec.  405.371).
    The following is a summary of the comments we received regarding 
supplier enrollment.
    Comment: Several commenters supported the proposal to allow 
organizations that previously would not be eligible to enroll in 
Medicare to enroll as MDPP suppliers. One commenter stated that 
enabling organizations with either preliminary or full CDC DPRP 
recognition to furnish MDPP services as officially enrolled suppliers 
is an important step in validating community health workers' place in 
the health care system. Other commenters stated that these 
organizations should be able to enroll and furnish MDPP services, but 
that they should do so with a clinical affiliate to serve as a resource 
to provide medical insight or oversight as necessary.
    Many commenters who supported allowing these organizations to 
enroll in Medicare as MDPP suppliers recommended that the enrollment 
policies should be aligned as closely to CDC DPRP Standards as possible 
to avoid additional burden to organizations that are less familiar with 
Medicare rules and regulations.
    Response: We appreciate the commenters' support for allowing 
organizations that meet the MDPP supplier eligibility criteria to 
enroll in Medicare, even for those that in other circumstances would be 
ineligible to enroll in Medicare. As described in detail in section 
III.J.7.c. of this final rule, the literature does not support the need 
for coaches to have clinical credentials to successfully achieve the 
behavior change MDPP seeks to encourage. Therefore, we disagree with 
commenters who suggested requiring that these new suppliers enroll with 
a clinical affiliate, that is, a provider or supplier that is currently 
enrolled in Medicare and currently furnishes services.
    For those who requested that we closely align MDPP supplier 
eligibility requirements to the DPP organization recognition 
requirements in the CDC DPRP Standards, an organization that obtains 
CDC DPRP recognition can become an MDPP supplier if they meet a few 
additional Medicare requirements.
    Comment: Some commenters disagreed with requiring community-based 
organizations to enroll as an MDPP supplier in order to furnish MDPP 
services, stating that the enrollment process would be too burdensome. 
Others recommended that due to the burden that enrolling as a Medicare 
supplier could place on smaller, community-based organizations that 
wish to furnish MDPP services, we should offer them an easier, 
expedited enrollment process that is less complex and burdensome. Other 
commenters noted that given the burden that enrolling, recordkeeping, 
and billing could impose on these organizations, particularly smaller 
community-based organizations, many such organizations utilize third 
party administrators to assume these roles on their behalf. Commenters 
recommended that we consider the role that third party administrators, 
which are not CDC-recognized to deliver DPP, could play in MDPP, 
particularly providing administrative services to new Medicare 
suppliers to lighten their burden.
    Response: We acknowledge that smaller, community-based 
organizations without experience in the traditional

[[Page 80472]]

health care system may not be familiar with Medicare's enrollment 
requirements, and may find Medicare enrollment burdensome. Medicare 
enrollment is the process through which suppliers acquire eligibility 
to submit claims to Medicare to bill for services furnished. (In other 
contexts enrollment can also be the process used to establish 
eligibility to order or certify Medicare covered items and services.) 
Furthermore, enrolling into Medicare also enables us to maintain 
program integrity through screening, monitoring and revocation. Thus, 
we believe the benefits of enrollment, even for smaller community-based 
organizations, outweigh the costs of the associated administrative 
burden. We note that organizations that face financial difficulty 
related to the enrollment application fee may apply for a hardship 
exception. For more information on the hardship exemption, please 
visit: https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM7350.pdf.
    We recognize the role that third party administrators may play in 
facilitating the enrollment process for DPP organizations. We intend to 
allow MDPP suppliers to utilize third-party administrators for the 
purposes of enrollment but will further consider how these entities may 
fit into the MDPP enrollment and policy framework in future rulemaking, 
as appropriate.
    Comment: A few commenters questioned whether new suppliers could 
obtain a National Provider Identifier (NPI) to become eligible to 
enroll in Medicare. Some commenters believed that many DPP 
organizations with CDC DPRP recognition do not meet the requirements to 
obtain an NPI given the definition of health care provider under 45 CFR 
160.103, and requested that we explain how unlicensed organizations and 
individuals with no health care experience qualify for an NPI.
    Commenters requested clarity regarding what supplier type an MDPP 
supplier would indicate on the Medicare enrollment application. Other 
commenters requested clarity on what taxonomy code suppliers would use 
when applying for their NPI.
    Response: We disagree with commenters who stated that some 
organizations that meet the MDPP supplier requirements would be unable 
to obtain an NPI. Under 45 CFR part 162, subpart D, health care 
providers, as defined in 45 CFR 160.103, may obtain NPIs. The 
definition of health care provider at 45 CFR 160.103 specifies, in 
part, that any person or organization who furnishes health care in the 
normal course of business is a health care provider. Section 45 CFR 
160.103 defines ``health care'' to include, among other things, 
preventive services. Because MDPP services are considered additional 
preventive services, we believe MDPP suppliers and coaches who furnish 
MDPP in the normal course of business are furnishing health care and 
therefore qualify as health care providers that are eligible for NPIs 
under 45 CFR part 162, subpart D.
    We acknowledge commenters' questions regarding which provider 
taxonomy to include when applying for an NPI, as well as which supplier 
type MDPP organizations would denote when enrolling. We plan to issue 
additional details through guidance or future rulemaking as appropriate 
to help guide organizations in applying for an NPI. For the purposes of 
providing guidance in this final rule, we would like to note for DPP 
organizations that we believe the taxonomy code of Health Educator 
(174H00000X) could be appropriate for MDPP suppliers when applying for 
an NPI. As for supplier type to denote upon applying to enroll in 
Medicare, we intend to create a new supplier type, specific to MDPP 
suppliers, and may release an appropriate application form accordingly.
    Comment: Many commenters sought clarity regarding enrolling 
suppliers new to Medicare. One commenter asked whether these suppliers 
could furnish MDPP services at community locations such as faith-based 
organizations and community centers, as was permitted in the DPP model 
test. One commenter stated that DSMT and MDPP should be subject to 
consistent rules, but noted that current rules for DSMT do not permit 
hospital-based programs to be offered at community locations. Another 
commenter noted that while we do not define ``qualified physical 
practice location,'' the Medicare Program Integrity Manual suggests 
that in order to enroll in Medicare, organizations must have a physical 
location where a Medicare beneficiary could visit in person. This 
commenter recommended that CMS clarify how suppliers furnishing virtual 
DPP services would meet this physical location requirement, whether it 
would be waived, or whether their company headquarters would serve as 
the ``qualified physical practice location.''
    Response: Consistent with the DPP model test, MDPP suppliers will 
be able to provide the service at community-locations such as faith-
based organizations and community centers. Given that MDPP services can 
be furnished in community-based settings, the physical location 
associated with the MDPP supplier's base of operations in each state, 
as indicated on their enrollment application, would meet the 
requirements for the qualified physical practice location, provided 
that the location was open and operational as described in Chapter 15 
of Medicare's Program Integrity Manual, Section 19.2.2. As described in 
III.J.7.e. of this final rule, we will address policies related to 
virtual DPP organizations in future rulemaking.
    Comment: Several commenters agreed with our proposal that we would 
screen MDPP suppliers as high categorical risk. Many other commenters 
disagreed and stated that MDPP, like Diabetes Self-Management Training 
(DSMT), is educational by teaching beneficiaries about eating healthy 
and being active, which makes MDPP suppliers more analogous to DSMT 
organizations than Home Health Agencies (HHAs). Both the MDPP expanded 
model and DSMT are educational in nature, and both MDPP and DSMT 
organizations require recognition or accreditation by a third party 
organization or agency to be eligible to furnish services. Given these 
similarities, commenters noted that organizations that enroll as DSMT 
providers are screened according to the limited categorical risk, and 
therefore MDPP suppliers should similarly be screened at the limited 
categorical risk. Some commenters stated that MDPP suppliers should 
face less scrutiny and screening than that of medical professionals 
because of the fundamental difference between the educational MDPP and 
the medical services furnished by traditional Medicare providers.
    Other commenters disagreed with CMS' parallel between HHAs and 
MDPP, noting that the requirement to obtain CDC DPRP recognition 
establishes a higher level of program integrity than that faced by 
HHAs. One commenter noted that Durable Medical Equipment, Prosthetics/
Orthotics, and Supplies (DMEPOS) suppliers and HHAs became classified 
as high categorical risk in response to reports issued by the HHS 
Office of Inspector General (HHS-OIG) and the Government Accountability 
Office (GAO).
    Response: We understand that MDPP bears similarities to an 
educational service like DSMT, but do not agree with commenters who 
stated MDPP suppliers should face less scrutiny or screening than that 
of medical professionals. CMS assigns risk level based not on the 
nature of the benefit that the supplier furnishes, but on the

[[Page 80473]]

level of risk that the supplier type may pose to the Medicare program. 
Therefore, we disagree with commenters who sought a limited screening 
level for MDPP suppliers on the basis that DSMT suppliers face limited 
screening. Fewer organizations are eligible to furnish DSMT than MDPP 
because DSMT organizations must already be enrolled in Medicare to 
furnish services other than DSMT. Due to their existing enrollments, 
all DSMT providers are affiliated with medical professionals enrolled 
in Medicare. Medical professionals face many additional regulations 
outside of those set by Medicare, including state licensure 
requirements that help to protect against fraud or abuse by these 
individuals. This is not comparable to MDPP suppliers that are not 
required to have an existing enrollment in Medicare. Given the 
requirements that credentialing and licensure place on these providers, 
the DSMT supplier type poses less risk to Medicare than suppliers like 
HHAs and DMEPOS suppliers that do not have the same credentialing and 
licensure requirements to serve as an additional check on fraud or 
abuse in addition to Medicare efforts. Similar to home health aides, 
individuals who furnish MDPP services are not required to have medical 
credentials or state licensure. Given the similarities between MDPP 
suppliers and HHAs, we believe the concerns HHS-OIG and GAO have 
regarding HHAs' vulnerability for fraud and abuse could also apply to 
MDPP. We believe our policy to require high-risk screening during 
enrollment will safeguard against potential fraud and abuse associated 
with this new supplier type.
    Comment: Some commenters stated that the high categorical risk 
screening requirement would carry a substantial financial burden that 
may discourage MDPP supplier enrollment. One commenter noted that the 
on-site visits required in moderate and high categorical risk 
screenings would be redundant to the CDC DPRP Standards that already 
subject recognized organizations to random audits and site visits. 
These commenters noted that financial burdens may disproportionally 
affect community-based organizations that are well-suited to furnish a 
behavioral change program like the DPP. Commenters highlighted that the 
burden of collecting fingerprints would disproportionately affect 
independently run community-based organizations more so than corporate 
entities that typically only have one central board.
    Commenters also requested additional information on the 
requirements for high categorical risk screening. One commenter stated 
that for entities that are corporately owned or traded, requirements 
for regional, privately owned suppliers may not be appropriate given 
the different ownership structures that are not well captured by CMS's 
enrollment applications. A few commenters also noted that suppliers 
newly enrolled into Medicare for MDPP, and providers or suppliers with 
existing enrollment in Medicare who wish to furnish MDPP, should be 
screened at the same level.
    Response: While we agree that CDC ensures the quality of DPP 
programs using performance data, which will help ensure the quality of 
MDPP suppliers, CDC is not a regulatory body responsible for the 
integrity of Medicare payments. We therefore disagree that program 
integrity policies in Medicare would duplicate CDC's random site visits 
and audits of DPP organizations because the agencies play different 
roles. CMS's program integrity and audits focus on payments, whereas 
CDC focuses on monitoring whether organizations are meeting the CDC 
DPRP standards.
    We agree with commenters who noted that suppliers newly enrolling 
into Medicare for MDPP should be screened at the same level as those 
with existing enrollment in Medicare who wish to furnish MDPP services. 
We acknowledge the financial burden that enrolling may place on some 
community-based DPP organizations. It is not our intent to hinder 
smaller organizations' ability to enroll in Medicare. We do not, 
however, believe that a high screening level as opposed to limited or 
moderate would greatly affect participation given the minimal 
additional requirements the higher screening levels entail. The 
difference between limited and high categorical risk screening includes 
a site visit for each base of operations and fingerprinting of certain 
individuals within the organization. This site visit poses no cost to 
the supplier, and should not delay the enrollment process beyond the 45 
to 60 day window. Fingerprints are required of all individuals with 5 
percent or more ownership interest in the entity. Organizations would 
not be required to submit fingerprints from managing members, coaches, 
or other employees. The enrollment application fee a supplier pays to 
Medicare is the same regardless of screening level, therefore the only 
difference in cost to the supplier amounts to the cost of obtaining 
fingerprints of those with 5 percent or more direct or indirect 
ownership interest in the entity. We do not believe this additional 
cost of high screening is cost prohibitive for enrollment, even for 
smaller community-based organizations. We understand the commenter's 
concern that for entities that are corporately owned or traded, 
screening requirements and CMS's enrollment applications may be 
difficult or may not be applicable given the different ownership 
structures. We will not change our requirement to collect fingerprints 
from all individuals with a direct or indirect ownership interest, 
though we recognize that not all suppliers under this requirement will 
have individual owners who meet this criterion. However, when an 
individual has 5 percent or more direct or indirect ownership in a 
prospective MDPP supplier, whether private or publically traded, 
submitting a set of fingerprints would be required for enrollment into 
Medicare.
    We refer those interested in learning more about the requirements 
associated with a high screening level to Sec.  424.518. Given the 
nominal financial difference of obtaining fingerprints from 5 percent 
or more owners, we do not believe that application of the high 
screening level will be a barrier to organizations to enroll in 
Medicare as an MDPP supplier. Additionally, we expect that MDPP 
suppliers will revalidate at a moderate risk level, consistent with the 
revalidation policy of other high risk suppliers. We will address the 
screening level of MDPP suppliers seeking to revalidate in future 
rulemaking.
    Comment: Various commenters recommended that we clarify whether the 
MDPP supplier eligibility criteria would apply to existing providers 
and suppliers in Medicare. Specifically, commenters asked whether 
certified diabetes educators, pharmacies, pharmacists, physical 
therapists, registered dietitians, licensed clinical social workers, 
and licensed naturopathic physicians who graduated from accredited 
medical schools would have the ability to bill Medicare for MDPP 
services. Other commenters highlighted that certain types of medical 
professionals that are not currently eligible to enroll in Medicare, 
like RNs, have the capabilities to furnish MDPP services as a coach, 
and requested the ability to enroll in Medicare to furnish and bill for 
MDPP services.
    Some commenters noted that many existing health care providers are 
well suited to furnish MDPP services, but may lack familiarity with the 
CDC National DPP and the process to obtain CDC DPRP recognition. These 
commenters recommended that CMS provide education and outreach to these

[[Page 80474]]

providers to ensure that they have the opportunity to obtain CDC DPRP 
recognition in a timely manner and eligible to furnish MDPP services.
    Response: We appreciate interest from existing Medicare providers 
and suppliers in furnishing MDPP services. Any organization that 
obtains CDC DPRP recognition would be eligible to enroll in Medicare as 
an MDPP supplier. The CDC recognizes organizations, not individuals. As 
such, only organizations, not individuals, would be able to enroll as 
an MDPP supplier. Any claims submitted for MDPP services would 
therefore be billed by the MDPP supplier, and not by an individual or 
any other enrollment type a supplier may have.
    Although many individual clinicians could serve as MDPP coaches, we 
note that entities, not individuals, receive CDC DPRP recognition. 
Furthermore, we would like to reiterate that entities enrolled in 
Medicare for the sole purpose of furnishing MDPP services would be 
eligible to submit claims only for MDPP services.
    We agree that many health care entities may be well suited to 
furnish MDPP services but may lack familiarity with the CDC DPRP 
recognition process. We will further consider the recommendations to 
undertake targeted education and outreach efforts to build supplier 
capacity.
    Comment: Some commenters noted that rural health clinics (RHCs) and 
federally qualified health centers (FQHCs) serve beneficiaries who 
could benefit from MDPP services, and sought clarification and/or 
recommended that RHCs and FQHCs be eligible to furnish MDPP services. 
One of these commenters also recommended that we allow RHCs to bill for 
MDPP services using the UB-04 form so that RHCs would not have to 
remove the cost of furnishing MDPP services from their cost report, 
which they said would make the benefit too administratively difficult 
to implement.
    Response: RHC and FQHC services are defined in section 1861(aa) of 
the Act as services furnished by a physician, nurse practitioner, 
physician assistant, certified nurse midwife, clinical psychologist, or 
clinical social worker. Under certain conditions, an FQHC visit may be 
furnished by a qualified practitioner of outpatient DSMT and medical 
nutrition therapy (MNT) when the FQHC meets the relevant program 
requirements for provision of these services. RHC and FQHC visits are 
medically-necessary primary health services, and qualified preventive 
health services, that are furnished face-to-face to a patient by a RHC 
or FQHC practitioner.
    RHCs and FQHCs can enroll as MDPP suppliers if they otherwise meet 
the enrollment eligibility criteria, but we clarify that MDPP is not a 
RHC/FQHC service. However, a clinic that chooses to furnish MDPP 
services could exclude all costs related to furnishing MDPP services 
from its cost report and instead submit claims for MDPP services under 
its separate MDPP supplier enrollment. RHCs and FQHCs must ensure that 
there is no commingling of RHC or FQHC resources in the cost report 
used to furnish MDPP services. We understand that some clinics believe 
this will be burdensome, but only RHC or FQHC services can be billed on 
a UB-04 form.
    Comment: Commenters generally supported the proposal that providers 
and suppliers with existing enrollment in Medicare only be required to 
inform us of their intent to furnish MDPP services. A few commenters 
explicitly stated that providers and suppliers with existing enrollment 
should not have to create a separate enrollment as an MDPP supplier to 
bill for MDPP services because the burden of doing so would 
unnecessarily discourage enrollment. In support of this assertion, 
commenters stated that providers and suppliers with existing enrollment 
face stringent regulations both from and outside of Medicare 
requirements, and therefore requiring an additional enrollment process 
for MDPP would only add redundancy, rather than support program 
integrity concerns. One commenter highlighted that under current CMS 
requirements, retail pharmacies must already undergo two enrollment 
processes and pay two application fees to serve dual roles as durable 
medical equipment suppliers and mass immunizers. The commenter stated 
that an additional enrollment process and fee would not further protect 
against fraud and abuse, but would simply add redundancy and 
inefficiency that could deter supplier uptake and limit beneficiary 
access.
    For providers and suppliers with existing enrollment in Medicare, 
some commenters noted that they should not have to be held to the CDC 
DPRP Standards, but instead meet other requirements, as noted above. 
Other commenters expressed support for specific health care provider 
types that are well suited to furnish MDPP services.
    A few commenters supported our alternative proposal that existing 
Medicare providers and suppliers separately enroll as MDPP suppliers 
and be separately screened to be eligible to bill for MDPP services. 
One commenter noted that consistency of procedures and guidelines among 
organizations furnishing MDPP services, regardless of whether they were 
new entrants to Medicare, would benefit the program to ensure the same 
requirements applied across all entities furnishing MDPP services.
    Response: We agree with commenters who support the alternative 
approach we proposed that suppliers and providers with existing 
Medicare enrollment enroll separately as an MDPP supplier. We believe 
existing providers and suppliers will benefit from a standardized 
procedure that all MDPP suppliers follow.
    Though requiring existing Medicare providers and suppliers to 
separately enroll as MDPP suppliers initially imposes an additional 
requirement, this is a standard procedure for current suppliers. Other 
types of Medicare providers, such as hospitals or clinics who wish to 
provide home health services, would similarly need to enroll as HHA 
suppliers and undergo screening requirements associated with HHAs. We 
also believe this requirement would ultimately protect existing 
Medicare providers from revocation action against their enrollment and 
ability to furnish services outside of MDPP. For example, should an 
existing provider furnishing MDPP services lose CDC DPRP recognition, 
the provider would be subject to revocation. If the provider were not 
enrolled separately as a MDPP supplier, the provider's Medicare 
enrollment would be subject to revocation action, not just the billing 
privileges associated with MDPP services. As discussed in section 
III.J.7.d. of this final rule, many commenters agreed with the proposal 
that loss of CDC DPRP recognition should result in revocation only of 
MDPP billing authorities, and not necessarily affect the existing 
provider or supplier's eligibility to furnish and bill for non-MDPP 
services. By requiring all prospective MDPP suppliers--regardless of 
whether they have existing enrollment in Medicare--to enroll as an MDPP 
supplier, CMS has the discretion to target any revocation action 
against the MDPP supplier enrollment alone, rather than affect the 
existing provider or supplier's other enrollment. It is important to 
note that revocation removes a provider or supplier's enrollment in 
Medicare, not just its billing privileges for a particular Medicare 
service. For example, if a hospital had an additional enrollment as an 
MDPP supplier and one of their coaches was fraudulently reporting 
weight loss that beneficiaries did not achieve, CMS would have the 
discretion

[[Page 80475]]

to revoke the hospital's MDPP supplier enrollment, but could withhold 
revocation of the hospital's Part A Medicare enrollment. Alternatively, 
if CMS pursued the original proposal and the hospital did not reenroll 
as an MDPP supplier, under the same scenario, the hospital's entire 
enrollment could be revoked for up to three years, which could have 
deleterious effects on the provision of care well beyond MDPP. For this 
reason, we are adopting our alternative proposal.
    We acknowledge the concerns that requiring enrolled providers and 
suppliers to separately enroll as an MDPP suppler imposes a burden. 
However, we disagree that enrollment screening for the purposes of one 
supplier type would satisfy program integrity concerns for a different 
supplier type. Many program integrity checks specifically target the 
licensure and credentials of a particular supplier type that would not 
necessarily transfer to other suppliers. Similarly, we disagree with 
commenters who stated that the program integrity efforts and 
regulations on providers or suppliers with an existing, non-MDPP 
enrollment in Medicare would sufficiently address any program integrity 
related concerns with regards to MDPP services. MDPP services and the 
manner in which those services will be provided differ from other 
Medicare benefits and therefore require separate monitoring and 
regulation to ensure the program integrity.
    Final Decision: After consideration of the public comments we 
received, we are finalizing our proposal to permit organizations that 
meet the supplier enrollment eligibility criteria to enroll in Medicare 
as MDPP suppliers. We are modifying our proposal with respect to 
existing Medicare providers or suppliers and requiring them to adhere 
to the same enrollment requirements as MDPP suppliers if they wish to 
furnish and bill for MDPP services and otherwise meet the MDPP supplier 
enrollment eligibility criteria.
    We are finalizing the high screening level as proposed. We will 
continue to monitor enrollment efforts and program integrity, and 
should our policy merit adjustment, we may amend this decision in 
future rulemaking as necessary.
    We are finalizing that MDPP suppliers are obligated to comply with 
all statutes and regulations that establish generally applicable 
requirements for Medicare suppliers. These regulations include, but are 
not limited to, time limits for filing claims (Sec.  424.44), 
requirements to report and return overpayments (Sec.  401.305), and 
procedures for suspending, offsetting or recouping Medicare payments in 
certain situations (Sec.  405.371). As explained in more detail in 
section III.J.7.c. of this final rule, we will not be able to begin 
supplier enrollment until enforcement activities are finalized during 
subsequent rulemaking in 2017, but we encourage DPP organizations to 
use this final rule to prepare for enrollment. This may include working 
towards CDC recognition, as detailed in III.J.7.b. of this final rule, 
obtaining NPIs, or obtaining claims processing software.
    The final policies for MDPP supplier enrollment are set forth in 
Sec.  424.59.
b. CDC DPRP Recognition
    CDC grants pending recognition to an organization upon its approval 
of the organization's application and the organization's agreement to 
comply with requirements for use of a CDC-approved curriculum and for 
duration and frequency of sessions. CDC also establishes an effective 
date for each approved organization which is the first day of the month 
following their approval date. Organization must submit data every 12 
months from their effective date. CDC grants full recognition after an 
organization with pending recognition has consistently furnished 
sessions with a CDC-approved curriculum, met CDC performance standards, 
and met CDC reporting requirements. CDC makes the first determination 
for full recognition 24 months after their effective date. 
Organizations not meeting full recognition at that time are reassessed 
at 36 months. Organizations that do not achieve full recognition within 
36 months after their effective date will lose any recognition and must 
wait 12 months before reapplying.
    In our proposal regarding eligibility of DPP organizations to 
enroll in Medicare, we proposed the use of an additional CDC 
recognition status: preliminary recognition.
    We proposed that DPP organizations must have either preliminary or 
full CDC DPRP recognition in order to be eligible to enroll in Medicare 
as MDPP suppliers. We proposed that DPP organizations can attain 
preliminary CDC DPRP recognition upon meeting CDC DPRP performance 
standards and reporting requirements for 12 months after applying for 
recognition, and full recognition upon demonstrating program 
effectiveness for 24-36 months after applying for CDC DPRP recognition. 
We proposed that if an organization loses its CDC DPRP recognition 
status at any point, for example for not meeting CDC standards or 
failing to move from preliminary to full recognition within 36 months 
of their effective date, or withdraws from the CDC DPRP at any point, 
the organization would be subject to revocation of its Medicare billing 
privileges for MDPP services as provided by 42 CFR part 424, subpart P. 
Under the CDC DPRP Standards, an organization that loses its CDC DPRP 
recognition (and thus, under our proposal, would no longer be able to 
bill Medicare for MDPP services) must wait 12 months before reapplying 
for recognition. We proposed that DPP organizations would be eligible 
to re-enroll in Medicare as an MDPP supplier if, after reapplying for 
CDC DPRP recognition, the organization again achieves preliminary 
recognition.
    The following is a summary of the comments we received and our 
responses.
    Comment: The majority of commenters supported requiring DPP 
organizations to obtain CDC DPRP recognition in order to be eligible 
for enrollment in Medicare as an MDPP supplier. Some commenters 
recommended we take into account the socioeconomic status of 
participants when considering CDC's recognition, and work with CDC to 
account for the risk of inadvertently precluding suppliers serving 
vulnerable populations who have fewer resources to achieve healthy 
eating and fitness goals. Some commenters requested that CMS allow MDPP 
supplier eligibility to be based on alternative accreditations and 
standards focused on diabetes education.
    A few commenters noted that CDC DPRP recognition is difficult to 
attain because it relies on average weight loss of 5 percent across the 
population of participants an organization serves, and if organizations 
fall a few decimal points short of that threshold, they can lose their 
recognition. Some commenters expressed the concern that beneficiary 
access may be disrupted if a supplier falls short of CDC DPRP 
Standards, therefore losing recognition and Medicare eligibility. 
Furthermore, commenters were concerned with the timelines the CDC DPRP 
Standards require for reapplication. Tribal organizations collectively 
requested CDC DPRP recognition be automatically granted to providers of 
the Special Diabetes Program for Indians.
    Response: In response to comments regarding CDC recognition 
(socioeconomic status of participants, average weight loss requirement, 
timelines with reapplication) we note that CDC is responsible for 
developing standards related to CDC recognition,

[[Page 80476]]

and we are not. We are coordinating with CDC to promote alignment 
between the CDC DPRP and MDPP expanded model requirements, to the 
extent possible. We are not considering other accrediting bodies or at 
this time. We expect that the updated CDC DPRP Standards will be 
published for public comment in 2017 and go into effect in 2018.
    We welcome consultation with tribes and tribal organizations as 
required by the CMS Tribal Consultation Policy,\27\ and will address 
this and other concerns that have tribal implications, as appropriate, 
in future rulemaking.
---------------------------------------------------------------------------

    \27\ Centers for Medicare & Medicaid Services, ``CMS Tribal 
Consultation Policy,'' Centers for Medicare & Medicaid Services, 
2015, https://www.cms.gov/Outreach-and-Education/American-Indian-Alaska-Native/AIAN/Downloads/CMSTribalConsultationPolicy2015.pdf.
---------------------------------------------------------------------------

    Comment: Several commenters expressed support for the proposal that 
organizations must obtain preliminary or full CDC DPRP recognition in 
order to become eligible to enroll in Medicare as an MDPP supplier. 
Other commenters recommended that we clarify the requirements for 
preliminary recognition and how preliminary recognition differs from 
the CDC DPRP Standards' definition of pending recognition. The 
commenters noted that the CDC DPRP Standards currently do not have a 
preliminary recognition definition. A commenter recommended that CDC be 
the entity responsible for recognizing organizations with preliminary 
recognition, just as CDC is responsible for recognizing organizations 
with pending recognition and full recognition.
    Several commenters recommended that CMS clarify which performance 
standards and reporting requirements need to be met for 12 consecutive 
months to qualify for preliminary recognition. The commenters noted 
that they assume that an MDPP supplier would comply with the first year 
of CDC DPRP Standards for pending recognition status, starting at the 
effective date of the DPP organization's pending recognition. The 
commenters also noted that this means submitting data at 12 months from 
the effective date, but not achieving any particular outcomes at 12 
months because current CDC DPRP Standards do not consider outcomes for 
achieving recognition until 24 months from the effective date. Several 
commenters recommended that we clarify whether an organization must 
submit 6 months or one year of data to obtain preliminary recognition. 
The commenters expressed their support that an organization offer DPP 
services for at least a year before qualifying for recognition as an 
MDPP supplier. A separate commenter suggested that CMS clarify that to 
obtain preliminary recognition, an organization must offer the CDC-
approved curriculum within 6 months of the effective date of the 
organization's CDC DPRP application and submit at least 6 months of 
participant data at 12 months post-effective date of the application. 
Several commenters recommended removing the requirement to submit one 
year's worth of data before obtaining preliminary recognition.
    One commenter noted that given the work and time required for DPP 
organizations to start providing DPP services, it may be difficult to 
obtain 12 months of reporting data immediately after the effective date 
of the DPP organization's pending recognition status. The commenter 
expressed concern that an organization that has met the standards and 
reporting requirements for 11 of the 12 months immediately following 
its application to participate in the DPRP should not have to reapply 
for preliminary recognition and start the 12-month process over again. 
Another commenter recommended that preliminary recognition performance 
standards focus on percent of weight loss achieved, as opposed to 
average weight loss, and maintenance of weight loss among participants.
    Some commenters recommended that we allow organizations that have 
either pending recognition or full recognition from CDC to enroll as 
MDPP suppliers. The commenters noted that organizations obtain pending 
recognition from CDC after they agree to curriculum, duration, and 
intensity requirements. One commenter noted that the additional status 
of preliminary recognition adds a complicated layer of bureaucracy to 
the existing CDC DPRP, adds little value, and will likely delay 
enrollment of organizations in Medicare as MDPP suppliers due to lack 
of defined requirements for preliminary recognition. Several commenters 
suggested that we allow participation of DPP organizations with pending 
recognition until CDC standards for preliminary recognition status are 
established. One commenter requested that we explain why we proposed an 
additional recognition status, whether we can create new CDC DPRP 
recognition standards, and if so, how the new recognition standards 
will be incorporated into the CDC DPRP Standards.
    One commenter recommended that only organizations with full CDC 
DPRP recognition may serve as MDPP suppliers in order to eliminate 
potential confusion caused by the preliminary recognition standard and 
preserve program integrity. The commenter suggested that we should only 
pay suppliers that have demonstrated their effectiveness as MDPP 
suppliers or their ability to establish and maintain the necessary 
infrastructure. Another commenter suggested that organizations with 
full recognition be paid at a higher rate than organizations with 
preliminary recognition.
    Several commenters recommended that CMS adopt a grandfathering 
policy where organizations with 12 months of data may obtain 
preliminary recognition. A few commenters noted that the creation of 
the preliminary recognition definition risks having few or no MDPP 
suppliers with preliminary recognition by MDPP's scheduled effective 
date of January 1, 2018, thus delaying the implementation of MDPP. One 
commenter noted that the preliminary recognition status does not exist 
in CDC DPRP Standards, and that the preliminary recognition definition 
would be published in CDC DPRP Standards too late for MDPP suppliers to 
begin enrolling into Medicare in time to begin furnishing MDPP services 
on January 1, 2018. The commenter recommended that we require CDC to 
identify organizations with pending recognition that qualify for 
preliminary recognition no later than December 31, 2016 and require 
that CDC release interim guidance on standards or requirements for 
preliminary recognition no later than March or April 2017. The 
commenter notes that additional, minor clarifications may also be 
needed when the CDC issues updated CDC DPRP Standards in January 2018 
to reflect early experience with the new preliminary recognition 
definition. One commenter believed it should be permitted to enroll as 
an MDPP supplier because it has one year of data, even though it lacks 
CDC DPRP recognition. Another commenter urged that we review its 
organization's data before 2018, and if it meets the standards for MDPP 
suppliers in 2017, that CMS reimburse the organization in 2017.
    Response: We appreciate the support for our proposal to allow DPP 
organizations with full CDC recognition, as well as certain DPP 
organizations that do not yet have full CDC recognition, to enroll as 
MDPP suppliers. We received many comments that raised questions and 
concerns about preliminary CDC recognition status or offer suggestions 
about how preliminary CDC recognition status should be determined. 
Because the CDC has not adopted standards for preliminary recognition, 
however, we are not finalizing any of our proposals

[[Page 80477]]

with respect to preliminary recognition status at this time. Although 
we anticipate that CDC will address standards for preliminary 
recognition when it publishes updated DPRP Standards for public comment 
next year, because any such standards for CDC preliminary recognition 
would not take effect until 2018, it will not be possible to permit DPP 
organizations to enroll in Medicare based on achievement of CDC 
preliminary recognition before then.
    For this reason, we intend to use future rulemaking to propose 
interim standards for preliminary recognition, under CMS authority, 
that would bridge the gap until CDC preliminary recognition standards 
are established. We anticipate that our proposed interim preliminary 
recognition standards would be consistent with the principles described 
in the proposed rule. We intend to align our MDPP supplier enrollment 
policies with CDC recognition standards, as appropriate, as they are 
established. We will take the commenters' comments on preliminary 
recognition into account as we develop our proposal for interim CMS 
recognition standards. We do not intend to delay implementation of the 
MDPP expansion.
    We proposed that certain DPP organizations that had not yet 
achieved full recognition could enroll in Medicare in acknowledgement 
that full recognition might take 36 months and require achievement of 
certain performance standards. We proposed this eligibility requirement 
for Medicare enrollment to allow an increased number of organizations 
that have demonstrated a capacity to provide DPP services to enroll in 
Medicare, thereby allowing access to MDPP services in a timely manner 
as of January 1, 2018. We continue to believe that it is appropriate to 
permit enrollment in Medicare prior to achievement of full CDC 
recognition in cases where there is demonstrated capacity to furnish 
DPP services, and as noted above, we intend to address this issue in 
future rulemaking. Therefore, we decline to permit DPP organizations 
that have only pending recognition to enroll in Medicare because such 
organizations may not have any demonstrated capacity to furnish DPP 
services. We are aware that most DPP organizations are currently in 
pending recognition status, and that CDC's definition for pending 
recognition currently includes a 6-month grace period before 
organizations are required to start offering DPP sessions. We are also 
aware that the current definition of full recognition requires 
organizations to meet certain standards for average weight loss and 
participation, and relative to those in pending status, few 
organizations have obtained full recognition. However, we believe it is 
important to ensure that prospective MDPP suppliers have demonstrated 
experience in actually furnishing DPP services, and therefore we do not 
believe it is appropriate to permit organizations to enroll in Medicare 
before they have submitted any performance data to CDC that allows CDC 
to assess their capacity to deliver DPP services.
    We recognize the timing and nature of our proposal has caused some 
confusion, particularly because we intend to use CDC recognition status 
as a Medicare enrollment standard. We also agree with commenters that 
in general CDC should be responsible for recognizing DPP organizations, 
consistent with its recognition standards. However, as noted above, we 
intend to propose in future rulemaking interim CMS recognition 
standards that would permit DPP organizations that are seeking full CDC 
recognition and have demonstrated capacity to furnish DPP services to 
enroll in Medicare prior to January 1, 2018. We are considering 
performance criteria that we could propose as part of any interim CMS 
standards that we would use to permit DPP organizations that have not 
yet achieved full CDC recognition to enroll as MDPP suppliers before 
the CDC standards are updated. For example, we are considering 
proposing that DPP organizations with pending CDC recognition would be 
required to meet a performance standard threshold of 60 percent 
participant attendance in at least 9 core sessions in months 1-6 and 60 
percent participant attendance in at least 3 core maintenance sessions 
in months 7-12. In addition, we intend to consider options to ensure 
program integrity and mitigate fraud and abuse during the preliminary 
recognition stage. We encourage interested parties to submit comments 
on any updates to CDC's DPRP Standards when CDC publishes them for 
public comment.
    Finally, in response to commenters, we do not intend to propose 
differential payments based on whether the supplier has full 
recognition. We also do not intend to make payments for MDPP services 
prior to January 1, 2018. We will also propose details on the payment 
structure in future rulemaking.
    Final Decision: We finalize our proposal that an entity must have 
full CDC DPRP recognition as a requirement to enroll in Medicare as an 
MDPP supplier. Due to timing issues with CDC standards updates, we are 
not finalizing any proposals for preliminary recognition at this time. 
We intend to address this issue in future rulemaking.
c. Coach Requirements
    We proposed to require personnel who would furnish MDPP services, 
referred to hereafter as ``coaches,'' to obtain a National Provider 
Identifier (NPI) to help ensure the coaches meet CMS program integrity 
standards. We also considered requiring that coaches enroll in the 
Medicare program in addition to obtaining an NPI, and we solicited 
comment on this approach. Another alternative policy we considered was 
to require DPP organizations to collect and submit information on the 
coaches who would furnish MDPP services, which could include 
identifying information such as first and last name and social security 
number (SSN). We proposed to require MDPP suppliers to submit the 
active and valid NPIs of all coaches who would furnish MDPP services on 
behalf of the MDPP supplier through a roster of coach identifying 
information. We proposed that if MDPP suppliers fail to provide active 
and valid NPIs of their coaches, or if the coaches fail to obtain or 
lose their active and valid NPIs, the MDPP supplier may be subject to 
compliance action or revocation of MDPP supplier status.
    The following is a summary of the comments we received and our 
responses.
    Comment: We received comments regarding coach enrollment into 
Medicare. Commenters overwhelmingly stated objections to coach 
enrollment, citing reasons including high turnover and the reality that 
many coaches work part time or as volunteers. Commenters also 
highlighted that since claims and payment are handled directly by the 
supplier, coaches have limited reasons to enroll. Other commenters 
noted that coaches lack medical licensure, indicating that only medical 
providers should enroll. And several commenters cited the burden that 
enrollment would impose on coaches, and that requiring this approach 
could limit coach participation and ultimately reduce beneficiary 
access to services.
    The majority of commenters indicated that organizations alone 
should enroll in Medicare as MDPP suppliers, though one commenter 
proposed that diabetes prevention coordinators, who oversee the coaches 
as outlined in the CDC DPRP Standards, should enroll. A few commenters 
recommended that coaches enroll, stating that this would ensure our 
ability to protect the integrity of the Medicare program and have 
direct oversight over coaches furnishing the benefit. Other commenters 
cited

[[Page 80478]]

consistent use of CMS processes such as enrollment for program 
integrity efforts rather than creating new processes. Several 
commenters highlighted the opportunity for coaches to be directly paid 
for the services furnished.
    Response: We agree with the commenters who stated that coaches 
should not enroll in Medicare and should not be submitting MDPP claims. 
Though we understand there may be program integrity advantages if 
coaches were to enroll, we do not believe the existing enrollment 
process is appropriate for coaches. Most notably, enrollment is for the 
purpose of permitting Medicare billing, and we have proposed that only 
MDPP suppliers, not coaches, would submit claims for MDPP services. We 
do not believe coaches should have the ability to submit claims for 
MDPP or be directly paid for the services furnished because CDC DPRP 
recognition is obtained at the organization level, not for the 
individual coach furnishing MDPP services. Additionally, we believe 
that the burden of enrolling and submitting claims, as well as the 
medical record retention requirements associated with claim 
submissions, would be too burdensome to place on individual coaches, 
and that suppliers are more appropriate and suitable to assume this 
responsibility. We did not propose enrolling diabetes prevention 
coordinators, but we believe the same rationale against requiring 
coaches to enroll would apply to these individuals as we did not 
propose that diabetes prevention coordinators would be able to bill for 
MDPP services.
    Comment: We received many comments regarding whether coaches should 
obtain NPIs, with commenters split on whether CMS should require only 
suppliers, or both suppliers and coaches, to obtain NPIs. A few 
commenters alternatively suggested that diabetes prevention 
coordinators, not coaches, would be more appropriately suited to obtain 
NPIs. Most commenters did not provide a reason for supporting the 
proposal that coaches obtain an NPI, but those that did stated that 
having coaches obtain an NPI would serve to validate community health 
workers' role in health care. Many commenters expressed their support 
for coaches obtaining an NPI as an alternative to enrolling in 
Medicare. One commenter indicated that given that MDPP services will be 
additional preventive services, the processes that would apply to other 
additional preventive services should also apply, and coaches who 
furnish these services should therefore obtain NPIs.
    Commenters who opposed the requirement for coaches to obtain NPIs 
largely expressed that only health care providers should obtain NPIs. 
Some commenters believed that MDPP coaches do not meet the definition 
of health care provider under 45 CFR 160.103, and therefore coaches 
should not be allowed to obtain an NPI. Other commenters questioned how 
coaches could obtain NPIs, particularly when registered nurses (RNs) 
and other credentialed professionals can neither obtain NPIs nor enroll 
as Medicare suppliers. Several commenters recommended that CMS extend 
those same proposals for coaches to RNs and other medical professionals 
who currently lack the ability to obtain an NPI. As an alternative to 
obtaining NPIs, a number of commenters proposed that coaches should 
have specialized training.
    Response: We did not propose any requirements for diabetes 
prevention coordinators, but we may consider this possibility for 
future rulemaking as appropriate. Given that coaches directly furnish 
MDPP services, we believe that for any process aiming to track and 
screen professionals working with an MDPP supplier, the coach will 
likely stand as the most appropriate individual to track and screen, as 
opposed to the coordinators who do not directly furnish MDPP services.
    To commenters who did not believe that coaches would be eligible 
for an NPI, we note that 45 CFR part 162, subpart D specifies that 
health care providers, as defined in 45 CFR 160.103, may obtain NPIs. 
Among other things, a health care provider under 45 CFR 160.103 is a 
person or organization who furnishes health care in the normal course 
of business. Because 45 CFR 160.103 specifies that health care includes 
preventive services, we believe MDPP coaches provide health care and 
are therefore health care providers under 45 CFR 160.103 and eligible 
to obtain NPIs. We disagree that requiring coaches to obtain NPIs would 
impose an undue burden on coaches, even those who work as coaches part-
time or as volunteers. Obtaining an NPI takes approximately 20 minutes 
and can be done easily online. We will further consider the impact of 
coach requirements for rural and tribal areas that lack reliable access 
to the internet and will consider adjusting policies in future 
rulemaking as appropriate.
    Requests for CMS to address NPI issues and enrollment for other 
health care providers such as RNs are outside of the scope of this 
rulemaking for MDPP. Should RNs or other providers who currently lack 
an NPI decide to work as a coach, these individuals would be able to 
obtain an NPI on that basis for purposes of furnishing MDPP services.
    Given the relatively low burden that obtaining NPIs places on 
coaches and important considerations for monitoring, evaluation, and 
program integrity, we will require every coach furnishing MDPP services 
on behalf of an MDPP supplier to obtain an active and valid NPI that 
will be submitted to Medicare on the supplier's updated roster of 
coaches. This roster of coach identifying information would be 
submitted alongside the MDPP supplier's enrollment application to be 
used for vetting and program integrity purposes. However, we did not 
propose specific standards for how we would use roster information in 
connection with MDPP supplier enrollment. We intend to propose such 
standards in future rulemaking, and will begin enrollment of MDPP 
suppliers once appropriate standards are in place.
    Comment: We received general support from commenters for the 
proposal to track coaches using some form of identifiable information 
to help ensure the coaches meet CMS program integrity standards. Few 
commenters detailed in their response the type of information that 
should be collected. While some commenters preferred using coach names 
and NPIs for tracking purposes, slightly more commenters preferred 
using identifiable information such as social security numbers (SSNs).
    Response: We appreciate the support from commenters. Use of NPIs 
and SSNs would serve different purposes in vetting coaches against 
program integrity risks upon the supplier's enrollment in Medicare, as 
well as evaluation and monitoring purposes for performance and 
continuing program integrity efforts. In existing areas of Medicare's 
enrollment process where both NPIs and SSNs are used for individual 
providers who enroll into Medicare, SSNs serve the purposes of 
completing background checks, while NPIs serve an identifying and 
tracking purposes with regards to Medicare claims and actions. These 
two identifiers play distinct and important roles in ensuring the 
integrity of Medicare's programs and the safety of the beneficiaries 
served. Given commenters' openness to using both pieces of identifying 
information, we will finalize a requirement that MDPP suppliers submit 
the names, NPIs and SSNs of their coaches.
    Upon enrollment, MDPP suppliers must submit, and update within 30 
days of any changes, a roster of coaches, including individuals' first 
and last

[[Page 80479]]

name, SSN and NPI to CMS along with its enrollment application to help 
ensure the coaches meet CMS program integrity standards. Changes that 
must be reported to us include adding identifying information for any 
coach beginning to furnish MDPP services on behalf of the supplier or 
removing a coach who ceases furnishing MDPP services on behalf of the 
supplier. We intend to address how this coach information might affect 
MDPP supplier enrollment and be used in enforcement actions in future 
rulemaking as appropriate. As noted previously, enrollment of MDPP 
suppliers will not begin until such standards are in place.
    Comment: We received a number of comments on coach requirements 
under the MDPP expanded model. The majority of commenters stated that 
training should be required, some stipulating that specific trainers 
should be utilized. Within the discussion of training, some commenters 
stipulated that medical professionals should be exempt from any 
additional training imposed on coaches, while others stipulated that 
everyone--including medical professionals--should undergo training to 
become a coach. One commenter recommended that CMS create an audit 
process to ensure that training occurred. Several commenters urged us 
to consider creating a certification program for coaches. Commenters 
also referred to the CDC DPRP Standards for coach requirements and 
requested that CMS clarify whether formal lifestyle coaching is a 
requirement and specifically what constitutes the definition of trained 
coach to furnish the required curriculum. Other commenters asked 
whether we will require additional training sources or continuing 
education requirements above the CDC DPRP Standards in order to qualify 
as a coach.
    Many commenters supported specific practitioners to serve as 
coaches, such as Certified Diabetes Educators (CDEs). Other commenters 
recommended that coaches should have clinician oversight. Similarly, 
other commenters suggested that we require for coaches to have 
clinicians as affiliates who can serve as a medical resource. A few 
commenters stated that coaches should have some form of credentials, 
particularly given that participants may have medical questions about 
weight loss that extend beyond a CDC-approved curriculum, which 
credentialed professionals are better equipped to handle. A number of 
commenters specifically requested that we recognize the value that CDEs 
can have in the MDPP expanded model and specify the role that they play 
in the management of lifestyle changes.
    While we received many comments suggesting additional requirements 
for coaches, a number of commenters also urged against adding 
additional requirements on coaches beyond CDC DPRP Standards.
    Response: We do not, at this time, see any need to require 
additional training, certification, or clinician oversight or 
affiliation beyond the CDC DPRP Standards, particularly given that the 
initial DPP model test met the criteria for expansion without these 
requirements.
    Though we agree that CDEs, RNs, and other credentialed professions 
can be effective MDPP coaches, the DPP model test showed that trained, 
non-credentialed coaches can effectively deliver the program. 
Additionally, we do not believe that the literature supports this claim 
that coaches with credentials would result in better participant 
performance than non-credentialed individuals trained to be 
coaches.28 29 30 31 Therefore, we do not believe credentials 
are necessary at this time, but may evaluate and revisit this proposal 
as necessary. Therefore, any individuals--with or without credentials--
can become a coach provided that they meet CDC DPRP Standards and work 
for a MDPP supplier.
---------------------------------------------------------------------------

    \28\ D Vojta et al., ``A Coordinated National Model for Diabetes 
Prevention: Linking Health Systems to an Evidence-Based Community 
Program,'' American Journal of Preventive Medicine 44, no. 4 Suppl 4 
(2013): S301-S306.
    \29\ Mohammed K. Ali et al., ``How Effective were Lifestyle 
Interventions in Real-World Settings that were Modeled on the 
Diabetes Prevention Program?,'' Health Affairs 31, no.1 (2012): 67-
75.
    \30\ L Ruggiero et al., ``Community-Based Translation of the 
Diabetes Prevention Program's Lifestyle Intervention in an 
Underserved Latino Population,'' The Diabetes EDUCATOR 37, no. 4 
(2011); 564-572.
    \31\ JA Katula et al., ``The Healthy Living Partnerships to 
Prevent Diabetes Study 2-Year Outcomes of a Randomized Controlled 
Trial,'' American Journal of Preventive Medicine 44, no. 4S4 (2013): 
S324 -S332.
---------------------------------------------------------------------------

    We will further consider commenters' suggestions regarding 
mechanisms to ensure that coaches have received high quality training, 
whether we will require coach certification, the impact credentials may 
have on coaches, and the possibility of clinician affiliation or 
oversight as we monitor and evaluate the expanded model.
    Final Decision: We are finalizing the proposal that DPP 
organizations must enroll in Medicare to become MDPP suppliers, and 
that coaches will not enroll in Medicare for purposes of furnishing 
MDPP services. We are finalizing the proposal that coaches must obtain 
NPIs. We are requiring MDPP suppliers to submit the active and valid 
NPIs of all affiliated coaches and to update CMS within 30 days of a 
coach beginning to or ceasing to furnish MDPP services. We finalize 
that this roster of coaches submitted will include the first and last 
name, SSN, and NPI. We intend to propose policies specific to 
enrollment standards and enforcement actions, as they relate to the 
roster, in future rulemaking.
    The final policies for coach requirements are set forth in Sec.  
424.59.
d. Revocation of MDPP Supplier Enrollment
    We proposed that all MDPP suppliers would be required to comply 
with the requirements of 42 CFR part 424. If an MDPP supplier has its 
Medicare enrollment revoked or deactivated for reasons unrelated to its 
loss of CDC DPRP recognition, that MDPP supplier would lose its ability 
to bill Medicare for MDPP services but would not automatically lose its 
CDC DPRP recognition. We proposed that existing Medicare providers and 
suppliers who lose CDC DPRP recognition would lose their Medicare 
billing privileges with respect to MDPP services, but may continue to 
bill for other non-MDPP Medicare services for which they are eligible 
to bill. We proposed that MDPP suppliers that have their Medicare 
billing privileges revoked or that lose billing privileges for MDPP may 
appeal these decisions in accordance with the procedures specified in 
42 CFR part 405, subpart H, 42 CFR part 424, and 42 CFR part 498. We 
proposed to add a new Sec.  424.59 to our regulations to specify the 
suppliers who would be eligible for Medicare enrollment and billing for 
MDPP services. We solicited comment on these proposals.
    The following is a summary of the comments we received regarding 
these proposals and our responses.
    Comment: A few commenters agreed with the proposal that loss of CDC 
DPRP recognition should lead to loss of MDPP billing privileges. Some 
commenters specifically agreed that revocation should be limited to 
MDPP privileges. Commenters also stated that the ability to appeal a 
revocation decision was important. One commenter expressed concerns 
that losing Medicare billing privileges would affect MDPP suppliers 
less than medical professionals, presenting a potential vulnerability 
to fraud. For medical professionals, Medicare provides a key source of 
income and livelihood, whereas non-traditional Medicare providers who 
primarily deliver non-health care related services like those in a 
community center would not necessarily be as affected by a

[[Page 80480]]

revocation than a health clinic. The commenter did not suggest an 
alternative approach that could make losing Medicare billing more 
impactful for these organizations.
    Response: We appreciate the support from commenters on our proposed 
revocation policies, including the right to appeal a revocation. Should 
we deny a prospective MDPP supplier's enrollment, we expect that appeal 
rights set forth in 42 CFR part 424 would apply, however we will 
address any provisions related to Medicare enrollment denial appeal 
rights in future rulemaking. We agree with commenters that should a 
supplier lose CDC DPRP recognition, the supplier's revocation would be 
only of the supplier's MDPP enrollment. We disagree that revocation of 
MDPP enrollment would affect existing providers and suppliers less than 
new MDPP suppliers. In both cases, the supplier would lose its ability 
to bill for MDPP services. We reiterate that all MDPP suppliers--
whether a new Medicare supplier or a currently enrolled provider and 
supplier--must comply with the requirements of 42 CFR part 424, subpart 
P, including, but not limited to, enrollment bars. CMS notes that we 
did not propose a policy regarding the effective date of the 
revocation, and will do so in future rulemaking. We retain the 
authority to revoke any Medicare enrollment--MDPP supplier or 
otherwise--if a supplier does not comply with Medicare requirements.
    Final Decision: We are finalizing our proposals that all MDPP 
suppliers must comply with the requirements of 42 CFR part 424, will 
have their MDPP supplier enrollment revoked upon loss of CDC DPRP 
recognition or noncompliance with Medicare requirements, and may appeal 
these decisions in accordance with the procedures specified in 42 CFR 
part 405, subpart H, 42 CFR part 424, and 42 CFR part 498.
    The final revocation and appeal policies are set forth in Sec.  
424.59.
e. Virtual MDPP Services
    Currently, CDC-recognized DPP organizations deliver DPP services 
in-person or virtually via a telecommunications system or other remote 
technology. The majority of current DPP organizations furnish DPP 
services in-person, but an emerging body of literature 
32 33 34 35 supports the effectiveness of virtual sessions 
furnished remotely. We proposed to allow MDPP suppliers to furnish MDPP 
services through remote technologies. As part of our evaluation of the 
MDPP expansion, to the extent feasible, we planned to evaluate the 
effectiveness of MDPP services, particularly in relation to virtual 
versus in-person services, and, using the evaluation data, modify or 
terminate this component of the expansion as appropriate. To permit 
such evaluation, we are considering specifying the nature of the 
virtual service and the site of the service in codes included on claims 
submitted for payment, as well as collecting information on the nature 
of the virtual service and the site of service at the beneficiary level 
from MDPP suppliers.
---------------------------------------------------------------------------

    \32\ W Su et al., ``Return on Investment for Digital Behavioral 
Counseling in Patients With Prediabetes and Cardiovascular 
Disease,'' Preventive Chronic Disease 13, no. E13 (2016).
    \33\ J Ma et al., ``Translating the Diabetes Prevention Program 
Lifestyle Intervention for Weight Loss into Primary Care: a 
Randomized Trial,'' JAMA Internal Medicine 173, no. 2 (2013): 113-
121.
    \34\ CS Sepah et al., ``Translating the Diabetes Prevention 
Program into an Online Social Network: Validation Against CDC 
Standards,'' The Diabetes Educator 40, no. 4 (2014): 435-443.
    \35\ Y Fukuoka et al., ``A Novel Diabetes Prevention 
Intervention Using a Mobile App: A Randomized Controlled Trial with 
Overweight Adults at Risk,'' American Journal of Preventive Medicine 
[serial online] 49, no. 2 (2015): 223-237.
---------------------------------------------------------------------------

    We planned to monitor administrative claims for virtual services to 
identify any unusual and/or adverse utilization of the MDPP services. 
We solicited comment on specific monitoring activities or program 
integrity safeguards with respect to virtual services, in addition to 
the time period in which such enhanced monitoring activities should 
occur.
    We noted that MDPP services provided via a telecommunications 
system or other remote technology will not be part of current Medicare 
telehealth benefits and have no impact on how telehealth services are 
defined by Medicare. We recognize that the provision of MDPP services 
by such virtual methods may introduce additional risks for fraud and 
abuse, and we plan to address specific policies in future rulemaking to 
mitigate these risks. We thus solicited comment on whether there are 
quality or program integrity concerns regarding the use of virtual 
sessions, or whether they offer comparable or higher quality MDPP 
services when compared to in-person services. We solicited comment on 
strategies to strengthen program integrity and minimize the potential 
for fraud and abuse in virtual sessions.
    The following is a summary of the comments we received regarding 
these proposals and our responses.
    Comment: In response to our proposals for virtual MDPP services, we 
received many insightful and informative public comments suggesting 
matters related to furnishing virtual services, various modes of 
furnishing virtual services, how effective these services are, and that 
the standards that apply to in-person sessions may not be applicable to 
virtual sessions. Commenters were overwhelmingly supportive of the 
proposal to allow virtual providers to participate, particularly to 
ensure adequate access to the benefit in underserved areas. Only one 
commenter noted that in-person services should be prioritized over 
virtual services. Commenters provided specific suggestions on how to 
mitigate fraud and abuse and evaluate these services by using site of 
service codes on claims, and requiring technology based methods for 
weight loss reporting (for example, digital scales) versus self-
reported methods.
    Response: We appreciate the comments on the virtual furnishing of 
MDPP services. We noticed many differences between the way a virtual 
MDPP supplier and in-person supplier may operate, in addition to hybrid 
virtual and in-person programs. We do not have enough information to 
finalize this proposal at this time, but expect to continue gathering 
more information on the virtual delivery of DPP services. We appreciate 
the many insights and comments we received, particularly suggestions of 
strategies to maintain program integrity. We remain committed to 
including virtual providers and services in MDPP as soon as possible, 
but we intend to use future rulemaking to address detailed policies on 
virtual providers' eligibility to enroll, furnish and bill for MDPP 
services.
f. Information Technology (IT) Infrastructure and Capabilities
    We proposed that in order to receive payment, MDPP suppliers would 
be required to submit claims to Medicare using standard claims forms 
and procedures. Claims would be submitted in batches that contain 
beneficiary Protected Health Information (PHI) and Personally 
Identifiable Information (PII), including the Health Insurance Claim 
Number (HICN). Most Medicare claims are submitted electronically except 
in limited situations. We provide a free software package called PC-ACE 
Pro32 that creates a patient database and allows organizations to 
electronically submit claims to Medicare Part A and B. We understand 
there are several other electronic claims submissions software packages 
available in the market for purchase. We encouraged current and 
prospective DPP organizations to investigate adopting these systems to 
enhance the efficiency of claims

[[Page 80481]]

submission, and we sought comment on the capacity of DPP organizations 
to integrate these systems into their workflows. We indicated that we 
would provide guidance to MDPP suppliers regarding the Medicare claims 
submission standards.
    We proposed to require MDPP suppliers to maintain a crosswalk 
between the beneficiary identifiers they submit to CMS for billing 
purposes and the beneficiary identifiers they provide CDC for 
beneficiary level-clinical data. We proposed that MDPP suppliers 
provide this crosswalk to the CMS evaluator on a regular basis.
    We proposed that MDPP suppliers maintain records that contain 
detailed documentation of the services furnished to beneficiaries, 
including but not limited to the beneficiary's eligibility status, 
sessions attended, the coach furnishing the session attended, the date 
and place of service of sessions attended, and weight. We proposed that 
MDPP suppliers maintain these records within a larger medical record, 
or within a medical record that an MDPP supplier establishes for the 
purposes of administering MDPP. Consistent with the requirement in 
Sec.  424.516(f) we proposed that these records be retained for 7 years 
from the date of service and that MDPP suppliers would provide CMS or a 
Medicare contractor access to these records upon request. We proposed 
to require MDPP suppliers to accurately track payments and resolve any 
discrepancies between claims and the beneficiary record within their 
medical record. We also proposed that MDPP suppliers would be required 
to maintain and handle any beneficiary PII and PHI in compliance with 
the Health Insurance Portability and Accountability Act of 1996 
(HIPAA), other applicable privacy laws, and CMS standards. We indicated 
that we would provide education and guidance to MDPP suppliers to 
mitigate the risk of data discrepancies and audits. We stated that we 
would address specific recordkeeping requirements and standards in 
future rulemaking as appropriate.
    The following is a summary of the comments we received and our 
responses.
    Comment: Several commenters recommended CMS clarify what the 
medical record should include, whether the medical record should be 
paper or electronic, and whether suppliers should retain records of any 
referrals and diagnostic tests demonstrating beneficiary eligibility or 
simply document that one was presented at the time of enrollment. 
Commenters requested guidance on whether the medical record would 
require proof of lab work or if documentation of the values would 
suffice. One commenter noted that while beneficiaries' data should be 
held in an EHR, suppliers should be able to transfer this information 
in electronic, paper, or fax format to beneficiaries' other providers. 
Though commenters generally agreed with the recordkeeping requirements, 
including the duration of recordkeeping, many of these same commenters 
and others noted the burden that recordkeeping requirements might 
impose on community-based organizations. These commenters urged us to 
consider the implications that a high cost, HIPAA-compliant 
recordkeeping system might impose on such organizations, as well as the 
subsequent strain it would place on beneficiary access should the 
requirement be cost prohibitive. Additionally, a number of commenters 
urged that when making IT-related policy decisions, that we consider 
the lack of internet and issues with electricity in rural and tribal 
areas.
    These commenters suggested clarifying the medical record 
requirement in such a way that would be economically feasible for 
community-based programs. Due to these concerns, a number of commenters 
suggested that we work with CDC or other entities to identify a low 
cost data and billing system. Other commenters went further to suggest 
that CMS work with CDC to streamline the two data reporting systems 
such that when coaches or suppliers input performance data on 
beneficiary sessions to CDC, the Medicare claim would automatically be 
generated. Others appreciated the reliance on existing claim forms and 
software and applauded CMS for not creating a new data submission 
system. A few commenters noted that given the cost burdens of adequate 
IT, data, and recordkeeping systems, many community-based programs are 
likely to use third party integrators. These commenters did not 
advocate for a specific role for these integrators. One commenter, 
however, requested that MDPP suppliers be permitted to partner with and 
use the IT system of a healthcare entity to maintain records and submit 
claims for Medicare payment. Lastly, one commenter suggested that MDPP 
suppliers be required to take HIPAA-compliant training due to concerns 
about non-medical professionals housing HIPAA-compliant information.
    Response: We wish to clarify that for purposes of MDPP, the medical 
record would need to contain information related to the MDPP services 
furnished to the beneficiary, in compliance with HIPAA and other 
applicable privacy laws, and CMS standards, such as documentation of 
the beneficiary's eligibility, including blood test results, sessions 
attended, the coach furnishing the session(s) attended, the date and 
location of service(s), and weight. We understand various forms of 
documentation exist depending on the type of blood test administered, 
and we will provide additional details on what specific records are 
required to demonstrate eligibility in future guidance and/or future 
rulemaking as appropriate. In response to commenters' questions on the 
format of these records, we encourage the use of electronic records, 
but do not require it for purposes of this expanded model. Further 
details on specific information that would qualify as auditable 
documentation of the supplier's record will be provided in guidance 
and/or future rulemaking as appropriate. Although we require entities 
to maintain these records for the purposes of auditing, medical 
reviews, or other CMS requests, we do not intend to require that 
suppliers submit additional data, outside what is on the claim, to CMS 
for the purpose of payment.
    Although we understand it might be easier for suppliers to submit 
claims and performance data to one joint CMS-CDC data system, we 
believe that maintaining MDPP claims independent from CDC performance 
data would allow us to compare information submitted to CMS with those 
submitted to CDC to identify inconsistencies, as supported by certain 
commenters. Additionally, it is important to note that while all MDPP 
suppliers will be organizations that have CDC recognition, it is likely 
that not all organizations with CDC recognition will enroll in 
Medicare. Similarly, not all participants in the National DPP are 
Medicare beneficiaries. Thus, Medicare claims information will not be 
relevant to CDC's assessment of performance data. For the 
aforementioned reasons, we do not agree with commenters that a joint 
CDC-CMS data system would be appropriate. We appreciate that these 
recordkeeping requirements can impose burdens on MDPP suppliers, 
particularly those who have not previously had to comply with these 
types of recordkeeping requirements. While MDPP suppliers are 
responsible for complying with these requirements, MDPP suppliers can 
decide which resources to utilize in order to do so, including the use 
of a third party administrator or other entity.

[[Page 80482]]

    Comment: Several commenters noted the current proposed requirements 
for recordkeeping do not apply to the nature of sessions furnished 
virtually. One commenter proposed alternative record keeping 
requirements that were consistent with the proposal, but would allow 
flexibility for suppliers who furnish MDPP services through virtual 
technologies.
    Response: We are deferring all decisions regarding virtual 
providers to future rulemaking as discussed in section III.J.7.e. of 
this final rule.
    Comment: Numerous commenters agreed with the proposal that MDPP 
suppliers maintain a crosswalk between beneficiary identifiers 
submitted to CMS for billing and beneficiary identifiers submitted to 
CDC for beneficiary-level clinical data. A few commenters disagreed, 
stating CMS and CDC should not impose this requirement on suppliers and 
should instead coordinate directly to alleviate further reporting 
requirements for MDPP suppliers. Regarding monitoring and program 
integrity comments, we received general support for this approach to 
compare CMS claims with CDC performance data. Several commenters 
requested further clarity on the crosswalk, its format, whether or not 
CMS would provide a template, the frequency with which suppliers would 
be required to submit the same data to CMS, and the need for the 
crosswalk to CDC data given that CMS is requiring all suppliers to 
retain records for auditing purposes, medical reviews, or other 
requests.
    Response: We understand the desire to avoid undue burdens on MDPP 
suppliers. We intend for the crosswalk to alleviate the redundancy for 
suppliers submitting performance data to CMS that is already being sent 
to CDC. Since MDPP is an expanded model test, we are required to 
evaluate the effectiveness of the MDPP expansion, and this crosswalk 
will facilitate this evaluation. While we understand the recommendation 
to create the crosswalk directly with CDC, the CDC does not receive any 
personal identifying information (PII) on beneficiaries who participate 
in the National DPP that would enable CMS and CDC to directly create 
the beneficiary crosswalk. While we are requiring organizations to 
retain records for CMS-directed audits, a crosswalk between CMS and CDC 
data will enable CMS to conduct an evaluation on the effectiveness of 
MDPP, as well as provide any necessary documents during an audit, 
medical review, or other CMS request. The crosswalk therefore has a 
role both with program integrity purposes as well as for evaluating the 
expanded model's effectiveness, as required of any Innovation Center 
model. We intend to provide guidance to suppliers on how to set up the 
crosswalk, and make any further adjustments or clarifications (for 
example, frequency of submissions) in future rulemaking, as 
appropriate.
    Final Decision: We are finalizing as proposed the documentation 
retention requirements and requirements for suppliers to provide 
documents in the case of an audit, medical review, or other CMS 
request. The final policies are set forth in Sec.  424.59.
8. Policies for Future Rulemaking
a. MDPP Reimbursement Structure
    We proposed to reimburse for MDPP services at the times and in the 
amounts set forth in the Table 41, with payment tied to the number of 
sessions attended and achievement of a minimum weight loss of 5 percent 
of baseline weight (body weight recorded during the beneficiary's first 
core session).

                 Table 41--MDPP Expansion Payment Model
------------------------------------------------------------------------
                                          Payment per  beneficiary (non-
                                                    cumulative)
------------------------------------------------------------------------
                              Core Sessions
------------------------------------------------------------------------
1 Session attended......................  $25
4 Sessions attended.....................  $50
9 Sessions attended.....................  $100
Achievement of minimum weight loss of 5%  $160
 from baseline weight.
                                         -------------------------------
Achievement of advanced weight loss of    $25 (in addition to $160
 9% from baseline weight.                  above)
                                         -------------------------------
    Maximum Total for Core Sessions.....  $360
------------------------------------------------------------------------
 Core Maintenance Sessions (Maximum of 6 monthly sessions over 6 months
                               in Year 1)
------------------------------------------------------------------------
3 Core Maintenance Sessions attended      $45
 (with maintenance of minimum required
 weight loss from baseline).
6 Core Maintenance Sessions attended      $45
 (with maintenance of minimum required
 weight loss from baseline).
                                         -------------------------------
    Maximum Total for Maintenance         $90
     Sessions.
                                         -------------------------------
        Maximum Total for First Year....  $450
------------------------------------------------------------------------
    Ongoing Maintenance Sessions After Year 1 (Minimum of 3 sessions
                    attended per quarter/no maximum)
------------------------------------------------------------------------
3 Ongoing Maintenance Sessions attended   $45
 plus maintenance of minimum required
 weight loss from baseline.
6 Ongoing Maintenance Sessions attended   $45
 plus maintenance of minimum required
 weight loss from baseline.
9 Ongoing Maintenance Sessions attended   $45
 plus maintenance of minimum required
 weight loss from baseline.
12 Ongoing Maintenance Sessions attended  $45
 plus maintenance of minimum required
 weight loss from baseline.
                                         -------------------------------
    Maximum Total After First Year......  $180
------------------------------------------------------------------------

    As proposed, Table 41 illustrates that payments would be heavily 
weighted toward achievement of weight loss over the 12-month core 
benefit, and no payments would be available after the first 6 months 
without achievement of

[[Page 80483]]

the minimum weight loss. In the payment structure we proposed, claims 
for payment would be submitted following the achievement of core 
session attendance, minimum weight loss, maintenance (both core and 
ongoing) session attendance, and maintenance of minimum weight loss. 
For example, MDPP suppliers would not be able to submit another claim 
after core session one until the beneficiary has completed four 
sessions, and maintenance sessions (both core and ongoing) would not 
qualify for payment unless minimum weight loss was achieved and 
maintained. Similar value-based payments are being offered by 
commercial insurers and accepted by DPP organizations. We sought 
comment on this payment structure. Additionally, we sought comment on 
whether to update payment rates annually through an existing fee 
schedule, such as the PFS, or establish a new fee schedule for MDPP 
suppliers.
    We are deferring finalizing the proposed reimbursement structure to 
future rulemaking. In response to our solicitation, we received many 
comments. We intend to address these comments in future rulemaking.
b. Program Integrity
    We recognize the potential for fraud and abuse by suppliers filing 
inaccurate claims and/or duplicative claims on the number of sessions 
attended or amount of weight loss achieved. We also recognize 
beneficiaries may move between MDPP suppliers, and we intend to address 
in future rulemaking as appropriate any requirements necessary to 
prevent duplication claims for MDPP services furnished by more than one 
MDPP supplier to the same beneficiary. We are also concerned about the 
potential for beneficiary inducement or coercion and the potential 
program risks posed by permitting a new type of organization to receive 
payment from Medicare for furnishing MDPP services. We also realize 
that there may be other risks to program integrity. We intend to 
develop policies to mitigate these risks and monitor the MDPP 
expansion, to ensure MDPP suppliers meet all applicable CMS program 
integrity and supplier enrollment standards, and will address them in 
future rulemaking, as necessary. We intend to develop system checks to 
identify when CMS may need to audit an MDPP supplier's records. We are 
considering ways to cross reference the data DPP organizations are 
currently required to report to the CDC to identify potential 
discrepancies with data submitted to CMS. We sought comment on such 
approaches. Finally, MDPP suppliers would be subject to audits and 
reviews performed by CMS program integrity and/or review or audit 
contractors in addition to program-specific audits. We sought comment 
on these approaches and others to mitigate these risks and strategies 
to ensure program integrity.
    In response to our solicitation, we received many comments. We 
intend to address these comments in future rulemaking.
c. Learning Activities
    The CDC provides technical assistance to DPP organizations with CDC 
DPRP recognition to improve performance. We solicited comment on what 
additional technical assistance would be needed for providers and other 
organizations in order to expand the MDPP model.
    In response to our solicitation, we received many insightful and 
informative public comments and will consider the input when developing 
our strategy for ensuring that organizations seeking to enroll in 
Medicare and furnish and bill for MDPP services have the information 
and guidance they need to do so.
d. Quality Monitoring and Reporting
    We solicited comment on the quality metrics that should be reported 
by MDPP suppliers in addition to the reporting elements required on 
Medicare claims submissions outlined above (attendance and weight loss) 
or by the CDC DPRP. We solicited comment specifically on what quality 
metrics should be considered for public reporting (not for payment) to 
guide beneficiary choice of MDPP suppliers.
    In response to our solicitation, we received many comments. We 
intend to address these comments in future rulemaking.

K. 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) (November 2011 final rule)). A 
subsequent major update to the program rules appeared in the June 9, 
2015 Federal Register (Medicare Shared Savings Program; Accountable 
Care Organizations Final Rule (80 FR 32692) (June 2015 final rule)). A 
final rule addressing changes related to the program's financial 
benchmark methodology appeared in the June 10, 2016 Federal Register 
(Medicare Program; Medicare Shared Savings Program; Accountable Care 
Organizations--Revised Benchmark Rebasing Methodology, Facilitating 
Transition to Performance-Based Risk, and Administrative Finality of 
Financial Calculations (81 FR 37950) (June 2016 final rule)). As noted 
below, we have also made use of the annual PFS rules to address quality 
reporting and certain other issues.
    Additionally, on April 27, 2016, the Department of Health and Human 
Services (HHS) issued a proposed rule to implement key provisions of 
the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and 
establish a new Quality Payment Program (QPP) (Medicare Program; Merit-
Based Incentive Payment System (MIPS) and Alternative Payment Model 
(APM) Incentive under the Physician Fee Schedule, and Criteria for 
Physician-Focused Payment Models (81 FR 28162) (QPP proposed rule)). On 
October 14, 2016, HHS issued a final rule to implement key provisions 
of the MACRA and establish a new QPP (QPP final rule with comment 
period). (The rule will appear in the November 4, 2016 Federal 
Register, and can be accessed at https://qpp.cms.gov/education.) The 
QPP final rule with comment period establishes a new program under 
which Medicare will reward physicians for providing high-quality care, 
instead of paying them only for the number of tests or procedures 
provided. The QPP final rule with comment period addresses issues 
related to APMs, such as Tracks 1, 2, and 3 of the Medicare Shared 
Savings Program, and issues related to reporting for purposes of MIPS 
by eligible clinicians (ECs) that are participating in APMs.
    Our intent in the CY 2017 PFS proposed rule was to propose further 
refinements to the Shared Savings Program rules, and we identified 
several policies that we proposed to update or revise. First, we 
discussed and proposed policies related to ACO quality reporting 
including proposed changes to the quality measures used to assess ACO 
quality performance, changes in the methodology used in our quality

[[Page 80484]]

validation audits and the way in which the results of these audits may 
affect an ACO's sharing rate, various issues related to alignment with 
policies proposed in the QPP proposed rule, and revisions related to 
the terminology used in quality assessment such as ``quality 
performance standard'' and ``minimum attainment level.'' We also 
proposed conforming changes to our regulatory text. Next, we addressed 
several issues unrelated to quality reporting and assessment. 
Specifically, we proposed to implement a process by which beneficiaries 
may voluntarily align with an ACO by designating an ACO professional as 
responsible for their overall care. We also proposed to introduce 
beneficiary protections related to use of the SNF 3-day rule waiver. 
Finally, we proposed to make technical changes and updates to certain 
rules related to merged and acquired TINs and the minimum savings rate 
(MSR) and minimum loss rate (MLR) that would be used during financial 
reconciliation for ACOs that fall below 5,000 assigned beneficiaries.
1. ACO Quality Reporting
    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 and recent CY PFS final rules with 
comment period (77 FR 69301 through 69304; 78 FR 74757 through 74764; 
79 FR 67907 through 67931; and 80 FR 71263 through 712710), we have 
established the quality performance standard that ACOs must meet to be 
eligible to share in savings that are generated. Through these previous 
rulemakings, we have worked to improve the alignment of quality 
performance measures, submission methods, and incentives under the 
Shared Savings Program and PQRS.
    In the CY 2017 PFS proposed rule, we proposed several changes and 
other revisions to our policies related to the quality measures and the 
quality performance standard, including the following:
     Changes to the measure set used in establishing the 
quality performance standard;
     Changes to the methodology used to validate quality data 
submitted by the ACO along with penalties that may apply if the audit 
match rate is less than 90 percent;
     Revisions to the use of the terms ``quality performance 
standard'' and ``minimum attainment level'' in the regulation text;
     Revisions related to use of flat percentages to establish 
quality benchmarks; and
     Alignment with policies proposed in the QPP proposed rule.
a. Changes to the Quality Measure Set Used in Establishing the Quality 
Performance Standard
(1) Background
    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 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 subsequent PFS final 
rules with comment period, we have made a number of updates to the set 
of measures that make up the quality performance standard. The quality 
measure set currently includes 34 quality measures.
    Quality measures are submitted by the ACO through the CMS 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 measures collected through the CMS web 
interface are also used to determine whether eligible professionals 
participating in an ACO avoid the PQRS and automatic Physician Value 
Modifier (VM) payment adjustments for 2015 and subsequent years. 
Currently, eligible professionals billing through the TIN of an ACO 
participant may avoid the downward PQRS payment adjustment when the ACO 
satisfactorily reports all of the ACO GPRO measures on their behalf 
using the CMS web interface. Beginning with the 2017 VM, ACO 
performance on the CMS web interface measures and all cause readmission 
measure will be used in calculating the quality component of the VM for 
groups and solo practitioners participating within an ACO (79 FR 67941 
through 67947).
    In the CY 2017 PFS proposed rule, we explained that our principal 
goal and rationale for 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 
and a preference for NQF-endorsed measures. We noted, however, that the 
statute does not limit us to using endorsed measures in the Shared 
Savings Program. As a result, we have 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, which is 
currently titled Percent of PCPs Who Successfully Meet Meaningful Use 
Requirements.
    Further, we described our continuing work with the measures 
community to ensure that the specifications for the measures used under 
the Shared Savings Program are up-to-date and reduce reporting burden. 
Importantly, we noted that the Core Quality Measures Collaborative was 
formed in 2014, as a collaboration between CMS, providers, and other 
stakeholders, with the goal of aligning quality measures for reporting 
across public and private stakeholders in order to reduce provider 
reporting burden. On February 16, 2016, the Core Quality Measures 
Collaborative recommended a core quality measure set that aligns and 
simplifies quality reporting across multiple payers (https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2016-Press-releases-items/2016-02-16.html) and made specific recommendations for 
ACOs (https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityMeasures/Downloads/ACO-and-PCMH-Primary-Care-Measures.pdf). We proposed to

[[Page 80485]]

integrate several recommendations made by the Core Quality Measures 
Collaborative into the CMS web interface as part of the QPP proposed 
rule (81 FR 28399). These recommendations were subsequently adopted in 
full in the QPP final rule with comment period. Groups that are 
eligible to report using the CMS web interface for purposes of 
reporting quality measures to CMS for various quality reporting 
initiatives such as PQRS and the Shared Savings Program are required to 
report on all measures included in the CMS web interface. In addition, 
for purposes of the QPP, we proposed and finalized a policy requiring 
that groups using the CMS web interface must report on all measures in 
the CMS web interface.
(2) Proposals
    In efforts to continue to align with other CMS initiatives and 
reduce provider confusion and the burden of reporting, we proposed 
modifications to the quality measure set that an ACO is required to 
report. Specifically, to align the Shared Savings Program quality 
measure set with the measures recommended by the Core Quality Measures 
Collaborative and proposed for reporting through the CMS web interface 
under the QPP proposed rule, we proposed to add, and in some cases to 
replace, existing quality measures with the following:
     ACO-12 Medication Reconciliation Post-Discharge 
(NQF #0097). This measure addresses adverse drug events (ADEs) through 
medication reconciliation, which is an important aspect of care 
coordination. According to HHS' Agency for Healthcare Research and 
Quality (AHRQ), ADEs account for nearly 700,000 emergency department 
visits and 100,000 hospitalizations each year.\36\ The ACO-12 
Medication Reconciliation measure was previously in the Shared Savings 
Program measure set, however, it was replaced with ACO-39, 
Documentation of Current Medications in the Medical Record (79 FR 67912 
through 67914). The Core Quality Measures Collaborative, in 
coordination with providers and stakeholders, determined the original 
Medication Reconciliation measure would be more appropriate for 
alignment across quality reporting initiatives. Based on this 
recommendation, we proposed to require reporting of the measure through 
the CMS web interface in the QPP proposed rule (81 FR 28403). In an 
effort to align with the QPP proposals, we therefore proposed to 
replace the Documentation of Current Medications in the Medical Record 
measure (ACO-39) by reintroducing Medication Reconciliation (ACO-12) in 
the Care Coordination/Patient Safety domain. We noted that in 
accordance with our policy for newly introduced measures, this measure 
would be pay for reporting for 2 years and proposed that it would phase 
into pay for performance in accordance with the schedule indicated in 
Table 36 of the proposed rule (81 FR 46421-46422).
---------------------------------------------------------------------------

    \36\ ``Medication Errors.'' AHRQ. https://psnet.ahrq.gov/primers/primer/23/medication-errors.
---------------------------------------------------------------------------

     ACO-44 Use of Imaging Studies for Low Back Pain 
(NQF #0052). Imaging utilization is an important area for quality 
measurement, because of the wide use of imaging services. This measure 
reports the percentage of patients with a primary diagnosis of low back 
pain that did not have an imaging study (for example, MRI, CT scan) 
within 28 days of the diagnosis. (A higher score indicates higher 
performance). The Use of Imaging Studies for Low Back Pain quality 
measure is specified for patients 18-50 years of age. We proposed 
adding this measure in the Care Coordination/Patient Safety domain to 
address a gap in measures related to resource utilization and align 
with the ACO measures recommended by the Core Quality Measures 
Collaborative core measure set (https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityMeasures/Downloads/ACO-and-PCMH-Primary-Care-Measures.pdf). We noted that the measure was 
also proposed in the QPP proposed rule for measuring the quality of 
care furnished by individual and specialty ECs (81 FR 28399 and 28460 
Tables A and E). In the QPP final rule with comment period, we adopted 
the low back pain measure for EHR reporting. Under the Shared Savings 
Program, we proposed that this measure would be calculated using 
Medicare claims data without any additional provider reporting 
requirement. We noted that in accordance with our policy for newly 
introduced measures, this measure would be designated as pay for 
reporting in 2017 and 2018. We proposed to phase it into pay for 
performance in accordance with the schedule indicated in Table 36 of 
the proposed rule (81 FR 46421-46422). However, given the possible 
small case sizes due to the measure specifications, we specifically 
solicited comment on whether this measure should be phased in to pay 
for performance or whether it should remain pay for reporting for all 3 
performance years.
    As we stated in the CY 2017 PFS proposed rule, by aligning the 
Shared Savings Program measures with the Core Quality Measures 
Collaborative recommendations and proposals under the QPP proposed 
rule, we hope to reduce the burden of provider data collection and 
reporting of measures that do not align across public and private 
quality reporting initiatives. Therefore, we proposed to retire or 
replace the following measures in order to reduce provider reporting 
burden by reducing the number of measures that must be reported and 
because these measures do not align with the core measure set 
recommendations from the Core Quality Measures Collaborative and the 
measures that we proposed for reporting through the CMS web interface 
in the QPP proposed rule:
     ACO-39 Documentation of Current Medications in the Medical 
Record.
     ACO-21 Preventive Care and Screening: Screening for High 
Blood Pressure and Follow-up Documented.
     ACO-31 Heart Failure (HF): Beta-Blocker Therapy for Left 
Ventricular Systolic Dysfunction (LVSD).
     ACO-33 Angiotensin-Converting Enzyme (ACE) Inhibitor or 
Angiotensin Receptor Blocker (ARB) Therapy--for patients with CAD and 
Diabetes or Left Ventricular Systolic Dysfunction (LVEF<40%).
    In addition to our proposals above to modify the quality measure 
set to align with the Core Quality Measures Collaborative and the 
proposed modifications to the measures reported through the CMS web 
interface under the QPP proposed rule, we proposed a few additional 
modifications as follows:
    First, we proposed to retire the two AHRQ Ambulatory Sensitive 
Conditions Admission measures (ACO-9 and ACO-10). Although ACO-9 and 
ACO-10 address admissions for patients with heart failure, chronic 
obstructive pulmonary disease (COPD), and asthma, we introduced two 
all-cause, unplanned admission measures for heart failure and multiple 
chronic conditions (ACO-37 and ACO-38, respectively) in the 2015 PFS 
final rule (79 FR 67911-67912). We believe ACO-37 and ACO-38 report on 
a similar population with similar conditions as ACO-9 and ACO-10. 
Therefore, in order to continue our efforts to reduce redundancies 
within the Shared Savings Program measure set, we proposed to remove 
ACO-9 and ACO-10 from the measure set.
    Second, although we proposed to remove ACO-9 and ACO-10, we stated 
that we continue to believe AHRQ's Prevention Quality Indicator (PQI)

[[Page 80486]]

measures are important because they report on inpatient hospital 
admissions of patients with clinical conditions (such as dehydration, 
bacterial pneumonia, and urinary tract infections) that could 
potentially be prevented with high-quality outpatient care. We 
therefore proposed adding ACO-43 Ambulatory Sensitive Condition Acute 
Composite (AHRQ PQI #91) to the Care Coordination/Patient Safety 
domain. We noted that this measure is a composite measure, currently 
used in the Physician Value-Based Payment Modifier, which includes PQIs 
reporting on admissions related to dehydration, bacterial pneumonia, 
and urinary tract infections (PQIs #10, 11, and 12). We noted the 
measure would be risk-adjusted for demographic variables and 
comorbidities. In accordance with our policy for newly introduced 
measures, we proposed that this measure would be pay for reporting for 
2 years, and then phase into pay for performance in accordance with the 
schedule indicated in Table 36 of the proposed rule (81 FR 46421-
46422).
    Comment: Commenters were generally supportive of the proposed 
changes to the Shared Savings Program quality measure set. Most 
commenters supported alignment of quality measures with Core Quality 
Measures Collaborative recommendations.
    Response: We appreciate the support for proposed changes to the 
Shared Savings Program quality measure set and for aligning with the 
recommendations of the Core Quality Measures Collaborative.
    The following is a summary of the comments we received on specific 
proposed changes to the quality measure set:
    Comment: Regarding our proposal to reinstate use of ACO-12 
Medication Reconciliation and remove ACO-39 Documentation of Current 
Medications in the Medical Record, one commenter suggested that using 
ACO-12 Medication Reconciliation would be a better means to improve 
population health. One commenter expressed concern over reintroducing 
ACO-12 since it counts a readmission within 30 days as a new index 
discharge for the measure and suggested using NQF #0554 Medication 
Reconciliation Post-Discharge instead.
    Response: We appreciate the comments submitted on our proposal to 
reinstate ACO-12 Medication Reconciliation, including the comment 
suggesting the measure would be a better means to improve population 
health. While one commenter suggested using NQF #0554 Medication 
Reconciliation Post-Discharge, as NQF notes on its Web site, NQF #0554 
measure is no longer endorsed, because the measure developer, NCQA, 
determined the measure is outdated and withdrew the measure from 
endorsement. Although readmissions could be counted as a new index 
discharge based on the measure specifications, it is important that 
providers coordinate care and engage in medication reconciliation 
following each hospital discharge, whether it be an initial admission 
or subsequent readmission. ACO-12 also maintains alignment with quality 
reporting under the QPP. Given that ACO-12 aligns with the QPP and is 
an NQF endorsed measure that is recommended by the Core Quality 
Measures Collaborative, we are finalizing our proposal to replace ACO-
39 with ACO-12. In accordance with our policy for newly introduced 
measures, we are also finalizing our proposal that this measure will be 
pay for reporting for 2 years, and then phase into pay for performance 
in accordance with the schedule as proposed in Table 36 of the proposed 
rule (81 FR 46421-46422).
    Comment: Several commenters specifically supported the removal of 
ACO-21 Screening for High Blood Pressure and Follow-up Documented, ACO-
31 Beta-Blocker Therapy for LVSD, and ACO-33 ACE Inhibitor or ARB 
Therapy--for patients with CAD and Diabetes or Left Ventricular 
Systolic Dysfunction (LVEF<40%) in the interest of harmonization, even 
though the measures do include an important follow-up component. One 
commenter raised concerns about removing ACO-21 because it has a 
follow-up component they believe is particularly important for women 
with heart disease.
    Response: We appreciate the commenter support we received for 
removing these measures. To the extent that commenters noted the 
importance of certain aspects of these measures, we acknowledge that 
these measures address important health issues. Many quality measures 
that are not part of the ACO quality measure set address various 
important health issues for patients. However, it is not feasible for 
us to include all measures that address important health issues in the 
quality measure set for the Shared Savings Program. Rather, we must 
choose measures based upon a consideration of the importance of the 
measures for the patient population served by ACOs, the reporting 
burden placed on ACOs and their participants, and the extent to which 
measures align with other quality reporting initiatives. Accordingly, 
we are finalizing our proposal to retire ACO-21, ACO-31, and ACO-33 in 
order to reduce provider reporting burden and align with the Core 
Quality Measures Collaborative recommended core set and the measures 
that will be reported for purposes of the QPP.
    Comment: Most commenters agreed that ACO-44 Use of Imaging Studies 
for Low Back Pain is an important quality measure and supported 
addition of this measure. However, concerns were raised regarding the 
measure specifications. Some commenters were concerned about the narrow 
age range of this measure and potentially small case sizes that could 
result from the age range being limited to adults aged 18-50. These 
commenters made various suggestions for modification of our proposal 
such as using a broader age range or making the measure pay for 
reporting for all years. While some commenters appreciated that the use 
of claims data to calculate this measure would avoid unnecessary 
administrative burden on providers, one commenter was concerned about 
relying solely on claims data without incorporating clinical data from 
the medical record and suggested that the measure be pay for reporting 
until CMS has the capacity to incorporate robust clinical data. A few 
commenters opposed the addition of ACO-44, stating they believe it is 
inappropriate for a Medicare ACO's patient population, given the 
measure specification's limited age range. One commenter on ACO-44 
asked whether plain film radiographs would be included as an imaging 
modality for the measure.
    Response: We agree with commenters that support the proposal to 
include ACO-44 Use of Imaging Studies for Low Back Pain because it 
addresses a clinically important gap in quality measurement and aligns 
with the recommendations made by the Core Quality Measures 
Collaborative. We also agree with commenters' concerns regarding the 
narrow age range (18-50 years of age) under the measure specifications, 
which could result in small case sizes if limited to Medicare 
beneficiaries assigned to the ACO. With respect to the comment that 
raised a concern about relying solely on claims data to calculate the 
measure, we agree that additional clinical data could possibly enhance 
the measure. However, using additional clinical data would require 
additional reporting by the ACO. At this time, we do not believe it is 
appropriate to impose this additional reporting burden, and therefore, 
we will not be adopting the commenter's suggestion. In response to the 
commenter that asked whether plain film radiographs would be included 
in the measure specifications, we note that

[[Page 80487]]

the current NQF endorsed measure specifies the use of plain x-ray, MRI, 
and CT scan. Although we are finalizing our proposal to add this 
measure to the quality measure set, in light of the concerns raised 
regarding the age range and potential for small case sizes, we are 
modifying the proposed timeline for transitioning the measure to pay 
for performance. In accordance with our policy for newly introduced 
measures, this measure will be pay for reporting for 2 years. However, 
rather than phasing in the measure as pay for performance, we are 
finalizing a policy under which the measure will remain as pay for 
reporting for all the 3 performance years of an ACO's agreement period.
    Comment: Some commenters supported the proposal to retire ACO-9 
because patients with COPD are already assessed under ACO-38 All-Cause 
Unplanned Admissions for Patients with Multiple Chronic Conditions 
(MCC). In addition, commenters supported CMS' proposal to retire ACO-
10, because the quality measure set already includes an all-cause 
admission measure for patients with Heart Failure (ACO-37). Some 
commenters urged CMS to retain ACO-9 or consider other COPD-related 
measures for future reporting due to the prevalence of mortality-
related COPD. A commenter suggested that the Core Quality Measures 
Collaborative consider COPD-related measures to include in their core 
measure set recommendations.
    Response: We appreciate the comments supporting our proposal to 
retire ACO-9 and ACO-10. We agree that COPD and heart failure affect a 
large volume of beneficiaries and are clinically important areas for 
quality measurement. However, we note that COPD and heart failure are 
among the chronic conditions addressed by the specifications for ACO-38 
and ACO-37, respectively. Therefore the patient populations for the 
measures are similar, and we agree with commenters who noted that the 
measures are redundant. As a result, we are finalizing our proposal to 
remove ACO-9 and ACO-10 from the ACO quality measure set. We also 
appreciate the additional COPD measure recommendations and will 
consider them for future reporting.
    Comment: Most commenters supported the proposal to add ACO-43 
Ambulatory Sensitive Condition Acute Composite to the measure set. 
Commenters also appreciated our proposal that the measure would be 
initially introduced as pay for reporting because it was not included 
in the Core Quality Measure Collaborative measure set recommendations. 
One commenter suggested quarterly feedback support for this measure and 
other commenters suggested this measure be pay for reporting for all 
performance years in an ACO's agreement period so ACOs can become more 
familiar with the measure for their own operations. Some commenters 
raised concerns with the use of the measure at the ACO-level when AHRQ 
developed the measure at the population level.
    Response: We appreciate commenters' support for our proposal to add 
ACO-43 to the ACO quality measure set. We are finalizing its addition 
to the ACO quality measure set because it addresses important clinical 
conditions that could potentially be prevented with coordinated, high-
quality outpatient care. Although some commenters suggested maintaining 
the measure as pay for reporting all 3 years of an ACO's agreement 
period, we believe ACOs will have sufficient opportunity to become 
familiar with the measure because, in accordance with the timeline for 
introducing new measures under Sec.  425.502(a)(4), it will be pay for 
reporting for 2 years before transitioning to pay for performance under 
the phase-in schedule indicated in Table 36 of the proposed rule (81 FR 
46421-46422). At this time, we do not anticipate providing quarterly 
quality measure updates, because we only calculate the measure 
annually; however, we will continue to consider whether it would be 
feasible to do so. Further, we believe it is appropriate to use this 
measure at the ACO-level to assess ACO performance. ACOs are required 
to improve the quality and cost of the care of the fee-for-service 
patient population assigned to them. In order to be eligible for 
participation in the Shared Savings Program, the ACO must have at least 
5,000 assigned beneficiaries. We therefore believe an ACO's patient 
population is sufficiently large enough that it is appropriate to apply 
this measure at the ACO-level. Additionally, ACO-43 is used in and 
aligns with other CMS quality initiatives; it is currently reported for 
purposes of the Physician Value-Modifier and has been used for 
assessing physician performance and was finalized as an informational 
measure under the QPP final rule with comment period. We have an 
overarching belief in the importance of collecting information 
regarding the prevalence of preventable conditions and readmissions and 
providing this information to clinicians to assist them in developing 
targeted care improvement processes. To support this goal and to align 
with other CMS quality initiatives, we believe it is appropriate to 
include ACO #43 in the ACO quality measure set.
    Comment: We received several additional comments regarding the 
quality measure set that were not directly related to our proposals. A 
few commenters suggested CMS risk adjust the claims-based quality 
measures to account for socioeconomic factors. Several commenters 
stated their support for retaining the Influenza and Pneumonia 
vaccination measures (ACO-14 and ACO-15). We also received quality 
measure suggestions for future consideration, such as additional 
immunization and transitions of care measures.
    Response: We appreciate the support for measures that are currently 
included in the quality measure set. We also thank commenters for their 
other recommendations regarding quality reporting under the Shared 
Savings Program. We will keep these suggestions and comments in mind 
for future consideration.
    Final Action: We appreciate the thoughtful comments submitted in 
response to our proposed changes to the quality measure set. We are 
finalizing the measure set changes (deletions, additions, and 
replacement) as proposed for the reasons noted in our responses above 
and to align with the Core Quality Measures Collaborative and the 
measures that were finalized in the QPP final rule with comment period. 
We note that in light of comments received on ACO-44 Use of Imaging 
Studies for Low Back Pain and its potential for low case sizes, we will 
add this measure as proposed but will retain it as pay for reporting in 
all 3 years of the ACO's agreement period. All other measures will be 
phased in as proposed.
    Table 42 lists the Shared Savings Program quality measure set that 
will be used to assess quality performance starting with the 2017 
performance year including the new measures adopted in this final rule. 
Each measure that is indicated as a new measure will be assessed as a 
pay for reporting measure for the 2017 and 2018 performance years. 
After that, the measure will be assessed based on the phase-in schedule 
noted in Table 42.
    As a result of these proposed measure changes, the four domains 
will include the following number of quality measures (See Table 43 for 
details.):
     Patient/Caregiver Experience of Care-8 measures
     Care Coordination/Patient Safety-10 measures
     Preventive Health-8 measures

[[Page 80488]]

     At Risk Population-5 measures (3 individual measures and a 
2-component diabetes composite measure)
    Table 43 provides a summary of the number of measures by domain and 
the total points and domain weights that will be used for scoring 
purposes under the changes to the quality measure set adopted in this 
final rule.

  Table 42--Measures for Use in the Establishing Quality Performance Standard That ACOs Must Meet for Shared Savings Starting With the 2017 Performance
                                                                          Year
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                            Pay for performance phase in
                                                                                        NQF  #/measure     Method of data    R--reporting P--performance
            Domain                ACO measure #      Measure title     New measure         steward           submission    -----------------------------
                                                                                                                               PY1       PY2       PY3
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            AIM: Better Care for Individuals
--------------------------------------------------------------------------------------------------------------------------------------------------------
Patient/Caregiver Experience..  ACO-1............  CAHPS: Getting    ...............  NQF #0005 AHRQ...  Survey...........        R         P         P
                                                    Timely Care,
                                                    Appointments,
                                                    and Information.
                                ACO-2............  CAHPS: How Well   ...............  NQF #0005 AHRQ...  Survey...........        R         P         P
                                                    Your Providers
                                                    Communicate.\37
                                                    \
                                ACO-3............  CAHPS: Patients'  ...............  NQF #0005 AHRQ...  Survey...........        R         P         P
                                                    Rating of
                                                    Provider.\2\
                                ACO-4............  CAHPS: Access to  ...............  NQF #N/A CMS/AHRQ  Survey...........        R         P         P
                                                    Specialists.
                                ACO-5............  CAHPS: Health     ...............  NQF #N/A CMS/AHRQ  Survey...........        R         P         P
                                                    Promotion and
                                                    Education.
                                ACO-6............  CAHPS: Shared     ...............  NQF #N/A CMS/AHRQ  Survey...........        R         P         P
                                                    Decision Making.
                                ACO-7............  CAHPS: Health     ...............  NQF #N/A CMS/AHRQ  Survey...........        R         R         R
                                                    Status/
                                                    Functional
                                                    Status.
                                ACO-34...........  CAHPS:            ...............  NQF #N/A CMS/AHRQ  Survey...........        R         P         P
                                                    Stewardship of
                                                    Patient
                                                    Resources.
Care Coordination/ Patient      ACO-8............  Risk-             ...............  Adapted NQF #1789  Claims...........        R         R         P
 Safety.                                            Standardized,                      CMS.
                                                    All Condition
                                                    Readmission.
                                ACO-35...........  Skilled Nursing   ...............  Adapted NQF #2510  Claims...........        R         R         P
                                                    Facility 30-Day                    CMS.
                                                    All-Cause
                                                    Readmission
                                                    Measure (SNFRM).
                                ACO-36...........  All-Cause         ...............  NQF#TBD CMS......  Claims...........        R         R         P
                                                    Unplanned
                                                    Admissions for
                                                    Patients with
                                                    Diabetes.
                                ACO-37...........  All-Cause         ...............  NQF#TBD CMS......  Claims...........        R         R         P
                                                    Unplanned
                                                    Admissions for
                                                    Patients with
                                                    Heart Failure.
                                ACO-38...........  All-Cause         ...............  NQF#TBD CMS......  Claims...........        R         R         P
                                                    Unplanned
                                                    Admissions for
                                                    Patients with
                                                    Multiple
                                                    Chronic
                                                    Conditions.
                                ACO-43...........  Ambulatory                     X   AHRQ.............  Claims...........        R         P         P
                                                    Sensitive
                                                    Condition Acute
                                                    Composite (AHRQ
                                                    Prevention
                                                    Quality
                                                    Indicator (PQI)
                                                    #91).
                                ACO-11...........  Use of certified               X   NQF #N/A CMS.....  As finalized             R         P         P
                                                    EHR technology.                                       under the QPP.
                                ACO-12...........  Medication                     X   NQF #0097 CMS....  CMS Web Interface        R         P         P
                                                    Reconciliation
                                                    Post-Discharge.
                                ACO-13...........  Falls: Screening  ...............  NQF #0101 NCQA...  CMS Web Interface        R         P         P
                                                    for Future Fall
                                                    Risk.
                                ACO-44...........  Use of Imaging                 X   NQF #0052 NCQA...  Claims...........        R         R         R
                                                    Studies for Low
                                                    Back Pain.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           AIM: Better Health for Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Preventive Health.............  ACO-14...........  Preventive Care   ...............  NQF #0041 AMA-     CMS Web Interface        R         P         P
                                                    and Screening:                     PCPI.
                                                    Influenza
                                                    Immunization.
                                ACO-15...........  Pneumonia         ...............  NQF #0043 NCQA...  CMS Web Interface        R         P         P
                                                    Vaccination
                                                    Status for
                                                    Older Adults.
                                ACO-16...........  Preventive Care   ...............  NQF #0421 CMS....  CMS Web Interface        R         P         P
                                                    and Screening:
                                                    Body Mass Index
                                                    (BMI) Screening
                                                    and Follow Up.
                                ACO-17...........  Preventive Care   ...............  NQF #0028 AMA-     CMS Web Interface        R         P         P
                                                    and Screening:                     PCPI.
                                                    Tobacco Use:
                                                    Screening and
                                                    Cessation
                                                    Intervention.
                                ACO-18...........  Preventive Care   ...............  NQF #0418 CMS....  CMS Web Interface        R         P         P
                                                    and Screening:
                                                    Screening for
                                                    Clinical
                                                    Depression and
                                                    Follow-up Plan.
                                ACO-19...........  Colorectal        ...............  NQF #0034 NCQA...  CMS Web Interface        R         R         P
                                                    Cancer
                                                    Screening.
                                ACO-20...........  Breast Cancer     ...............  NQF #2372 NCQA...  CMS Web Interface        R         R         P
                                                    Screening.
                                ACO-42...........  Statin Therapy    ...............  NQF #N/A CMS.....  CMS Web Interface        R         R         R
                                                    for the
                                                    Prevention and
                                                    Treatment of
                                                    Cardiovascular
                                                    Disease.

[[Page 80489]]

 
Clinical Care for At Risk       ACO-40...........  Depression        ...............  NQF #0710 MNCM...  CMS Web Interface        R         R         R
 Population--Depression.                            Remission at
                                                    Twelve Months.
Clinical Care for At Risk       ACO-27...........  Diabetes          ...............  NQF #0059 NCQA     CMS Web Interface        R         P         P
 Population--Diabetes.                              Composite (All                     (individual
                                                    or Nothing                         component).
                                                    Scoring): ACO-
                                                    27: Diabetes
                                                    Mellitus:
                                                    Hemoglobin A1c
                                                    Poor Control.
                                ACO-41...........  ACO-41:           ...............  NQF #0055 NCQA     CMS Web Interface        R         P         P
                                                    Diabetes: Eye                      (individual
                                                    Exam.                              component).
Clinical Care for At Risk       ACO-28...........  Hypertension      ...............  NQF #0018 NCQA...  CMS Web Interface        R         P         P
 Population--Hypertension.                          (HTN):
                                                    Controlling
                                                    High Blood
                                                    Pressure.
Clinical Care for At Risk       ACO-30...........  Ischemic          ...............  NQF #0068 NCQA...  CMS Web Interface        R         P         P
 Population--Ischemic Vascular                      Vascular
 Disease.                                           Disease (IVD):
                                                    Use of Aspirin
                                                    or Another
                                                    Antithrombotic.
--------------------------------------------------------------------------------------------------------------------------------------------------------


 Table 43--Number of Measures and Total Points for Each Domain Within the Quality Performance Standard Starting
                                         With the 2017 Performance Year
----------------------------------------------------------------------------------------------------------------
                                           Number of
                Domain                    individual       Total measures for     Total possible   Domain weight
                                           measures         scoring purposes          points         (percent)
----------------------------------------------------------------------------------------------------------------
Patient/Caregiver Experience..........               8  8 individual survey                   16              25
                                                         module measures.
Care Coordination/Patient Safety......              10  10 measures, including                22              25
                                                         double-weighted EHR
                                                         measure.
Preventive Health.....................               8  8 measures..............              16              25
At-Risk Population....................               5  3 individual measures,                 8              25
                                                         plus a 2-component
                                                         diabetes composite
                                                         measure that is scored
                                                         as one measure.
                                       -------------------------------------------------------------------------
    Total in all Domains..............              31  30......................              62             100
----------------------------------------------------------------------------------------------------------------

b. Improving the Process Used To Validate ACO Quality Data Reporting
(1) Background
    In the November 2011 final rule, we finalized a proposal to retain 
the right to validate the data ACOs enter into the Web Interface (76 FR 
67893 through 67894). This validation process, referred to as the 
Quality Measures Validation audit, was based on the process used in 
Phase I of the Physician Group Practice (PGP) demonstration. The policy 
was finalized at Sec.  425.500(e). In this audit process, CMS selects a 
subset of Web Interface measures, and selects a random sample of 30 
confirmed and completely reported beneficiaries for each measure in the 
subset. The ACO provides medical records to support the data reported 
in the Web Interface for those beneficiaries. A measure-specific audit 
performance rate is then calculated using a multi-phased audit process:
---------------------------------------------------------------------------

    \37\ The quality measure title has been updated to ``Providers'' 
and is not only referencing ``Doctors.''
---------------------------------------------------------------------------

     Phase 1: Eight randomly selected medical records for each 
audited measure are reviewed to determine if the medical record 
documentation supports what was reported (that is, a match). If all 
records reviewed support what was reported, the audit ends. If any 
records do not support what was reported (that is, a mismatch), the 
audit process continues in a second phase for any measure with a 
mismatch identified.
     Phase 2: The remaining 22 medical records are reviewed for 
any measure that had a mismatch identified in Phase 1. If less than 90 
percent of the medical records provided for a measure support what was 
reported, the audit process continues to Phase 3.
     Phase 3: For each measure with a match rate less than 90 
percent, CMS provides education to the ACO about how to correct 
reporting and the ACO is given an opportunity to resubmit the 
measure(s) in question.
    If at the conclusion of the third phase there is a discrepancy 
greater than 10 percent between the quality data reported and the 
medical records provided during the audit, the ACO will not be given 
credit for meeting the quality target for any measure(s) for which the 
mismatch rate exists.
    As we explained in the proposed rule, since publication of the 
initial program rules in 2011, we have gained experience in conducting 
audits and believe that certain modifications to our rules should be 
made in order to increase the statistical rigor of the audit 
methodology, streamline audit operations, and more closely align the 
Quality Measures Validation audit used in Shared Savings Program audits 
with other CMS quality program audits including those performed in the 
Physician Quality Reporting Program and the Hospital Inpatient and 
Outpatient Quality Reporting programs. We therefore proposed four 
improvements to our audit process that would address the number of 
records to be reviewed per measure, the number of audit phases, the 
calculation of an audit match rate and the consequences if the audit 
match rate falls below 90 percent.
(2) Proposals
    First, we proposed to increase the number of records audited per 
measure to achieve a high level of confidence that the true audit match 
rate is within

[[Page 80490]]

5 percentage points of the calculated result. The November 2011 final 
rule indicated that CMS would review as few as 8 records (Phase 1 only) 
or as many as 30 records (Phase 1 and 2) per audited measure. With this 
phased methodology, the total number of records reviewed for each ACO 
varies (range of 40 to 150 records per audited ACO during the 
Performance Year 2014 audit). A sample size analysis found that the 
number of reviewed records needs to increase in order to provide the 
desired high level of confidence that the audited sample is 
representative of the ACO's quality reporting performance. We noted 
that the precise number of records requested for review would 
necessarily vary, depending on the desired confidence level, the number 
of measures audited, and the expected match rate. Therefore, we did not 
propose a specific number of records that would be requested for 
purposes of ACO quality validation audits in the future. However, based 
on an analysis using the poorest expected match rate, the highest 
degree of confidence and an estimated number of measures to be audited, 
we explained we did not anticipate more than 50 records would be 
requested per audited measure.
    Second, we proposed to modify our regulations in order to conduct 
the quality validation audit in a single step rather than the current 
multi-phased process described at Sec.  425.500(e)(2). We proposed to 
use a more streamlined approach in which all records selected for audit 
would be reviewed in a single step and some activities currently 
conducted in phase 3 would be removed from the audit process entirely 
while others would instead be addressed at the conclusion of the audit. 
During the proposed single step, we stated we would review all 
submitted medical records and calculate the match rate. We anticipated 
that the education we currently provide to ACOs and the opportunity for 
ACOs to explain the mismatches that occur in Phase 3 of the current 
process would continue, but would occur at the conclusion of the audit. 
We stated that under the proposal, there would not be an the 
opportunity for ACOs to correct and resubmit data for any measure with 
a >10 percent mismatch because we have learned through our experience 
with program operations that resubmission of CMS Web Interface measure 
data after the close of the CMS Web Interface is not feasible. Instead, 
we proposed that an ACO's quality score would be affected by an audit 
failure as described below, without requiring re-opening of the CMS Web 
Interface. We stated we believed that this single step process would 
allow us to maintain the desired level of confidence that the true 
audit match rate is within 5 percentage points of the calculated result 
and to complete the audit in a timely manner. Therefore, we proposed to 
remove the provision at Sec.  425.500(e)(2) that requires 3 phases of 
medical record review. In so doing, we proposed to redesignate Sec.  
425.500(e)(3) as Sec.  425.500(e)(2).
    Third, we proposed to revise the redesignated provision at Sec.  
425.500(e)(2) in order to provide for an assessment of the ACO's 
overall audit match rate across all measures, instead of assessing the 
ACO's audit mismatch rate at the measure level. Specifically, we 
proposed to calculate an overall audit match rate which would be 
derived by dividing the total number of audited records that match the 
information reported in the Web Interface by the total number of 
records audited. This would be a change from the current audit 
performance calculation methodology, which calculates a measure 
specific mismatch rate. We stated that we believe making this change 
would be necessary to minimize the number of records that must be 
requested in order to achieve the desired level of statistical 
certainty as described in the first proposal discussed in this section. 
Our analysis suggests that we would have to request a much larger 
number of records (approximately 200 per measure) from the ACO during a 
quality validation audit of individual measures to achieve a 90 percent 
confidence interval for each measure. In addition, combining all 
records to calculate an overall audit match rate is less subject to 
variability based on the specific subset of measures chosen for audit 
each year and better aligns with the methodology used by other CMS 
quality program audits.
    Fourth, we proposed to revise the redesignated provision at Sec.  
425.500(e)(2), to indicate that if an ACO fails the audit (that is, has 
an overall audit match rate of less than 90 percent), the ACO's overall 
quality score would be adjusted proportional to its audit performance. 
Currently, our regulation at Sec.  425.500(e)(3) states that if, at the 
conclusion of the audit process there is a discrepancy greater than 10 
percent between the quality data reported and the medical records 
provided, the ACO will not be given credit for meeting the quality 
target for any measures for which this mismatch rate exists. In light 
of our proposed modifications to the quality validation audit process 
above in which we proposed to assess and validate the ACO's performance 
overall rather than the ACO's performance on each measure, we explained 
that we believe a modification to this requirement would be necessary 
to reflect an overall adjustment. Therefore, we proposed to modify the 
provision at newly redesignated Sec.  425.500(e)(2) to state that if an 
ACO fails the audit (that is, has an audit match rate of less than 90 
percent), the ACO's overall quality score will be adjusted proportional 
to the ACO's audit performance. The audit-adjusted quality score would 
be calculated by multiplying the ACO's overall quality score by the 
ACO's audit match rate. For example, if an ACO's quality score is 75 
percent and the ACO's audit match rate is 80 percent, the ACO's audit-
adjusted quality score would be 60 percent. The audit-adjusted quality 
score would be the quality score that is used to determine the 
percentage of any earned savings that the ACO may share or the 
percentage of any losses for which the ACO is accountable.
    Finally, we proposed to add a new requirement at Sec.  
425.500(e)(3) that in addition to the adjustment to the ACO's overall 
quality score, any ACO that has an audit match rate of less than 90 
percent, may be required to submit a corrective action plan (CAP) under 
Sec.  425.216 for CMS approval. In the CAP, the ACO may be required to 
explain the cause of its audit performance and how it plans to improve 
the accuracy of its quality reporting in the future. In addition, we 
explained that CMS maintains the right, as described in Sec.  
425.500(f), to terminate or impose other sanctions on any ACO that does 
not report quality data accurately, completely or timely.
    We invited comment on the proposed improvements to the process used 
to validate ACO quality data reporting.
    The following is a summary of the comments we received regarding 
the proposed improvements to the process used to validate ACO quality 
data reporting.
    Comment: Most commenters supported our proposals to improve and 
better streamline the process for validating the accuracy of data 
reported through the CMS web interface and to use audit results to 
adjust the ACO's overall quality performance score. Few commenters 
opposed the proposed changes to the audit because they like the current 
process that includes multiple phases of review and is focused on 
performance on specific measures. Some commenters raised general 
concerns regarding the administrative burden for ACOs and providers and 
suppliers who are selected for the audit and must submit records for 
review. A couple of

[[Page 80491]]

commenters recommended delaying implementation of the new process until 
a single web interface measures information document is available or to 
allow ACOs additional time to adjust to the proposed changes to the 
process for conducting the quality validation audits.
    Response: We agree with commenters on the importance of validating 
the accuracy of data reported through the web interface. The accuracy 
of the reported data is important because it is used by us to conduct 
certain activities, such as determining shared savings and shared 
losses. The data is also made available to the public, and we 
understand that ACOs and ACO providers/suppliers may use it to make 
business decisions while beneficiaries may rely on it to determine 
whether to work care from practitioners participating in an ACO. We 
believe the proposed streamlined approach to quality validation audits 
will minimize administrative burden associated with the audit for both 
ACOs and CMS because it reduces the multiple phases of documentation 
submission contemplated under the existing process to a single phase of 
supporting documentation submission.
    Additionally, we appreciate stakeholder input on our operational 
documents, such as the suggestion to create a single guidance document 
that addresses the specifications for and requirements of web interface 
measures reporting. Currently, educational materials about web 
interface measures are found in several documents. In response to 
earlier requests for the creation of a single document, we have been 
working closely with our colleagues who are responsible for the CMS web 
interface to develop educational documents that would streamline the 
information available to all web interface reporters, including ACOs. 
We intend to continue to work to improve these communications and 
materials to assist ACOs in their preparation for quality measures 
submission. However, we believe that information currently available to 
ACOs, in addition to the support we provide through our help desks, 
webinars, and other methods of communication as noted below, is 
sufficient to ensure ACOs' understanding of and compliance with quality 
measure submission requirements. We therefore will not delay 
implementation of the new streamlined audit process and will use it 
beginning in spring 2017 to validate data received from ACOs for the 
2016 performance year.
    Comment: Some commenters requested more information on the number 
of measures that would be selected for the audit or suggested that ACOs 
have an opportunity to correct and resubmit data during the audit 
process. Some commenters suggested CMS include an appeal process, 
because of the audit's potential impact on an ACO's overall quality 
score and on the calculation of shared savings. A few commenters 
pointed out there is a difference between ACOs selected for audit due 
to data anomalies and those that are selected randomly and that these 
groups should be treated differently. One commenter noted that innocent 
mistakes can be made by those uploading data to CMS systems and that 
rather than penalizing the ACO there should be an opportunity for the 
ACO to correct such mistakes. Additionally, while some commenters 
agreed with the 90 percent match rate, others recommended using a lower 
confidence interval.
    Response: To streamline the process, we proposed to have a single 
process with a single audit step, regardless of the reason an ACO is 
selected for the audit. The proposals were intended to streamline the 
audit process, provide audit feedback to ACOs and validate the accuracy 
of quality data in a timely manner that, in turn, permits timely 
feedback and allows accurate information to be used in the 
reconciliation of the ACO's performance for the prior year. 
Incorporating an appeals process would severely delay ACO 
reconciliation, and therefore, we do not agree that such a process 
should be included. Additionally, we believe that establishing an 
appeals process would be inconsistent with the statutory preclusion on 
administrative and judicial review of the assessment of the quality of 
care furnished by the ACO under section 1899(g) of the Act. 
Nevertheless, we are sympathetic to comments noting that simple 
mistakes can be made when reporting quality that, if given the 
opportunity to be rectified, would not reflect poorly on the actual 
quality of the care delivered by the ACO. We note, however, that the 
CMS web interface provides a number of reports that ACOs can access and 
use to check their data entry in the CMS Web Interface to assist ACOs 
in monitoring the accuracy of the quality data they submit. These 
reports can help ACOs to identify and correct errors in their data 
submission during the timeframe the CMS Web Interface is open for 
quality data submission. Even so, we believe there may be instances 
following an audit when CMS may need to employ some discretion related 
to the adjustment of an ACO's overall quality score. For example, an 
ACO may have experienced an error when reporting measures 
electronically (for example, an error in mapping the extensible markup 
language (XML) specifications) that affects all beneficiaries reported 
on for a quality measure. In this instance, a mapping error could be 
out of the control of the ACO that, based on an audit, demonstrated 
that it had otherwise fulfilled our quality reporting requirements. In 
the absence of flexibility not to apply an adjustment to the ACO's 
overall quality score, such an ACO may be unfairly penalized. 
Therefore, we are modifying our proposed policy. Specifically, we are 
finalizing a policy under which CMS will adjust an ACO's overall 
performance score to reflect audit findings when the ACO has an audit 
mismatch rate of greater than 10 percent. However, we will retain 
discretion not to apply this adjustment to the ACO's score in certain 
unusual circumstances where it would be inappropriate to apply the 
adjustment. We note that we do not intend to employ this discretion to 
avoid adjusting an ACO's overall performance score in instances when 
the ACO cannot produce adequate validation of the data submitted or did 
not interpret the measure specifications correctly. For example, if we 
determine that the ACO has not produced medical record information 
sufficient to validate the data the ACO submitted to the web interface, 
we would not exercise our discretion not to apply the adjustment to the 
ACO's overall performance score based on results of the audit. We 
believe it is reasonable to: (1) Hold ACOs accountable for the accuracy 
of the data submitted according to information they validate from 
medical record reviews; and (2) require ACOs to produce proof of such 
accuracy in the event of an audit. Also, if we determine that the ACO 
did not interpret the measure specifications correctly, we would apply 
the adjustment to the ACO's overall performance based on audit results 
because ACOs are provided numerous opportunities to receive assistance 
from CMS before and during the quality measure submission process. For 
example, ACOs may access measure specification documents that are 
available on our Web site, contact the dedicated help desk, and attend 
webinars that we hold to educate ACOs about measure specifications and 
reporting requirements. Therefore, we believe that this modification of 
our proposal addresses stakeholder

[[Page 80492]]

concerns while permitting us to perform timely quality validation 
audits that hold ACOs accountable not only for the quality of the care 
they provide but also for the accuracy of their quality reporting.
    Final Action: For the reasons discussed above, we are finalizing 
our proposed changes to the audit process with modification. 
Specifically, we are finalizing a policy under which we will audit 
enough medical records to achieve a 90 percent confidence interval; 
conduct the audit in a single phase; and calculate an overall audit 
performance rate. We are modifying our regulations in order to reflect 
the new process of conducting the quality validation audit in a single 
step by removing the provision at Sec.  425.500(e)(2) that requires 3 
phases of medical record review. In so doing, we are redesignating 
Sec.  425.500(e)(3) as Sec.  425.500(e)(2). We are also revising the 
newly redesignated provision at Sec.  425.500(e)(2) in order to provide 
for an assessment of the ACO's overall audit match rate across all 
measures, instead of assessing the ACO's audit mismatch rate at the 
measure level. For the reasons noted in our responses to comments 
above, we are modifying our proposed policy in order to give CMS 
discretion, in certain unusual circumstances, not to adjust the ACO's 
overall quality score when the ACO has an audit mismatch rate of 
greater than 10 percent. Specifically, we are revising the redesignated 
provision at Sec.  425.500(e)(2), to indicate that if an ACO has an 
overall audit match rate of less than 90 percent, absent unusual 
circumstances, CMS will adjust the ACO's overall quality score 
proportional to its audit performance. Thus, CMS will retain discretion 
to avoid making the adjustment if circumstances warrant.
    Finally, we are finalizing our proposal to add a new requirement at 
Sec.  425.500(e)(3) that an ACO that has an audit match rate of less 
than 90 percent may be required to submit a corrective action plan 
(CAP) under Sec.  425.216 for CMS approval. In the CAP, the ACO would 
be required to explain the reasons for the low audit match rate and how 
it plans to improve the accuracy of its quality reporting in the 
future. In addition, we maintain the right, as described in Sec.  
425.500(f), to terminate or impose other sanctions on any ACO that does 
not report quality data accurately, completely or timely. We will apply 
these policies to the quality validation audits beginning in 2017 with 
the quality validation audits of quality reporting for the 2016 
performance year.
c. Technical Changes Related to Quality Reporting Requirements
    In this section of the CY 2017 PFS proposed rule, we proposed 
several technical changes to the quality performance standard that an 
ACO must meet to be eligible to share in savings, as established in the 
November 2011 final rule. Part of the determination of whether an ACO 
has met the quality reporting standard in each year is dependent on the 
ACO meeting the minimum attainment level for certain measures. We 
discussed how the ``minimum attainment'' requirement has been 
implemented to date and proposed a modification that we believe is more 
consistent with our policies for assessing an ACO's performance over 
time. Finally, we proposed to move references to compliance actions 
from Sec.  425.502(d)(2)(ii) to a more appropriate provision at Sec.  
425.316(c).
    First, we proposed to make technical revisions to ensure 
stakeholder understanding of the definition of the quality performance 
standard. The quality performance standard is established under Subpart 
F for each performance year (Sec.  425.502(a)). For the first 
performance year of an ACO's first agreement period, the quality 
performance standard is defined as complete and accurate reporting of 
all quality measures. For each subsequent performance year, quality 
measures phase in to pay for performance, and although the ACO must 
continue to report all measures completely and accurately, the ACO will 
also be assessed on performance based on the quality performance 
benchmark and minimum attainment level of certain measures that are 
designated as pay for performance. The quality performance standard 
that applies to an ACO's final year in its first agreement period also 
applies to each year of an ACO's subsequent agreement period (Sec.  
425.502(a)(3)) (79 FR 67925 through 67926). ACOs must meet or exceed 
the minimum quality performance standard in a given performance year to 
be eligible to receive payments for shared savings (Sec.  425.100(b)). 
Conversely, failure to meet the quality performance standard in a given 
performance year makes ACOs ineligible to share in savings, even if 
generated, and such ACOs may be subject to compliance actions.
    In the proposed rule, we explained that our intent in the November 
2011 final rule was to establish a single quality performance standard 
that would apply for each performance year in which an ACO participates 
in the program. Because the quality performance standard changes, 
depending on the performance year, the ACO may be subject to multiple 
quality performance standards over the course of its 3-year agreement 
period. We stated that we recognize that some of the language used in 
subsequent revisions to our regulations may have generated some 
confusion related to this issue. We clarified that while there are 
certain standards that must be met for each measure or in each domain, 
there is one overall quality performance standard that must be met in 
each performance year by an ACO. Therefore, we proposed to make 
conforming changes to the regulations text to remove references to the 
quality performance standard in contexts where it does not appear to 
apply to the overall quality performance standard (particularly 
Sec. Sec.  425.316(c)(2), 425.502(a)(4), and 425.502(d)(1)). We 
proposed to retain certain references to multiple quality performance 
standards, such as the reference at Sec.  425.100(b), because we 
believe the use of the plural is appropriate in certain contexts as the 
quality performance standard varies depending on the performance year 
in question.
    Second, we addressed the concept of the minimum attainment level 
and its use in determining whether an ACO has met the quality 
performance standard. As noted above, beginning in the second year of 
an ACO's first agreement period, the quality performance standard is 
met by complete and accurate reporting on all measures, but also 
includes meeting the minimum attainment level on ``certain'' measures. 
As provided at Sec.  425.502(b)(1), we designate a performance 
benchmark and minimum attainment level for each measure. Pursuant to 
Sec.  425.502(b)(3), the minimum attainment level is set at 30 percent 
or the 30th percentile of the performance benchmark. In Sec.  
425.502(c)(1) through (c)(2), we state that performance below the 
minimum attainment level for a measure will receive zero points for 
that measure and performance equal to or greater than the minimum 
attainment level for a measure will receive points on a sliding scale 
based on the level of performance. Finally, Sec.  425.502(d) outlines 
quality performance requirements for the four domains, stating that the 
ACO must report all measures in a domain and must score above the 
minimum attainment level determined by CMS on 70 percent of the 
measures in each domain. If the ACO fails to achieve the minimum 
attainment level on at least 70 percent of the measures in a domain, 
CMS will take compliance action. Additionally, the ACO must achieve the

[[Page 80493]]

minimum attainment level for at least one measure in each of the four 
domains to be eligible to share in savings. In guidance, we have 
interpreted the quality performance requirements for domains to apply 
only to pay for performance measures because minimum attainment applies 
only to ``certain'' measures according to the definition of the quality 
performance standard in Sec.  425.502(a)(3), and we have interpreted 
the reference to ``certain'' measures in Sec.  425.502(a)(2) to mean 
pay for performance measures. In the proposed rule, we explained that, 
as a result of this interpretation, we believe an inconsistency in the 
application of the policy goals outlined in our November 2011 final 
rule has arisen. In particular, we believe certain current policies are 
inconsistent with our goal of holding ACOs to higher quality reporting 
standards over time. Specifically, because measures are phased-in from 
pay for reporting to pay for performance over the course of an ACO's 
first 3-year agreement period, there are no pay for performance 
measures during PY1 and fewer pay for performance measures in each 
domain in PY2 compared to PY3. Thus, under our current interpretation 
of the rules, it is not possible to take compliance actions against an 
ACO in its first performance year for failure to achieve the minimum 
attainment level on at least 70 percent of the measures in a domain 
because there are no pay for performance measures on which to assess 
performance on a domain. Additionally, because there are fewer pay for 
performance measures in PY2 than in PY3, and because of our policy of 
designating new measures as pay for reporting, it is more likely that a 
compliance action would be taken against an ACO due to failure to meet 
the minimum attainment level on 70 percent of the pay for performance 
measures in a domain in PY2 than in PY3. We explained that, as a result 
of this experience, we now believe it would be more consistent with our 
policy goals to take all measures into account when determining whether 
a compliance action should be taken against an ACO based on its quality 
performance in one or more domains.
    Therefore, we proposed to take all measures into account when 
determining ACO performance at the domain level for purposes of 
compliance actions. Additionally, we stated that we believe compliance 
actions should be addressed at Sec.  425.316 rather than in the quality 
reporting section, and therefore, we proposed to move the provisions 
governing the specific performance levels at which a compliance action 
would be triggered from Sec.  425.502 to Sec.  425.316.
    The following is a summary of the comments we received regarding 
the proposed technical changes related to the quality performance 
standard and minimum attainment level.
    Comment: We received few comments on the proposed technical 
changes. Most commenters generally supported these proposals. However, 
some commenters expressed concerns about including pay for reporting 
measures in our assessment of whether the ACO could meet the minimum 
attainment level on 70 percent of measures within a domain. For 
example, one commenter seemed to believe that we had proposed that an 
ACO must meet the 30th percent or percentile threshold for all 
measures, including pay for reporting measures. One commenter expressed 
concerns about whether an ACO would be able to meet the pay for 
performance minimum attainment level on newly introduced measures, and 
therefore, recommended not including pay for reporting measures in our 
assessment of whether an ACO has met the minimum attainment level on 70 
percent of measures in a domain. Commenters also requested that these 
technical changes be disseminated to all ACOs.
    Response: We thank commenters for their support of our proposed 
policies and wish to clarify several points for those who expressed 
concerns regarding the proposed changes. First, we emphasize that we 
proposed to continue to define the ``minimum attainment level'' for pay 
for performance measures at the level of the 30th percent or 30th 
percentile. We also wish to clarify that we proposed to define the 
``minimum attainment level'' for pay for reporting measures at the 
level of complete and accurate reporting. In other words, the minimum 
requirement for attainment on a particular measure is different 
depending on whether the measure is designated as pay for reporting or 
pay for performance. Because newly introduced measures are pay for 
reporting for the first 2 years, the minimum attainment standard level 
for new measures would be pay for reporting. Second, including all 
measures in the domain (rather than including only the pay for 
performance measures) in our assessment of whether the ACO has met the 
minimum attainment level on 70 percent of the measures in the domain 
has an end result of insulating many ACOs that would otherwise be 
subject to a warning letter or CAP. Some domains have very few pay for 
performance measures and poor performance on just one of those measures 
increases the likelihood that the ACO will receive a warning letter or 
CAP. It was not our intent to subject an ACO to compliance action based 
on its poor performance on just one measure in a domain. Therefore, 
including pay for reporting measures in this assessment limits the 
issuance of warning letters and CAPs to only those ACOs that have 
grossly underperformed in a domain by failing to meet the minimum 
attainment level on at least 70 percent of the measures in a domain, 
including measures that are designated as pay for reporting. Therefore, 
we are finalizing this policy as proposed. We intend to include these 
changes in the ``Medicare Shared Savings Program Quality Measurement 
Methodology and Resources'' document posted on the Shared Savings 
Program Portal where it will be available to all ACOs.
    Final Action: We are finalizing the technical changes related to 
the use of the term ``quality performance standard'' and the 
application of the ``minimum attainment level'' to determine whether an 
ACO has met the quality performance standard for a performance year as 
proposed for the reasons discussed above and in the proposed rule. 
Specifically, we are making the following modifications to our 
regulations:
     Revise introductory text at Sec.  425.502(a) to clarify 
that the quality performance standard is the overall standard the ACO 
must meet to qualify to share in savings.
     Replace the word ``certain'' in Sec.  425.502(a)(2) and 
(3) with ``all,'' so that the term ``minimum attainment level'' clearly 
applies to both pay for reporting and pay for performance measures.
     At Sec.  425.502(a)(4), make modifications to remove the 
reference to the quality performance standard each time it appears to 
avoid causing confusion between the standards for individual measures 
and the overall quality performance standard.
     At Sec.  425.502(b)(3), define ``minimum attainment 
level'' for both pay for reporting and pay for performance measures. We 
will set the minimum attainment level for pay for performance measures 
at the 30th percent or 30th percentile of the quality performance 
benchmark and for pay for reporting measures at the level of complete 
and accurate reporting.
     At Sec.  425.502(c)(2), revise the regulation text to 
specify that only pay for performance measures are assessed on a 
sliding scale.
     At Sec.  425.502(c)(5), add a provision to specify that 
pay for reporting measures earn the maximum number of

[[Page 80494]]

points for a measure when the minimum attainment level is met.
     Modify Sec.  425.502(d) to refer generally to compliance 
actions that may be taken for failure to meet quality requirements, 
including low quality performance.
    We are also modifying Sec.  425.316(c)(1) and (c)(2) to address the 
specific levels of quality performance at which compliance action will 
be triggered and to reference the single quality performance standard 
that an ACO must meet in order to remain eligible to participate in the 
Shared Savings Program.
d. Technical Change to Application of Flat Percentages for Quality 
Benchmarks
    As explained in greater detail in the CY 2017 PFS proposed rule, we 
previously finalized a methodology to spread clustered measures when 
setting quality benchmarks to promote a clinically meaningful 
assessment of ACO quality. Specifically, we finalized a policy that CMS 
would set quality benchmarks using flat percentages for a clustered 
measure when the national FFS data results in the 60th percentile for 
the measure are equal to or greater than 80.00 percent. We noted that 
the methodology would not apply to measures whose performance rates are 
calculated as ratios, for example, measures such as the two ACO 
Ambulatory Sensitive Conditions Admissions and the All Condition 
Readmission measures. We subsequently finalized a policy to address 
``topped out'' measures by setting benchmarks using flat percentages 
when the 90th percentile is equal to or greater than 95 percent. 
Although similar to the ``cluster'' policy finalized earlier, we 
included measures whose performance rates are calculated as ratios. We 
believed this policy was appropriate because measures calculated and 
reported as ratios may become topped out and we wanted to treat all 
topped out measures consistently.
    Since these policies were adopted, we have determined that 
converting measures calculated and reported as ratios into benchmarks 
expressed as percentiles and percentages creates confusion in the 
interpretation of quality results and may yield results that are 
contrary to the intended purpose of using flat percentages. As a 
result, we proposed to no longer apply the flat percentage policy to 
performance measures calculated as ratios. In addition, we proposed two 
technical changes to address typographical errors in Sec.  
425.502(a)(1), which contains a duplicative reference to CMS, and in 
Sec.  425.502(b)(2)(ii), which contains an extra ``t'' at the end of 
``percent.''
    The following is a summary of the comments we received regarding 
the proposed technical change to the application of flat percentages 
for quality benchmarks.
    Comment: We received three comments on this proposal. All were 
supportive of the proposed technical change. One commenter requested 
that CMS clarify which measures are calculated as percentages versus 
ratios.
    Response: We thank the commenters for their support of this 
proposed technical change. When we release the quality measure 
benchmarks for the 2017 performance year as part of our operational 
documents and guidance, we will indicate which measures are calculated 
as ratios, and therefore, exempt from our policies with respect to the 
use of flat percentages.
    Final Action: We are finalizing our proposed technical change to 
the use of flat percentages to set quality performance benchmarks. 
Specifically, we will no longer use flat percentages to set the quality 
performance benchmark for quality performance measures calculated as 
ratios. Such measures will be clearly identified in operational 
documents posted on our Web site. In addition, we are finalizing the 
two technical changes to address typographical errors in Sec.  
425.502(a)(1), which contains a duplicative reference to CMS, and in 
Sec.  425.502(b)(2)(ii), which contains an extra ``t'' at the end of 
``percent.''
e. Incorporation of Other Reporting Requirements Related to the PQRS
    The Affordable Care Act gives the Secretary authority to 
incorporate reporting requirements and incentive payments from certain 
Medicare programs into the Shared Savings Program, and to use 
alternative criteria to determine if payments are warranted. 
Specifically, section 1899(b)(3)(D) of the Act affords the Secretary 
discretion to incorporate reporting requirements and incentive payments 
related to the physician quality reporting initiative (PQRI), under 
section 1848 of the Act, including such requirements and such payments 
related to electronic prescribing, electronic health records, and other 
similar initiatives under section 1848, and permits the Secretary to 
use alternative criteria than would otherwise apply under section 1848 
of the Act for determining whether to make such payments. Under this 
authority, in the November 2011 final rule establishing the Shared 
Savings Program, we incorporated certain reporting requirements and 
payment rules related to the PQRS into the Shared Savings Program at 
Sec.  425.504 for ``eligible professionals'' (EPs) who bill under the 
TIN of an ACO participant within an ACO. Thus, the Shared Savings 
Program rules provide that EPs who bill under the TIN of an ACO 
participant within an ACO may only participate under their ACO 
participant TIN as a group practice under PQRS under the Shared Savings 
Program for purposes of qualifying for a PQRS incentive (prior to 2015) 
or avoiding the payment adjustment (starting in 2015). In other words, 
the current regulations prohibit ACO participant TINs and the EPs 
billing through those TINs from participating in PQRS outside of the 
Shared Savings Program such that these entities may not independently 
report for purposes of PQRS apart from the ACO.
    An ACO, reporting on behalf of its EPs for purposes of PQRS, is 
required to satisfactorily submit through the CMS web interface all of 
the ACO GPRO measures that are part of the Shared Savings Program 
quality performance standard. Under Sec.  425.504(c), for 2016 and 
subsequent years, if an ACO fails to satisfactorily report all of the 
ACO GPRO measures through the CMS web interface each EP who bills under 
the TIN of an ACO participant within the ACO will receive a downward 
adjustment, as described in Sec.  414.90(e) for that year. In the 2017 
PFS proposed rule, we noted that the current regulations do not provide 
any mechanism for these EPs to report separately or otherwise avoid the 
downward payment adjustment if the ACO fails to satisfactorily report 
on their behalf. We also summarized the reasons discussed in the 
November 2011 final rule for not allowing EPs who bill under the TIN of 
an ACO participant to report outside their ACO for purposes of PQRS.
    Since publication of the November 2011 final rule, we have gained 
experience with these policies and program operations, and now believe 
there may be limited instances in which it would be appropriate to use 
data that is reported by these EPs outside their ACO for purposes of 
PQRS. Therefore, we proposed a change in policy in order to be able to 
accept and use data that is separately reported outside the ACO by EPs 
billing through the TIN of an ACO participant within an ACO for 
purposes of PQRS under limited circumstances for the final 2 years of 
PQRS before it sunsets and is replaced by the Quality Payment Program 
(QPP). We stated that we continue to believe that in most cases it is 
appropriate to assess EPs that

[[Page 80495]]

bill through the TIN of an ACO participant under the PQRS as a group 
practice because as noted in the November 2011 final rule, the Shared 
Savings Program is concerned with measuring the quality of care 
furnished to an assigned population of FFS beneficiaries by the ACO, as 
a whole, and not that of individual ACO providers/suppliers. We 
explained that we believe this framework promotes clinical integration 
among the ACO providers/suppliers, which is an important aspect of the 
Shared Savings Program. In addition, it is consistent with the 
requirement under Sec.  425.108(d) that each ACO provider/supplier must 
demonstrate a meaningful commitment to the mission of the ACO to ensure 
its likely success. Because an ACO cannot be successful in the Shared 
Savings Program without satisfying the quality reporting requirements, 
we believe a meaningful commitment by ACO providers/suppliers to the 
mission of the ACO includes assisting with and engaging in annual 
quality reporting through the ACO. Further, ACO reporting reduces 
burden for those in small or solo practices, and places a focus on 
population health by encouraging care coordination by ACO providers/
suppliers to improve the health of the broader patient population for 
which they are responsible. Finally, we believe that such group 
reporting is consistent with group reporting under various other CMS 
initiatives, and therefore, we stated that we did not intend to remove 
the requirement that ACOs report on behalf of the EPs who bill under 
the TIN of an ACO participant. As a corollary, we stated our intent to 
continue to use ACO data preferentially for purposes of assessing or 
determining an EP's quality performance for purposes of programs such 
as PQRS or, by extension, the VM.
    However, we went on to explain in the proposed rule that we believe 
that when an ACO does not satisfactorily report for purposes of PQRS, 
it may be appropriate to accept and use data that is reported outside 
the ACO. In order to be able to accept and use data reported outside 
the ACO for purposes of PQRS, we noted that we must modify the 
provision at Sec.  425.504 prohibiting EPs that bill under the TIN of 
an ACO participant in an ACO from reporting separately for purposes of 
PQRS. We therefore proposed to modify Sec.  425.504 to lift the 
prohibition on separate reporting for purposes of the 2017 and 2018 
PQRS payment adjustment. We explained that we believe this change to 
our program rules was necessary for several reasons.
    First, we stated that we believe it is necessary to protect EPs 
that participate in ACOs that fail to satisfactorily report all of the 
ACO GPRO measures. Although 98 percent of ACOs successfully complete 
required quality reporting annually, there have been a few instances 
where an ACO has failed to report all of the required measures, for 
example, where an ACO has terminated its participation in the Shared 
Savings Program and did not quality report on behalf of the EPs that 
bill under the TIN of an ACO participant at the end of the performance 
year as required under our close-out procedures. In other instances, 
some ACOs continued to participate in the Shared Savings Program but 
failed to complete quality reporting in a timely manner. In these 
instances, the lack of complete quality reporting by the ACO translated 
into a failure for the EPs within the ACO to receive a PQRS incentive 
(or to avoid the PQRS downward adjustment) for that year.
    Second, PQRS has transitioned away from providing incentive 
payments to applying only downward payment adjustments to payments 
under the Medicare Physician Fee Schedule, making it even more 
important for EPs to ensure they comply with the reporting requirements 
for PQRS. Under the current rules, EPs who bill under the TIN of an ACO 
participant within an ACO must ultimately rely on the ACO to report on 
their behalf. These EPs are only able to encourage and facilitate ACO 
reporting, but lack the ability to ensure that the ACO satisfactorily 
reports in order to prevent application of the payment adjustment. The 
proposed change to allow EPs to report separately would provide them a 
mechanism over which they have direct control to ensure satisfactory 
reporting occurs. Additionally, we noted that because there are no more 
payment incentives under the PQRS, there is no longer any concern that 
an EP may inadvertently receive duplicative PQRS incentive payments 
from CMS. We address the specific issues and policies related to the 
use of data reported by EPs apart from an ACO for purposes of avoiding 
the PQRS payment adjustment for payment years 2017 and 2018 in section 
III.H. of this final rule.
    Third, under the VM, groups and solo practitioners that bill under 
the TIN of an ACO participant are evaluated under a quality tiering 
methodology and could qualify for an upward payment adjustment if the 
ACO satisfactorily reports on their behalf. However, if the ACO does 
not satisfactorily report quality data as required under Sec.  425.504 
then groups and solo practitioners that bill under the TIN of an ACO 
participant fall into Category 2 for the VM and are subject to a 
downward payment adjustment. Our proposed and final policies for how 
quality data reported by EPs billing under the TINs of ACO participants 
that is reported apart from the ACO will be used for purposes of 
avoiding the VM downward payment adjustment for 2017 and 2018 are 
discussed in section III.L.3.b of this final rule.
    For the reasons noted above, we stated that we believed it would be 
appropriate to retain the provisions under Sec.  425.504 that require 
the ACO to report all of the ACO GPRO measures to satisfactorily report 
on behalf of the EPs who bill under the TIN of an ACO participant for 
purposes of the PQRS payment adjustment; however, we proposed to modify 
the provisions that prohibit EPs that bill under the TIN of an ACO 
participant from reporting apart from the ACO. Specifically, we 
proposed to add a redesignated and revised paragraph at Sec.  
425.504(d) to address the requirement that the ACO report on behalf of 
the eligible professionals who bill under the TIN of an ACO participant 
for purposes of the 2017 and 2018 PQRS payment adjustment. Under this 
revised provision the prohibition on separate quality reporting for 
purposes of the PQRS payment adjustment for 2017 and 2018 would be 
removed. We also proposed to make a technical change to Sec.  425.504 
to move existing Sec.  425.504(d) to Sec.  425.504(c)(5) because the 
intent of this provision was to parallel the language of Sec.  
425.504(b)(6) for purposes of the payment adjustment for 2016 and 
subsequent years. We reiterated our intent that data reported by an ACO 
would continue to be preferentially used for purposes of other CMS 
initiatives that rely on such data, including the PQRS and the VM. If 
an EP who bills under the TIN of an ACO participant chooses to report 
apart from the ACO, the EP's data may be used for purposes of PQRS and 
VM only when complete ACO reported data is not available. Additionally, 
we noted that under the Shared Savings Program, only the quality data 
reported by the ACO as required under Sec.  425.500 would be used to 
assess the ACO's performance under the Shared Savings Program. In other 
words, quality data submitted separately from the ACO would not be 
considered under the Shared Savings Program. We requested comments on 
this proposal.
    The following is a summary of the comments we received regarding 
our proposed changes to the reporting requirements under the Shared 
Savings Program related to PQRS.

[[Page 80496]]

    Comment: Commenters supported the proposal to allow EPs to report 
apart from the ACO to meet PQRS reporting requirements and to avoid the 
PQRS adjustment. Additionally, commenters supported maintaining this 
policy as CMS transitions to the Quality Payment Program (QPP). Several 
commenters raised issues related to PQRS proposals discussed in section 
III.H related to reporting requirements and timing, and suggested 
alternatives to allow EPs who bill under the TIN of an ACO participant 
to avoid the PQRS downward payment adjustment when their ACO fails to 
report. For example, several commenters were concerned about the effort 
and expense that would be incurred by EPs to report apart from their 
ACO without first knowing if the ACO had satisfactorily reported. A few 
commenters recommended that EPs be held harmless and not incur a 
downward payment adjustment under PQRS or the VM if their ACO failed to 
report.
    Response: We appreciate commenters' support for our proposal to 
modify program rules to permit EPs to report quality apart from an ACO. 
Additional comments having to do with EP reporting for purposes of PQRS 
and the VM are addressed in sections III.H and III.L.3.b of this final 
rule, respectively. Comments related to timing and submission of 
quality data apart from the ACO for purposes of the QPP have been 
shared with the appropriate staff.
    Final Action: We are finalizing our proposal to allow EPs that bill 
under the TIN of an ACO participant to report for purposes of PQRS 
apart from the ACO. For the reasons noted above, we are also finalizing 
our proposal to add a redesignated and revised paragraph at Sec.  
425.504(d) to address the requirement that the ACO report on behalf of 
the eligible professionals who bill under the TIN of an ACO participant 
for purposes of the 2017 and 2018 PQRS payment adjustment. We are also 
finalizing our proposal to make a technical change to Sec.  425.504 to 
move existing Sec.  425.504(d) to Sec.  425.504(c)(5) because the 
intent of this provision was to parallel the language of Sec.  
425.504(b)(6) for purposes of the payment adjustment for 2016 and 
subsequent years. Details regarding the requirements for reporting 
quality data apart from the ACO and the use of such quality data for 
purposes of PQRS and the VM are addressed in sections III.H. and 
III.L.3.b. of this final rule, respectively. We reiterate, however, 
that these revisions to our regulations in order to allow quality data 
to be submitted apart from the ACO and for such quality data to be used 
under other programs (such as PQRS or the VM) does not alter or impact 
our assessment of an ACO's quality under the Shared Savings Program. 
Only quality data reported by the ACO as required under Sec.  425.500 
will be used to assess the ACO's performance under the Shared Savings 
Program.
f. Alignment With the Quality Payment Program (QPP)
1. Background and Introduction to the Quality Payment Program
    The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) 
(Pub. L. 114-10, enacted April 16, 2015), amended title XVIII of the 
Act to repeal the Medicare sustainable growth rate (SGR) and strengthen 
Medicare access by improving physician payments and making other 
improvements. The statute established the Merit-Based Incentive Payment 
System (MIPS), a new program for certain Medicare-participating 
practitioners. MIPS consolidates components of three existing programs, 
the PQRS, the Physician Value Modifier (VM), and the Medicare 
Electronic Health Record (EHR) Incentive Program for EPs. The statute 
also established incentives for participation in certain alternative 
payment models (APMs). On April 27, 2016, the Department of Health and 
Human Services (HHS) issued a proposed rule to implement key provisions 
of the MACRA and establish a new Quality Payment Program (QPP) 
(Medicare Program; Merit-Based Incentive Payment System (MIPS) and 
Alternative Payment Model (APM) Incentive under the Physician Fee 
Schedule, and Criteria for Physician-Focused Payment Models (81 FR 
28162 through 28586) (the QPP proposed rule)). On October 19, 2016, HHS 
issued the final rule with comment period establishing the Quality 
Payment Program (QPP final rule with comment period). (The rule will 
publish in the November 4, 2016 Federal Register and can be accessed at 
https://qpp.cms.gov/education.) The Quality Payment Program (QPP) 
replaces a patchwork system of Medicare reporting programs with a 
flexible system that allows practitioners to choose from two paths that 
link quality to payments: The Merit-Based Incentive Payment System 
(MIPS) and the APM incentive participation in Advanced Alternative 
Payment Models (APMs). MIPS and the APM incentive will impact 
practitioner payments beginning in payment year 2019 based on 2017 
reporting. MIPS is a new program that combines parts of the Physician 
Quality Reporting System (PQRS), Value Modifier (VM) and Medicare 
Electronic Health Record (EHR) Incentive Program into a single program 
in which eligible clinicians (ECs) will be measured over 4 categories 
which include quality, resource use, clinical practice improvement, and 
advancing care information. The rulemaking implementing the QPP 
specifically addresses ECs that participate in APMs and Advanced APMs, 
such as the Shared Savings Program. Specifically, for ECs participating 
in APMs, the QPP final rule with comment period:
     Establishes criteria for reporting under each of the 4 
categories. For example, the QPP final rule with comment period 
establishes a policy for the quality performance category to use 
quality information submitted by the ACO through the CMS Web interface 
to assess each EC billing under the TIN of an ACO participant. To 
assess performance in the category of advancing care information 
performance category for ECs billing under the TIN of an ACO 
participant, we will aggregate EC-reported data to calculate an ACO 
score which will be applied to each participating EC. Under the QPP 
final rule with comment period, this reporting by ECs will be 
accomplished by each ACO participant TIN reporting on the advancing 
care information as specified in Sec.  414.1375(b). We note that under 
the QPP final rule with comment period, ECs for whom a sufficient 
percentage of payments for covered professional services, or a 
sufficient percentage of patients, are attributable to services 
furnished through an Advanced APM for a year will be qualifying APM 
participants (QPs) for the year. In addition to earning a 5 percent APM 
Incentive Payment, QPs are exempt from the MIPS reporting requirements 
and payment adjustment for the year.
     Defines an Advanced APM as one that meets several criteria 
including requiring participants to use certified EHR technology 
(CEHRT). Under the QPP final rule with comment period, only Tracks 2 
and 3 of the Shared Savings Program have the potential to meet all 
criteria necessary for designation as an Advanced APM. In order for 
Tracks 2 and 3 of the Shared Savings Program to meet the CEHRT 
requirement for Advanced APMs, the Shared Savings Program must hold 
ACOs accountable for their participating eligible clinicians' use of 
CEHRT by applying a penalty or reward based on the degree of use of 
CEHRT (such as the percentage of EPs that are using CEHRT or the care 
coordination or other activities performed using CEHRT).
    In the 2017 PFS proposed rule, we reviewed the Shared Savings 
Program

[[Page 80497]]

rules and identified several modifications to program rules that we 
believed needed to be made in order to support and align with the QPP. 
These modifications included the following:
     Revisions to Sec. Sec.  425.504 and 425.506 to sunset 
Shared Savings Program alignment with PQRS and the EHR Incentive 
Program starting with quality reporting period 2017 (corresponding to 
payment year 2019).
     Addition of new paragraph Sec.  425.506(e) and section 
Sec.  425.508 to align with the proposed Quality Payment Program, 
including rules addressing annual assessment of the use of CEHRT by ECs 
participating in ACOs and for ACO reporting of certain quality measures 
to satisfy the quality performance category on behalf of the eligible 
clinicians who bill under the TIN of an ACO participant.
     Modifications to the EHR measure title and specifications 
necessary to align with the proposed QPP criteria for determining 
Advanced APM status, including scoring requirements for the limited 
circumstances when the measure is designated as pay for reporting.
2. Proposals Related to Sunsetting PQRS and EHR Incentive Program 
Alignment and Alignment With APM Reporting Requirements Under the 
Quality Payment Program
    The Shared Savings Program has established rules at Sec. Sec.  
425.504 and 425.506 incorporating reporting requirements related to 
PQRS and the EHR Incentive Program. The current provision at Sec.  
425.504(c), addresses the PQRS payment adjustment for 2016 and 
subsequent years. Under current Shared Savings Program rules, EPs who 
bill under the TIN of an ACO participant within an ACO may only 
participate under their ACO participant TIN as a group practice under 
the PQRS Group Practice Reporting Option for purposes of the PQRS 
payment adjustment under the Shared Savings Program. ACOs must submit 
all of the ACO GPRO measures to satisfactorily report on behalf of 
their eligible professionals for purposes of the PQRS payment 
adjustment. If an ACO does not satisfactorily report, each EP 
participating in the ACO receives a payment adjustment under PQRS. As 
discussed in this final rule, we are finalizing a policy that will 
allow EPs who bill under the TIN of an ACO participant within an ACO to 
report separately from their ACO for purposes of the PQRS payment 
adjustment for 2017 and 2018.
    At Sec.  425.506, we address alignment with the EHR Incentive 
Program. Specifically, at Sec.  425.506(a), we state that ACOs, ACO 
participants, and ACO providers/suppliers are encouraged to develop a 
robust EHR infrastructure, which aligns with our eligibility criteria 
under Sec.  425.112 that require ACOs to define care coordination 
processes, which may include the use of enabling technologies such as 
CEHRT. At Sec.  425.506(b) and (c) we state that the quality measure 
regarding EHR adoption is measured based on a sliding scale and that it 
is weighted twice that of any other measure for scoring purposes and 
determining compliance with quality performance requirements for 
domains. To align with the EHR incentive program we state in Sec.  
425.506(d), that EPs participating in an ACO under the Shared Savings 
Program satisfy the CQM reporting component of meaningful use for the 
Medicare EHR Incentive Program when the EP extracts data necessary for 
the ACO to satisfy the quality reporting requirements under the Shared 
Savings Program from CEHRT and when the ACO reports the ACO GPRO 
measures through a CMS Web interface. EPs are responsible for meeting 
the rest of the EHR incentive program requirements apart from the ACO.
    As noted above, the VM, PQRS and the EHR incentive programs are 
sunsetting and the last quality reporting period under these programs 
will be 2016, which will impact payments in 2018. Quality reporting 
under the QPP, as proposed and subsequently finalized, will begin in 
2017 for payment year 2019. In order to align with the policies 
proposed in the QPP proposed rule (and that were subsequently finalized 
in the QPP final rule with comment period), we proposed to amend 
Sec. Sec.  425.504 and 425.506 to indicate that these reporting 
requirements would apply to ACOs and their EPs through the 2016 
performance year. Specifically, at Sec.  425.504(c) we proposed to 
remove the phrase ``for 2016 and subsequent performance years'' each 
time it appears and add in its place the phrase ``for 2016.'' As 
discussed above, we proposed and are finalizing a technical change to 
redesignate paragraph (d) as paragraph (c)(5) and then to add new 
paragraph (d) to address the PQRS alignment rules for the 2017 and 2018 
PQRS payment adjustment. Similarly, at Sec.  425.506, we proposed to 
revise paragraph (d) to indicate that the last reporting year for the 
EHR Incentive Program is 2016.
    In addition, in the CY 2017 PFS proposed rule, we proposed to 
require ACOs, on behalf of the ECs who bill under the TIN of an ACO 
participant, to report quality measures through the CMS Web interface 
in order to satisfy the QPP quality performance category. Currently, 
ACOs are required under Sec.  425.504 to report certain quality 
measures on behalf of the EPs who bill under the TIN of an ACO 
participant for purposes of PQRS. Under the policy proposed in the QPP 
proposed and subsequently adopted in the QPP final rule with comment 
period, the quality data submitted to the CMS Web interface by ACOs 
will satisfy the quality performance category for ECs participating in 
the ACO. Therefore, in order to align with the QPP, we proposed to add 
a new paragraph at Sec.  425.508(a) that parallels the current 
requirement at Sec.  425.504 for reporting on behalf of EPs who bill 
under the TIN of an ACO participant for purposes of PQRS. Specifically, 
we proposed to require that ACOs, on behalf of ECs who bill under the 
TIN of an ACO participant, must submit all the ACO CMS Web interface 
measures required by the Shared Savings Program using a CMS Web 
interface, to meet reporting requirements for the quality performance 
category under MIPS. Because we proposed to maintain flexibility for 
EPs to report quality performance category data separately from the ACO 
for purposes of PQRS, we did not propose to include a provision that 
would restrict an EC from reporting outside the ACO for purposes of the 
QPP. While the intent of these proposals was to permit flexibility in 
reporting quality data, we reiterated that no quality data reported 
apart from the ACO would be considered for purposes of assessing the 
quality performance of the ACO under the Shared Savings Program.
    The following is a summary of the comments we received regarding 
our proposals to sunset PQRS and EHR Incentive Program alignment and to 
align with the reporting requirements under the QPP.
    Comment: Commenters were supportive of our efforts to align Shared 
Savings Program ACO quality reporting with the MIPS quality performance 
category. In addition, commenters supported the proposal to allow ECs 
to report outside of the ACO for purposes of the QPP, in the event that 
the ACO fails to satisfactorily report.
    Response: We appreciate commenters' support for our proposals to 
align ACO quality reporting with the sunsetting of PQRS and the EHR 
Incentive Program and the new reporting requirements under the QPP.
    Final Action: We are finalizing our proposal to sunset PQRS and EHR 
Incentive Program alignment and to align with the reporting 
requirements under the QPP. Specifically, we will amend Sec. Sec.  
425.504 and 425.506 to

[[Page 80498]]

indicate that the PQRS and EHR Incentive Program reporting requirements 
apply to ACOs and their EPs through the 2016 performance year.
    To align with the reporting requirements under the QPP, we are 
finalizing our proposal to add a new provision at Sec.  425.508 that 
parallels the current requirement at Sec.  425.504 that ACOs report on 
behalf of EPs who bill under the TIN of an ACO participant for purposes 
of PQRS. Specifically, we are finalizing our proposal to require that 
ACOs, on behalf of ECs who bill under the TIN of an ACO participant, 
must submit all the CMS Web interface measures required by the Shared 
Savings Program using a CMS Web interface, to meet reporting 
requirements for the quality performance category under the QPP. As 
discussed elsewhere in this final rule, we are also finalizing a policy 
to maintain flexibility for EPs to report quality data separately from 
the ACO for purposes of PQRS and the VM, and therefore, are not 
including a provision that would restrict an EC from reporting outside 
the ACO for purposes of the QPP. While the intent of this policy is to 
permit flexibility in reporting quality data for purposes of the QPP, 
we reiterate that no quality data reported apart from the ACO will be 
considered for purposes of assessing the quality performance of the ACO 
under the Shared Savings Program.
3. Proposals Related to Alignment With the Quality Payment Program 
(QPP)
    In the QPP proposed rule (81 FR 28296) and in the subsequent QPP 
final rule with comment period, we outlined and defined the criteria 
for Advanced APMs, APMs through which ECs would have the opportunity to 
become Qualified Participants (QPs) as specified in section 
1833(z)(3)(C) and (D) of the Act. First, under MACRA, for an APM to be 
considered an Advanced APM, it must meet three requirements: (1) 
Require participants to use certified EHR technology; (2) provide 
payment for covered professional services based on quality measures 
comparable to those used in the quality performance category of MIPS; 
and (3) either be a Medical Home Model expanded under section 1115A(c) 
of the Act or require the participants to bear more than a nominal 
amount of risk for monetary losses. In the rulemaking implementing the 
QPP, we established criteria for each of these requirements. As 
proposed and subsequently finalized, under the QPP, significant 
distinctions between the design of different tracks or options within 
an APM mean that certain tracks or options could meet the Advanced APM 
criteria while other tracks or options may not. Under the approach 
discussed in the QPP proposed rule and as subsequently adopted in the 
QPP final rule with comment period, while all Tracks of the Shared 
Savings Program would meet the criterion to provide for payment based 
on quality measures comparable to those used in the quality performance 
category of MIPS, only Tracks 2 and 3 meet the proposed financial risk 
standard to bear more than a nominal amount of risk for monetary 
losses.
    In the rulemaking to establish the QPP, we adopted an alternative 
criterion that would allow all three tracks of the Shared Savings 
Program to satisfy the EHR criterion if ACOs are held accountable for 
their ECs' use of CEHRT. In the QPP final rule with comment period, we 
adopted a definition of CEHRT at Sec.  414.1305 for purposes of MIPS 
and the APM incentive. We noted that section 1833(z)(3)(D)(i)(I) of the 
statute does not specify how the APM must require participants to use 
CEHRT in order to be an Advanced APM. For this reason, we stated that 
we believed it was reasonable to use discretion when determining the 
details of how APMs might meet this criterion. For purposes of the APM 
incentive under the QPP, we proposed and subsequently finalized a 
policy that an Advanced APM must require at least 50 percent of ECs who 
are enrolled in Medicare (or each hospital if hospitals are the APM 
participants) to use the certified health IT functions outlined in the 
definition of CEHRT to document and communicate clinical care with 
patients and other health care professionals. However, although the 
Shared Savings Program requires ACOs to encourage and promote the use 
of enabling technologies (such as EHRs) to coordinate care for assigned 
beneficiaries, the Shared Savings Program does not require a specific 
level of CEHRT use for participation in the program. Instead, the 
Shared Savings Program, as noted above, includes an assessment of EHR 
use as part of the quality performance standard which directly impacts 
the amount of shared savings/shared losses generated by the ACO. 
Therefore, in the rulemaking to establish the QPP, we proposed and 
subsequently finalized an alternative criterion available only to the 
Shared Savings Program. Specifically, we proposed and subsequently 
finalized an alternative criterion that would allow the Shared Savings 
Program to satisfy the EHR criterion to be an Advanced APM if it holds 
APM Entities accountable for their ECs' use of CEHRT by applying a 
financial penalty or reward based on the degree of CEHRT use (such as 
the percentage of ECs that use CEHRT or the engagement in care 
coordination or other activities using CEHRT). In the rulemaking for 
the QPP, we noted that the current EHR quality measure at ACO #11 
assesses the degree to which certain ECs in the ACO successfully meet 
the requirements of the EHR Incentive Program, and we stated that 
``[s]uccessful reporting of the measure for a performance year gives 
the ACO points toward its overall quality score, which in turn affects 
the amount of shared savings or shared losses an ACO could earn or be 
liable for, respectively.'' Finally, we stated that we believed the 
alternative criterion meets the statutory requirement because the 
alternative criterion builds on established Shared Savings Program 
rules and incentives that directly tie the level of CEHRT use to the 
ACO's financial reward which in turn has the effect of directly 
incentivizing ever-increasing levels of CEHRT use among participating 
clinicians.
    In the CY 2017 PFS proposed rule, we proposed several modifications 
to our program rules in order to align with the policies proposed for 
the QPP.
    First, we proposed to modify the title and specifications of the 
EHR quality measure (ACO #11). This measure is currently titled Percent 
of PCPs Who Successfully Meet Meaningful Use Requirements. Under the 
current Shared Savings Program rules, ACOs must report on and are held 
accountable for certain measures that make up the quality reporting 
standard. One of these measures, ACO #11, assesses the degree of CEHRT 
use by primary care physicians participating in the ACO and performance 
on this measure is weighted twice that of any other measure for scoring 
purposes. To calculate this measure, CMS collects information submitted 
by PCPs through the EHR Incentive Program and determines the rate of 
CEHRT use by PCPs participating in the ACO. Specifically, as explained 
in our guidance [https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/Downloads/2015-ACO11-Percent-PCP-Successfully-Meeting-Meaningful-Use-Requirement.pdf ], the denominator 
is based on all PCPs who are participating in the ACO in the reporting 
year under the Shared Savings Program and the numerator for the measure 
is based on the PCPs included in the denominator who successfully 
qualify to participate in either the Medicare or Medicaid EHR Incentive 
Program in the year indicated.

[[Page 80499]]

Results of this measure are used in determining the ACO's overall 
quality score which in turn determines the ACO's final sharing/loss 
rate and the amount of shared savings earned (or shared losses owed) by 
the ACO.
    In the QPP proposed rule, we proposed that ECs participating in an 
ACO would satisfy the Advancing Care Information performance category 
under the MIPS by reporting meaningful use of EHRs apart from the ACO 
(81 FR 28247, Table 15). We subsequently finalized this policy in the 
QPP final rule with comment period. Similar to the process currently 
used under the Shared Savings Program to determine what practitioners 
have met criteria for meaningful use for the ACO #11 measure, we will 
access EC-reported data under the Advancing Clinical Information 
performance category to assess the ACO's overall use of CEHRT. Because 
the current EHR measure at ACO-11 only assesses the degree of use of 
CEHRT by primary care physicians participating in the ACO, in the CY 
2017 PFS proposed rule we proposed to modify the EHR measure to align 
with the policy proposed for the QPP. Specifically, we proposed to 
change the specifications of the EHR measure in order to assess the ACO 
on the degree of CEHRT use by all providers and suppliers designated as 
ECs under the QPP that are participating in the ACO, rather than 
narrowly focusing on the degree of use of CEHRT of only the primary 
care physicians participating in the ACO. We stated that we believed 
this modification to the specifications for ACO #11 would better align 
with the QPP and ensure a subset of ACOs in the Shared Savings Program 
could qualify to be Advanced APM entities by participating in an 
Advanced APM. We also proposed to modify the title of the measure to 
remove the reference to PCPs. We stated that we believed the 
modification in the specifications of ACO #11 would be extensive and 
ECs would also have to gain familiarity with the reporting requirements 
under the QPP. We therefore proposed that this measure would be 
considered a newly introduced measure and set at the level of complete 
and accurate reporting for the first 2 reporting periods for which 
reporting of the measure is required according to our rules at Sec.  
425.502(a)(4). Thus, the measure would be pay for reporting for the 
2017 and 2018 performance years. We further proposed to define 
requirements specific to this measure for the limited circumstances in 
which it is designated as pay for reporting. Specifically, we proposed 
to include the requirement at Sec.  425.506(e)(1) that during years in 
which ACO #11 is designated as a pay for reporting measure, in order 
for us to determine that the ACO has met requirements for complete and 
accurate reporting, at least one EC, as that term is defined for 
purposes of the QPP, participating in the ACO must meet the reporting 
requirements under the Advancing Clinical Information performance 
category under the QPP. We stated that we believed this proposal would 
safeguard the ability of Tracks 2 and 3 to fully meet all criteria for 
designation as Advanced APMs by ensuring the letter and spirit of the 
statutory criteria are met, even in the limited circumstances when ACO 
#11 is designated as pay for reporting under the Shared Savings 
Program. Beginning in the 2019 performance year, we proposed that ACO 
#11 would be assessed according to the phase-in schedule indicated in 
Table 36 of the proposed rule (81 FR 46421-46422) which is consistent 
with the current phase-in schedule for the measure. We further proposed 
to add Sec.  425.506(e)(2) reiterating our current requirement at Sec.  
425.506(b) that during pay for performance years, the quality measure 
regarding EHR adoption is measured based on a sliding scale. We stated 
that we did not intend our proposal to use this measure to assess the 
degree of CEHRT use by ECs participating in the ACO for purposes of 
meeting the CERHT criterion for Advanced APMs under the QPP to change 
the way we treat the measure under pay for performance now. Similar to 
the current method used by the Shared Savings Program to calculate the 
EHR measure, we stated that the data would continue to be derived using 
EC reported EHR data that is required and collected for purposes of 
MIPS. Additionally, we stated that we intended for the measure to 
remain double weighted. We proposed to retain the existing EHR measure 
requirements at Sec.  425.506(a)-(c) and to modify Sec.  425.506(d) to 
sunset the current EHR reporting requirement as discussed in the prior 
section.
    We also stated that we did not believe that any additional 
modifications or exceptions to current Shared Savings Program rules 
(other than the ones proposed, specifically, that the measure 
specifications and title of ACO #11 be modified to include all ECs and 
not just PCPs, and the proposal for how an ACO would demonstrate 
complete and accurate reporting) must be made in order to be consistent 
with the spirit and intent of the statute and the Advanced APM 
criteria, as proposed in the QPP proposed rule. Rather, we stated that 
we believe the existing Shared Savings Program rules are sufficient to 
permit Tracks 2 and 3 to meet the criteria to be designated as Advanced 
APMs because the EHR quality measure will always be used to impact the 
amount of shared savings or losses of an ACO, regardless of whether it 
is designated as pay for performance or pay for reporting. We noted 
that the EHR measure has an especially significant impact on the 
overall quality scoring for an ACO because it is double-weighted 
compared to any other measure. In spite of this, we indicated that we 
were considering additional options regarding the treatment of the EHR 
measure under the Shared Savings Program in order to further enhance 
the importance of this measure and its impact on an ACO's quality 
performance score and to improve alignment with the intent of the 
policies proposed in the QPP proposed rule. Specifically, we were 
considering whether to finalize a policy that would require the EHR 
measure to be pay for performance in all performance years, including 
the first year of an ACO's first agreement period. Additionally, we 
were considering whether to finalize a policy that would require the 
EHR measure to remain pay for performance, even when a new EHR measure 
is introduced or there are significant modifications to the 
specifications for the measure. We noted that such modifications may 
require additional changes or alternative approaches to certain current 
Shared Savings Program rules related to quality benchmarking and 
scoring. We anticipated that if such modifications were made, they 
would only apply to the EHR measure and would not impact current 
scoring and benchmarking rules for other quality measures that make up 
the quality performance standard. We solicited comment on how best to 
conform to the intent and spirit of the QPP requirements to ensure that 
clinicians have assurance they are participating in an Advanced APM. We 
specifically solicited comment on our proposals and the alternatives 
considered.
    Furthermore, we noted that the CMS Web interface measures, 
including those proposed in the QPP proposed rule, are consistent 
across CMS reporting programs. We stated that we do not believe it is 
beneficial to propose CMS Web interface measures for ACO quality 
reporting separately. Therefore, to avoid confusion and duplicative 
rulemaking, we proposed that any future changes to the CMS Web 
interface measures would be proposed and finalized through rulemaking 
for the QPP, and that such

[[Page 80500]]

changes would be applicable to ACO quality reporting under the Shared 
Savings Program.
    The following is a summary of the comments we received regarding 
our proposals to align with QPP.
    Comment: Many commenters were supportive of our proposed changes to 
the title and specifications of the EHR measure (ACO-11) to align with 
the QPP. In contrast, several commenters opposed the proposed 
modifications to the measure or made additional suggestions. For 
example, some commenters requested that CMS keep the current version of 
the measure that assesses PCPs (not all ECs). Another commenter 
suggested that CMS assess ACOs using two EHR measures. This commenter 
recommended keeping the current version of the measure focused on 
primary care physicians as pay for performance while adding the 
modified version of the measure, which would be assessed under pay for 
reporting for 2 years like all new measures, before transitioning to 
pay for performance. In contrast, one commenter suggested that the EHR 
measure be removed from the ACO measure set entirely. Another commenter 
suggested that the proposed modifications to the measure specifications 
should apply only to ACOs participating in Shared Savings Program 
tracks that could meet the criteria for designation as Advanced APMs 
under the QPP.
    Response: We are finalizing the proposal to modify the EHR measures 
(ACO-11) to align with the Advanced APM criteria under the QPP. We 
appreciate commenters' support for these changes. We believe the 
modification to ACO-11 to require reporting by all ECs better aligns 
with the QPP and will ensure that a subset of ACOs participating in the 
Shared Savings Program are able to qualify to be designated as Advanced 
APM entities by participaing in an Advanced APM. Accordingly, ACO 
participants in ACOs under all tracks of the Shared Savings Program 
must report data on the Advancing Care Information performance category 
on behalf of all ECs billing through the TIN of the ACO participant 
according to the MIPS requirements as specified at Sec.  414.1375(b) in 
order to report for purposes of ACO #11.
    We note that under the QPP final rule with comment period, eligible 
clinicians who become QPs by participating in Advanced APMs will be 
exempt from reporting in the advancing care information performance 
category for purposes of MIPS. However, under Sec.  425.500(c), ACOs 
must submit data on ACO quality performance measures according to the 
method of submission established by CMS. Thus, in the QPP final rule 
with comment period, we established a policy that all eligible 
clinicians participating in ACOs under all tracks of the Shared Savings 
Program must report for purposes of the advancing care information 
performance category according to the MIPS requirements found at Sec.  
414.1375(b) regardless of whether they are excluded from MIPS for the 
year by virtue of their participation in an Advanced APM, in order for 
the Shared Savings Program to assess the ACO's performance on ACO-11, 
as required by the Advanced APM CEHRT use criterion.
    We appreciate the suggestion that the old measure (based on percent 
of primary care physician use of CEHRT) be retained in addition to 
establishing a new EHR measure that assesses EC use of CEHRT. We 
decline to retain the old measure at this time because the nature of 
the data being submitted to us is changing and primary care physicians 
are included in the new measure as a subset of the ECs participating in 
the ACO. Although we decline to hold ACOs accountable for both measures 
of CEHRT use at this time, we will continue to consider whether in the 
future it would be useful to calculate the percent of primary care 
physicians using CEHRT and share this information with ACOs.
    Comment: Many commenters supported the proposal to treat ACO-11 as 
a new measure and set it at the level of pay for reporting for the 
first 2 years of its use, consistent with our existing approach to 
implementing new measures. Other commenters disagreed with the proposal 
to transition the measure to pay for performance according to the 
phase-in schedule indicated in Table 36 of the proposed rule (81 FR 
46421-46422) and requested that it remain pay for reporting for all 3 
years of an ACO's agreement period. One commenter encouraged CMS to set 
new benchmarks for the new EHR measure.
    Response: We recognize that reporting use of CEHRT under the QPP's 
Advancing Care Information performance category according to MIPS 
requirements will be new for many ECs and that it will take some time 
for ACOs and their ECs to gain some familiarity with the new reporting 
requirements for ACO-11. For this reason, we proposed and are 
finalizing a policy to treat ACO-11 as a newly introduced measure and 
to hold the ACO accountable for pay for reporting only for the first 2 
years after the revised measure is introduced. However, to stress the 
importance of care coordination and support the use of CEHRT, we intend 
to phase in the measure to pay for performance according to the 
schedule outlined in Table 36 of the proposed rule (81 FR 46421-46422) 
and as indicated in Table 42 of this final rule. Consistent with our 
established policies for setting quality performance benchmarks for new 
measures, a new benchmark for this measure will be set based on the 
data gathered during the two pay for reporting years after the measure 
is introduced.
    Comment: One commenter expressed concerns over including ECs in the 
EHR measure who are excluded from MIPS and thus have the option of not 
reporting under the Advancing Care Information performance category 
(for example, low volume providers and QPs). They recommended ECs 
excluded from MIPS be excluded from the denominator of ACO-11.
    Response: As noted above, in the QPP final rule with comment 
period, we established a requirement at Sec.  414.1370(g)(4)) that each 
ACO participant TIN participating in a Shared Savings Program ACO 
(regardless of Track) must submit data on the advancing care 
information performance category as specified in MIPS as finalized at 
Sec.  414.1375(b). Additionally, it is necessary for ACO participant 
TINs to submit such data to meet the requirements under MIPS and for 
the calculation of the final score under the APM scoring methodology. 
All ECs participating in Track 1 ACOs will be subject to MIPS as will 
ECs participating in ACOs under Tracks 2 and 3 that do not qualify as 
QPs. We plan to align closely with the QPP when developing our 
operational guidance and the measure specifications to ensure a clear 
understanding of the data submission requirements for ACO participant 
TINs under MIPS.
    Comment: We received one comment supporting our proposal that 
future changes to the measures an ACO is required to report through the 
CMS Web Interface be finalized through rulemaking for the QPP in order 
to maintain alignment with QPP.
    Response: We appreciate the support for our proposal. We believe a 
single rulemaking process for adding and removing Web interface quality 
measures will be less confusing for stakeholders and streamline 
alignment of ACO and MIPS APM reporting. Therefore, we are finalizing 
our proposal that future revisions to the Web interface quality 
measures will be adopted through rulemaking for the QPP to avoid 
confusion or duplicative rulemaking.

[[Page 80501]]

    Comment: Many commenters submitted questions or comments related to 
MIPS scoring of the advancing care information performance category and 
also requested further clarification regarding the CEHRT criteria for 
Advanced APMs.
    Response: These comments are out of the scope of the CY 2017 PFS 
proposed rule. However, we have shared these comments with our 
colleagues who have responsibility for the QPP. We also note that the 
QPP final rule with comment period responds to comments received on the 
QPP proposed rule and further describes the CEHRT criteria for Advanced 
APMs.
    Final Action: We are finalizing our policies regarding alignment 
with the QPP as proposed. Specifically, we are modifying the title and 
specifications of the EHR quality measure (ACO#11) to align with the 
QPP. We are changing the specifications of the EHR measure in order to 
assess the ACO on the degree of CEHRT use by all providers and 
suppliers that are participating in the ACO and that are designed as 
ECs under the QPP rather than narrowly focusing on the degree of CEHRT 
use by the primary care physicians participating in the ACO. 
Additionally, as noted above, although certain eligible clinicians are 
exempt from reporting under MIPS, we will require all ACO participant 
TINs, regardless of track, to submit data for the advancing care 
information performance category.
    Because the specifications for this measure are changing, we are 
finalizing our proposal to consider it a newly introduced measure and 
to set it at the level of complete and accurate reporting for the first 
2 reporting periods for which reporting of the measures is required 
consistent with our existing rule at Sec.  425.502(a)(4). Specifically 
the measure will be pay for reporting for all ACOs for the 2017 and 
2018 performance years. We are also finalizing our proposal to include 
a requirement at Sec.  425.506(e)(1) that during years in which ACO #11 
is designated as a pay for reporting measure, in order for us to 
determine that an ACO has met requirements for complete and accurate 
reporting, at least one EC participating in the ACO must meet the 
reporting requirements under the Advancing Clinical Information 
performance category under the QPP. Beginning in the 2019 performance 
year, ACO #11 will be assessed according to the phase-in schedule noted 
in Table 42. We are finalizing our proposal to add Sec.  425.506(e)(2) 
reiterating our current requirement at Sec.  425.506(b) that during pay 
for performance years, assessment of EHR adoption will be measured 
based on a sliding scale.
    Finally, we are finalizing a policy that any future changes to the 
CMS Web interface measures will be adopted through rulemaking for the 
QPP, and that such changes will be applicable to ACO quality reporting 
under the Shared Savings Program.
4. Incorporating Beneficiary Preference Into ACO Assignment
a. Background
    Under section 1899(c) of the Act, beneficiaries are required to be 
assigned to an ACO participating in the Shared Savings Program based on 
the beneficiary's utilization of primary care services rendered by 
physicians participating in the ACO. Medicare FFS beneficiaries do not 
enroll in the Shared Savings Program, and they retain the right to seek 
Medicare-covered services from any Medicare-enrolled provider or 
supplier of their choosing. No exclusions or restrictions based on 
health conditions or similar factors are applied in the assignment of 
Medicare FFS beneficiaries. Thus, a beneficiary's choice to receive 
primary care services furnished by physicians and certain non-physician 
practitioners that are ACO professionals in the ACO, determines the 
beneficiary's assignment to an ACO under the Shared Savings Program. As 
discussed in detail in the November 2011 Medicare Shared Savings 
Program final rule (76 FR 67851 through 67870), we finalized a claims-
based hybrid approach (called preliminary prospective assignment with 
retrospective reconciliation) for assigning beneficiaries to an ACO. 
Under this approach, beneficiaries are preliminarily assigned to an ACO 
at the beginning of a performance year to help the ACO refine its care 
coordination activities, but final beneficiary assignment is determined 
at the end of each performance year based on where beneficiaries chose 
to receive a plurality of their primary care services during the 
performance year. We adopted this policy because we believe that the 
methodology balances beneficiary freedom to choose healthcare providers 
under FFS Medicare with the ACO's desire to have information about the 
FFS beneficiaries that are likely to be assigned at the end of the 
performance year. We believe this methodology accomplishes an 
appropriate balance because ACOs have the greatest opportunities to 
impact the quality and cost of the care of beneficiaries that choose to 
receive care from providers and suppliers participating in the ACO 
during the course of the year.
    A beneficiary is eligible for assignment to an ACO under Sec.  
425.402 if the beneficiary had a primary care service with a physician 
who is an ACO professional, and thus, is eligible for assignment to the 
ACO under the statutory requirement to base assignment on utilization 
of primary care services furnished by physicians who are ACO 
professionals in the ACO. The beneficiary is then assigned to the ACO 
if the allowed charges for primary care services furnished to the 
beneficiary by all primary care physicians who are ACO professionals 
and non-physician ACO professionals in the ACO are greater than the 
allowed charges for such services provided by primary care physicians, 
nurse practitioners, physician assistants, and clinical nurse 
specialists who are ACO professionals in another ACO or not affiliated 
with any ACO and are identified by a Medicare-enrolled TIN. The second 
step of the assignment process considers the remainder of beneficiaries 
who have received at least one primary care service from an ACO 
physician with a specialty designation specified in Sec.  425.402(c), 
but have received no services from a primary care physician, nurse 
practitioner, physician assistant, or clinical nurse specialist either 
inside or outside the ACO. These beneficiaries are assigned to the ACO 
if the allowed charges for primary care services furnished by 
physicians who are ACO professionals in the ACO with one of the 
specialty designations specified in Sec.  425.402(c) are greater than 
the allowed charges for primary care services furnished by physicians 
with such specialty designations in another ACO or who are not 
affiliated with any ACO and are identified by a Medicare-enrolled TIN. 
The ``two step'' assignment process simultaneously maintains the 
requirement to focus on primary care services in beneficiary 
assignment, while recognizing the necessary and appropriate role of 
specialists and non-physician practitioners in providing primary care 
services, such as in areas with primary care physician shortages. We 
revised this two-step claims based methodology in the June 2015 Final 
Rule as discussed in detail in that final rule (80 FR 32743 through 
32758) and finalized a policy that would exclude services provided by 
certain physician specialties from step 2 of the assignment process.
    Additionally, in the June 2015 final rule, and in response to 
stakeholders' suggestions, we implemented an option for ACOs to 
participate in a new two-sided performance-based risk track, Track 3. 
Under Track 3, beneficiaries are

[[Page 80502]]

prospectively assigned to the ACO at the beginning of the performance 
year using the same two-step methodology, based on the most recent 12 
months for which data are available, which reflects where beneficiaries 
have chosen to receive primary care services during that period. The 
ACO is held accountable for beneficiaries that are prospectively 
assigned to it for the performance year. Under limited circumstances, a 
beneficiary may be excluded from the prospective assignment list, for 
example, if the beneficiary enrolls in Medicare Advantage or no longer 
lives in the United States or U.S. territories and possessions, based 
on the most recent available data in our beneficiary records at the end 
of the performance year. A beneficiary is not excluded from the ACO's 
prospective assignment list at the time of reconciliation because the 
beneficiary chose to receive most or all of his or her primary care 
during the performance year from providers and suppliers outside the 
ACO. Additionally, no beneficiaries are added to the ACO's prospective 
assignment list at the time of reconciliation because a beneficiary 
chose to receive a plurality of his or her primary care during the 
performance year from ACO professionals participating in the ACO. 
Offering this alternative approach to beneficiary assignment responds 
to stakeholders who expressed a desire for a prospective assignment 
approach. These stakeholders believe prospective assignment will 
provide more certainty about the beneficiaries for whom the ACO will be 
held accountable during the performance year, thus enabling ACOs to 
redesign their patient care processes to more efficiently and 
effectively improve care for specific FFS beneficiaries rather than for 
all FFS beneficiaries. We note, however, that such certainty is limited 
because prospectively aligned beneficiaries who meet the exclusion 
criteria specified in Sec.  425.401(b) during the performance year will 
not be aligned to the ACO at the end of the year; and further, as 
noted, beneficiaries remain free under FFS Medicare to choose the 
healthcare providers from whom they receive services.
    Because of uncertainty inherent in FFS Medicare where there is no 
beneficiary lock-in or enrollment, both patient advocacy groups and 
ACOs have expressed interest in and support for enhancing claims-based 
assignment of beneficiaries to ACOs by taking into account beneficiary 
attestation regarding the healthcare provider that they consider to be 
responsible for coordinating their overall care. Stakeholders believe 
that incorporating this information and giving beneficiaries the 
opportunity to voluntarily ``align'' with the ACO in which their 
primary healthcare provider participates will improve the patient 
centeredness of the assignment methodology, and possibly reduce year-
to-year ``churn'' in beneficiary assignment lists.
    The Center for Medicare & Medicaid Innovation (Innovation Center) 
began conducting a test of beneficiary attestation (which was referred 
to as voluntary alignment, a term that we will also use in the context 
of the Shared Savings Program) in the Pioneer ACO Model (see https://innovation.cms.gov/initiatives/Pioneer-aco-model/) for the 2015 
performance year. In the Pioneer ACO Model, for a Pioneer ACO to 
participate in voluntary alignment for performance year four (Pioneer 
ACO contract year 2015), the Pioneer ACO was required to submit an 
application to CMS in the summer of performance year three (Pioneer ACO 
contract year 2014) in which the ACO explained its plan for contacting 
beneficiaries. ACOs that were approved to participate in voluntary 
alignment were limited to contacting only those beneficiaries who 
appeared on the ACO's then current (Pioneer ACO contract year 2014) and 
prior year's (Pioneer ACO contract year 2013) prospective assignment 
lists.
    The ACOs sent letters to beneficiaries during a specified period 
asking the beneficiaries to confirm whether a listed Pioneer Provider/
Supplier was their ``main doctor.'' The Innovation Center imposed 
certain safeguards on the participating ACOs to protect against actions 
that could improperly influence a beneficiary's decision to complete 
the voluntary alignment form. The ACOs collected responses and turned 
them in to CMS in fall 2014, before the start of the 2015 performance 
year. Beneficiaries who confirmed a care relationship with the Pioneer 
Provider/Supplier listed on the form, and met all other eligibility 
criteria for alignment, were prospectively aligned to the Pioneer ACO 
for the upcoming performance year, regardless of whether or not the 
practitioners participating in the Pioneer ACO rendered the plurality 
of the beneficiary's primary care services during the alignment period. 
We refer to the procedures used under the Pioneer ACO Model as ``the 
manual process.''
    Beneficiary and ACO participation in and experience with voluntary 
alignment under the Pioneer ACO Model to date has been mixed. 
Initially, beneficiaries often seemed confused about the implications 
of attesting to a care relationship with a Pioneer Provider/Supplier, 
based on the letters they received from Pioneer ACOs. Beneficiaries, 
for example, were often unfamiliar with the name of the Pioneer ACO. 
Although most Pioneer ACOs initially expressed high interest in 
beneficiary attestation, only half participated. Those that did not 
participate cited cost/benefit concerns. To address concerns expressed 
by ACOs and beneficiaries, the beneficiary attestation process was 
updated for the Pioneer ACO Model for PY 2016, with letters sent to 
beneficiaries during the summer of 2015. The new beneficiary 
attestation process includes updated language in the letters to 
beneficiaries and the attestation form to reduce beneficiary confusion. 
The letters now include plainer language, refer to a specific 
healthcare provider (in addition to the ACO), and Pioneer Providers/
Suppliers are permitted to discuss beneficiary attestation with 
beneficiaries and respond to questions. Other significant changes to 
the process are discussed in the proposed rule (81 FR 46432). We would 
note that for performance year five (Pioneer ACO contract year 2016), 
CMS changed the criteria to allow beneficiaries to voluntarily align 
into the performance year five aligned population if, among other 
requirements, the beneficiary had at least one paid claim for a 
Qualified E/M service, as defined in section 2.4 of Appendix C of the 
Pioneer ACO Agreement, furnished by a Pioneer Provider/Supplier on or 
after January 1, 2013. Based on some initial feedback, beneficiaries 
appear to be wary of the implications of designating a ``main doctor'' 
but are much more amenable to this type of information request when it 
comes from their physician or other practitioner, rather than from an 
ACO. However, information is not yet available on the impact or results 
of the modifications made to the beneficiary attestation process in the 
Pioneer ACO Model. The Next Generation ACO Model, which started 
operation on January 1, 2016, includes a beneficiary attestation policy 
similar to the updated manual process used under the Pioneer ACO Model. 
In order for a Medicare FFS beneficiary to be eligible to voluntarily 
align with a Next Generation ACO for performance year two (Next 
Generation ACO contract year 2017), the beneficiary must have had at 
least one paid claim for a qualified evaluation and management service 
on or after January 1, 2014, with an entity that was a Next Generation 
Participant during performance year one, among other requirements.

[[Page 80503]]

    To date, the Innovation Center has done limited analyses of the 
updated voluntary alignment process for effects on beneficiary 
engagement. Early experience indicates that for the participating ACOs, 
the number of prospectively assigned beneficiaries per ACO increased by 
0.2 to 2.7 percent relative to the number of beneficiaries who would 
have otherwise been assigned. However, there is not yet enough 
information to determine whether beneficiary attestation under the 
manual process has had an impact on increasing certainty that a 
beneficiary will continue to choose to receive primary care or other 
services from practitioners participating in an ACO.
    We note that a similar manual process for sending letters to 
beneficiaries to provide them notice of their opportunity to opt out of 
claims data sharing was removed from the Shared Savings Program in the 
June 2015 final rule (see 80 FR 32743). This data sharing opt out 
process was removed because it was resource intensive and cumbersome 
for ACOs and CMS, and was confusing for beneficiaries. Instead, based 
on stakeholder comments, we finalized a process to provide 
beneficiaries the opportunity to decline claims data sharing directly 
by contacting the Medicare program (through 1-800-MEDICARE) rather than 
through the ACO. This more direct process started at the end of 2015 
and so far appears to be working well, as it has not generated the 
number of complaints and concerns raised by the initial manual process.
b. Proposals
    In the CY 2017 PFS proposed rule, we proposed to incorporate 
beneficiary attestation into the assignment of beneficiaries to ACOs 
participating in the Shared Savings Program, to supplement and enhance 
the current claims-based algorithm driven methodology as described in 
more detail in this section of the final rule.
    We indicated that we believed that it would be appropriate to 
implement, at a minimum, a voluntary alignment process under the Shared 
Savings Program that would be similar to the updated manual process we 
have implemented under the Pioneer ACO Model and that is used under the 
Next Generation ACO Model. Supplementing the current claims-based 
assignment process with a voluntary alignment process that incorporates 
beneficiary attestation about their ``main doctor'' could help ACOs to 
increase patient engagement, improve care management and health 
outcomes, and lower expenditures for beneficiaries, while also helping 
to assure that beneficiaries are assigned to ACOs based on their 
relationship with providers that they believe to be truly responsible 
for their overall care. However, based on the valuable knowledge and 
experience we have gained through these Innovation Center models, we 
also expressed our concern that the manual voluntary alignment process 
used for the Pioneer ACO Model and that is used under the Next 
Generation ACO Model is resource intensive for both ACOs and CMS.
    Because of the limitations of the manual process, we proposed to 
implement an automated approach under which we could determine which 
healthcare provider a FFS beneficiary believes is responsible for 
coordinating their overall care (their ``main doctor'') using 
information that is collected in an automated and standardized way 
directly from beneficiaries (through a system established by us, such 
as MyMedicare.Gov), rather than requiring individual ACOs, ACO 
participants, or ACO professionals to directly obtain this information 
from beneficiaries annually and then communicate these beneficiary 
attestations to CMS.
    We proposed to make such an automated mechanism available for 
beneficiaries to voluntarily align with the provider or supplier that 
they believe is responsible for coordinating their overall care 
starting early in 2017, making it possible for us to use beneficiary 
attestations for assigning beneficiaries to ACOs in all three tracks 
for the 2018 performance year. We indicated that voluntary alignment 
data would be accessed and incorporated in the beneficiary assignment 
process each time we run the assignment algorithm. Under the automated 
approach, beneficiaries would be able to change their attestation about 
their ``main doctor'' at any time; however, we noted there may be a lag 
in using the information to update an ACO's assignment list depending 
on the timing of the beneficiary's updated designation and the track 
under which the ACO is participating. For example, as described in more 
detail in the CY 2017 PFS proposed rule, we proposed for Track 3 to 
incorporate the beneficiary's designation annually prior to the start 
of the performance year at the time beneficiaries are prospectively 
assigned for that performance year.
    Further, we proposed to incorporate voluntary alignment for ACOs in 
Tracks 1 and 2 on a quarterly basis. We stated that we believe this 
policy would be appropriate because it aligns with the current timing 
for updates to Track 1 and 2 ACO assignment lists. We also proposed 
that if a beneficiary voluntarily aligns with a provider or supplier 
whose services would be considered in assignment but who is not 
participating in an ACO as an ACO professional, the beneficiary would 
not be eligible for alignment to an ACO, even if the beneficiary would 
have otherwise been assigned to an ACO under our claims-based approach.
    We further proposed that, if an automated voluntary alignment 
process is not operationally ready for implementation by spring 2017, 
we would implement a manual voluntary alignment process for Track 3 
ACOs only that builds upon experience previously gained under the 
Pioneer ACO Model. We explained our view that it would be appropriate 
to initially limit the manual process to ACOs participating in the 
Shared Savings Program under Track 3 because the process and timing for 
sending letters to beneficiaries regarding voluntary alignment under 
the manual process was developed specifically for prospective alignment 
under the Pioneer and Next Generation ACO Models and for a limited 
number of ACOs. We indicated that we believe implementing such a manual 
process for the hundreds of ACOs in Track 1 and Track 2 whose 
beneficiaries are preliminarily prospectively assigned with 
retrospective reconciliation would result in operational challenges for 
ACOs and CMS and could have unintended consequences that could be 
confusing or harmful to beneficiaries. We therefore proposed that if an 
automated process is not available to allow beneficiaries to designate 
their primary healthcare provider in time for the information to be 
considered for beneficiary assignment for PY 2018, we would implement 
an alternative manual voluntary alignment process (similar to the 
updated process used under the Pioneer ACO Model and described in more 
detail in the CY 2017 PFS proposed rule) to allow beneficiaries to 
align with Track 3 ACOs for the 2018 performance year and until such 
time as an automated process is available.
    Regardless of process (manual or automatic), we proposed to begin 
to incorporate beneficiary attestation into the assignment methodology 
for the Shared Savings Program, effective for assignment for the 2018 
performance year. In brief, under the proposal, an eligible beneficiary 
would be assigned to an ACO based on the existing claims-based 
assignment process unless the beneficiary has designated a primary care 
physician as defined at Sec.  425.20, a physician with a specialty 
designation included at paragraph (c) of Sec.  425.402, or a nurse 
practitioner, physician

[[Page 80504]]

assistant, or clinical nurse specialist as being responsible for their 
overall care. If an eligible beneficiary has made such a designation 
then the voluntary alignment would override the claims-based assignment 
process if certain additional conditions are met. We proposed to revise 
the regulation governing the assignment methodology to add a new 
paragraph (e) to Sec.  425.402 to address the voluntary alignment 
process. Further, we proposed to prohibit ACOs, ACO participants, ACO 
providers/suppliers, ACO professionals, and other individuals or 
entities performing functions or services related to ACO activities 
from directly or indirectly committing any act or omission, or adopting 
any policy that coerces or otherwise influences a Medicare 
beneficiary's decision to designate or not designate an ACO 
professional as responsible for coordinating their overall care.
    We stated that to maintain flexibility for ACOs, ACO participants, 
ACO providers/suppliers, ACO professionals, beneficiaries, and CMS, we 
would intend to provide further operational details regarding the 
voluntary alignment process and the applicable implementation timelines 
through subregulatory guidance and other outreach activities.
    We solicited comments on this proposal, on the effective date, and 
on any other related issues that we should consider for the final rule 
to address issues related to voluntary alignment under the Shared 
Savings Program. In particular, we solicited comment on a variety of 
topics such as whether voluntary alignment is an appropriate mechanism 
for assigning beneficiaries retrospectively to an ACO, whether ACOs 
should be permitted to opt into or out of voluntary alignment, and 
whether we should exclude a beneficiary from an ACO's prospective 
assignment list for a performance year if later during the performance 
year the beneficiary voluntarily aligns with a healthcare provider that 
is not an ACO professional in the ACO. We also solicited input on how 
concerns about ACO avoidance of at risk beneficiaries might be 
addressed.
    We also noted that under the proposed automated voluntary alignment 
process, a beneficiary's designation of a healthcare provider as 
responsible for coordinating their overall care would stay in effect 
until the beneficiary chose to make a subsequent change. We indicated 
that under the proposal we would rely on appropriate information shared 
with beneficiaries at the point of care to ensure the beneficiary's 
designation is kept up to date. We solicited comment on this issue and 
our proposal under the automated system to continue to use a 
beneficiary's designation of the healthcare provider responsible for 
coordinating their overall care until it is changed.
    We also welcomed suggestions regarding the operational process, 
implementation timelines, and related issues regarding the process for 
beneficiaries to voluntarily align with an ACO, including how to 
strengthen ACOs' beneficiary engagement activities. We noted that 
although we proposed to establish a process under which beneficiaries 
may designate their ``main doctor'' who they consider responsible for 
coordinating their overall care, in establishing the operational 
processes for allowing beneficiaries to designate their ``main doctor'' 
we may not explicitly use the phrase ``responsible for coordinating 
overall care'' which we included in the proposed provision at Sec.  
425.402(e). Instead, we indicated that we may consider using other 
terminology based on focus group testing and/or other feedback from 
beneficiary representatives. We welcomed comments on what terminology 
would be preferable to ensure beneficiaries understand the significance 
of designating a provider or supplier as responsible for coordinating 
their overall care. We indicated we would consider such suggestions 
further as we develop program guidance and outreach activities for 
beneficiaries and ACOs.
    The following is a summary of the comments we received regarding 
voluntary alignment under the Shared Savings Program.
    Comment: Commenters supported the incorporation of voluntary 
alignment into the Shared Savings Program, citing the potential for 
patient engagement and a more stable beneficiary population. Commenters 
indicated that voluntary alignment is appropriate for ACOs that have 
either retrospective or prospective assignment. One commenter indicated 
that providing beneficiaries with the opportunity to align voluntarily 
with an ACO would balance the important considerations of 
beneficiaries' freedom to choose their providers with ACOs' interest in 
reducing patient turnover or ``churn,'' thus providing a more defined 
and stable beneficiary population. The commenter suggested this would 
allow ACOs to better target their efforts to manage and coordinate care 
for beneficiaries for whose care they will ultimately be held 
accountable.
    Another commenter suggested there are many times where for a 
particular year the current claims-based assignment algorithm may not 
be an accurate reflection of the beneficiary's wishes and normal care 
pattern. Examples provided by this commenter of when the current 
algorithm could lead to inappropriate attribution were in cases where a 
beneficiary is dealing with an acute illness or condition requiring 
specialized evaluation and management services, is experiencing an 
extended time away from a primary residence, is a low health care 
utilizer where a single service plays a big role in determining the 
plurality of primary care services, or is switching primary care 
physicians when entering a skilled nursing facility (SNF). Commenters 
indicated that allowing beneficiaries to attest to the provider they 
believe is managing their care may also help increase beneficiary 
engagement in that care. A number of commenters expressed support for 
the proposal to exclude from alignment to an ACO any beneficiaries who 
voluntarily align with a healthcare provider who is not an ACO 
professional, as that respects the beneficiary's preference.
    Response: We agree with stakeholders that supplementing the current 
assignment process with a voluntary alignment process that incorporates 
beneficiary attestation could help ACOs to increase patient engagement, 
improve care management and health outcomes, and lower expenditures for 
beneficiaries. Incorporating beneficiary attestation into the 
beneficiary assignment process could further strengthen the current 
claims-based, two-step assignment process. Supplementing the claims-
based assignment algorithm with beneficiary attestations could further 
assure that beneficiaries are assigned to ACOs based on their 
relationship with providers and suppliers that they believe to be truly 
responsible for their overall care. Therefore, we plan to begin to 
incorporate beneficiary attestation into the assignment methodology for 
the Shared Savings Program, effective for assignment for the 2018 
performance year. Based on comments, we will incorporate beneficiary 
attestation as proposed, with certain modifications as discussed in 
this section.
    Comment: Many of the commenters who supported voluntary alignment 
strongly urged CMS to prioritize development and timely implementation 
of an automated voluntary alignment process for attestation that 
minimizes the burden for beneficiaries and ACOs, and that would be 
accessible to ACOs in all three tracks beginning with performance year 
2018. Some commenters further noted that the process should be 
automated from the beginning even if it were to

[[Page 80505]]

result in a delay in implementation. Commenters indicated that using an 
automated approach for voluntary alignment would be less burdensome for 
both ACOs and CMS, and would allow for more robust participation by 
ACOs and beneficiaries. Otherwise, the commenters believe that 
differences in how beneficiary attestation is handled for the three 
tracks would cause unnecessary confusion for beneficiaries. These 
commenters indicated that the manual voluntary alignment approach used 
under the Pioneer and Next Generation ACO Models has been very 
cumbersome and confusing, and therefore, has been pursued by only about 
one-half of eligible ACOs because of cost/benefit concerns. One 
commenter expressed concern that a manual process would increase the 
likelihood of errors.
    Response: We agree with the commenters who urge us to prioritize 
development and implementation of an automated voluntary alignment 
process for all three ACO tracks rather than to develop concurrently a 
manual process limited to Track 3 ACOs that would be implemented only 
in the event that an automated system for all three Tracks is not 
available. We also agree the process should be automated from the 
beginning even if it were to result in a delay in implementation 
because a manual process might increase the likelihood of errors, and 
an automated approach would be more efficient for ACOs and their ACO 
participants, ACO providers/suppliers, and ACO professionals, as well 
as for beneficiaries and CMS. Based on valuable experience gained 
through development and testing of beneficiary attestation processes 
through the Pioneer ACO Model, the manual process developed thus far 
appears to be resource intensive for both ACOs and CMS and may not 
significantly impact beneficiary assignment to ACOs.
    Comment: Some commenters raised concerns regarding the potential 
burden of a voluntary alignment process (whether manual or automated) 
and suggested that further testing be done prior to implementation. For 
example, one commenter suggested testing voluntary alignment under 
Track 1 on a small scale to assess whether it impacts ACO performance 
and beneficiary health. Another commenter suggested that voluntary 
alignment should not be implemented unless there is a tested automated 
process. One commenter supported the testing of both of the manual and 
automated models to determine which approach presents lower burden for 
providers, CMS, and, most importantly, Medicare beneficiaries.
    Response: We believe that the development and testing of manual 
beneficiary attestation processes through the Pioneer ACO Model has 
been very valuable, and, along with the very helpful public comments 
received in response to our proposals, provides a good foundation for 
development and implementation of an automated process. Other than our 
intent to determine appropriate terminology through focus groups and to 
perform other systems quality assurance testing and the like, we do not 
believe additional testing of the automated process is needed because 
it will incorporate the same or similar policies as the manual process 
that has already undergone testing in Innovation Center models. 
Therefore, we will prioritize the development of procedures to 
implement voluntary alignment using an automated process with the 
intent of incorporating beneficiary attestations into the claims-based 
assignment algorithm beginning with the 2018 performance year. We do 
not intend to develop a manual beneficiary attestation process under 
the Shared Savings Program.
    Comment: A few commenters suggested that ACOs be permitted to opt 
in or out of the use of beneficiary designations in assignment. In 
contrast, some other commenters disagreed that ACOs should be given 
this option in order to ensure all beneficiaries have the opportunity 
to be aligned with the ACO in which the provider or supplier that the 
beneficiary considers responsible for their overall care participates.
    Response: We agree with the commenters who suggested it would be 
inappropriate to permit ACOs to opt into or out of voluntary alignment 
under an automated voluntary alignment approach. We agree that, to the 
extent feasible, all beneficiaries would benefit by being provided with 
the option of designating a healthcare provider responsible for their 
overall care.
    Comment: One commenter supported voluntary alignment, but urged 
that beneficiary designations only be considered, and used to override 
otherwise applicable assignment rules, for beneficiaries who have been 
assigned to an ACO under the claims-based assignment algorithm.
    Response: We disagree. We believe that assignment to ACOs and 
beneficiary engagement under the Shared Savings Program would be better 
enhanced by taking into account all beneficiary attestations and not 
just the beneficiary attestations for those who would have otherwise 
been assigned to an ACO under the claims-based assignment algorithm.
    Comment: Some commenters expressed support for a quarterly process 
to incorporate voluntary alignment for Track 1 and 2 ACOs, and for 
keeping beneficiaries who are prospectively assigned to a Track 3 ACO 
but designate a provider or supplier outside of the ACO as responsible 
for their overall care assigned to the ACO until the end of the 
benchmark or performance year. A few other commenters supported the 
proposal to incorporate the beneficiary attestations annually for Track 
3 ACOs at the time beneficiaries are prospectively assigned for a 
performance year, but for Track 1 and 2 ACOs, the commenters 
recommended changes to the proposal to incorporate voluntary alignment 
on a quarterly basis. For Track 1 and 2 ACOs, the commenter suggested 
that only beneficiary attestations made in the previous year or the 
during the first 3 months of the performance year should be effective 
for that performance year; voluntary alignments made later in the 
performance year would not go into effect until the next performance 
year. The commenter indicated this timing would allow ACOs to identify 
new voluntarily aligned beneficiaries on the quarterly reports 
beginning with the first or second quarter reports, thus enabling the 
ACO to identify and focus efforts on these beneficiaries. The commenter 
indicated this would enable ACOs to be able to better target care for 
beneficiaries likely to be retrospectively assigned to the ACO in order 
to make a meaningful difference for the performance year. Another 
commenter supported keeping a beneficiary who has voluntarily aligned 
with a Track 1 or Track 2 ACO assigned to that ACO for the entire 
performance year, even if the beneficiary later designates a provider 
or supplier outside the ACO as responsible for their overall care in 
the middle of the performance year, because it would avoid adding 
confusion in the administration of the program. Similarly, another 
commenter suggested that variations in the policies regarding voluntary 
alignment by track could lead to confusion for ACOs and difficulty in 
tracking the effect of voluntary alignment on assignment, and 
therefore, recommended that, for all three tracks, voluntary alignment 
should be based simply on the most current choice of primary care 
physician at the end of the performance year.
    Another commenter expressed concerns that voluntary alignment under 
a retrospective assignment methodology (Tracks 1 and 2) could increase 
adverse incentives for ACOs to selectively encourage some beneficiaries

[[Page 80506]]

to stay aligned to the ACO and others to leave it. For example, the 
commenter suggested that a beneficiary having a hip replacement in the 
next few months might be inappropriately encouraged to voluntarily 
align with a healthcare provider outside the ACO to avoid having the 
high cost of a hip replacement included in the ACO's expenditures.
    Response: We proposed to incorporate voluntary alignment for ACOs 
in Tracks 1 and 2 on a quarterly basis because this approach aligns 
with the current timing for updates to the assignment lists for ACOs in 
Tracks 1 and 2. However, following further consideration and based on 
our review of the comments on this issue, we now agree with the 
commenters who indicated that incorporating beneficiary attestation 
less frequently under Tracks 1 and 2 could help ACOs to better focus 
their efforts to target care for beneficiaries likely to be assigned to 
the ACO and make a meaningful difference for the performance year. 
Further, we believe that incorporating beneficiary attestations 
annually, prior to the beginning of a performance year, for all three 
tracks, rather than incorporating beneficiary attestations quarterly 
for Tracks 1 and 2, could be less confusing for ACOs and beneficiaries. 
This timeline aligns with other annual beneficiary election/designation 
processes such as Medicare's annual enrollment period which would 
simplify our education and outreach efforts. This approach might also 
at least partially address the commenter's concern that voluntary 
alignment under Tracks 1 and 2 could increase possible adverse 
incentives for ACOs to encourage some beneficiaries to stay aligned to 
the ACO and others to leave it. We believe such adverse incentives 
under voluntary alignment for Tracks 1 and 2 would be reduced if we 
were to incorporate beneficiary attestation annually, as we proposed 
for Track 3 ACOs. Accordingly, we are modifying our proposed policy in 
order to take beneficiary attestations into account and to voluntarily 
align beneficiaries annually and prospectively to ACOs participating in 
all tracks at the beginning of each performance year, provided the 
beneficiary is eligible for assignment to the ACO. Although we assign 
beneficiaries to ACOs under Tracks 1 and 2 using a preliminary 
prospective with retrospective reconciliation approach for purposes of 
the claims-based assignment methodology, when incorporating beneficiary 
voluntary alignment information, we would assign beneficiaries that 
have attested to a care relationship with an ACO provider/supplier to 
the ACO at the beginning of each performance year and these 
beneficiaries would ``stick'' on the assignment list for the full 
performance year for ACOs under all tracks. In other words, 
beneficiaries who voluntarily align to an ACO participating in Track 1 
or Track 2 would be prospectively assigned to that ACO for the entire 
performance year even if they would not be retrospectively assigned to 
the ACO under the claims-based assignment methodology or later align 
with another provider or supplier outside the ACO during the 
performance year (we note that in such cases, the change in designation 
would be taken into account at the beginning of the next performance 
year).
    In brief, if a beneficiary designates an ACO professional that they 
believe is responsible for coordinating their overall care as their 
``main doctor'', the beneficiary will be assigned to the ACO in which 
that ACO professional is participating, as long as the ACO 
professional's specialty is used in assignment and the beneficiary has 
received at least one primary care service from a physician in that ACO 
and does not meet the criteria for exclusion. If these criteria are 
met, the beneficiary's selection of his or her ``main doctor'' and, 
ultimately, assignment to the ACO would take precedence over any 
assignment to an ACO based on claims. For example, if a beneficiary 
selects a physician in ACO 1 as his or her main doctor, the 
beneficiary's designation would take precedence over claims-based 
assignment, as long as the physician's specialty is used in assignment 
and the beneficiary received a primary care service from a physician in 
ACO 1. This will be the case even if the beneficiary would have 
otherwise been assigned to ACO 2 through claims-based assignment.
    However, if a beneficiary designates a physician or practitioner in 
an ACO and the conditions for assignment are not met, then the claims-
based assignment methodology will be used to determine the 
beneficiary's assignment. For example, if a beneficiary designates a 
physician in ACO 1, he or she could not be assigned to ACO 1 based on 
the attestation if he or she did not receive at least one primary care 
service from a physician in ACO 1. Similarly, if a beneficiary 
designates an ACO professional in ACO 1 whose services are not used in 
assignment, the claims-based assignment methodology would be used to 
determine whether the beneficiary will be assigned to ACO 1, another 
ACO, or to no ACE. Relatedly, if a beneficiary designates a 
practitioner with a specialty used in assignment and the practitioner 
is not affiliated with an ACO, then the beneficiary will not be 
eligible for assignment to an ACO, even if the beneficiary would have 
otherwise been assigned to an ACO through claims-based assignment.
    Finally, we also clarify that consistent with Sec.  425.400(a)(1), 
the assignment methodology described under Sec.  425.402 also applies 
to benchmarking years. Accordingly, when determining beneficiary 
assignment for a benchmark year, we will incorporate beneficiary 
designations that were in place during the assignment window for the 
benchmarking year.
    Comment: One commenter supported aligning beneficiaries that choose 
a ``main doctor'' indefinitely until the beneficiary changes his or her 
designation, drawing an analogy with the way beneficiaries who select 
an MA Plan continue under that MA Plan until the beneficiary chooses 
otherwise. Another commenter expressed concern that this policy could 
result in an ACO being inappropriately held responsible for the costs 
of a beneficiary's care even in cases where the ACO no longer has a 
relationship with the beneficiary and has not furnished services to 
that beneficiary for years. The commenter recommended that voluntary 
alignment override the existing assignment methodology only when a 
beneficiary has at least one qualified primary care service during the 
previous or current performance year with an ACO professional that 
would be considered under Step 1 or Step 2 of the Shared Savings 
Program assignment methodology (based on the existing services used for 
Shared Savings Program assignment). Another commenter recommended that 
if the beneficiary does not update their selection annually, reverting 
to the claims-based alignment should be the default because that will 
be updated regularly as beneficiaries express their preference through 
their healthcare provider visits.
    Response: We continue to believe that it would be appropriate, 
under an automated voluntary alignment process, for a beneficiary's 
designation of a healthcare provider as being responsible for 
coordinating their overall care to stay in effect until the beneficiary 
voluntarily changes his or her designation. We intend to remind 
beneficiaries to make a selection and update it annually; however, we 
believe it would be burdensome to require beneficiaries make this 
designation each year. We also agree that it would be

[[Page 80507]]

inappropriate for an ACO to be held responsible for the costs of a 
beneficiary's care in cases where the ACO no longer has a relationship 
with the beneficiary and has not furnished services to that beneficiary 
for years. However, we believe the voluntary alignment policy directly 
addresses this concern because, under the proposal, beneficiaries that 
have voluntarily aligned with an ACO by designating an ACO professional 
whose services are used in assignment as responsible for coordinating 
their overall care would be added to the ACO's list of assigned 
beneficiaries for a performance year or benchmark year only if certain 
conditions are met. One of these required conditions is that a 
beneficiary must have had at least one primary care service with a 
physician who is an ACO professional in the ACO and who is a primary 
care physician as defined under Sec.  425.20 or who has one of the 
primary specialty designations included in Sec.  425.402(c). In this 
final rule, we are amending the proposed regulations text at Sec.  
425.402(e)(2)(i) to clarify that in order for a beneficiary to be 
eligible for assignment under voluntary alignment this service must 
have been received during the ``assignment window'' for the applicable 
benchmark or performance year as defined at Sec.  425.20. This 
requirement will ensure that a beneficiary cannot remain aligned to an 
ACO for an extended period if the beneficiary's designation is outdated 
and the beneficiary is no longer receiving services from any ACO 
providers/suppliers in the ACO.
    Comment: Several commenters raised specific concerns over the use 
of certain phrases such as ``main doctor'' and recommended testing such 
terminology with beneficiaries through focus groups or other methods. 
For example, some commenters believe the term ``main doctor'' is too 
ambiguous. Other commenters requested that CMS revise physician-centric 
language such as ``main doctor'' to avoid miscommunication given that 
certain non-physician practitioners are also included in the assignment 
process. A commenter suggested that CMS should also work with other 
payers to align terms.
    Response: We appreciate receiving the helpful comments regarding 
what terminology would be preferable to ensure beneficiaries understand 
the significance of designating a provider or supplier as responsible 
for coordinating their overall care. We will consider these suggestions 
further as we implement voluntary alignment and develop program 
guidance and outreach activities for beneficiaries and ACOs. We note 
that the terms used in the Innovation Center models have undergone 
beneficiary focus group testing. However, we may conduct further 
beneficiary focus group testing if necessary to ensure the terms used 
are appropriate and understandable to beneficiaries.
    Comment: One commenter recommended EHR-compatible transfer of 
information about beneficiary attestations.
    Response: We are not entirely certain what the commenter had in 
mind, but we believe it is a request that we consider building in a 
method to electronically alert a practitioner that the beneficiary has 
designated him or her as their ``main doctor. We agree that such a 
feedback loop could be desirable to encourage and enhance the 
relationship beneficiaries have with their practitioners. In the future 
we may consider such possibilities but at this time we plan to 
prioritize development and implementation of an automated voluntary 
alignment process within MyMedicare.gov, as discussed in this section.
    Comment: Several commenters requested more detail regarding the 
process and timing for beneficiaries to designate their ``main doctor'' 
and how ACOs would be educated about the voluntary alignment process 
and applicable program requirements.
    Response: We will notify beneficiaries of this opportunity and 
encourage them to designate their ``main doctor'' or primary healthcare 
provider responsible for coordinating their overall care and explain 
how to do this through beneficiary outreach materials such as through 
the Medicare & You Handbook (see https://www.medicare.gov/medicare-and-you/medicare-and-you.html), the required Shared Savings Program 
notifications under Sec.  425.312, and/or other beneficiary outreach 
activities or materials. We intend to issue, either directly or 
indirectly through template language (for example, template language 
that would be incorporated into the ACO's required written 
notifications under Sec.  425.312), written communications to 
beneficiaries detailing the automated process for voluntary alignment. 
The designation must be made in the form and manner and by a deadline 
determined by CMS. Additionally, as noted above, in the proposed rule 
we stated that to maintain flexibility for ACOs, ACO participants, ACO 
providers/suppliers, ACO professionals, beneficiaries, and CMS, we 
would intend to provide further operational details regarding the 
voluntary alignment process and the applicable implementation timelines 
through subregulatory guidance and other outreach activities. We 
anticipate ensuring ACO and practitioner understanding and compliance 
with program rules using typical methods, for example, through 
guidance, programmatic webinars, newsletter articles, email 
notifications, and communications with the ACO's designated CMS 
coordinator. We intend to monitor beneficiary use of the voluntary 
alignment process and the ACO's compliance with program rules.
    Comment: One commenter expressed concerns about using 
MyMedicare.gov or 1-800-Medicare as the only avenue to collect 
beneficiary attestations, questioning how frequently beneficiaries are 
actively engaging with Medicare through these vehicles. The commenter 
also recommended that the designation of a ``main doctor'' should be 
independent of the ``favorites'' indication in MyMedicare.gov, 
suggesting that being designated as a ``favorite'' is not a good 
indicator of being a ``main doctor''.
    Response: The operational process for beneficiaries to voluntarily 
align with an ACO by designating a ``main doctor'' or primary 
healthcare provider responsible for coordinating their overall care 
will be incorporated into existing processes to the extent feasible. As 
we indicated in the proposed rule, examples by which such a process 
could be automated include using MyMedicare.gov, 1-800-Medicare, or 
Physician Compare. We anticipate that for the first year of the 
automated process, we will enable beneficiaries to voluntarily align 
with an ACO by designating a ``main doctor'' or primary healthcare 
provider responsible for coordinating their overall care through 
MyMedicare.gov. Beneficiaries or their representatives that call 1-800-
Medicare during the early implementation of the automated voluntary 
alignment process in order to designate a ``main doctor'' or primary 
healthcare provider will be provided with information about how to make 
the designation in MyMedicare.gov. Subsequently, we plan to consider 
expanding the use of 1-800-Medicare as a way for beneficiaries to make 
a designation and in order to provide additional avenues or technical 
assistance to support beneficiaries in making a designation. As we and 
our stakeholders gain experience with the automated process, we intend 
to continue to refine and build upon the automated process. More 
information will be forthcoming as we gather additional input from 
beneficiaries, ACOs, and other stakeholders. We agree that designating 
``favorite'' providers is

[[Page 80508]]

not the same as designating a ``main doctor'' and that these two things 
should be independent.
    Comment: A few commenters suggested beneficiaries also be offered 
the opportunity to attest in person, during a visit to an ACO provider/
supplier, if that is their preference.
    Response: We are not providing an option for beneficiaries to 
attest in person during a visit with an ACO provider/supplier or other 
healthcare provider because we are concerned that such an option would 
lead to additional program complexity and could defeat the purpose of 
having an automated process that is designed to relieve stakeholder 
burden experienced when such designations are made manually made at the 
point of care. However, as noted above in this section, we plan to 
provide written educational material and template language that ACOs 
and healthcare providers can use at the point of care to inform and 
educate beneficiaries about the ability to designate a healthcare 
provider in MyMedicare.gov as responsible for the beneficiary's overall 
care.
    Comment: Other commenters questioned whether seniors would keep 
their ``main doctor'' attestation up to date given their varied and 
often unpredictable care needs, and therefore, asked that CMS 
explicitly allow physicians and other appropriately qualified 
individuals involved with patient care to assist beneficiaries in 
keeping their ``main doctor'' attestation up to date.
    Response: We believe it is important to promote engagement and 
discussion between beneficiaries and their healthcare providers. ACOs, 
ACO participants, ACO providers/suppliers, and ACO professionals may 
provide a beneficiary with accurate descriptive information about the 
potential patient care benefits of designating an ACO professional as 
responsible for the beneficiary's overall care. However, we do not 
intend for the voluntary alignment process to be used as a mechanism 
for ACOs (or their ACO participants, ACO providers/suppliers, ACO 
professionals or other individuals or entities performing functions or 
services on behalf of the ACO) to target beneficiaries for whose 
treatment the ACO might expect to earn shared savings, or to avoid 
those for whose treatment the ACO might be less likely to generate 
shared savings.
    Comment: One commenter recommended that rather than asking 
beneficiaries to designate a specific doctor, that they be asked to 
designate the ACO they generally identify as where they receive health 
services because this approach better aligns with ACO-level 
accountability and avoids some of the confusion over ``main doctor.'' 
Another commenter suggested beneficiaries should be provided 
information about the process for opting-out of alignment with an ACO.
    Response: Our experience with the Pioneer ACO Model indicates that 
beneficiaries are less likely to identify with an ACO as compared to an 
individual healthcare provider; that is, when given the option, 
beneficiaries are more likely to align with their practitioner, not 
with an organization. Accordingly, we continue to believe it is 
appropriate under an automated system for beneficiaries to be given the 
option to voluntarily align with an individual healthcare provider 
rather than to an ACO with which the beneficiary may not be familiar. 
For the same reason, we do not believe it is necessary or appropriate 
to give beneficiaries the option of ``opting out'' of assignment to an 
ACO. The intent of the voluntary alignment process is to seek to 
improve beneficiary engagement with a selected practitioner that he/she 
designates as being responsible for his/her overall care, regardless of 
whether the practitioner is participating in an ACO.
    Comment: One commenter recommended information be provided to an 
ACO as soon as the attestation is updated within the CMS designated 
system when one of its assigned beneficiaries designates a new ``main 
doctor.'' The commenter believed this notification would allow ACOs 
time to make any updates to their management of their ``participation 
programs'' and properly manage their patient populations, and it would 
give them guidance on how to set up for their next performance year.
    Response: We are considering possible ways of notifying ACOs that a 
beneficiary has designated one of their ACO providers/suppliers as 
their ``main doctor;'' however, we note that the under the modified 
policy we are adopting in this final rule, ACOs in all tracks will have 
advanced notice when a beneficiary is assigned to them based on the 
voluntary alignment methodology because such beneficiaries will be 
prospectively assigned to the ACO for that performance year and will 
appear on the ACO's assignment list at the beginning of the performance 
year.
    Comment: A commenter suggested CMS should provide beneficiaries 
with a list of providers that they have seen recently (based on claims) 
to simplify their selection and help them accurately select their 
``main doctor.'' The commenter believed this approach would mitigate 
the risk of beneficiaries accidentally selecting doctors with similar 
names, for example.
    Response: We agree this information could be useful for 
beneficiaries. This is a feature that already exists in MyMedicare.gov 
where beneficiaries can access their claims information which includes 
information such as the name of the practitioner that submitted the 
claim. We note this information can be used currently to build the 
beneficiary's ``favorites'' list. Similarly, the beneficiary could use 
the information to assist in making their ``main doctor'' designation.
    Comment: A commenter suggested an alternative approach for 
assigning beneficiaries to ACOs using claims submitted by providers and 
suppliers using only the codes for initial Medicare visits, annual 
wellness visits, chronic care management, and advanced care planning; 
the commenter believed this alternative approach would be less 
cumbersome for CMS to administer and a simpler and more streamlined 
approach for beneficiaries and the primary care physician.
    Response: We will continue to consider suggestions that might 
further improve the beneficiary assignment methodology. However, we are 
giving priority to supplementing the current claims-based assignment 
process with a voluntary alignment process that incorporates 
beneficiary attestation about their ``main doctor'' which we believe 
will more directly help ACOs to increase patient engagement, improve 
care management and health outcomes, and lower expenditures for 
beneficiaries. The process may also be advantageous for beneficiaries 
by improving engagement between the beneficiary and the practitioner 
they believe is primarily responsible for their overall care.
    Comment: A commenter suggested CMS provide incentives for 
beneficiaries who designate an ACO professional within the ACO.
    Response: We are unclear as to what incentives this commenter was 
suggesting but we would note that we do not believe we have authority 
under the Shared Savings Program to provide incentives for 
beneficiaries who designate an ACO professional within the ACO as their 
``main doctor.'' Further, the ACO, ACO participants, ACO providers/
suppliers, ACO professionals, and other individuals and entities 
performing functions and services related to ACO activities are 
prohibited from providing or offering gifts or other remuneration to 
Medicare beneficiaries as inducements to influence a Medicare 
beneficiary's decision to designate or not designate an

[[Page 80509]]

ACO professional as responsible for coordinating their overall care.
    Comment: We received several comments supporting the proposals to 
prohibit ACOs from directly or indirectly influencing a Medicare 
beneficiary's decision to designate or not designate an ACO 
professional as responsible for coordinating their overall care. The 
commenters indicated this could help ensure that ACOs do not ``cherry-
pick'' the healthiest patients or ``lemon-drop'' patients with certain 
complex, costly diseases. Some commenters also urged CMS to put in 
place mechanisms to monitor the impact of voluntary alignment on the 
composition of ACOs' assigned beneficiary populations, especially with 
regard to any changes in the prevalence of patients with certain 
complex, costly diseases within a specific ACO.
    Response: We intend to monitor the implementation of voluntary 
alignment. As noted above in this section, we emphasize that we do not 
intend for the voluntary alignment process to be used as a mechanism 
for ACOs (or their ACO participants, ACO providers/suppliers, ACO 
professionals or other individuals or entities performing functions or 
services on behalf of the ACO) to target beneficiaries for whose 
treatment the ACO might expect to earn shared savings, or to avoid 
those for whose treatment the ACO might be less likely to generate 
shared savings. However, we believe it is important to promote 
engagement and discussion between beneficiaries and their healthcare 
providers. Therefore ACOs, ACO participants, ACO providers/suppliers, 
and ACO professionals are not prohibited from providing a beneficiary 
with accurate descriptive information about the potential patient care 
benefits of designating an ACO professional as responsible for the 
beneficiary's overall care.
    Final Action: We are finalizing our proposal to incorporate 
beneficiary preference into ACO assignment as proposed with two 
modifications as noted above. In addition, we are making a minor 
editorial revision to paragraph (b) of Sec.  425.402 in order to more 
clearly identify beneficiaries assigned by the claims-based assignment 
methodology.
     We no longer intend to develop a manual voluntary 
alignment process as an alternative for ACOs participating in Track 3 
in the event an automated process is not ready for performance year 
2018, and instead will focus on developing and implementing an 
automated voluntary alignment process with the intent of incorporating 
beneficiary designations into the current claims-based assignment 
algorithm beginning with the 2018 performance year. If an automated 
system is not available during the assignment window for the 2018 
performance year, then voluntary alignment would not be used for 
performance year 2018.
     We are modifying our proposed policy to incorporate new or 
revised beneficiary attestations and align such beneficiaries to ACOs 
in Tracks 1 and 2 on a quarterly basis and instead will incorporate 
these updates and align such beneficiaries prospectively for all tracks 
at the beginning of each performance and benchmark year, provided the 
beneficiary is eligible for assignment to the ACO in which their 
designated ``main doctor'' is participating.
     We are modifying Sec.  425.402, paragraph (b), by removing 
the phrase ``beneficiaries to an ACO:'' and adding in its place the 
phrase ``beneficiaries to an ACO based on available claims 
information.'' This revision is necessary to ensure understanding that 
the procedure described under paragraph (b) is based on claims data, 
not on other data that may be available (such as voluntary alignment 
data).
    We are also revising the regulations governing the assignment 
methodology to amend Sec.  425.402(b) and add a new paragraph (e) to 
Sec.  425.402. Beginning in performance year 2018, if a system is 
available to allow beneficiaries to designate a provider or supplier as 
responsible for coordinating their overall care and for CMS to process 
the designation electronically, beneficiaries that have voluntarily 
aligned with an ACO by designating an ACO professional whose services 
are used in assignment as responsible for coordinating their overall 
care will be added to the ACO's list of assigned beneficiaries, for a 
benchmark or performance year under the following conditions:
     The beneficiary must have had at least one primary care 
service during the assignment window as defined under Sec.  425.20 with 
a physician who is an ACO professional in the ACO and who is a primary 
care physician as defined under Sec.  425.20 of this subpart or who has 
one of the primary specialty designations included in Sec.  425.402(c).
     The beneficiary must meet the assignment eligibility 
criteria established in Sec.  425.401(a), and must not be excluded by 
the criteria at Sec.  425.401(b). Such exclusion criteria shall apply 
to all tracks for purposes of alignment based on beneficiary 
designation information.
     The beneficiary must have designated an ACO professional 
who is a primary care physician as defined at Sec.  425.20 of this 
part, a physician with a specialty designation included at Sec.  
425.402(c) of this subpart, or a nurse practitioner, physician 
assistant, or clinical nurse specialist as responsible for their 
overall care.
     The designation must be made in the form and manner and by 
a deadline determined by CMS.
    In contrast, if a beneficiary designates a provider or supplier 
outside the ACO, who is a primary care physician as defined at Sec.  
425.20 of this part, a physician with a specialty designation included 
at Sec.  425.402(c), or a nurse practitioner, physician assistant, or 
clinical nurse specialist, as responsible for coordinating their 
overall care, the beneficiary will not be added to the ACO's list of 
assigned beneficiaries for a performance year or benchmark year, even 
if the beneficiary would otherwise be included in the ACO's assigned 
beneficiary population under the assignment methodology in Sec.  
425.402(b).
    Further, we are finalizing our proposal that the ACO and its ACO 
participants, ACO providers/suppliers, ACO professionals, and other 
individuals or entities performing functions or services related to ACO 
activities are prohibited from providing or offering gifts or other 
remuneration to Medicare beneficiaries as inducements to influence a 
Medicare beneficiary's decision to designate or not designate an ACO 
professional under Sec.  425.402(e). The ACO, ACO participants, ACO 
providers/suppliers, ACO professionals, and other individuals or 
entities performing functions or services related to ACO activities 
must not directly or indirectly, commit any act or omission, nor adopt 
any policy that coerces or otherwise influences a Medicare 
beneficiary's decision to designate or not designate an ACO 
professional as responsible for coordinating their overall care, 
including but not limited to the following:
     Offering anything of value to the Medicare beneficiary as 
an inducement to influence the Medicare beneficiary's decision to 
designate or not to designate an ACO professional as responsible for 
coordinating their overall care. Any items or services provided in 
violation of this prohibition will not be considered to have a 
reasonable connection to the medical care of the beneficiary, as 
required under Sec.  425.304(a)(2).
     Withholding or threatening to withhold medical services or 
limiting or threatening to limit access to care.
    We will provide further operational details regarding the voluntary 
alignment process and the applicable

[[Page 80510]]

implementation timelines through subregulatory guidance and other 
outreach activities.
3. SNF 3-Day Rule Waiver Beneficiary Protections
a. Background
    The Medicare SNF benefit is for beneficiaries who require a short-
term intensive stay in a SNF, requiring skilled nursing, or skilled 
rehabilitation care, or both. Under section 1861(i) of the Act, 
beneficiaries must have a prior inpatient hospital stay of no fewer 
than 3 consecutive days in order to be eligible for Medicare coverage 
of inpatient SNF care. In the June 2015 final rule (80 FR 32804 through 
32806), we provided ACOs participating in Track 3 with additional 
flexibility to attempt to increase quality and decrease costs by 
allowing these ACOs to apply for a waiver of the SNF 3-day rule for 
their prospectively assigned beneficiaries when they are admitted to 
certain ``SNF affiliates,'' that is, SNFs with whom the ACO has 
executed SNF affiliate agreements. (See Sec.  425.612(a)(1)). Waivers 
are effective upon CMS notification of approval for the waiver or the 
start date of the ACO's participation agreement, whichever is later. 
(See Sec.  425.612(c)). We stated in the June 2015 final rule that the 
SNF 3-day rule waiver would be effective for services furnished on or 
after January 1, 2017. Program requirements for this waiver are 
codified at Sec.  425.612. These requirements are primarily based on 
criteria previously developed under the Pioneer ACO Model. 
Specifically, under Sec.  425.612(a)(1), we waive the requirement in 
section 1861(i) of the Act for a 3-day inpatient hospital stay prior to 
a Medicare covered post-hospital extended care service for eligible 
beneficiaries prospectively assigned to ACOs participating in Track 3 
that have been approved to implement the waiver that receive otherwise 
covered post-hospital extended care services furnished by an eligible 
SNF that has entered into a written agreement to partner with the ACO 
for purposes of this waiver. All other provisions of the statute and 
regulations regarding Medicare Part A post-hospital extended care 
services continue to apply.
    We believe that clarity regarding whether a waiver applies to SNF 
services furnished to a particular beneficiary is important to help 
ensure compliance with the conditions of the waiver and also improve 
our ability to monitor waivers for misuse. Therefore, in the June 2015 
final rule, we limited the waiver to ACOs in Track 3 because under the 
prospective assignment methodology used in Track 3, beneficiaries are 
assigned in advance to the ACO for the entire performance year (unless 
they meet any of the exclusion criteria under Sec.  425.401(b) during 
the performance year), so it will be clearer to a Track 3 ACO whether 
the waiver applies to SNF services furnished to a particular 
beneficiary than it would be to an ACO in Track 1 or 2, where 
beneficiaries are assigned using a preliminary prospective assignment 
methodology with retrospective reconciliation (80 FR 32804). An ACO's 
use of the SNF 3-day rule waiver will be associated with a distinct and 
easily identifiable event, specifically, admission of a prospectively 
assigned beneficiary to a previously identified SNF affiliate without 
prior inpatient hospitalization or after an inpatient hospitalization 
of fewer than 3 days.
    Based on our experiences under the Pioneer ACO Model, and in 
response to comments, we established certain requirements under Sec.  
425.612 for ACOs, ACO providers/suppliers, SNF affiliates, and 
beneficiaries with respect to the SNF 3-day rule waiver under the 
Shared Savings Program. All ACOs electing to participate in Track 3 
will be offered the opportunity to apply for a waiver of the SNF 3-day 
rule for their prospectively assigned beneficiaries at the time of 
their initial application to participate in Track 3 of the program and 
annually thereafter while participating in Track 3. We began accepting 
the first SNF 3-day rule waiver applications from Track 3 ACOs this 
past summer.
    To be eligible to receive covered services under the SNF 3-day rule 
waiver, a beneficiary must be prospectively assigned to the ACO for the 
performance year in which he or she is admitted to the SNF affiliate, 
may not reside in a SNF or other long-term care setting, must be 
medically stable and have an identified skilled nursing or 
rehabilitation need that cannot be provided as an outpatient, and must 
meet the other requirements set forth at Sec.  425.612(a)(1)(ii).
    For a SNF to be eligible to partner with ACOs for purposes of the 
waiver, the SNF must have an overall quality rating of 3 or more stars 
under the CMS 5 Star Quality Rating System, and must sign a written 
agreement with the ACO, which we refer to as the ``SNF affiliate 
agreement,'' that includes elements determined by CMS, including: A 
clear indication of the effective dates of the SNF affiliate agreement; 
agreement to comply with Shared Savings Program rules, including but 
not limited to those specified in the participation agreement between 
the ACO and CMS; agreement to validate beneficiary eligibility to 
receive covered SNF services under the waiver prior to admission; 
remedial processes and penalties for noncompliance with the terms of 
the waiver, and other requirements set forth at Sec.  
425.612(a)(1)(iii). The SNF affiliate agreement must include these 
elements to ensure that the SNF affiliate understands its 
responsibilities related to implementation of the SNF 3-day rule 
waiver.
    We indicated in the June 2015 final rule that the SNF 3-day rule 
waiver would be effective no earlier than January 1, 2017; thereafter, 
the waiver will be effective upon CMS notification to the ACO of 
approval for the waiver or the start date of the ACO's participation 
agreement, whichever is later, and will not extend beyond the term of 
the ACO's participation agreement.
    We also indicated in the June 2015 final rule that we established 
the timeline for implementation of the SNF 3-day rule waiver to allow 
for development of additional subregulatory guidance, including 
necessary education and outreach for ACOs, ACO participants, ACO 
providers/suppliers, and SNF affiliates. We noted that we would 
continue to evaluate the waiver of the SNF 3-day rule, including 
further lessons learned from Innovation Center models in which a waiver 
of the SNF 3-day rule is being tested. We indicated that in the event 
we determined that additional safeguards or protections for 
beneficiaries or other changes were necessary, such as to incorporate 
additional protections for beneficiaries into the ACO's participation 
agreement or SNF affiliate agreements, we would propose the necessary 
changes through future rulemaking.
    In considering additional beneficiary protections that may be 
necessary to ensure proper use of the SNF 3-day rule waiver under the 
Shared Savings Program, we note that there are existing, well 
established payment and coverage policies for SNF services based on 
sections 1861(i), 1862(a)(1), and 1879 of the Act that include 
protections for beneficiaries from liability for certain non-covered 
SNF charges. These existing payment and coverage policies for SNF 
services continue to apply to SNF services furnished to beneficiaries 
assigned to ACOs participating in the Shared Savings Program, including 
services furnished pursuant to the SNF 3-day rule waiver. (For example, 
see the Medicare Claims Processing Manual, Chapter 30--Financial 
Liability Protections, section 70, available at https://www.cms.gov/
Regulations-and-Guidance/Guidance/Manuals/

[[Page 80511]]

Downloads/clm104c30.pdf; Medicare Coverage of Skilled Nursing Facility 
Care beneficiary booklet, Section 6: Your Rights & Protections, 
available at https://www.medicare.gov/Pubs/pdf/10153.pdf; and Medicare 
Benefit Policy Manual, Chapter 8--Coverage of Extended Care (SNF) 
Services Under Hospital Insurance available at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/bp102c08.pdf). In 
general, CMS requires that the SNF inform a beneficiary in writing 
about services and fees before the beneficiary is admitted to the SNF 
(Sec.  483.10(b)(6)); the beneficiary cannot be charged by the SNF for 
items or services that were not requested (Sec.  483.10(c)(8)(iii)(A)); 
a beneficiary cannot be required to request extra services as a 
condition of continued stay (Sec.  483.10(c)(8)(iii)(B)); and the SNF 
must inform a beneficiary that requests an item or service for which a 
charge will be made that there will be a charge for the item or service 
and what the charge will be (Sec.  483.10(c)(8)(iii)(C)). (See also 
section 6 of Medicare Coverage of Skilled Nursing Facility Care at 
https://www.medicare.gov/Pubs/pdf/10153.pdf.)
b. Proposals
    Since publication of the June 2015 final rule, we have continued to 
learn from implementation and refinement of the SNF 3-day rule waiver 
in the Pioneer ACO Model (see https://innovation.cms.gov/initiatives/Pioneer-aco-model/) and the Next Generation ACO Model (see https://innovation.cms.gov/initiatives/Next-Generation-ACO-Model). Based on 
these experiences, we indicated in the proposed rule that we believe 
there are situations where it would be appropriate to require 
additional beneficiary financial protections under the SNF 3-day rule 
waiver for the Shared Savings Program. Specifically, we are concerned 
about potential beneficiary financial liability for non-covered Part A 
SNF services that might be directly related to use of the SNF 3-day 
rule waiver under the Shared Savings Program.
    First, one example of a scenario under which a beneficiary may be 
at financial risk relates to the quarterly exclusions from a Track 3 
ACO's prospective assignment list. For example, assume a beneficiary 
was prospectively assigned to a Track 3 ACO that has been approved for 
the SNF 3-day rule waiver (a waiver-approved ACO), but during the first 
quarter of the year, the beneficiary's Part B coverage terminated and 
the beneficiary is therefore no longer eligible to be assigned to the 
ACO. As a result, the beneficiary would be excluded from the ACO's 
prospective assignment list because the beneficiary meets one or more 
of the exclusion criteria specified at Sec.  425.401(b). That is, 
although SNF services are covered under Part A, not Part B, the 
beneficiary would be dropped from the ACO's prospective assignment list 
if during the performance year the beneficiary is no longer enrolled in 
Part B and thus no longer eligible to be assigned to the ACO. We are 
concerned about some very limited situations, such as when a 
beneficiary's Part B coverage terminates during a quarter when the 
beneficiary is also receiving SNF services. The beneficiary may be 
admitted to a SNF without a prior 3-day inpatient hospital stay after 
his or her Part B coverage ended, but before the beneficiary appears on 
a quarterly exclusion list. It is not operationally feasible for CMS to 
notify the ACO and for the ACO, in turn, to notify its SNF affiliates, 
ACO participants, and ACO providers/suppliers immediately of the 
beneficiary's exclusion. The lag in communication may then cause the 
SNF affiliate to unknowingly admit a beneficiary who no longer 
qualifies for the waiver without a prior 3-day inpatient hospital stay. 
Absent specific beneficiary protections, we are concerned that the 
beneficiary could be charged for such non-covered SNF services. We do 
not believe it would be appropriate for CMS to hold the beneficiary or 
the SNF affiliate financially liable for such services. We believe we 
should allow for a reasonable amount of time for CMS to communicate 
beneficiary exclusions to an ACO and for the ACO to communicate the 
exclusions to its SNF affiliates, ACO participants, and ACO providers/
suppliers. Typically there would be no way for the SNF affiliate to 
verify in real-time that a beneficiary continues to be prospectively 
assigned to the ACO; the SNF affiliate must rely upon the assignment 
list and quarterly exclusion lists provided by CMS to the ACO and 
communicated by the ACO to its SNF affiliates, ACO participants, and 
ACO providers/suppliers. Further, the beneficiary does not receive a 
notification regarding his or her eligibility for the SNF 3-day rule 
waiver prior to receiving SNF services under the waiver, so 
beneficiaries are not able to check their own eligibility.
    To address delays in communicating beneficiary exclusions from the 
prospective assignment list, the Pioneer ACO Model and Next Generation 
ACO Model provide for a 90-day grace period that functionally acts as 
an extension of beneficiary eligibility for the SNF 3-day rule waiver 
and permits some additional time for the ACO to receive quarterly 
exclusions lists from CMS and communicate beneficiary exclusions to its 
SNF affiliates. In the proposed rule, we stated that we believe it 
would be appropriate, in order to protect beneficiaries from potential 
financial liability related to the SNF 3-day rule waiver under the 
Shared Savings Program, to establish a similar 90-day grace period in 
the case of a beneficiary who was prospectively assigned to a waiver-
approved ACO at the beginning of the performance year but is later 
excluded from assignment to the ACO.
    Therefore, we explained that we believe it is necessary for 
purposes of carrying out the Shared Savings Program to allow formerly 
assigned beneficiaries to receive covered SNF services under the SNF 3-
day rule waiver when the beneficiary is admitted to a SNF affiliate 
within a 90-day grace period following the date that CMS delivers the 
quarterly beneficiary exclusion list to an ACO. The equitable and 
efficient implementation of the SNF 3-day rule waiver is necessary to 
further support ACOs' efforts to increase quality and decrease costs 
under two-sided performance-based risk arrangements. (See 80 FR 32804 
for a detailed discussion of the rationale for establishing the SNF 3-
day rule waiver.) Based upon the experience in the Pioneer ACO Model, 
we believe it is not possible to adopt such a waiver without providing 
some protection for certain beneficiaries who were prospectively 
assigned to the ACO at the start of the year, but are subsequently 
excluded from assignment. Accordingly, we proposed to modify the waiver 
to include a 90-day grace period to allow sufficient time for CMS to 
notify the ACO of any beneficiary exclusions, and for the ACO then to 
inform its SNF affiliates, ACO participants, and ACO providers/
suppliers of those exclusions.
    More specifically, we proposed to modify the waiver under Sec.  
425.612(a)(1) to include a 90-day grace period that would permit 
payment for SNF services provided to beneficiaries who were initially 
on the ACO's prospective assignment list for a performance year but 
were subsequently excluded during the performance year. CMS would make 
payments for SNF services furnished to such a beneficiary under the 
terms of the SNF 3-day rule waiver if the following conditions are met:
     The beneficiary was prospectively assigned to a waiver-
approved ACO at the beginning of the performance year

[[Page 80512]]

but was excluded in the most recent quarterly exclusion list.
     The SNF affiliate services are furnished to a beneficiary 
admitted to the SNF affiliate within 90 days following the date that we 
deliver the quarterly exclusion list to the ACO.
     We would have otherwise made payment to the SNF affiliate 
for the services under the SNF 3-day rule waiver, but for the 
beneficiary's exclusion from the waiver-approved ACO's prospective 
assignment list.
    We further noted that we anticipate that there would be very few 
instances where it would be appropriate for SNF services to qualify for 
payment under this 90-day grace period. This is because this waiver 
only allows for payment for claims that meet all applicable 
requirements except the requirement for a prior 3-day inpatient 
hospital stay. For example, assume that a beneficiary who had been 
assigned to a waiver-approved ACO was admitted to a SNF without a prior 
3-day inpatient hospital stay after his or her enrollment in an MA 
Plan, but before the beneficiary appears on a quarterly exclusion list. 
In this case, these SNF services would not be covered under FFS because 
the waiver does not expand coverage to include services furnished to 
Medicare beneficiaries enrolled in MA Plans. Both beneficiaries and 
healthcare providers are expected to know that the beneficiary is 
covered under an MA plan and not FFS Medicare.
    Second, we are concerned that there could be other more likely 
scenarios where a beneficiary could be charged for non-covered SNF 
services that were a result of an ACO's or SNF's inappropriate use of 
the SNF 3-day rule waiver. Specifically, we are concerned that a 
beneficiary could be charged for non-covered SNF services if a SNF 
affiliate were to admit a FFS beneficiary who is not prospectively 
assigned to the waiver-approved ACO, and payment for SNF services is 
denied for lack of a qualifying inpatient hospital stay.
    We believe this situation could occur as a result of a breakdown in 
one or more of processes the ACO and SNF affiliate are required to have 
in place to implement the waiver. For example, the SNF affiliate and 
the admitting ACO provider/supplier may not verify that the beneficiary 
appears on the ACO's prospective assignment list prior to admission, as 
required under the SNF 3-day rule waiver (Sec.  
425.612(a)(1)(iii)(B)(4)) and the terms of the SNF's affiliate 
agreement with the ACO. In this scenario, Medicare would deny payment 
of the SNF claim under existing FFS rules because the beneficiary did 
not have a qualifying inpatient hospital stay. We are concerned that, 
once the claim is rejected, the beneficiary may not be protected from 
financial liability, and thus could be charged by the SNF affiliate for 
these non-covered SNF services that were a result of an inappropriate 
attempt to use the waiver, potentially subjecting the beneficiary to 
significant financial liability. However, in this scenario, a SNF with 
a relationship to the ACO submitted the claim that was rejected for 
lack of a qualifying inpatient hospital stay, but that otherwise would 
have been paid by Medicare. In this circumstance, we proposed to assume 
the SNF's intent was to rely upon the SNF 3-day rule waiver, but the 
waiver requirements were not met. We believe it is reasonable to assume 
the SNF's intent was to use the SNF 3-day rule waiver because, as a SNF 
affiliate, the SNF should be well aware of the ability to use the SNF 
3-day rule waiver and, by submitting the claim, demonstrated an 
expectation that CMS would pay for SNF services that would otherwise 
have been rejected for lack of a 3-day inpatient hospital stay. We 
believe that in this scenario, the rejection of the claim under the SNF 
3-day rule waiver could easily have been avoided if the ACO, the 
admitting ACO provider/supplier, and the SNF affiliate had confirmed 
that the requirements for use of the SNF 3-day rule waiver were 
satisfied. Because each of these entities is in a better position to 
know the requirements of the waiver and ensure that they are met than 
the beneficiary is, we believe that the ACO and/or the SNF affiliate 
should be accountable for such rejections and the SNF affiliate should 
be prevented from attempting to charge the beneficiary for the non-
covered SNF stay.
    To address situations similar to this scenario where the 
beneficiary may be subject to financial liability due to an eligible 
SNF submitting a claim that is not paid only as a result of the lack of 
a qualifying inpatient hospital stay, the Next Generation ACO Model 
generally places the financial responsibility on the SNF, where the SNF 
knew or reasonably could be expected to have known that payment would 
not be made for the non-covered SNF services. In such cases, CMS makes 
no payment for the services and the SNF may not charge the beneficiary 
for the services and must return any monies collected from the 
beneficiary. Additionally, under the Next Generation ACO Model, the ACO 
must indemnify and hold the beneficiary harmless for payment for the 
services. We believe it is appropriate to propose to adopt a similar 
policy under the Shared Savings Program because, under Sec.  
425.612(a)(1)(iii)(B), to be a SNF affiliate, a SNF must agree to 
validate the eligibility of a beneficiary to receive covered SNF 
services in accordance with the waiver prior to admission to the SNF, 
and otherwise comply with the requirements and conditions of the Shared 
Savings Program. SNF affiliates are required to be familiar with the 
SNF 3-day rule and the terms and conditions of the SNF 3-day rule 
waiver for the Shared Savings Program, and should know to verify that a 
FFS Medicare beneficiary who is a candidate for admission has completed 
a qualifying hospital stay or that the admission meets the criteria 
under a waiver of the SNF 3-day rule that is properly in place. 
Additionally, ACOs and their SNF affiliates are required to develop 
plans that will govern communication and beneficiary evaluation and 
admission prior to use of the SNF 3-day rule waiver. In these 
circumstances, we believe it is reasonable that the ultimate 
responsibility and liability for a non-covered SNF admission should 
rest with the admitting SNF affiliate.
    Therefore, to protect FFS beneficiaries from being charged in 
certain circumstances for non-covered SNF services related to the 
waiver of the SNF 3-day rule under the Shared Savings Program, 
potentially subjecting such beneficiaries to significant financial 
liability, we proposed to add certain beneficiary protection 
requirements in Sec.  425.612(a)(1). These requirements would apply to 
SNF services furnished by a SNF affiliate that would otherwise have 
been covered except for the lack of a qualifying hospital stay 
preceding the admission to the SNF affiliate. Specifically, we proposed 
that we would make no payment to the SNF, and the SNF may not charge 
the beneficiary for the non-covered SNF services, in the event that a 
SNF that is a SNF affiliate of a Track 3 ACO that has been approved for 
the SNF 3-day rule waiver admits a FFS beneficiary who was never 
prospectively assigned to the waiver-approved ACO (or was assigned but 
later excluded and the 90 day grace period has lapsed), and the claim 
is rejected only for lack of a qualifying inpatient hospital stay.
    In this situation, we proposed that we would apply the following 
rules:
     We would make no payment to the SNF affiliate for such 
services.
     The SNF affiliate must not charge the beneficiary for the 
expenses incurred for such services, and the SNF affiliate must return 
to the beneficiary any monies collected for such services.

[[Page 80513]]

     The ACO may be required to submit a corrective action plan 
to CMS for approval as specified at Sec.  425.216(b) addressing what 
actions the ACO will take to ensure that the SNF 3-day rule waiver is 
not misused in the future. If after being given an opportunity to act 
upon the corrective action plan the ACO fails to come into compliance, 
approval to use the waiver will be terminated in accordance with Sec.  
425.612(d). We noted that in accordance with our existing program rules 
at Sec. Sec.  425.216 and 425.218, CMS retains the authority to take 
corrective action, including terminating an ACO for non-compliance with 
program rules. A misuse of a waiver under Sec.  425.612 would 
constitute non-compliance with program rules. Accordingly, we proposed 
to codify at new provision at Sec.  425.612(d)(4) providing that misuse 
of a waiver under Sec.  425.612 may result in CMS taking remedial 
action against the ACO under Sec. Sec.  425.216 and 425.218, up to and 
including termination of the ACO from the Shared Savings Program.
    We proposed that if the SNF submitting the claim is a SNF affiliate 
of a waiver-approved ACO, and the only reason for the rejection of the 
claim is lack of a qualifying inpatient hospital stay, then CMS would 
assume the SNF intended to rely upon the SNF 3-day rule waiver. We 
would not assume the SNF intended to rely upon the SNF 3-day rule 
waiver if the SNF is not a SNF affiliate of a waiver-approved ACO 
because the waiver is not available to SNFs more broadly. We explained 
that we believe intended reliance on the waiver is an important factor 
in determining whether the proposed additional beneficiary protections 
should apply. Outside the context of an intent to rely on the SNF 3-day 
rule waiver, we do not believe it would be necessary to include 
additional beneficiary protections under the Shared Savings Program 
because there is no reason for either the beneficiary or the SNF to 
expect that different coverage rules would apply to SNF services. In 
these other situations, the beneficiary protections generally 
applicable under traditional FFS Medicare, noted earlier in this 
section, continue to apply.
    We solicited comments on these proposals. We noted that under our 
proposed beneficiary protection provision, a SNF affiliate would be 
prohibited from charging a beneficiary for non-covered SNF services 
even in cases where the beneficiary explicitly requested or agreed to 
being admitted to the SNF in the absence of a qualifying 3-day hospital 
stay if all other requirements for coverage are met. We therefore 
specifically solicited comment on whether it is reasonable to hold SNFs 
that are SNF affiliates responsible for all claims that are rejected 
solely as a result of lack of a qualifying inpatient hospital stay. We 
also solicited comment on whether the ACO rather than or in addition to 
the SNF affiliate, should be held liable for such claims and under what 
circumstances. We also solicited comment on our proposal to modify the 
waiver under Sec.  425.612(a)(1) to include a 90-day grace period for 
beneficiaries prospectively assigned to a waiver-approved ACO at the 
start of the performance year but later excluded. We solicited comment 
on the proposed length of the grace period, and in particular whether 
the grace period should be less than 90 days, given our expectation 
that ACOs will share the quarterly beneficiary exclusion lists with 
their SNF affiliates, ACO participants, and ACO providers/suppliers in 
a timely manner. Finally, we solicited comment on any other related 
issues that we should consider in connection with these proposals to 
protect beneficiaries from significant financial liability for non-
covered SNF services related to the waiver of the SNF 3-day rule under 
the Shared Savings Program.
    The following is a summary of the comments we received on these 
proposals.
    Comment: Commenters, in general, supported the proposed enhanced 
beneficiary protections under the SNF 3-day rule waiver that are 
largely consistent with the beneficiary protections in place under the 
Next Generation ACO Model. Commenters agreed that it would be 
appropriate to hold beneficiaries harmless for non-covered SNF services 
if a SNF affiliate admitted a beneficiary who was not qualified for the 
waiver without a qualifying inpatient stay. Commenters also generally 
agreed that a 90-day grace period from the date that CMS delivers the 
quarterly beneficiary exclusion list to ACOs is a reasonable period to 
allow ACOs to incorporate beneficiary exclusions into their processes, 
including communicating the updated beneficiary information to ACO 
participants, ACO providers/suppliers, and SNF affiliates. Although 
most commenters supported the proposals without additional elaboration, 
a few commenters expressed other specific concerns or made additional 
suggestions which are addressed in this section.
    Response: We appreciate commenters' support for our proposal to 
incorporate enhanced beneficiary protections under the SNF 3-day rule 
waiver that are largely consistent with the beneficiary protections in 
place under the Next Generation ACO Model.
    Comment: A commenter recommended that the first grace period of the 
calendar year be extended to accommodate a very large exclusion file 
that is distributed in July. This commenter further noted that the July 
exclusion file often includes a change in file format or other criteria 
for files transmitted to ACOs, such that it requires significant time 
to work through the data file transmission and loading process.
    Response: We are a somewhat unclear about the concerns regarding 
the exclusion file referenced in this comment and believe they may 
perhaps relate to an EHR measure exclusion file that is unrelated to 
the quarterly beneficiary exclusion process. Regardless, we believe a 
90-day grace period is more than sufficient time for the appropriate 
communications to occur regarding exclusions from the prospective 
assignment list. Under the rules governing the SNF 3-day rule waiver, 
the ACO must have a communication plan, a beneficiary evaluation and 
admission plan, and a care management plan in place prior to our 
approval of the ACO for use of the waiver. The requirement that an ACO 
have these plans in place should help to mitigate concerns regarding 
the length of the grace period by ensuring that the ACO has established 
procedures in place to govern communications between the ACO, its SNF 
affiliates, ACO participants, and ACO providers/suppliers regarding 
beneficiary eligibility and admissions under the terms of the waiver. 
Thus, we continue to believe that a 90-day grace period is a sufficient 
time period for an ACO to process the quarterly exclusion list and 
transmit any beneficiary exclusions to its ACO participants, ACO 
providers/suppliers, and SNF affiliates.
    Comment: Some commenters supported our proposal that no payments 
would be made to SNF affiliates for SNF services furnished without a 
qualifying inpatient hospital stay to beneficiaries who are not 
assigned to the ACO or who are not in the 90-day grace period. These 
commenters agreed that the financial responsibility for SNF stays that 
do not meet the waiver criteria should lie with the SNF because, in 
accordance with our rules for use of the waiver by SNF affiliates, SNF 
affiliates are responsible for confirming a beneficiary's eligibility 
to receive services under the waiver prior to admission. Some 
commenters disagreed with this aspect of the proposal, suggesting that 
ACOs should be responsible for at least some the

[[Page 80514]]

liability. One commenter indicated that, SNF affiliates should not be 
accountable for identifying waiver-eligible beneficiaries and suggested 
that CMS ``require hospitals to share the list of waiver-eligible Track 
3-enrolled beneficiaries with all of their ACOs and partner SNFs.'' 
This commenter also requested that CMS explore additional policies that 
would give SNF affiliates independent access to beneficiary waiver 
eligibility information that they could access prior to admission to 
verify if a beneficiary meets the eligibility requirements for the 
waiver. To illustrate possibilities, the commenter suggested that CMS 
could: (1) Make it a requirement for SNF affiliate agreements that the 
ACO provide all SNF affiliates with timely, accurate lists of waiver-
eligible beneficiaries; or (2) CMS could integrate information 
regarding eligibility for the SNF 3-day rule waiver into the Common 
Working File so that SNFs may independently verify a beneficiary's 
eligibility under the waiver.
    Response: After reviewing the comments, we continue to believe the 
proposed policy, which is based on beneficiary protections under the 
Next Generation ACO Model, is also appropriate under the Shared Savings 
Program. Under Sec.  425.612(a)(1)(iii)(B), in order to be a SNF 
affiliate, a SNF must agree to validate the eligibility of a 
beneficiary to receive covered SNF services in accordance with the 
waiver prior to admission to the SNF, and otherwise comply with the 
requirements and conditions of the Shared Savings Program. As a result, 
we do not believe it is unreasonable to hold the SNF affiliate 
financially responsible if it admits a beneficiary that is neither 
prospectively assigned to a Track 3 ACO nor in a 90-day grace period 
without a qualifying inpatient hospital stay. We also believe it is 
reasonable to hold the SNF affiliate fully responsible under these 
circumstances because a SNF affiliate is obligated under the terms and 
conditions of the SNF 3-day rule waiver to validate the beneficiary's 
eligibility for use of the waiver prior to admission.
    Further, we do not believe that it is necessary to include the 
suggested additional requirements for SNF affiliate agreements. The 
current requirements provide SNFs with the flexibility to address, in 
their SNF affiliate agreements with Track 3 ACOs, any concerns they may 
have about the processes used by ACOs to communicate which 
beneficiaries are eligible to receive covered SNF services under the 
waiver.
    ACOs must create and implement a communication plan between the ACO 
and all of its SNF affiliates as required at Sec.  
425.612(a)(1)(i)(A)(1). In accordance with our SNF waiver guidance on 
the CMS Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/Downloads/SNF-Waiver-Guidance.pdf, 
the communication plan should include detailed communication processes 
including for example, identifying and designating person(s) at the ACO 
with whom SNF affiliates will communicate and coordinate admissions, 
and explaining how the ACO will respond to questions and complaints 
related to the ACO's use of the SNF 3-day waiver from SNF affiliates, 
ACO participants, ACO providers/suppliers, beneficiaries, acute care 
hospitals, and other stakeholders.
    ACOs are also required to establish a beneficiary evaluation and 
admission plan for beneficiaries admitted to a SNF affiliate under the 
SNF 3-day rule waiver that is approved by the ACO medical director and 
the healthcare professional responsible for the ACO's quality 
improvement and assurance processes under Sec.  425.112. Further, as 
part of their waiver application, ACOs are required to describe how 
they plan to evaluate and periodically update their plan (see section 6 
of the guidance at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/Downloads/SNF-Waiver-Guidance.pdf). It is also recommended in the guidance that the 
beneficiary evaluation and admission plan include detailed requirements 
including, for example, a protocol for an ACO provider/supplier who is 
a physician to evaluate and approve admissions to a SNF affiliate 
pursuant to the waiver and consistent with the beneficiary eligibility 
requirements described at Sec.  425.612(a)(1)(ii) and a protocol for 
educating and training SNF affiliates regarding waiver requirements and 
the ACO's communications plan, beneficiary evaluation and admission 
plan, and care management plan for purposes of the SNF 3-Day Waiver.
    We believe these requirements adequately address the commenter's 
concerns about SNF affiliates' ability to verify beneficiaries' 
eligibility to receive covered SNF services under the SNF 3-day rule 
waiver. However, as we develop operational procedures and guidance 
documents, we will further consider whether it would be feasible to 
develop a mechanism that could permit SNF affiliates to verify, though 
a source other than the ACO, a beneficiary's eligibility to receive SNF 
services under the waiver.
    Comment: A few commenters suggested that ACOs should not be 
required to submit a corrective action plan in cases where the SNF 
affiliate, not the ACO, is responsible for inappropriate use of the 
waiver, as such corrective action plans could be resource intensive for 
ACOs.
    Response: We continue to believe that in some circumstances it 
could be appropriate for an ACO to be required to submit a corrective 
action plan, including in some cases where a SNF affiliate may be 
responsible for inappropriate use of the SNF 3-day rule waiver. The 
possibility of compliance action provides an incentive for ACOs to work 
together with their SNF affiliates to ensure that the SNF 3-day rule 
waiver is used appropriately, and reflects the requirement that ACOs 
must enter into agreements with their SNF affiliates that contain 
detailed requirements providing for the proper use of the waiver. We 
are finalizing the proposal that in cases where a SNF affiliate of a 
Track 3 ACO has misused the SNF 3-day rule waiver, the ACO may be 
required to submit a corrective action plan to CMS for approval as 
specified at Sec.  425.216(b) addressing what actions the ACO will take 
to ensure that the SNF 3-day rule waiver is not misused in the future. 
We are also finalizing the proposal to codify a new provision at Sec.  
425.612(d)(4) providing that misuse of a waiver under Sec.  425.612 may 
result in CMS taking remedial action against the ACO under Sec. Sec.  
425.216 and 425.218, up to and including termination of the ACO from 
the Shared Savings Program.
    Comment: One commenter suggested that CMS should also modify the 
existing financial protections in the Medicare Claims Processing Manual 
Chapter 30--Financial Protections at section 70.2.2.2 to address the 
SNF 3-day rule waiver rules.
    Response: We will further consider whether revisions are necessary 
to the Medicare Claims Processing Manual and/or other guidance 
documents related to SNF discharges and billing.
    Final Action: We are finalizing the SNF 3-day rule waiver 
beneficiary protections described in this section as proposed. 
Specifically, we are modifying the SNF 3-day rule waiver under Sec.  
425.612(a)(1) to include a 90-day grace period that will permit payment 
for SNF services provided to beneficiaries without a qualifying 
inpatient stay who were initially on the ACO's prospective assignment 
list for a performance year but were subsequently excluded during the 
performance year, if such services would otherwise be covered under the 
SNF 3-day rule waiver. In addition, in the event that a SNF that is a 
SNF affiliate of a Track 3 ACO that has been approved for the

[[Page 80515]]

SNF 3-day rule waiver admits a FFS beneficiary who was never 
prospectively assigned to the ACO (or was assigned but later excluded 
and the 90-day grace period has lapsed), and the claim is rejected only 
for lack of a qualifying inpatient hospital stay, we will make no 
payment to the SNF, and the SNF may not charge the beneficiary for the 
non-covered SNF services. In this circumstance, the SNF affiliate will 
be prohibited from charging a beneficiary for non-covered SNF services 
even in cases where the beneficiary explicitly requested or agreed to 
being admitted to the SNF in the absence of a qualifying 3-day hospital 
stay, if all other requirements for coverage are met. We are also 
adding a provision at Sec.  425.612(d)(4) providing that misuse of a 
waiver under Sec.  425.612 may result in CMS taking remedial action 
against the ACO under Sec. Sec.  425.216 and 425.218, up to and 
including termination of the ACO from the Shared Savings Program.
    We strongly believe it is important to ensure that beneficiaries 
have appropriate financial protections, including financial protection 
against misuse of the waiver prior to approving any SNF 3-day rule 
waiver applications from Track 3 ACOs. We also recognize that ACOs and 
their SNF affiliates could be reluctant to enter into a SNF affiliate 
agreement without there being clarity as to their potential 
responsibility for non-covered SNF services related to the waiver. For 
these reasons, we are also developing a process for Track 3 ACOs that 
have already applied for the SNF 3-day rule waiver for the 2017 
performance year to confirm that they and their SNF affiliates agree to 
comply with all requirements related to the SNF 3-day rule waiver, 
including the new requirements we are adopting in this rulemaking. ACOs 
and SNF affiliates that do not agree to comply with all requirements 
will be ineligible to offer services under the SNF 3-day rule waiver. 
We note that this confirmation process may delay approval of ACOs' 
applications for the SNF 3-day rule waiver for the 2017 performance 
year; however, we do not anticipate approval will be delayed beyond the 
first quarter of 2017.
4. Technical Changes
a. Financial Reconciliation for ACOs That Fall Below 5,000 Assigned 
Beneficiaries
    Section 1899(b)(2)(D) of the Act includes a requirement that a 
participating ACO must have a minimum of 5,000 Medicare FFS 
beneficiaries assigned to it. Currently, the regulations at Sec.  
425.110(b) indicate that if at any time during the performance year, an 
ACO's assigned population falls below 5,000, the ACO may be subject to 
the actions described in Sec. Sec.  425.216 and 425.218; the 
regulations further indicate at Sec.  425.110(b)(1) that while under a 
CAP, the ACO remains eligible for shared savings and losses and the MSR 
and MLR (if applicable) is set at a level consistent with the number of 
assigned beneficiaries. We have applied this rule in the past to 
perform financial reconciliation for ACOs that fell below 5,000 
assigned beneficiaries. In these cases, the ACO was subject to a CAP 
and financial reconciliation was based on a variable MSR/MLR that was 
determined by the number of assigned beneficiaries. For example, we 
have calculated the ACO's MSR based on an expanded sliding scale that 
includes a range of 3,000 to 4,999 assigned beneficiaries with a 
corresponding MSR range of 5.0 to 3.9 percent.
    However, ACOs under risk-based tracks are not limited to financial 
reconciliation under a variable MSR/MLR that is based on the number of 
assigned beneficiaries. In the June 2015 final rule (see 80 FR 32769-
32771, and 32779-32780), we finalized a policy that provides ACOs under 
two-sided performance-based risk tracks with an opportunity to choose 
among several options for establishing their MSR/MLR. In addition to 
being able to choose a symmetrical MSR/MLR that varies based on the 
ACO's number of assigned beneficiaries, ACOs under two-sided 
performance-based risk tracks can also choose from a menu of non-
variable MSR/MLR options (either a 0 percent MSR/MLR or a symmetrical 
MSR/MLR in a 0.5 percent increment between 0.5 through 2.0 percent).
    We stated in the CY 2017 PFS proposed rule that we believe it is 
important to clarify the policy regarding situations where an ACO under 
a two-sided performance-based risk track has chosen a non-variable MSR/
MLR at the start of the agreement period but has fallen below 5,000 
assigned beneficiaries at the time of financial reconciliation. As 
discussed in detail in the June 2015 final rule, we continue to believe 
that ACOs under two-sided performance-based risk tracks are best 
positioned to determine the level of risk that they are prepared to 
accept. Therefore, we proposed to update the regulations at Sec.  
425.110(b)(1) to be consistent with the regulatory changes in the June 
2015 final rule that permit ACOs under a two-sided performance-based 
risk track (Track 2 and Track 3) to choose their own MSR/MLR from a 
menu of options. Specifically, we proposed to update the regulations at 
Sec.  425.110(b)(1) to indicate that in the event an ACO falls below 
5,000 assigned beneficiaries at the time of financial reconciliation, 
the ACO participating under a two-sided risk track will be eligible to 
share in savings (or losses) and the MSR/MLR will be set at a level 
consistent with the choice of MSR/MLR that the ACO made at the start of 
the agreement period. If the Track 2 or Track 3 ACO selected a 
symmetrical MSR/MLR option based on a fixed percentage (for example, 
zero percent or a percentage between 0.5 and 2 percent) regardless of 
ACO size, then the current methodology for use of a variable MSR/MLR 
based on the ACO's number of assigned beneficiaries would not apply. 
For example, if at the beginning of the agreement period the ACO chose 
a 1.0 percent MSR/MLR and the ACO's assigned population falls below 
5,000, the MSR/MLR will remain 1.0 percent for purposes of financial 
reconciliation while the ACO is under a CAP. Further, as we noted in 
earlier rulemaking, if the ACO has elected a variable MSR/MLR, the 
methodology for calculating the variable MSR/MLR under a two-sided 
model is consistent with the methodology for calculating the variable 
MSR that is required under the under the one-sided model (Track 1) (see 
80 FR 32769 through 32771; 32779 through 32780). Under the one-sided 
shared savings model (Track 1), we have accounted for circumstances 
where an ACO's number of assigned beneficiaries falls below 5,000, by 
expanding the variable MSR range based on input from the CMS Office of 
the Actuary (OACT). Thus, in the case where a Track 2 or Track 3 ACO 
selects a variable MSR/MLR based on its number of assigned 
beneficiaries, and the ACO's number of assigned beneficiaries falls 
below 5,000, we proposed to continue to use an approach for determining 
the MSR/MLR range consistent with the approach for calculating the MSR 
range under the one-sided model.
    The following is a summary of the comments we received on these 
proposals.
    Comment: Commenters supported this proposal. One commenter 
suggested, without providing a justification, that in the event an 
ACO's assigned beneficiary population falls below 5,000, the MSR be 
capped at 3.9 percent in cases where the MSR/MLR varies based on the 
number of beneficiaries. The commenter did not expressly make a similar 
recommendation for capping the MLR.
    Response: We appreciate the support for this proposal. For ACOs 
with a

[[Page 80516]]

variable MSR and MLR (if applicable), the MSR and MLR (if applicable) 
will be set at a level consistent with the number of assigned 
beneficiaries. For ACOs with a fixed MSR/MLR, the MSR/MLR will remain 
fixed at the level consistent with the ACO's choice of MSR and MLR that 
the ACO made at the start of the agreement period. In addition, we 
disagree that it would be appropriate to cap the MSR (but not the MLR) 
at 3.9 percent in cases where the MSR/MLR varies based on the number of 
beneficiaries in the event the ACO falls below 5,000 assigned 
beneficiaries beneficiaries.
    Section 1899(d)(1)(B)(i) of the Act specifies that the Secretary 
shall determine the appropriate percent by which an ACO's expenditures 
must be lower than its benchmark in order for the ACO to be eligible to 
share in savings to account for normal variation in expenditures under 
Title XVIII. Consistent with the statute, this percentage must be based 
upon the number of Medicare fee-for-service beneficiaries assigned to 
the ACO. As explained in the November 2011 final rule, we believe that 
the most appropriate policy concerning determination of the 
``appropriate percent'' for the MSR would achieve a balance between the 
advantages of making incentives and rewards available to successful 
ACOs and prudent stewardship of the Medicare Trust Funds (76 FR 67927). 
Capping the MSR for Track 1 ACOs would not be consistent with the 
statute and our established policy for computing the MSR for Track 1 
ACOs. Capping only the MSR but not the MLR for Track 2 or 3 ACOs would 
create an asymmetry that would make it easier for the ACO to share in 
savings but not in losses. To the extent that the commenter was 
recommending capping both the MSR and MLR for ACOs in Tracks 2 and 3 
that choose a variable MSR/MLR, we believe this could be an approach 
worthy of consideration in future rulemaking because the approach would 
equalize the risk for the ACO and CMS.
    Final Action: We are finalizing this policy and the revisions to 
Sec.  425.110(b)(1) as proposed, but are making a minor editorial 
revision to paragraph (b)(1)(ii) in order to eliminate a redundant 
reference.
b. Requirements for Merged or Acquired TINs
    ACOs frequently request that we take into account the claims billed 
by the TINs of practices that have been acquired by sale or merger for 
the purpose of meeting the minimum assigned beneficiary threshold, 
establishing a more accurate financial benchmark, and determining the 
prospective or preliminary prospective assignment list for the upcoming 
performance year. In response to these inquiries, we initially 
developed subregulatory guidance that allowed claims billed under the 
TIN of a merged or acquired entity to be considered in certain 
circumstances. In that guidance we indicated that the merged or 
acquired entity's TIN may no longer be used to bill Medicare. In the 
June 2015 final rule, we codified the policies outlined in this 
guidance allowing for consideration of claims billed under merged or 
acquired entities' TINs for purposes of beneficiary assignment and 
establishing the ACO's benchmark, provided certain requirements were 
met (Sec. Sec.  425.204(g), 425.118(a)(2)). However, the regulation at 
Sec.  425.204(g) indicates that an ACO may request that CMS consider, 
for purposes of beneficiary assignment and establishing the ACO's 
benchmark under Sec.  425.602, claims billed by ``Medicare-enrolled'' 
entities' TINs that have been acquired through sale or merger by an ACO 
participant. Because the regulation at Sec.  425.204(g) refers to such 
merged or acquired TINs as ``Medicare-enrolled,'' we have received 
inquiries from ACOs regarding whether such merged or acquired TINs must 
continue to be Medicare-enrolled after the merger or acquisition has 
been completed and the TINs are no longer used to bill Medicare.
    We stated in the CY 2017 PFS proposed rule that it was not our 
intent to establish such a requirement. We stated we do not believe 
there would be a program purpose to require the TIN of a merged or 
acquired entity to maintain Medicare enrollment if it is no longer used 
to bill Medicare. Therefore, to address this issue, we proposed a 
technical change to Sec.  425.204(g) to clarify that the merged/
acquired TIN is not required to remain Medicare enrolled after it has 
been merged or acquired and is no longer used to bill Medicare.
    The following is a summary of the comments we received on these 
proposals.
    Comment: The few comments received on this issue supported the 
proposal.
    Response: We appreciate the support for this proposal.
    Final Action: We are finalizing the technical change to Sec.  
425.204(g) as proposed.

L. 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 and Physician Feedback program continue CMS' initiative to 
recognize and reward clinicians based on the quality and cost of care 
provided to their patients, increase the transparency of health care 
quality information and to assist clinicians and beneficiaries in 
improving medical decision-making and health care delivery. As stated 
in the CY 2016 PFS final rule with comment period (80 FR 71277), the 
MACRA was enacted on April 16, 2015. 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.
2. Overview of Existing Policies for the VM
    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. 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

[[Page 80517]]

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. In the CY 2016 PFS final rule with comment period (80 FR 
71277 through 71279), we finalized that in the CY 2018 payment 
adjustment period, the VM will apply to nonphysician EPs who are 
physician assistants (PAs), nurse practitioners (NPs), clinical nurse 
specialists (CNSs), and certified registered nurse anesthetists (CRNAs) 
in groups with 2 or more EPs and to PAs, NPs, CNSs, and CRNAs who are 
solo practitioners.
3. Provisions of This Final Rule
    As a general summary, we proposed to update the VM informal review 
policies and establish how the quality and cost composites under the VM 
would be affected for the CY 2017 and CY 2018 payment adjustment 
periods in the event that unanticipated program issues arise.
a. Expansion of the Informal Inquiry Process To Allow Corrections for 
the VM
    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.
    In the CY 2016 PFS final rule with comment period (80 FR 71294 
through 71295), for the CY 2017 and CY 2018 payment adjustment periods, 
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. We also finalized the continuation of the process 
for accepting requests from groups and solo practitioners to correct 
certain errors made by CMS or a third-party vendor (for example, PQRS-
qualified registry). We stated we would continue the approach of the 
initial corrections process to classify a TIN as ``average quality'' in 
the event we determine a third-party vendor error or CMS made an error 
in the calculation of the quality composite and the infrastructure was 
not available to allow for recomputation of the quality measure data. 
Additionally, we finalized that we would 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 to avoid the PQRS downward payment 
adjustment for the relevant payment adjustment year. If the group was 
initially classified as Category 2, then we would not expect to have 
data for calculating their quality composite, in which case they would 
be classified as ``average quality''; however, if the data is available 
in a timely manner, then we would recalculate the quality composite.
    As we noted in the CY 2017 PFS proposed rule (81 FR 46443 through 
46444), as a result of issues that we became aware of prior to and 
during the CY 2016 VM informal review process, we learned that re-
running QRURs and recalculating the quality composite is not always 
practical or possible, given the diversity and magnitude of the errors, 
timing of when we become aware of an error, and practical 
considerations in needing to compute a final VM upward payment 
adjustment factor after the performance period has ended, based on the 
aggregate amount of downward payment adjustments. Furthermore, this 
approach can create uncertainty for groups and solo practitioners about 
their final VM payment adjustment making it difficult for them to plan 
and make forecasts.
    Due to the volume and complexities of the informal review issues, 
the inconsistency of available PQRS data to calculate a TIN's quality 
composite, the case-by-case nature of the informal review process, and 
the condensed timeline to calculate an accurate VM upward payment 
adjustment factor, we expressed our belief that we needed to update the 
VM informal review policies and establish in rulemaking how the quality 
and cost composites under the VM would be affected if unanticipated 
issues were to arise (for example, the program issues described in the 
CY 2017 PFS proposed rule), errors made by a third-party such as a 
vendor, or errors in our calculation of the quality and/or cost 
composites). We noted that the intent of these proposals is not to 
provide relief for EPs and groups who fail to report under PQRS, but 
rather to provide a mechanism for addressing unexpected issues such as 
the data integrity issues discussed in the proposed rule.
    We further noted that limiting the potential movement of TINs 
between VM quality tiers based on informal review may result in a more 
accurate adjustment factor calculation and provide greater 
predictability for the CMS' Office of the Actuary (OACT) in making 
assumptions around the adjustment factor including assumptions around 
the impact of outstanding informal reviews at the time of the 
calculations. We expressed our belief that our proposals would help 
groups and solo practitioners to better predict the outcome of their 
final VM adjustment and reduce uncertainty as we continue to improve 
our systems. We requested comment on all four of the scenarios we 
proposed. We provide a combined summary of comments received on the 
four scenarios later in this section of this final rule, following the 
individual descriptions of the scenarios proposed.
    Table 44 summarizes our proposals.

[[Page 80518]]



                                Table 44--Quality and Cost Composite Status for TINs Due to Informal Review Decisions and Widespread Quality and Cost Data Issues
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                   Scenario 1: TINS moving from Category   Scenario 2: Non-GPRO Category 1 TINs      Scenario 3: Category 1 TINs with        Scenario 4: Category 1 TINs with
                                  2 to Category 1 as a result of PQRS or     with additional EPs avoiding PQRS        widespread quality data issues           widespread claims data issues
                                        VM informal review process        payment adjustment as a result of PQRS -------------------------------------------------------------------------------
                                 ----------------------------------------         informal review process
                                                                         ---------------------------------------- Initial  composite  Revised  composite     Recalculated     Revised  composite
                                  Initial  composite  Revised  composite  Initial  composite  Revised  composite                                               composite
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Quality.........................  N/A...............  Average...........  Low...............  Average...........  N/A...............  Average...........  Low...............  Average.
                                  N/A...............  Average...........  Average...........  Average...........  N/A...............  Average...........  Average...........  Average.
                                  N/A...............  Average...........  High..............  High..............  N/A...............  Average...........  High..............  High.
Cost............................  Low...............  Low...............  Low...............  Low...............  Low...............  Low...............  Low...............  Low.
                                  Average...........  Average...........  Average...........  Average...........  Average...........  Average...........  Average...........  Average.
                                  High..............  Average...........  High..............  High..............  High..............  Average...........  High..............  Average.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Scenario 1: TINs Moving From Category 2 to Category 1 as a Result of 
PQRS or VM Informal Review Process
    As finalized in the CY 2016 PFS final rule with comment period, for 
the CY 2017 VM, Category 1 will include those groups that meet the 
criteria to avoid the CY 2017 PQRS payment adjustment as a group 
practice participating in the PQRS Group Practice Reporting Option 
(GPRO) in CY 2015 and groups that have at least 50 percent of the 
group's EPs meet the criteria to avoid the CY 2017 PQRS payment 
adjustment as individuals (80 FR 71280). Category 1 also includes those 
solo practitioners that meet the criteria to avoid the CY 2017 PQRS 
payment adjustment as individuals. Category 2 will include groups and 
solo practitioners that are subject to the CY 2017 VM and do not fall 
within Category 1 (79 FR 67939). We finalized a similar two-category 
approach for the CY 2018 VM based on participation in the PQRS by 
groups and solo practitioners in 2016 (80 FR 71280 through 71281).
    In the CY 2017 PFS proposed rule, we proposed that, if a TIN were 
initially classified as Category 2, and subsequently, through the PQRS 
or VM informal review process, it was reclassified as Category 1, then 
we would classify the TIN's quality composite as ``average quality,'' 
instead of attempting to calculate the quality composite (81 FR 46444). 
We also proposed to calculate the TIN's cost composite using the 
quality-tiering methodology. If the TIN were classified as ``high 
cost'' based on its performance on the cost measures, then we proposed 
to reclassify the TIN's cost composite as ``average cost.'' If the TIN 
were classified as ``average cost'' or ``low cost'', then we proposed 
that the TIN would retain the calculated cost tier designation. We 
noted that in the CY 2016 PFS final rule with comment period (80 FR 
71280), we finalized a policy for the CY 2017 and 2018 payment 
adjustment periods that when determining whether a group would be 
included in Category 1, we would consider whether the 50 percent 
threshold had been met, regardless of whether the group registered to 
participate in the PQRS GPRO for the relevant performance period. We 
expressed our belief that this policy 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 
the purposes of applying the VM. We noted that consequently, because of 
this policy we anticipate that the number of TINs who could fall into 
Scenario 1 would be minimal; however, we believe it is necessary to 
have a policy in place, in the event that CMS determines on informal 
review that Category 2 TINs had been negatively impacted by a third-
party vendor error or CMS made an error in the calculation of the 
quality composite. We proposed to apply these policies for the CY 2017 
VM and CY 2018 VM.
    Calculating a quality composite for a TIN that was initially 
classified as Category 2, then reclassified as Category 1 during the 
informal review process would be operationally complex, given a number 
of factors: The timeline for determining and applying the VM 
adjustments for all TINs subject to the VM; the volume of informal 
reviews; the need to calculate the VM upward payment adjustment factor 
as close to the beginning of the payment adjustment period as possible; 
and uncertainty about the availability of the PQRS quality data. 
Therefore, classifying the quality composite as ``average quality'' 
would offer a predictable decision for all informal reviews where a TIN 
changes classification from Category 2 to Category 1.
    Our proposal to calculate the cost composite and assign ``average 
cost'' if the cost composite was initially classified as ``high cost'' 
would alleviate concerns from stakeholders that a TIN may receive a 
downward VM payment adjustment under the quality-tiering methodology as 
a result of being classified as average quality and high cost. Under 
our proposal discussed above, for TINs in Scenario 1, we would not 
consider a TIN's actual performance on the quality measures or 
calculate a quality composite score; rather, we would classify the 
TIN's quality composite as average quality for the reasons stated 
above. In this scenario, we do not believe that we should retain a 
TIN's ``high cost'' designation when the TIN's actual cost performance 
is not being compared to the TIN's actual quality performance, as it is 
possible the TIN might have scored high quality if actual performance 
had been considered. We believe that these proposals would help groups 
and solo practitioners who receive a favorable determination on 
informal review to better predict the outcome of their final VM 
adjustment and reduce uncertainty about the impact of the informal 
review. Additionally, it is important to note that groups or solo 
practitioners who submit an informal review request would not 
automatically be covered by the policy proposed for Scenario 1. In the 
CY 2017 PFS proposed rule, we stated that we would verify on informal 
review that the group or solo practitioner did submit complete and 
accurate data and did meet the criteria to avoid the PQRS payment 
adjustment to be included in Category 1.
Scenario 2: Non-GPRO Category 1 TINs With Additional EPs Avoiding PQRS 
Payment Adjustment as a Result of PQRS Informal Review Process
    As finalized in the CY 2016 PFS final rule with comment period, for 
the CY 2017 VM, Category 1 will include groups that have at least 50 
percent of

[[Page 80519]]

the group's EPs meet the criteria to avoid the CY 2017 PQRS payment 
adjustment as individuals (80 FR 71280). A similar policy was finalized 
for the CY 2018 VM (80 FR 71280). In the CY 2017 PFS proposed rule (81 
FR 46455), we proposed that, if a TIN were classified as Category 1 for 
the CY 2017 VM by having at least 50 percent of the group's EPs meet 
the criteria to avoid the CY 2017 PQRS payment adjustment as 
individuals, and subsequently, through the PQRS informal review 
process, it is determined that additional EPs that are in the TIN also 
meet the criteria to avoid the CY 2017 PQRS payment adjustment as 
individuals, then the following policies would be used to determine the 
TIN's quality and cost composites:
     If the TIN's quality composite is initially classified as 
``low quality'', then we proposed to reclassify the TIN's quality 
composite as ``average quality.'' If the TIN's quality composite is 
initially classified as ``average quality'' or ``high quality'', then 
we proposed that the TIN would retain that quality tier designation.
     We would maintain the cost composite that was initially 
calculated.
    We proposed to apply these policies for the CY 2017 VM and CY 2018 
VM. Under these policies, we would not recalculate the TIN's quality 
composite to include the additional EPs that were determined to have 
met the criteria to avoid the PQRS payment adjustment as individuals 
through the PQRS informal review process. As discussed under Scenario 
1, recalculating the quality composite is operationally complex, and we 
may not have PQRS data for the additional EPs, because they were 
initially determined not to have met the criteria to avoid the PQRS 
payment adjustment. In addition, we seek to avoid a situation where by 
recalculating the quality composite, a TIN may be subject to a lower 
quality tier designation because a few EPs in the TIN independently 
pursued PQRS informal reviews. As stated above, we proposed to 
reclassify a TIN's quality composite as average quality if it is 
initially classified as ``low quality'' in order to avoid a situation 
where we do not have the PQRS quality data for those few EPs whose 
quality performance could have bumped the TIN up from a low quality 
designation as the EPs did not meet the criteria to avoid the PQRS 
payment adjustment during the initial determination. Additionally, it 
is important to note that TINs whose EPs submit an informal review 
request would not automatically be covered by the policy proposed for 
Scenario 2. We stated in the CY 2017 PFS proposed rule that we would 
verify on informal review that an EP did submit complete and accurate 
data and did meet the criteria to avoid the PQRS payment adjustment as 
an individual in order for the TIN to be included in Category 1.
Scenario 3: Category 1 TINs With Widespread Quality Data Issues
    In cases where there is a systematic issue with any of a Category 1 
TIN's quality data that renders it unusable for calculating a TIN's 
quality composite, we proposed to classify the TIN's quality composite 
as average quality. For this proposal, we consider widespread quality 
data issues, as issues that impact multiple TINs and we are unable to 
determine the accuracy of the data submitted via these TINs (for 
example, the EHR and QCDR issues for the CY 2014 performance period as 
described in the CY 2017 PFS proposed rule (81 FR 46455). This proposal 
would offer a predictable designation for all TINs under this scenario.
    We also proposed to calculate the TIN's cost composite using the 
quality-tiering methodology. If the TIN were classified as ``high 
cost'' based on its performance on the cost measures, then we proposed 
to reclassify the TIN's cost composite as ``average cost.'' If the TIN 
were classified as ``average cost'' or ``low cost'', then we proposed 
that the TIN would retain the calculated cost tier designation. We 
proposed to apply these policies for the CY 2017 VM and CY 2018 VM.
    As discussed under Scenario 1, our proposal to calculate the cost 
composite and assign ``average cost'' if the cost composite is 
initially classified as ``high cost'' would alleviate concerns from 
stakeholders that a TIN may receive a downward VM payment adjustment 
under the quality-tiering methodology as a result of being classified 
as average quality and high cost. Similarly, for TINs in Scenario 3, we 
would not consider a TIN's actual performance on the quality measures 
or calculate a quality composite score; rather, we would classify the 
TIN's quality composite as average quality for the reasons stated 
above. In this scenario, we do not believe that we should retain a 
TIN's high cost designation when the TIN's actual cost performance is 
not being compared to the TIN's actual quality performance, as it is 
possible the TIN might have scored high quality if actual performance 
had been considered. We would continue to show and designate these 
groups as high cost in their annual QRURs so they have the opportunity 
to understand and improve their performance, but under our proposal, we 
would classify their cost composite as average cost for purposes of 
determining their VM adjustment.
    In the CY 2017 PFS proposed rule, we noted that we expect quality 
data issues to be significantly limited moving forward, due to newly-
added front-end edits. Additionally, we noted that TINs are ultimately 
responsible for the data that are submitted by their third-party 
vendors and that we expect that TINs are holding their vendors 
accountable for accurate reporting. We noted that, while we understand 
that data submission requirements are evolving and that both vendors 
and CMS are developing capabilities for reporting and assessing 
performance, we are considering further policies to promote complete 
and accurate reporting by registries and other third-party entities 
that submit data on behalf of groups and EPs.
Scenario 4: Category 1 TINs With Widespread Claims Data Issues
    If we determine after the release of the Quality and Resource Use 
Reports (QRURs) that there is a widespread claims data issue that 
impacts the calculation of the quality and/or cost composites for 
Category 1 TINs, we propose to recalculate the quality and cost 
composites for affected TINs. For this proposal, we consider widespread 
claims data issues, as issues that impact multiple TINs and require the 
recalculation of the quality and/or cost composites (for example, the 
incomplete claims identification and specialty adjustment issues 
described in the CY 2017 PFS proposed rule (81 FR 46446)
    After recalculating the composites, if the TIN's quality composite 
is classified as low quality, then we proposed to reclassify the 
quality composite as average quality, and if the TIN's cost composite 
is classified as high cost, we proposed to reclassify the cost 
composite as average cost. If the TIN is classified as average quality, 
high quality, average cost or low cost, then we proposed that the TIN 
would retain the calculated quality or cost tier designation. We made 
the proposals because, after a claims data issue is identified, it 
would take approximately 6 weeks to recalculate the composites and 
notify groups and solo practitioners about their recalculated VM. Given 
that the VM informal review period lasts for 60 days after the release 
of the QRURs and the timing of when we become aware of an error, we 
would likely not be able to notify groups and solo practitioners about 
their recalculated VM before the end of the informal review period. 
Further, we expressed our belief that the proposed policies are 
necessary to provide certainty for

[[Page 80520]]

groups and solo practitioners about their final VM payment adjustment 
and due to the condensed timeline to calculate an accurate VM upward 
payment adjustment factor.
    We proposed to apply these policies for the CY 2017 VM and CY 2018 
VM.
    The following is a summary of the comments we received regarding 
these proposals.
    Comment: Many commenters supported our proposals to modify a TIN's 
quality and cost composites based on informal review determination or 
widespread quality and cost data issues, agreeing that assigning 
``average quality'' would not unfairly penalize those that fall into 
these scenarios. Many of these commenters urged CMS to continue efforts 
to address data integrity and calculation issues. A few commenters 
agreed that limiting the potential movement between the VM quality 
tiers based on informal review would result in a more predictable 
adjustment factor calculation. Some of these commenters noted that 
assignment of an ``average quality'' designation does not recognize the 
significant resources invested by physicians and other eligible 
professionals in reporting quality data, particularly through agency-
preferred electronic methods. One commenter suggested CMS could shorten 
the informal review timeframe or eliminate mid-year reports, in order 
to allow more resources for recalculation of the quality composite. 
Several commenters were not supportive of our proposals, stating that 
CMS should instead correct the underlying issues necessitating such 
scenarios, with several expressing added concern that the MIPS program 
will be even more complex. One commenter stated that the proposed 
changes to the informal review process would hold practices accountable 
for performance without a mechanism in place to ensure the accuracy of 
the data, thus reclassifying a solo practitioner or group practice's 
performance based on an incomplete understanding of their performance. 
Another commenter believes it is important to hold solo practitioners 
and group practices harmless from penalties resulting from errors made 
by external parties. However, they expressed concerns that solo 
practitioners and group practices have no opportunity to resubmit their 
data allowing their quality composite scores to be recalculated to 
reflect all the available data. They suggest that this would deprive 
them of upward adjustments to payments because measures were reported 
or calculated inaccurately through no fault of their own.
    Response: We thank the commenters for their feedback and support of 
our policies. We acknowledge commenters' concerns about the complexity 
of the underlying data and their suggestions that we correct the 
underlying issues, rather than establish policies to address these 
scenarios through the informal review process. We note that scenarios 
three and four were proposed to address unforeseen issues with reported 
quality data or CMS claims data, respectively. Additionally, we note 
that as discussed in this final rule, we expect quality data issues to 
be significantly limited moving forward. We have worked to resolve PQRS 
program and receiving system data issues impacting the VM by 
reprioritizing scheduled deliverables and implementing enhancements to 
improve 2016 submissions. While some issues may still need to be 
handled through the informal review process, enhanced reporting 
functionality, with the removal of constraints around ACO reporting 
outside of a group, will be supported by both the program and the 
receiving system. In 2017, the MIPS receiving systems will provide 
further enhanced real-time feedback to submitters in a more rapid and 
accurate manner to identify errors earlier and will further accept the 
most accurate data submitted. We are finalizing the policies for 
Scenarios 1, 2, 3 and 4 as proposed. Additionally we note that under 
Scenarios 1 and 3, consistent with the policy adopted in the CY 2013 
PFS final rule with comment period (77 FR 69325), for groups of 
physicians or solo practitioners classified as average quality/low cost 
as a result of informal review, we would apply an additional upward 
payment adjustment of +1.0x to those that care for high-risk 
beneficiaries (as evidenced by the average HCC risk score of the 
attributed beneficiary population). We note further that, under 
Scenarios 2 and 4, for groups of physicians or solo practitioners 
classified as high quality/low cost, high quality/average cost, or 
average quality/low cost as a result of informal review, we would apply 
an additional upward payment adjustment of +1.0x to those that care for 
high-risk beneficiaries (as evidenced by the average HCC risk score of 
the attributed beneficiary population). We would apply this additional 
upward +1.0x adjustment, because the results of informal review under 
the policy being finalized here, would qualify these solo practitioners 
and groups for the additional upward adjustment, based on the policy 
previously finalized at 77 FR 69325.
b. Application of the VM to Participant TINs in Shared Savings Program 
ACOs That Do Not Complete Quality Reporting
    In the CY 2015 PFS final rule with comment period (79 FR 67946), 
for groups and solo practitioners, as identified by their TIN, that 
participate in a Shared Savings Program ACO, we finalized 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. 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. In the CY 2016 PFS proposed rule (80 FR 
41899), we proposed to continue this policy in the CY 2018 payment 
adjustment period for all groups and solo practitioners subject to the 
VM that participate in a Shared Savings Program ACO and finalized our 
proposal in the CY 2016 PFS final rule with comment period (80 FR 
71285).
    As discussed in sections III.H. and III.K.1.e. of this final rule, 
we proposed to remove the prohibition on EPs who are part of a group or 
solo practitioner that participates in a Shared Savings Program ACO, 
for purposes of PQRS reporting for the CY 2017 and CY 2018 payment 
adjustments, to report outside the ACO. As a result of this proposed 
policy, the EPs in groups and those who are solo practitioners would be 
allowed to report to the PQRS as a group (using one of the group 
registry, QCDR, or EHR reporting options) or individually (using the 
registry, QCDR, or EHR reporting option) outside of the ACO. This 
section addresses how we proposed to use the PQRS data reported by EPs 
outside of the ACO for the CY 2018 VM when the ACO does not 
successfully report quality data on behalf of their EPs for purposes of 
PQRS as required by the Shared Savings Program under Sec.  425.504.
    For the CY 2018 payment adjustment period, if a Shared Savings 
Program ACO does not successfully report quality data on behalf of 
their EPs for purposes of PQRS as required by the Shared Savings 
Program under Sec.  425.504, then we proposed to use the

[[Page 80521]]

data reported to the PQRS by the EPs under the participant TIN (as a 
group (using one of the group registry, QCDR, or EHR reporting options) 
or as individuals (using the registry, QCDR, or EHR reporting option)) 
outside of the ACO to determine whether the TIN would fall in Category 
1 or Category 2 under the VM. We proposed to apply the two-category 
approach finalized for the CY 2018 VM (80 FR 71280) based on 
participation in the PQRS by groups and solo practitioners to determine 
whether groups and solo practitioners that participate in a Shared 
Savings Program ACO, but report to the PQRS outside of the ACO, would 
fall in Category 1 or Category 2 under the VM. We noted that the 
proposed policy was 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 by EPs in the event the ACO does not successfully 
report quality data as required by the Shared Savings Program under 
Sec.  425.504. For example, if groups that participate in a Shared 
Savings Program ACO in 2016 report quality data to the PQRS outside of 
the ACO and meet the criteria to avoid PQRS payment adjustment for CY 
2018 as a group using one of the group registry, QCDR, or EHR reporting 
options or have at least 50 percent of the group's EPs meet the 
criteria to avoid the PQRS payment adjustment for CY 2018 as 
individuals using the registry, QCDR, or EHR reporting option by 
reporting quality data to PQRS outside of the ACO, then they would be 
included in Category 1 for the CY 2018 VM. If solo practitioners that 
participate in a Shared Savings Program ACO in 2016 report quality data 
to the PQRS outside of the ACO and meet the criteria to avoid the PQRS 
payment adjustment for CY 2018 as individuals using the registry, QCDR, 
or EHR reporting option, then they would also be included in Category 
1. Category 2 would include those groups and solo practitioners subject 
to the CY 2018 VM that participate in a Shared Savings Program ACO and 
do not fall within Category 1.
    As finalized for the CY 2018 payment adjustment period (80 FR 
71285), all groups and solo practitioners that participate in a Shared 
Savings Program ACO and fall in Category 2 will be subject to an 
automatic downward payment adjustment under the VM. In the CY 2017 PFS 
proposed rule, we proposed that, for groups and solo practitioners that 
participate in a Shared Savings Program ACO that did not successfully 
report quality data as required by the Shared Savings Program under 
Sec.  425.504 and are in Category 1 as a result of reporting quality 
data to the PQRS outside of the ACO, we would classify their quality 
composite for the VM for the CY 2018 payment adjustment period as 
``average quality (81 FR 46447).'' As finalized in the CY 2015 PFS 
final rule with comment period (79 FR 67943), the cost composite for 
groups and solo practitioners that participate in a Shared Savings 
Program ACO will be classified as ``average cost.'' Because we would 
not have the ACO's quality data for these groups and solo 
practitioners, we expressed our belief that it would be appropriate to 
use the quality data they reported to the PQRS outside the ACO to 
determine whether they avoided the PQRS payment adjustment and whether 
they would be in Category 1 or 2 for purposes of the VM, but not to 
calculate a quality composite using the quality-tiering methodology. As 
we stated previously, we continue to believe that it is appropriate to 
calculate a quality composite for groups and solo practitioners 
participating in the Shared Savings Program based on the ACO's quality 
data (79 FR 67944). We noted that the proposal was not intended to 
encourage groups and solo practitioners that participate in a Shared 
Savings Program ACO to report to the PQRS outside the ACO, but in the 
event the ACO does not successfully report quality data on behalf of 
their EPs for purposes of PQRS, to provide them with a safeguard that 
would allow them to avoid the PQRS payment adjustment and the automatic 
downward adjustment under the VM. We encourage groups and solo 
practitioners to continue to report through the ACO in order to promote 
clinical and financial integration within the ACO and for the Medicare 
beneficiaries they treat. For groups and solo practitioners that 
participate in a Shared Savings Program ACO that successfully reports 
quality data on behalf of their EPs for purposes of PQRS as required by 
the Shared Savings Program under Sec.  425.504, we will calculate their 
VM for the CY 2018 payment adjustment period according to the policies 
established in the CY 2015 PFS final rule with comment period (79 FR 
67941 to 67947 and 79 FR 67956 to 67957) and CY 2016 PFS final rule 
with comment period (80 FR 71283 to 71286 and 80 FR 71294). We 
solicited comment on these proposals and also proposed corresponding 
revisions to Sec.  414.1210(b)(2).
    As discussed in section III.H. of this final rule, to allow 
affected EPs that participate in an ACO to report separately for the CY 
2017 PQRS payment adjustment, we proposed a secondary PQRS reporting 
period for EPs that were in an ACO that did not successfully report 
quality data on behalf of the EPs in the group and those who are solo 
practitioners. Specifically, we proposed that affected individual EPs 
or groups, who report under an ACO, may separately report outside the 
ACO either as individual EPs (using the registry, QCDR, or EHR 
reporting option) or using one of the group registry, QCDR, or EHR 
reporting options (note these EPs and groups would not need to register 
for one of these group reporting options, but rather could mark the 
data as group-level data in their submission) during a secondary PQRS 
reporting period for the CY 2017 PQRS payment adjustment if they were a 
participant in an ACO that did not successfully report quality data on 
their behalf during the established reporting period for the CY 2017 
PQRS payment adjustment. We proposed the secondary PQRS reporting 
period for the CY 2017 PQRS payment adjustment would coincide with the 
reporting period for the CY 2018 PQRS payment adjustment (that is, 
January 1, 2016 through December 31, 2016).
    This section addresses how we proposed to use, for purposes of the 
CY 2017 VM, the PQRS data reported by the EPs in the group and those 
who are solo practitioners outside of the ACO using the secondary PQRS 
reporting period when the ACO did not successfully report quality data 
on behalf of their EPs for purposes of PQRS as required by the Shared 
Savings Program under Sec.  425.504 for the CY 2017 PQRS payment 
adjustment. For the CY 2017 payment adjustment period, if a Shared 
Savings Program ACO did not successfully report quality data on behalf 
of their EPs for purposes of PQRS as required by the Shared Savings 
Program under Sec.  425.504 for the CY 2017 PQRS payment adjustment, 
then we propose to use the data reported to the PQRS by the EPs (as a 
group using one of the group registry, QCDR, or EHR reporting options 
or as individuals using the registry, QCDR, or EHR reporting option) 
under the participant TIN) outside of the ACO during the secondary PQRS 
reporting period to determine whether the TIN would fall in Category 1 
or Category 2 under the VM. We proposed to apply the two-category 
approach finalized for the CY 2017 VM (79 FR 67938 to 67939 and as 
revised in 80 FR 71280 to 71281) based

[[Page 80522]]

on participation in the PQRS by groups and solo practitioners to 
determine whether groups and solo practitioners that participate in a 
Shared Savings Program ACO, but report to the PQRS outside of the ACO, 
would fall in Category 1 or Category 2 under the VM. As discussed in 
section III.H. of this final rule, we proposed to assess the individual 
EP or group's 2016 data submitted outside the ACO and during the 
secondary PQRS reporting period against the reporting requirements for 
the CY 2018 PQRS payment adjustment. Therefore, we proposed that groups 
that meet the criteria to avoid PQRS payment adjustment for CY 2018 as 
a group practice participating in the PQRS GPRO (using one of the group 
registry, QCDR, or EHR reporting options) or have at least 50 percent 
of the group's EPs meet the criteria to avoid the PQRS payment 
adjustment for CY 2018 as individuals (using the registry, QCDR, or EHR 
reporting option), based on data submitted outside the ACO and during 
the secondary PQRS reporting period, would be included in Category 1 
for the CY 2017 VM. We also proposed that solo practitioners that meet 
the criteria to avoid the PQRS payment adjustment for CY 2018 as 
individuals using the registry, QCDR, or EHR reporting option, based on 
data submitted outside the ACO and during the secondary PQRS reporting 
period, would be included in Category 1 for the CY 2017 VM. Category 2 
would include those groups and solo practitioners subject to the CY 
2017 VM that participate in a Shared Savings Program ACO and do not 
fall within Category 1.
    As finalized for the CY 2017 payment adjustment period (79 FR 
67946), all groups and solo practitioners that participate in a Shared 
Savings Program ACO and fall in Category 2 will be subject to an 
automatic downward payment adjustment under the VM. For groups and solo 
practitioners that participate in a Shared Savings Program ACO that did 
not successfully report quality data as required by the Shared Savings 
Program under Sec.  425.504 and are in Category 1 as a result of 
reporting quality data to the PQRS outside of the ACO using the 
secondary PQRS reporting period, we propose to classify their quality 
composite for the VM for the CY 2017 payment adjustment period as 
``average quality'' for the same reasons described above for the CY 
2018 payment adjustment period. As finalized in the CY 2015 PFS final 
rule with comment period (79 FR 67943), the cost composite for groups 
and solo practitioners that participate in a Shared Savings Program ACO 
will be classified as ``average cost.''
    If EPs who are part of a group or are solo practitioners who 
participated in a Shared Savings Program ACO in 2015 that did not 
successfully report quality data on their behalf decide to use the 
secondary PQRS reporting period, it is important to note that such 
groups and solo practitioners should expect to be initially classified 
as Category 2 and receive an automatic downward adjustment under the VM 
for items and services furnished in CY 2017 until CMS is able to 
determine whether the group or solo practitioner met the criteria to 
avoid the PQRS payment adjustment as described above. First, we would 
need to process the data submitted for 2016. Second, we would need to 
determine whether or not the group or solo practitioner would be 
classified as Category 1 or Category 2 for the CY 2017 VM and notify 
the group or solo practitioner if there is a change in the VM status. 
Third, we would need to update the group or solo practitioner's status 
so that they will stop receiving an automatic downward adjustment under 
the VM for items and services furnished in CY 2017 and reprocess all 
claims that were previously paid. Since groups and solo practitioners 
taking advantage of this secondary reporting period for the 2017 VM 
will have missed the deadline for submitting an informal review request 
for the 2017 VM, we proposed the informal review submission periods for 
these groups and solo practitioners would occur during the 60 days 
following the release of the QRURs for the 2018 VM.
    We requested comment on these proposals. We also proposed 
corresponding revisions to Sec.  414.1210(b)(2).
    The following is a summary of the comments we received regarding 
these proposals.
    Comment: Commenters supported our proposals to use the PQRS data 
reported by EPs outside of the ACO for the CY 2017 and CY 2018 VM when 
the ACO does not successfully report quality data on behalf of its EPs 
for purposes of PQRS as required by the Shared Savings Program under 
Sec.  425.504. Several commenters requested that CMS consider holding 
these EPs harmless from VM adjustments for both the 2017 and 2018 
payment adjustment years. Commenters stated EPs would not know if the 
ACO failed to report for PQRS until close to the end of the reporting 
period which would not allow sufficient time for them to report 
separately. In addition, commenters stated EPs are not in direct 
control of decisions made by the ACO, and therefore, should not be 
penalized if the ACO does not successfully report quality data. One 
commenter also stated that if the EPs had been aware of the option 
earlier in the 2016 reporting period, it would be a more viable 
proposal.
    Response: As discussed in sections III.H. and III.K.1.e. of this 
final rule, we are finalizing our proposals to remove the prohibition 
on EPs who are part of a group or solo practitioner that participates 
in a Shared Savings Program ACO, for purposes of PQRS reporting for the 
CY 2017 and CY 2018 payment adjustments, to report outside the ACO. As 
discussed in section III.H. of this final rule, to allow affected EPs 
that participate in an ACO to report separately for the CY 2017 PQRS 
payment adjustment, we are finalizing our proposal to create a 
secondary PQRS reporting period for EPs that were in an ACO that did 
not successfully report quality data on behalf of the EPs in the group 
and those who are solo practitioners. Specifically, in section III.H. 
of this final rule, we are finalizing that affected individual EPs or 
groups, who report under an ACO, may separately report outside the ACO 
either as individual EPs (using the registry, QCDR, or EHR reporting 
option) or using one of the group registry, QCDR, or EHR reporting 
options (note these EPs and groups would not need to register for one 
of these group reporting options, but rather mark the data as group 
data in their submission) during a secondary PQRS reporting period for 
the CY 2017 PQRS payment adjustment if they were a participant in an 
ACO that did not successfully report quality data on their behalf 
during the established reporting period for the CY 2017 PQRS payment 
adjustment. We are also finalizing in section III.H. of this final rule 
that the secondary PQRS reporting period for the CY 2017 PQRS payment 
adjustment would coincide with the reporting period for the CY 2018 
PQRS payment adjustment (that is, January 1, 2016, through December 31, 
2016).
    We appreciate the commenters' support of our proposal to use the 
PQRS data reported by EPs outside of the ACO for the CY 2017 and CY 
2018 VM when the ACO does not successfully report quality data on 
behalf of its EPs and are finalizing the policies as proposed. We plan 
to communicate with the ACOs (and their participant TINs) that did not 
successfully report quality data on behalf of their EPs for purposes of 
PQRS for the CY 2017 PQRS payment adjustment to inform them about the 
reporting during the secondary PQRS reporting period. We encourage EPs 
to

[[Page 80523]]

communicate with their ACO and report quality data in the event the ACO 
does not successfully report quality data as required by the Shared 
Savings Program under Sec.  425.504 for the CY 2018 PQRS payment 
adjustment.
    For the CY 2018 payment adjustment period, we are finalizing that, 
if a Shared Savings Program ACO does not successfully report quality 
data on behalf of their EPs for purposes of PQRS as required by the 
Shared Savings Program under Sec.  425.504, then we will use the data 
reported to the PQRS by the EPs under the participant TIN (as a group 
(using one of the group registry, QCDR, or EHR reporting options) or as 
individuals (using the registry, QCDR, or EHR reporting option) outside 
of the ACO to determine whether the TIN would fall in Category 1 or 
Category 2 under the VM. We are also finalizing that we will apply the 
two-category approach finalized for the CY 2018 VM (80 FR 71280) based 
on participation in the PQRS by groups and solo practitioners to 
determine whether groups and solo practitioners that participate in a 
Shared Savings Program ACO, but report to the PQRS outside of the ACO, 
would fall in Category 1 or Category 2 under the VM. Thus, if groups 
that participate in a Shared Savings Program ACO in 2016 report quality 
data to the PQRS outside of the ACO and meet the criteria to avoid PQRS 
payment adjustment for CY 2018 as a group using one of the group 
registry, QCDR, or EHR reporting options or have at least 50 percent of 
the group's EPs meet the criteria to avoid the PQRS payment adjustment 
for CY 2018 as individuals using the registry, QCDR, or EHR reporting 
option by reporting quality data to PQRS outside of the ACO, then they 
will be included in Category 1 for the CY 2018 VM. If solo 
practitioners that participate in a Shared Savings Program ACO in 2016 
report quality data to the PQRS outside of the ACO and meet the 
criteria to avoid the PQRS payment adjustment for CY 2018 as 
individuals using the registry, QCDR, or EHR reporting option, then 
they will also be included in Category 1. Category 2 will include those 
groups and solo practitioners subject to the CY 2018 VM that 
participate in a Shared Savings Program ACO and do not fall within 
Category 1.
    For the CY 2017 payment adjustment period, we are finalizing that, 
if a Shared Savings Program ACO did not successfully report quality 
data on behalf of their EPs for purposes of PQRS as required by the 
Shared Savings Program under Sec.  425.504 for the CY 2017 PQRS payment 
adjustment, then we will use the data reported to the PQRS by the EPs 
under the participant TIN (as a group using one of the group registry, 
QCDR, or EHR reporting options or as individuals using the registry, 
QCDR, or EHR reporting option) outside of the ACO during the secondary 
PQRS reporting period to determine whether the TIN would fall in 
Category 1 or Category 2 under the VM. We are also finalizing that we 
will apply the two-category approach finalized for the CY 2017 VM (79 
FR 67938 to 67939 and as revised in 80 FR 71280 to 71281) based on 
participation in the PQRS by groups and solo practitioners to determine 
whether groups and solo practitioners that participate in a Shared 
Savings Program ACO, but report to the PQRS outside of the ACO, would 
fall in Category 1 or Category 2 under the VM. In section III.H. of 
this final rule, we finalized that we will assess the individual EP or 
group's 2016 data submitted outside the ACO and during the secondary 
PQRS reporting period against the reporting requirements for the CY 
2018 PQRS payment adjustment. Therefore, we are also finalizing that 
groups that meet the criteria to avoid PQRS payment adjustment for CY 
2018 as a group practice participating in the PQRS GPRO (using one of 
the group registry, QCDR, or EHR reporting options) or have at least 50 
percent of the group's EPs meet the criteria to avoid the PQRS payment 
adjustment for CY 2018 as individuals (using the registry, QCDR, or EHR 
reporting option), based on data submitted outside the ACO and during 
the secondary PQRS reporting period, will be included in Category 1 for 
the CY 2017 VM. We are also finalizing that solo practitioners that 
meet the criteria to avoid the PQRS payment adjustment for CY 2018 as 
individuals using the registry, QCDR, or EHR reporting option, based on 
data submitted outside the ACO and during the secondary PQRS reporting 
period, will be included in Category 1 for the CY 2017 VM. Category 2 
will include those groups and solo practitioners subject to the CY 2017 
VM that participate in a Shared Savings Program ACO and do not fall 
within Category 1.
    Comment: Several commenters supported our proposal to classify the 
quality composite of TINs that report outside of the ACO as ``average 
quality'' for the CY 2017 VM so that these EPs are protected from 
downward adjustments under quality-tiering; however, few commenters 
stated that it would be appropriate to apply the quality-tiering 
methodology for the 2018 VM payment adjustment when TINs in the Shared 
Savings Program report separately from the ACO. One commenter stated 
that, for the 2018 VM, in cases where measures are submitted by both 
the EP and the ACO, the best performance be counted and the EP should 
be eligible for a payment adjustment based on performance; and in cases 
where the EP opts to report through an ACO, but the ACO fails to 
report, the EP should receive a neutral payment adjustment. One 
commenter supported our proposal to classify the quality composite of 
TINs that report outside of the ACO as ``average quality'' for the CY 
2018 VM.
    Response: As we stated previously, we continue to believe that it 
is appropriate to calculate a quality composite for groups and solo 
practitioners participating in the Shared Savings Program based on the 
ACO's quality data (79 FR 67944). Our proposed policies were not 
intended to encourage groups and solo practitioners that participate in 
a Shared Savings Program ACO to report to the PQRS outside the ACO, but 
in the event the ACO does not successfully report quality data on 
behalf of their EPs for purposes of PQRS, to provide them with a 
safeguard that would allow them to avoid the PQRS payment adjustment 
and the automatic downward adjustment under the VM. We encourage groups 
and solo practitioners to continue to report through the ACO in order 
to promote clinical and financial integration within the ACO and for 
the Medicare beneficiaries they treat.
    Therefore, we are finalizing as proposed that, for groups and solo 
practitioners that participate in a Shared Savings Program ACO that did 
not successfully report quality data as required by the Shared Savings 
Program under Sec.  425.504 and are in Category 1 as a result of 
reporting quality data to the PQRS outside of the ACO, we will classify 
their quality composite for the VM for the CY 2018 payment adjustment 
period as ``average quality.'' We are also finalizing that for groups 
and solo practitioners that participate in a Shared Savings Program ACO 
that did not successfully report quality data as required by the Shared 
Savings Program under Sec.  425.504 and are in Category 1 as a result 
of reporting quality data to the PQRS outside of the ACO using the 
secondary PQRS reporting period, we will classify their quality 
composite for the VM for the CY 2017 payment adjustment period as 
``average quality''.
    As finalized in the CY 2015 PFS final rule with comment period (79 
FR 67943), the cost composite for groups and solo practitioners that 
participate in a Shared Savings Program ACO will be

[[Page 80524]]

classified as ``average cost.'' We are also finalizing the 
corresponding revisions to Sec.  414.1210(b)(2).
    Since groups and solo practitioners taking advantage of the 
secondary PQRS reporting period for the CY 2017 PQRS payment adjustment 
will have missed the deadline for submitting an informal review request 
for the 2017 VM, we proposed the informal review submission periods for 
these groups and solo practitioners would occur during the 60 days 
following the release of the QRURs for the 2018 VM. We did not receive 
any comments on this proposal and are finalizing this policy as 
proposed.

M. Physician Self-referral Updates

1. Unit-based Compensation in Arrangements for the Rental of Office 
Space or Equipment
a. The Physician Self-referral Statute and Regulations
(1) Section 1877 of the Act
    Section 6204 of the Omnibus Budget Reconciliation Act of 1989 (Pub. 
L. 101- 239) (OBRA 1989), enacted on December 19, 1989, added section 
1877 to the Act. 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. Additionally, the statute mandates refunding any amount 
collected under a bill for an item or service furnished under a 
prohibited referral. Finally, the statute imposes reporting 
requirements and provides for sanctions, including civil monetary 
penalty provisions. Section 1877 of the Act became effective on January 
1, 1992.
    Section 4207(e) of the Omnibus Budget Reconciliation Act of 1990 
(Pub. L. 101-508) (OBRA 1990), enacted on November 5, 1990, amended 
certain provisions of section 1877 of the Act to clarify definitions 
and reporting requirements relating to physician ownership and 
referrals and to provide an additional exception to the prohibition. 
Several subsequent laws further changed section 1877 of the Act. 
Section 13562 of the Omnibus Budget Reconciliation Act of 1993 (Pub. L. 
103- 66) (OBRA 1993), enacted on August 10, 1993, expanded the referral 
prohibition to cover certain other ``designated health services'' in 
addition to clinical laboratory services, modified some of the existing 
statutory exceptions, and added new exceptions. Section 152 of the 
Social Security Act Amendments of 1994 (SSA 1994) (Pub. L. 103-432), 
enacted on October 31, 1994, amended the list of designated health 
services, changed the reporting requirements at section 1877(f) of the 
Act, and modified some of the effective dates established by OBRA 1993. 
Some provisions relating to referrals for clinical laboratory services 
were effective retroactively to January 1, 1992, while other provisions 
became effective on January 1, 1995.
(2) Regulatory History
(a) General Background
    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.
    Following 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 January 4, 2001 Federal Register (66 FR 856) as a 
final rule with comment period. The second final rulemaking (Phase II) 
was published in the March 26, 2004 Federal Register (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 September 5, 2007 Federal Register (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 (73 FR 48434) (the FY 2009 IPPS final 
rule). That rulemaking made various revisions to the physician self-
referral regulations, including provisions that prohibited certain per 
unit-of-service (often referred to as ``per-click'') and percentage-
based compensation formulas for determining the rental charges for 
office space and equipment lease arrangements.
    We issued additional final regulations after passage of the 
Affordable Care Act. In the CY 2011 PFS final rule with comment period 
(75 FR 73170), we codified a disclosure requirement established by the 
Affordable Care Act for the in-office ancillary services exception. We 
also issued regulations in the CY 2011 OPPS final rule with comment 
period (75 FR 71800), the CY 2012 OPPS final rule with comment period 
(76 FR 74122), and the CY 2015 OPPS final rule with comment period (79 
FR 66770) that established or revised certain regulatory provisions 
concerning physician-owned hospitals to codify and interpret the 
Affordable Care Act's revisions to section 1877 of the Act. Finally, in 
the CY 2016 PFS final rule (80 FR 70886), we issued regulations to 
accommodate delivery and payment system reform, reduce burden, and to 
facilitate compliance. In that rulemaking, we established two new 
exceptions, clarified certain provisions of the physician self-referral 
law, updated regulations to reflect changes in terminology, and revised 
definitions related to physician-owned hospitals. One of the new 
exceptions, the exception for timeshare arrangements at Sec.  
411.357(y), includes a prohibition on certain per unit-of-service 
compensation formulas.
(b) Unit-based Compensation
    We have addressed the issue of unit-based compensation in several 
rulemakings. Sections 1877(e)(1)(A)(iv) and (B)(iv) of the Act provide 
that, for an arrangement for the rental of office space or equipment to 
satisfy the relevant exceptions to the physician self-referral law, the 
rental charges over the term of the lease must be set in advance, be 
consistent with fair market value, and not be determined in a manner 
that takes into account the volume or value of any referrals or other 
business generated between the parties. Interpreting this ``volume or 
value'' standard in the 1998 proposed rule, we proposed that 
compensation could be based on units of service (for example, ``per-
use'' equipment rentals) provided that the units of service did not 
include services provided to patients who were referred by the 
physician receiving the payment. For example, a physician who owned a 
lithotripter could rent it to a hospital on a per-procedure basis,

[[Page 80525]]

except for lithotripsies for patients referred by the physician owner. 
Instead, payments for the use of the lithotripter for those patients 
would have to use a methodology that did not vary with referrals. (63 
FR 1714; see also 66 FR 876). We further proposed that arrangements in 
which a physician rents equipment to an entity that furnishes a 
designated health service, such as a hospital that rents an MRI 
machine, with the physician receiving rental payments on a ``per-use'' 
or ``per-click'' basis (that is, a rental payment is generated each 
time the machine is used) do not prohibit the physician from otherwise 
referring to the entity, provided that these kinds of arrangements are 
typical and comply with the fair market value and other standards that 
are included under the rental exception. However, because a physician's 
compensation under this exception cannot reflect the volume or value of 
the physician's own referrals, we proposed that the rental payments may 
not reflect ``per-use'' or ``per-click'' payments for patients who are 
referred for the service by the physician lessor (63 FR 1714).
    After reviewing the public comments in response to the 1998 
proposed rule, we finalized in Phase I significant revisions with 
respect to the scope of the volume or value standard. We revised our 
interpretation of the ``volume or value'' standard for purposes of 
section 1877 of the Act to permit, among other things, payments based 
on a unit of service, provided that the unit-based payment is fair 
market value and does not vary over time (66 FR 876 through 879). 
Importantly, we permitted unit-based compensation formulas, even when 
the physician receiving the payment has generated the payment through a 
DHS referral. To reach this position, we noted that page 814 of the 
House Conference Committee report (H. Rep. No. 213, 103rd Cong., 1st 
Sess. (1993)) stated, with respect to the statutory exceptions for the 
rental of office space and equipment in sections 1877(e)(1)(A)(iv) and 
(B)(iv) of the Act, that the conferees ``intend[ed] that rental charges 
for [office] space and equipment leases may be based on daily, monthly, 
or other time-based rates, or rates based on units of service 
furnished, so long as the amount of the time-based or units of service 
rates does not fluctuate during the contract period based on the volume 
or value of referrals between the parties to the lease or 
arrangement.'' (66 FR 876). However, we stated our unequivocal belief 
that arrangements in which the lessor is compensated each time that the 
lessor refers a patient to the lessee for a service performed in the 
leased office space or using the leased equipment have an obvious 
potential for abuse and could incent overutilization (66 FR 878). We 
indicated that we would continue to monitor financial arrangements in 
the health care industry and would revisit particular regulatory 
decisions if we determine that there has been abuse or overutilization 
(66 FR 860).
    In the CY 2008 PFS proposed rule (72 FR 38122), we stated that 
arrangements between a physician lessor and an entity lessee under 
which the physician lessor receives unit-of-service payments are 
inherently susceptible to abuse because the physician lessor has an 
incentive to profit from referring a higher volume of patients to the 
lessee. We proposed that space and equipment leases may not include 
per-click payments to a physician lessor for services rendered by an 
entity lessee to patients who are referred by a physician lessor to the 
entity (72 FR 38183). We also solicited comments on the question of 
whether we should prevent per-click payments in situations in which the 
physician is the lessee and a DHS entity is the lessor. The CY 2008 PFS 
proposed rule also included eight other significant proposed revisions 
to the physician self-referral regulations. Due to the large number of 
physician self-referral proposals, the significance of the provisions 
both individually and in concert with each other, and the volume of 
public comments received in response to the CY 2008 PFS proposed rule, 
we declined to finalize our proposals, including our proposal to 
prohibit certain per unit-of-service compensation formulas in 
arrangements for the rental of office space and equipment, in the CY 
2008 PFS final rule (72 FR 66222).
    After consideration of the public comments and our independent 
research, we finalized regulations prohibiting certain per-unit of 
service compensation formulas for determining office space and 
equipment rental charges in the FY 2009 IPPS final rule (73 FR 48434). 
Specifically, we revised Sec.  411.357(a)(4) and (b)(4) to prohibit 
rental charges for the rental of office space or equipment that are 
determined using a formula based on per-unit of service rental charges, 
to the extent that such charges reflect services provided to patients 
referred by the lessor to the lessee. In doing so, we relied on our 
authority in section 1877(e)(1)(A)(vi) and (B)(vi) of the Act, which 
permits the secretary to impose by regulation other requirements needed 
to protect against program or patient abuse. We also revised the 
exceptions at Sec. Sec.  411.357(l) and (p) for fair market value 
compensation and indirect compensation arrangements, respectively, to 
include similar limitations on the formula for determining office space 
and equipment rental charges, as applicable. We did so using our 
authority at section 1877(b)(4) of the Act, as those exceptions were 
established using that authority (See 73 FR 48713 through 48721). We 
determined it necessary to limit the type of per-click compensation 
formulas available for arrangements for the rental of office space and 
equipment because we believe that arrangements under which a lessor 
receives unit-of-service payments are inherently susceptible to abuse. 
Specifically, we believe that the lessor has an incentive to profit 
from referring a higher volume of patients to the lessee and from 
referring patients to the lessee that might otherwise go elsewhere for 
services.
b. Development of This Rulemaking
(1) Council for Urological Interests v. Burwell
    On June 12, 2015, the D.C. Circuit (the Court) issued an opinion in 
Council for Urological Interests v. Burwell, 790 F.3d 212 (D.C. Cir. 
2015), that addressed the prohibition on per-click rental charges for 
the lease of equipment found at Sec.  411.357(b)(4)(ii)(B). In its 
ruling, the Court agreed with CMS that section 1877(e)(1)(B)(vi) of the 
Act provides the Secretary the authority to prohibit per-click leasing 
arrangements. The Court concluded that--

    The text of the statute does not unambiguously preclude the 
Secretary from using her authority to add a requirement that bans 
per-click leases. To the contrary, the statutory text of the 
exception clearly provides the Secretary with the discretion to 
impose any additional requirements that she deems necessary ``to 
protect against program or patient abuse.'' (Council for Urological 
Interests, 790 F.3d at 219.)

The Court further concluded that the relevant language in the House 
Conference Report merely interpreted section 1877(e)(1)(B)(iv) of the 
Act, and thus did not preclude CMS from imposing additional 
requirements under section 1877(e)(1)(B)(vi) of the Act. It stated that 
the legislative history ``simply indicates that, as written, the 
rental-charge clause [in section 1877(e)(1)(B)(iv) of the Act] does not 
preclude per-click leases'' and stated further that ``[n]othing in the 
legislative history suggests a limit on [the Secretary's] authority'' 
to prohibit per-click leases under section 1877(e)(1)(B)(vi) of the Act 
(Id. at 222.).
    The Court also concluded, however, that CMS's discussion of the 
House

[[Page 80526]]

Conference Report in the FY 2009 IPPS final rule contained an 
unreasonable interpretation of the conferees' statements concerning 
sections 1877(e)(1)(A)(iv) and (B)(iv) of the Act, and it remanded the 
case to the agency to permit a fuller consideration of the legislative 
history. This rulemaking addresses that decision.
(2) The FY 2009 IPPS Final Rule
    As discussed above, in the FY 2009 IPPS final rule, we revised the 
exceptions for the rental of office space and equipment to include in 
each a requirement that the rental charges for the office space or 
equipment are not determined using a formula based on per-unit of 
service rental charges, to the extent that such charges reflect 
services provided to patients referred by the lessor to the lessee. We 
explained that our decision to add this requirement was ultimately 
based on our authority under section 1877(e)(1)(B)(vi) of the Act to 
promulgate ``other requirements'' needed to protect against program or 
patient abuse. However, we also discussed certain legislative history 
contained in the House Conference Report addressing sections 
1877(e)(1)(A)(iv) and 1877(e)(1)(B)(iv) of the Act, which establish 
requirements that rental charges over the term of a lease for office 
space or rental equipment be set in advance, be consistent with fair 
market value, and not be determined in a manner that takes into account 
the volume or value of any referrals or other business generated 
between the parties. With respect to those statutory conditions, the 
language in the House Conference Report states that--

    The conferees intend that charges for space and equipment leases 
may be based on daily, monthly, or other time-based rates, or rates 
based on units of service furnished, so long as the amount of time-
based or units of service rates does not fluctuate during the 
contract period based on the volume or value of referrals between 
the parties to the lease or arrangement. (H.R. Rep. No. 103-213, at 
814 (1993).)

    In the FY 2009 IPPS final rule, we noted that CMS had previously 
concluded that this language indicated that Congress intended to permit 
leases that included per-click payments, even for patients referred by 
the physician lessor (66 FR 940), but stated that the language could 
also be interpreted as excluding from the office space and equipment 
lease exceptions those lease arrangements that include per-click 
payments for services provided to patients referred from one party to 
the other (73 FR 48716). Specifically, we stated that, where the total 
amount of rent (that is, the rental charges) over the term of the lease 
is directly affected by the number of patients referred by one party to 
the other, those rental charges can arguably be said to ``take into 
account'' or ``fluctuate during the contract period based on'' the 
volume or value of referrals between the parties. The Court found this 
revised interpretation to be an unreasonable reading of the language of 
the House Conference Report. The Court remanded Sec.  
411.357(b)(4)(ii)(B) to the Secretary for further proceedings 
consistent with its opinion, and directed that the Secretary should 
consider whether a ban on per-click equipment leases is consistent with 
the House Conference Report.
    c. The CY 2017 PFS Proposed Rule: Re-proposal of Limitation on the 
Types of Per-unit of Service Compensation Formulas for Determining 
Office Space and Equipment Rental Charges
    In the CY 2017 PFS proposed rule, we proposed certain requirements 
for arrangements involving the rental of office space or equipment. 
Specifically, using the same language in existing Sec.  
411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B), we 
proposed to include at Sec.  411.357(a)(5)(ii)(B), (b)(4)(ii)(B), 
(l)(3)(ii), and (p)(1)(ii)(B) a requirement that rental charges for the 
lease of office space or equipment are not determined using a formula 
based on per-unit of service rental charges, to the extent that such 
charges reflect services provided to patients referred by the lessor to 
the lessee. We used the authority granted to the Secretary in sections 
1877(e)(1)(A)(vi) and (B)(vi) of the Act to re-propose this requirement 
in the exceptions at Sec.  411.357(a) and (b) for the rental of office 
space and equipment, respectively. We used the authority granted to the 
Secretary in section 1877(b)(4) of the Act to re-propose this 
requirement in the exceptions at Sec.  411.357(l) and (p) for fair 
market value compensation and indirect compensation arrangements, 
respectively. For the reasons set forth below, we are finalizing 
without modification at Sec.  411.357(a)(5)(ii)(B), (b)(4)(ii)(B), 
(l)(3)(ii), and (p)(1)(ii)(B) a requirement that rental charges for the 
lease of office space or equipment are not determined using a formula 
based on per-unit of service rental charges, to the extent that such 
charges reflect services provided to patients referred by the lessor to 
the lessee.
    We emphasize that we did not propose and are not finalizing an 
absolute prohibition on rental charges based on units of service 
furnished. In general, per-unit of service rental charges for the 
rental of office space or equipment are permissible. We proposed to 
limit, and in this final rule are finalizing a limit on, the general 
rule by prohibiting per-unit of service rental charges where the lessor 
generates the payment from the lessee through a referral to the lessee 
for a service to be provided in the rented office space or using the 
rented equipment. Thus, under this final rule, per-unit of service 
rental charges for the rental of office space or equipment are 
permissible, but only in those instances where the referral for the 
service to be provided in the rented office space or using the rented 
equipment did not come from the lessor.
(1) Authority
    In accordance with the Court's opinion in Council for Urological 
Interests, in the proposed rule, we set forth the Secretary's authority 
to include in the exceptions applicable to office space and equipment 
leases a requirement that rental charges are not determined using a 
formula based on per-unit of service rental charges that reflect 
services provided to patients referred by the lessor to the lessee. Our 
determination followed the Court's reasoning, excerpted below, in 
rejecting the Council for Urological Interests' assertion that the 
Secretary lacked the authority to impose a ban on ``per-click'' 
equipment--and by correlation--office space leases. We also described 
why limiting the types of per-click rental charges that would not 
violate the physician self-referral law's referral and claims 
submission prohibitions is consistent with the language of the House 
Conference Report.
    As the Court stated, the physician self-referral law gives the 
Secretary power to add requirements as needed to protect against 
program or patient abuse, even if Congress did not anticipate such 
abuses at the time of enactment of the statute. Specifically, although 
Congress may not have originally included a ban on per-click rental 
charges in office space and equipment lease arrangements, it 
``empowered the Secretary to make her own assessment of the needs of 
the Medicare program and regulate accordingly.'' (Council for 
Urological Interests, 790 F.3d at 220.) The statute explicitly permits 
the Secretary to impose additional conditions on arrangements for the 
rental of office space or equipment, and nowhere expressly states that 
per-click rates must always be permitted. Thus, as the Court confirmed, 
the Secretary's regulation limiting the use of per-click compensation 
formulas ``can properly be classified as an `other' requirement 
expressly permitted by sections

[[Page 80527]]

1877(e)(1)(A)(vi) and (B)(vi) of the Act.'' (Id.)
    The Secretary's authority to impose requirements regarding the type 
of compensation formulas upon which office space and equipment rental 
charges may be based is not constrained by the House Conference Report. 
In the proposed rule, we acknowledged that the language in the House 
Conference Report states Congress' intent at the time of enactment of 
the physician self-referral law that sections 1877(e)(1)(A)(iv) and 
(B)(iv) of the Act not be interpreted as prohibiting charges for the 
rental of office space or equipment that are based on units of service 
furnished. We did not purport to interpret this language as implying 
anything other than the conferees' understanding--at the time of 
enactment of the statute--that the statute as written did not prohibit 
rental charges based on units of service rates. But Congress also gave 
the Secretary the authority in sections 1877(e)(1)(A)(vi) and (B)(vi) 
of the Act to impose by regulation other requirements as needed to 
protect against program or patient abuse. Nowhere in the House 
Conference Report did Congress express an intent to limit the authority 
granted to the Secretary in sections 1877(e)(1)(A)(vi) and (B)(vi) of 
the Act (as enacted). In fact, the House Conference Report was 
completely silent regarding sections 1877(e)(1)(A)(vi) and (B)(vi) of 
the Act, leaving the express words of the statute to speak for 
themselves. As the Court noted--

    The conference report . . . states only that rental charges 
``may'' be based on units of service. The language is not 
obligatory. Instead, it simply indicates that, as written, the 
rental-charge clause [(section 1877(e)(1)(B)(iv) of the Act)] does 
not preclude per-click leases. But, as we have already explained, 
there is more to the statute than this clause, and to qualify for 
the exception, a rental agreement must comply with all six clauses, 
not merely the rental-charge clause alone. The final clause 
[(section 1877(e)(1)(B)(vi) of the Act)] gives the Secretary the 
authority to add further requirements. Nothing in the legislative 
history suggests a limit on this authority. We conclude that the 
statute does not unambiguously forbid the Secretary from banning 
per-click leases as she evaluates the needs of the Medicare system 
and its patients. (790 F.3d at 221-22 (footnote omitted).)

    Moreover, as the Court further noted, a statement that unit of 
service-based rental charges are not precluded by sections 
1877(e)(1)(A)(iv) and (B)(iv) of the Act as they are written is not 
equivalent to a statement that the Secretary must continue to permit 
such charges as she reevaluates, in light of experience, the operation 
of the statute and the need to protect the Medicare program and its 
beneficiaries against abuse. (Id. at 222 n.7; see also id. at 222 n.6 
(``Congress has expressly delegated to the Secretary the authority to 
promulgate additional requirements, as she has done here, and the 
legislative history does not clearly impose a constraint on that 
power.'').)
    In the proposed rule, we discussed the Secretary's broad authority 
under sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act to impose 
conditions on arrangements for the rental of office space or equipment 
in order to protect against program or patient abuse. That authority is 
not limited by the express words of the statute as it is in other 
provisions of section 1877 of the Act. In agreement, the Court in 
Council for Urological Interests explained--

. . . Congress knew how to limit the Secretary's authority to impose 
additional requirements to the various exceptions [to the physician 
self-referral law]. In [section 1877(e)(2) of the Act], Congress 
excludes bona fide employment relationships from the definition of 
compensation arrangements. This provision states that the employment 
relationship must comply with various requirements, including that 
the pay not be determined ``in a manner that takes into account 
(directly or indirectly) the volume or value of any referrals by the 
referring physician.'' This employment exception also allows the 
Secretary to impose ``other requirements,'' just as the equipment 
rental exception. But the statute then goes on to say that the 
listed requirements ``shall not prohibit the payment of remuneration 
in the form of a productivity bonus based on services performed 
personally by the physician.'' This language shows that Congress 
knew how to cabin the Secretary's authority to impose ``other'' 
requirements and that it knew how to further clarify what it meant 
by compensation that does not take into account the volume of 
business generated between parties. That Congress employed neither 
of these tools with reference to the [exception for the rental of 
office space or equipment] again supports reading the statute as 
giving the Secretary broad discretion as she regulates in this area. 
(790 F.3d at 221 (citations omitted).)

    The Secretary's authority to limit the use of per-unit of service 
rental charges in arrangements for the rental of office space or 
equipment is particularly clear when the exceptions for the rental of 
office space and equipment are compared to other provisions in section 
1877 of the Act. According to the Court in Council for Urological 
Interests--

    [T]he statute elsewhere expressly permits charging per-click 
fees in other contexts, showing that Congress knew how to authorize 
such payment terms when it wanted to. In [section 1877(e)(7)(A) of 
the Act], Congress created an exception to the [physician self-
referral law] that allows the continuation of certain group practice 
arrangements with a hospital. . . . The provision states that ``[a]n 
arrangement between a hospital and a group under which designated 
health services are provided by the group but are billed by the 
hospital'' is excepted from the ban on referrals if, among other 
things, ``the compensation paid over the term of the agreement is 
consistent with fair market value and the compensation per unit of 
services is fixed in advance and is not determined in a manner that 
takes into account the volume or value of any referrals or other 
business generated between the parties.'' Comparing this provision 
to the [exceptions for the rental of office space and equipment] 
shows that Congress knew how to permit per-click payments 
explicitly, suggesting that the omission in this particular context 
was deliberate. . . . In other words, Congress's decision not to 
include similar language in the [exceptions for the rental of office 
space and equipment] supports our conclusion that the statute is 
silent regarding the permissibility of per-click leases for 
equipment rentals. (790 F.3d at 220-21 (citations omitted).)

In the proposed rule, we stated in summary that, as we similarly stated 
in the FY 2009 IPPS final rule (73 FR 48716), the physician self-
referral statute responds to the context of the times in which it was 
enacted (by addressing known risks of overutilization and, in 
particular, by creating exceptions for common business arrangements), 
and also incorporates sufficient flexibility to adapt to changing 
circumstances and developments in the health care industry. For 
example, in section 1877(b)(4) of the Act, Congress authorized the 
Secretary to protect additional beneficial arrangements by promulgating 
new regulatory exceptions. In addition, Congress included the means to 
address evolving fraud risks by inserting into many of the exceptions--
and notably, for our purposes, in the lease exceptions--specific 
authority for the Secretary to add conditions as needed to protect 
against abuse. This design reflects a recognition that a fraud and 
abuse law with sweeping coverage over most of the health care industry 
could not achieve its purpose over the long term if it were frozen in 
time. In short, the statute evidences Congress' foresight in 
anticipating that the nature of fraud and abuse--and of beneficial 
industry arrangements--might change over time. (73 FR 48716 (citations 
omitted).)
    As we did in 2007 when we first proposed to impose additional 
requirements for rental charges in arrangements for the rental of 
office space and equipment, and in 2008 when we finalized regulations 
incorporating

[[Page 80528]]

such additional requirements, we relied in making our proposal on the 
Secretary's clear authority in sections 1877(e)(1)(A)(vi) and (B)(vi) 
of the Act to impose such other requirements needed to protect against 
program or patient abuse. With respect to our proposal to include the 
same requirements at Sec.  411.357(l) and (p), we determined that the 
revisions to Sec.  411.357(l) and (p) are necessary to meet the 
standard set forth in section 1877(b)(4) of the Act, which authorizes 
the Secretary to establish exceptions to the statute's referral and 
billing prohibitions only where the excepted financial relationships do 
not pose a risk of program or patient abuse.
(2) Rationale for Proposal
    As we discussed in prior rulemakings, including the 1998 proposed 
rule, we stated in the proposed rule that a number of studies prior to 
the enactment of the physician self-referral law found that physicians 
who had financial relationships with entities to which they referred 
patients ordered more services than physicians without such financial 
relationships (63 FR 1661). We noted that studies conducted since that 
time, including recent studies by GAO, indicate that financial self-
interest continues to affect physicians' medical decision making.
    In the FY 2009 IPPS final rule, we discussed in detail our 
rationale for finalizing the limitation on per-unit of service rental 
charges in arrangements for the rental of office space or equipment. We 
noted primary concerns regarding the potential for overutilization, 
patient steering and other anti-competitive effects, and reduction in 
quality of care and patient outcomes, as well as concerns regarding the 
potential for increased costs to the Medicare program. For the reasons 
set forth in the FY 2009 IPPS final rule, some of which we restated in 
the proposed rule, we stated our belief that, in order to protect 
against program or patient abuse, it is necessary to impose additional 
requirements on arrangements for the rental of office space or 
equipment. Specifically, we stated that we believe that it is necessary 
to prohibit rental charges that are determined using a formula based on 
per-unit of service rental charges to the extent that such charges 
reflect services provided to patients referred by the lessor to the 
lessee of the office space or equipment.
    In the CY 2017 PFS proposed rule, we noted that commenters 
responding to our proposal in the CY 2008 PFS proposed rule to impose 
additional requirements for office space and equipment lease 
arrangements provided compelling information regarding potential 
program or patient abuse. We were persuaded in 2008 to finalize 
requirements limiting per-unit of service rental charges in the 
exceptions applicable to the rental of office space or equipment, and 
stated our continued belief that these requirements continue to be 
necessary, due to our concerns that ``per-click'' lease arrangements in 
which the lessor makes referrals to the lessee that generate payments 
to the lessor--
     Create an incentive for overutilization of imaging 
services (as described by MedPAC in its comments to our proposal in the 
CY 2008 PFS proposed rule), as well as other services, including 
therapeutic services;
     Create an incentive for physicians to narrow their choice 
of treatment options to those for which they will realize a profit, 
even where the best course of action may be no treatment;
     Influence physicians to refer to the lessee instead of 
referring to another entity that utilizes the same or different (and 
perhaps more efficacious) technology to treat the patient's condition;
     Result in physicians steering patients to equipment they 
own, even if it means having the patient travel to a non-convenient 
site for services using the leased equipment; and
     Increase costs to the Medicare program when referring 
physicians pressure hospitals to use their leasing company despite not 
being the low cost provider.
    We noted that, in the CY 2016 PFS final rule, we expressed our 
continued concern that, when physicians have a financial incentive to 
refer a patient to a particular entity, 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 is 
diminished 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 if new competitors cannot win business with superior quality, 
service, or price (80 FR 41926). We stated that, in establishing the 
exception at Sec.  411.357(y) for timeshare arrangements, we determined 
it necessary to exclude from the exception any timeshare arrangements 
that incorporate compensation formulas based on: (1) A percentage of 
the revenue raised, earned, billed, collected, or otherwise 
attributable to the services provided while using the timeshare; or (2) 
per-unit of service fees, to the extent that such fees reflect services 
provided to patients referred by the party granting permission to use 
the timeshare to the party to which the permission is granted. We 
explained our belief that timeshare arrangements based on percentage 
compensation or per-unit of service compensation formulas present a 
risk of program or patient abuse because they may incentivize 
overutilization and patient steering. We noted in the CY 2016 PFS final 
rule, by way of example, that a per-patient compensation formula could 
incent the timeshare grantor to refer patients (potentially for 
unnecessary consultations or services) to the party using the timeshare 
because the grantor will receive a payment each time the premises, 
equipment, personnel, items, supplies, or services are used (80 FR 
71331 through 71332). Similarly, we believe that arrangements utilizing 
rental charges for the rental of office space or equipment that are 
determined using a formula that rewards the lessor for each service the 
lessor refers to the lessee are susceptible to this and other abuse.
    Finally, we noted in the CY 2017 PFS proposed rule that we are not 
alone in our concern regarding overutilization and steering of 
beneficiaries resulting from arrangements in which a physician's 
referral may provide future remuneration back to the physician. In two 
notable advisory opinions, OIG expressed its concern with per-unit of 
service compensation arrangements. Specifically, in Advisory Opinion 
03-08, OIG stated that ```[p]er patient,' `per click,' `per order,' and 
similar payment arrangements with parties in a position, directly or 
indirectly, to refer or recommend an item or service payable by a 
federal health care program are disfavored under the anti-kickback 
statute. The principal concern is that such arrangements promote 
overutilization . . . .'' In Advisory Opinion 10-23, OIG noted that the 
arrangement that was the subject of the opinion ``involves a `per-
click' fee structure, which is inherently reflective of the volume or 
value of services ordered and provided . . . .''
    The following is a summary of the comments we received regarding 
our re-proposal.
    Comment: The majority of commenters that addressed the re-proposed 
regulations at Sec.  411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), 
and (p)(1)(ii)(B) supported the restriction on per-unit of service (or 
per-

[[Page 80529]]

click) compensation formulas for determining the rental charges for 
office space and equipment lease arrangements. Many of these commenters 
offered general support, while others noted appreciation for our 
continued monitoring of financial relationships in the health care 
industry, particularly with respect to per-click compensation 
arrangements and the ``misuses of physician-owned office space.'' One 
commenter commended us for continuing to recognize the ``perverse 
incentives created by compensation arrangements between physicians and 
other providers that are based on volume.'' Another commenter 
specifically agreed that overutilization and abuse can occur under 
these types of arrangements and agreed with our re-proposal to limit 
them.
    One commenter commended us for keeping the integrity of the 
Medicare program in mind by re-proposing the per-click restrictions. 
This commenter and another noted that improper financial relationships 
risk wasting funds and could limit access to more appropriate treatment 
options. A third commenter encouraged us to ``keep in place the 
relevant restriction on per-unit arrangements when payments are made to 
referral sources.'' Another commenter acknowledged that a careful 
balance must be established between permitting physicians to lease 
office space or equipment to ensure access to patient care and avoiding 
potential risks of abuse of the Medicare program, and stated its 
appreciation that the restrictions we proposed on the formula for 
rental charges are reasonable and preserve the ability of physicians to 
lease office space and equipment from other physicians.
    Response: We continue to believe, and agree with the commenters, 
that arrangements for the rental of office space or equipment utilizing 
rental charges that are determined using a formula that rewards the 
lessor for each service the lessor refers to the lessee are susceptible 
to abuse. As discussed in the CY 2017 PFS proposed rule, such abuse 
includes the potential for overutilization, patient steering and 
stifling patient choice, and the reduction in quality of care and 
patient outcomes, as well as the potential for increased costs to the 
Medicare program (81 FR 46452). For the reasons explained in detail in 
the proposed rule and elsewhere in this final rule, we believe that, in 
order to protect against program or patient abuse, it is necessary to 
impose additional requirements on arrangements for the rental of office 
space or equipment. Specifically, we believe that it is necessary to 
prohibit rental charges that are determined using a formula based on 
per-unit of service rental charges to the extent that such charges 
reflect services provided to patients referred by the lessor to the 
lessee of the office space or equipment. Therefore, using our using our 
authority at section 1877(e)(1)(A)(vi) and (B)(vi) of the Act, we are 
finalizing without modification the regulations re-proposed at Sec.  
411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B).
    Comment: One commenter welcomed what it referred to as a 
``clarification'' that the restriction on per-unit of service 
compensation formulas applies only in instances where the referral that 
results in the payment for the use of the equipment comes from the 
lessor.
    Response: The regulations at Sec.  411.357(a)(5)(ii)(B), 
(b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B) prohibit per-unit of 
service rental charges only to the extent that such charges reflect 
services provided to patients referred by the lessor to the lessee. We 
discussed this limitation in the FY 2009 IPPS final rule, stating that 
the regulations do not prohibit per-click rental payments to physician 
lessors for services rendered to patients who were not referred to the 
lessee by the physician lessors, because such arrangements do not carry 
with them risk under the physician self-referral statute (73 FR 48719). 
We again discussed the provision in the CY 2017 PFS proposed rule, 
stating that per-unit of service rental charges for the rental of 
office space or equipment are permissible, but only in those instances 
where the referral for the service to be provided in the rented office 
space or using the rented equipment does not come from the lessor (81 
FR 46450). The re-proposed language at Sec.  411.357(a)(5)(ii)(B), 
(b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B) is identical to the 
regulatory provisions finalized in the FY 2009 IPPS final rule.
    Comment: We received one comment opposing our proposal to prohibit 
per-unit of service (``per-click'') rental charges where the lessor 
generates the payment from the lessee through a referral to the lessee 
for a service to be provided in the rented office space or using the 
rented equipment. The commenter asserted that, in its opinion, our re-
proposal of the limitation on per-click rental charges does not comply 
with the Court's decision in Council for Urological Interests v. 
Burwell. The commenter asserted that, as a result, our re-proposal of 
the limitation on per-click rental charges is arbitrary and capricious.
    The commenter premised its objection to our proposal in two ways. 
First, the commenter asserted that we lacked the authority to re-
propose the regulations because our determination to prohibit certain 
per-click rental charges cannot be reconciled with the House Conference 
Report. The commenter asserted that we did ``not even try to reconcile 
a ban on per-click [compensation formulas] with the [House] Conference 
Report.'' At the same time, the commenter asserted that the Court 
rejected our explanation that, given the authority granted to the 
Secretary under sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act, the 
House Conference Report does not constrain her authority to impose 
requirements regarding the type of compensation formulas upon which 
office space and equipment rental charges may be based.
    Second, the commenter rejected our justification for re-proposing 
the prohibition on certain per-click compensation formulas for 
determining rental charges in arrangements for the rental of office 
space and equipment. Specifically, the commenter claimed that we cited 
no ``industry developments'' since the enactment of the physician self-
referral law or since our Phase I regulations that ``now warrant a 
prohibition on per-click [rental charge formulas]''; criticized our 
reliance on ``concerns'' and ``belief[s]'' informing our judgment that 
per-click rental charge arrangements create incentives for abuse and 
overutilization; and asserted that ``only empirical data or evidence'' 
can support a Secretarial determination under the physician self-
referral law that additional conditions are needed to protect against 
program or patient abuse. The commenter acknowledged that the GAO 
studies and other studies, as well as an OIG advisory opinion, 
referenced in the CY 2017 PFS proposed rule ``stand . . . for the 
general proposition that physician financial interests can affect the 
utilization of medical tests and procedures.'' Nonetheless, the 
commenter asserted that the re-proposed regulations must be based on 
``recent'' developments or ``recent'' studies showing abuse in per-
click lease arrangements in order to stand.
    Response: We disagree with the commenter. The Secretary's authority 
for the regulations re-proposed (and finalized here) at Sec.  
411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B), 
which include a requirement that the rental charges for the lease of 
office space or equipment are not determined using a formula based on 
per-unit of service rental charges, to the extent that such charges 
reflect services provided to patients referred by the lessor to the

[[Page 80530]]

lessee, is found in sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act, 
which we detail below. The Court in Council for Urological Interests v. 
Burwell expressly confirmed this authority. See 790 F.3d at 219-22. We 
specifically disagree with--and address below--the commenter's 
assertions that we lack the authority for this rulemaking because: (1) 
Our regulations cannot be reconciled with the House Conference Report; 
and (2) only recent empirical data or evidence can support a 
Secretarial determination under the physician self-referral law that 
additional conditions in the exceptions for the rental of office space 
and equipment are needed to protect against program or patient abuse.
    We first address the commenter's assertion that a ban on per-click 
rental charges in arrangements for the lease of office space or 
equipment cannot be reconciled with the House Conference Report. The 
commenter is incorrect. In Council for Urological Interests, the Court 
itself explicitly reconciled such a ban with respect to per-click 
equipment leases, stating that the legislative history ``simply 
indicates that, as written, the rental-charge clause [in section 
1877(e)(1)(B)(iv) of the Act] does not preclude per-click leases'' and 
emphasized that ``[n]othing in the legislative history suggests a limit 
on [the Secretary's] authority'' to prohibit per-click leases under 
section 1877(e)(1)(B)(vi) of the Act (790 F.3d at 222.). Here, in 
finalizing the re-proposed regulations at Sec.  411.357(a)(5)(ii)(B) 
and (b)(4)(ii)(B), we are relying on the Secretary's authority under 
sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act to impose such other 
requirements needed to protect against program or patient abuse. Thus, 
the House Conference Report can be reconciled with a ban on per-click 
rental charges in arrangements for the lease of office space or 
equipment.
    We next address the commenter's assertion that our CY 2017 PFS 
rulemaking ``did not even try to reconcile a ban on per-click 
[compensation formulas] with the [House] Conference Report.'' The 
Court's directive to the Secretary was to ``consider--with more care 
than she exercised [in the FY 2009 IPPS final rule]--whether a per-
click ban on equipment leases is consistent with the 1993 Conference 
Report.'' (Id. at 224.) The commenter implied that our explanation in 
the proposed rule as to why the Secretary's authority to impose 
requirements regarding the type of compensation formulas upon which 
office space and equipment rental charges may be based is not 
constrained by the House Conference Report should be disregarded on the 
theory that the Court rejected this explanation in Council for 
Urological Interests. As noted above, the Court did not reject this 
argument; rather, the Court set out in detail why the Secretary's 
authority to impose such regulatory restrictions is not constrained by 
the House Conference Report. (Id. at 222.) In the CY 2017 PFS proposed 
rule (81 FR 46452) and again in this final rule, we have complied with 
the Court's directive and set forth our analysis why a per-click ban on 
office space and equipment leases is consistent with the House 
Conference Report.
    In accordance with the Court's opinion in Council for Urological 
Interests and in support of this final rule, we set forth below the 
Secretary's authority to include in the exceptions applicable to office 
space and equipment leases a requirement that rental charges are not 
determined using a formula based on per-unit of service rental charges 
that reflect services provided to patients referred by the lessor to 
the lessee. Our determination follows the Court's reasoning, which we 
excerpt below, in rejecting the Council for Urological Interests' 
assertion that the Secretary lacks the authority to impose a ban on 
certain ``per-click'' equipment--and by correlation--office space 
leases. We also further describe why limiting the types of per-click 
rental charges that would not violate the physician self-referral law's 
referral and claims submission prohibitions is consistent with the 
language of the House Conference Report.
    As the Court stated, the physician self-referral law gives the 
Secretary power to add requirements as needed to protect against 
program or patient abuse, even if Congress did not anticipate such 
abuses at the time of enactment of the statute. Specifically, although 
Congress may not have originally included a ban on per-click rental 
charges in office space and equipment lease arrangements, it 
``empowered the Secretary to make her own assessment of the needs of 
the Medicare program and regulate accordingly.'' (Council for 
Urological Interests, 790 F.3d at 220.) The statute explicitly permits 
the Secretary to impose additional conditions on arrangements for the 
rental of office space or equipment, and nowhere expressly states that 
per-click rates must always be permitted. As the Court confirmed, the 
Secretary's regulation ``can properly be classified as an `other' 
requirement expressly permitted by sections 1877(e)(1)(A)(vi) and 
(B)(vi) of the Act.'' (Id.)
    The Secretary's authority to impose requirements regarding the type 
of compensation formulas upon which office space and equipment rental 
charges may be based is not constrained by the House Conference Report. 
Clause (iv) in each of the statutory exceptions for the rental of 
office space and equipment (sections 1877(e)(1)(A) and (B) of the Act) 
provide that a physician may only make use of either exception if the 
rental charges over the term of the lease are set in advance, are 
consistent with fair market value, and are not determined in a manner 
that takes into account the volume or value of any referrals or other 
business generated between the parties. In the 1998 proposed rule, we 
proposed to interpret the ``volume or value'' standard, which is common 
in many of the exceptions to the physician self-referral law and 
included in the exceptions for the rental of office space and equipment 
at sections 1877(e)(1)(A)(iv) and (B)(iv) of the Act, respectively, as 
permitting only those per-click compensation formulas where the units 
of service did not include services provided to patients who were 
referred by the physician receiving the payment (63 FR 1714). In our 
Phase I interim final rule with comment period, we stated that, after 
reviewing the comments on our proposed interpretation of the ``volume 
or value'' standard, we were substantially revising the regulation with 
respect to the scope of that standard (66 FR 876). Most importantly, 
under our revised interpretation of the ``volume or value'' standard, 
we would permit time-based or unit-based compensation formulas, even 
when the physician receiving the rental payment generated the payment 
through a DHS referral. We noted that we reviewed the legislative 
history with respect to the exceptions for office space and equipment 
lease arrangements and concluded that Congress intended that sections 
1877(e)(1)(A)(iv) and (B)(iv) of the Act not be interpreted to prohibit 
time-based or unit-of-service-based compensation formulas, so long as 
the payment per unit is fair market value at inception and does not 
subsequently change during the lease term in any manner that takes into 
account DHS referrals.
    The passage in the House Conference Report relevant to sections 
1877(e)(1)(A)(iv) and (B)(iv) of the Act reads in full--

    The conferees intend that charges for space and equipment leases 
may be based on daily, monthly, or other time-based rates, or rates 
based on units of service furnished, so long as the amount of the 
time-based or units of service rates does not fluctuate during the

[[Page 80531]]

contract period based on the volume or value of referrals between 
the parties to the lease agreement. (H.R. Rep. No. 103-213, at 814 
(1993)).

    In the CY 2017 PFS proposed rule, we again acknowledged that the 
language in the House Conference Report states Congress' intent at the 
time of enactment of the physician self-referral law that sections 
1877(e)(1)(A)(iv) and (B)(iv) of the Act (the clauses that contain the 
``volume or value'' standard in the exceptions for the rental of office 
space and equipment, respectively) not be interpreted as prohibiting 
charges for the rental of office space or equipment that are based on 
units of service furnished (81 FR 46451). Even so, the House Conference 
Report in no way limits any other provision, including clause (vi) of 
the exceptions for the rental of office space and equipment.
    As in the proposed rule, we do not purport here to interpret this 
language as implying anything other than the conferees' understanding--
at the time of enactment of the statute--that the statute as written 
did not prohibit rental charges based on unit-of-service rates. But 
Congress also gave the Secretary the authority in sections 
1877(e)(1)(A)(vi) and (B)(vi) of the Act to impose by regulation other 
requirements as needed to protect against program or patient abuse, 
which could only happen after the enactment of the statute. Nowhere in 
the House Conference Report did Congress express an intent to limit the 
authority granted to the Secretary in sections 1877(e)(1)(A)(vi) and 
(B)(vi) of the Act (as enacted). In fact, the House Conference Report 
was completely silent regarding sections 1877(e)(1)(A)(vi) and (B)(vi) 
of the Act, leaving the express words of the statute to speak for 
themselves. As the Court noted--

    The conference report . . . states only that rental charges 
``may'' be based on units of service. The language is not 
obligatory. Instead, it simply indicates that, as written, the 
rental-charge clause [(section 1877(e)(1)(B)(iv) of the Act)] does 
not preclude per-click leases. But, as we have already explained, 
there is more to the statute than this clause, and to qualify for 
the exception, a rental agreement must comply with all six clauses, 
not merely the rental-charge clause alone. The final clause 
[(section 1877(e)(1)(B)(vi) of the Act)] gives the Secretary the 
authority to add further requirements. Nothing in the legislative 
history suggests a limit on this authority. We conclude that the 
statute does not unambiguously forbid the Secretary from banning 
per-click leases as she evaluates the needs of the Medicare system 
and its patients. (790 F.3d at 221-22 (footnote omitted).)

    Moreover, as the Court further noted, a statement that unit of 
service-based rental charges are not precluded by sections 
1877(e)(1)(A)(iv) and (B)(iv) of the Act as they are written is not 
equivalent to a statement that the Secretary must continue to permit 
such charges as she reevaluates, in light of experience, the operation 
of the statute and the need to protect the Medicare program and its 
beneficiaries against abuse. (Id. at 222 n.7; see also id. at 222 n.6 
(``Congress has expressly delegated to the Secretary the authority to 
promulgate additional requirements, as she has done here, and the 
legislative history does not clearly impose a constraint on that 
power.'').)
    The Secretary has broad authority under sections 1877(e)(1)(A)(vi) 
and (B)(vi) of the Act to impose conditions on arrangements for the 
rental of office space or equipment in order to protect against program 
or patient abuse. That authority is not limited by the express words of 
the statute as it is in other provisions of section 1877 of the Act. In 
agreement, the Court in Council for Urological Interests explained--

    . . . Congress knew how to limit the Secretary's authority to 
impose additional requirements to the various exceptions [to the 
physician self-referral law]. In [section 1877(e)(2) of the Act], 
Congress excludes bona fide employment relationships from the 
definition of compensation arrangements. This provision states that 
the employment relationship must comply with various requirements, 
including that the pay not be determined ``in a manner that takes 
into account (directly or indirectly) the volume or value of any 
referrals by the referring physician.'' This employment exception 
also allows the Secretary to impose ``other requirements,'' just as 
the equipment rental exception. But the statute then goes on to say 
that the listed requirements ``shall not prohibit the payment of 
remuneration in the form of a productivity bonus based on services 
performed personally by the physician.'' This language shows that 
Congress knew how to cabin the Secretary's authority to impose 
``other'' requirements and that it knew how to further clarify what 
it meant by compensation that does not take into account the volume 
of business generated between parties. That Congress employed 
neither of these tools with reference to the [exceptions for the 
rental of office space or equipment] again supports reading the 
statute as giving the Secretary broad discretion as she regulates in 
this area. (790 F.3d at 221 (citations omitted).)

    The Secretary's authority to limit the use of per-unit of service 
rental charges in arrangements for the rental of office space or 
equipment is particularly clear when the exceptions for the rental of 
office space and equipment are compared to other provisions in section 
1877 of the Act. According to the Court in Council for Urological 
Interests--

    [T]he statute elsewhere expressly permits charging per-click 
fees in other contexts, showing that Congress knew how to authorize 
such payment terms when it wanted to. In [section 1877(e)(7)(A) of 
the Act], Congress created an exception to the [physician self-
referral law] that allows the continuation of certain group practice 
arrangements with a hospital. . . . The provision states that ``[a]n 
arrangement between a hospital and a group under which designated 
health services are provided by the group but are billed by the 
hospital'' is excepted from the ban on referrals if, among other 
things, ``the compensation paid over the term of the agreement is 
consistent with fair market value and the compensation per unit of 
services is fixed in advance and is not determined in a manner that 
takes into account the volume or value of any referrals or other 
business generated between the parties.'' Comparing this provision 
to the [exceptions for the rental of office space and equipment] 
shows that Congress knew how to permit per-click payments 
explicitly, suggesting that the omission in this particular context 
was deliberate. . . . In other words, Congress's decision not to 
include similar language in the [exceptions for the rental of office 
space and equipment] supports our conclusion that the statute is 
silent regarding the permissibility of per-click leases for 
equipment rentals. (790 F.3d at 220-21 (citations omitted).)

    In summary, as we stated in the FY 2009 IPPS final rule (73 FR 
48716), the physician self-referral statute responds to the context of 
the times in which it was enacted (by addressing known risks of 
overutilization and, in particular, by creating exceptions for common 
business arrangements), and also incorporates sufficient flexibility to 
adapt to changing circumstances and developments in the health care 
industry. For example, in section 1877(b)(4) of the Act, Congress 
authorized the Secretary to protect additional beneficial arrangements 
by promulgating new regulatory exceptions. In addition, Congress 
included the means to address other fraud risks by inserting into many 
of the exceptions--and notably, for our purposes, in the lease 
exceptions--specific authority for the Secretary to add conditions as 
needed to protect against abuse. This design reflects a recognition 
that a fraud and abuse law with sweeping coverage over most of the 
health care industry could not achieve its purpose over the long term 
if it were frozen in time (73 FR 48716). It also demonstrates Congress' 
respect for regulatory expertise of the Secretary. The Secretary 
administers and oversees numerous federal health care programs, 
including Medicare and Medicaid, and interacts with numerous 
participants in

[[Page 80532]]

the health care industry. Aware of the Secretary's expertise in this 
area, Congress expressly allowed the Secretary to impose further 
restrictions upon compensation arrangements that the Secretary, in her 
judgment, finds to present risks of overutilization and abuse. (Accord, 
e.g., Council for Urological Interests, 790 F.3d at 220 (``While 
Congress may not have originally intended the ban of per-click leases, 
it empowered the Secretary to make her own assessment of the needs of 
the Medicare program and regulate accordingly.'').)
    As we did in 2007 when we first proposed to impose additional 
requirements for rental charges in arrangements for the rental of 
office space and equipment, and in 2008 when we finalized regulations 
incorporating such additional requirements, we are relying in this 
final rule on the Secretary's clear authority in sections 
1877(e)(1)(A)(vi) and (B)(vi) of the Act to finalize such other 
requirements needed to protect against program or patient abuse. With 
respect to our determination to include the same requirements at 
Sec. Sec.  411.357(l) and (p), we have determined that the revisions to 
Sec. Sec.  411.357(l) and (p) that we are finalizing here are necessary 
to meet the standard set forth in section 1877(b)(4) of the Act, which 
authorizes the Secretary to establish exceptions to the statute's 
referral and billing prohibitions only where the excepted financial 
relationships do not pose a risk of program or patient abuse.
    We intend and believe that the reasoning set forth in this final 
rule fully addresses the basis for the D.C. Circuit's conclusion that 
the prior regulation of per-click compensation arrangements contained 
in the FY 2009 IPPS final rule was arbitrary and capricious. In Council 
for Urological Interests, the Court remanded the rule because it 
disagreed with our statement in the FY 2009 IPPS final rule that ``both 
the statutory language [of section 1877(e)(1)(A)(iv) and (B)(iv)] and 
the Conference Report'' could ``reasonably be interpreted to exclude'' 
the relevant per-click payments even without reliance on the 
Secretary's separate authority under sections 1877(e)(1)(A)(vi) and 
(B)(vi) of the Act (73 FR 48716). The Court concluded that this 
statement undermined the reasonableness of the regulation as a whole 
because the agency had ``treate[d] the Conference Report as a key 
interpretive roadblock,'' and thus may have relied on an erroneous 
interpretation as a basis for the regulation. (Council for Urological 
Interests, 790 F.3d at 224.) By contrast, in re-proposing and now 
finalizing this rule here, we rely exclusively on the Secretary's 
authority under sections 1877(e)(1)(A)(vi) and (B)(vi) of the Act to 
impose such other requirements as needed to protect against program or 
patient abuse. We do not rely on the interpretation that the Court in 
Council for Urological Interests found to be arbitrary and capricious, 
and we note that the House Conference Report does not present any 
``interpretive roadblock'' to invoking our authority under sections 
1877(e)(1)(A)(vi) and (B)(vi) of the Act.
    We next address the commenter's assertion that only recent 
empirical data or evidence can support a Secretarial determination 
under the physician self-referral law that additional conditions in the 
exceptions for the rental of office space and equipment are needed to 
protect against program or patient abuse, and that the agency may not 
rely on its concerns and beliefs when issuing regulations. As a 
preliminary matter, section 1877 of the Act does not require the agency 
to ``clear a specific evidentiary hurdle prior to imposing additional 
restrictions for lease exceptions.'' (Council for Urological Interests 
v. Sebelius, 946 F. Supp. 2d 91, 110 n.15 (D.D.C. 2013), aff'd in part, 
rev'd in part sub nom. Council of Urological Interests v. Burwell, 790 
F.3d 212 (D.C. Cir. 2015)). Specifically, the provisions upon which we 
rely for finalizing the re-proposed regulations, sections 
1877(e)(1)(A)(vi) and (B)(vi) of the Act, impose no such precondition 
on the Secretary's ability to regulate, and it is reasonable to infer 
that ``[i]f Congress had wanted the Secretary to meet a specific 
evidentiary burden of proof, it would have said so.'' Id. Moreover, the 
Administrative Procedure Act itself does not impose any ``general 
obligation on agencies to produce empirical evidence.'' (Stilwell v. 
Office of Thrift Supervision, 569 F.3d 514, 519 (D.C. Cir. 2009).) An 
agency's reasoned assessment of the potential for abuse inherent in a 
particular business arrangement--particularly in circumstances where, 
as here, that assessment is corroborated by numerous comments in the 
rulemaking--justifies the issuance of a prophylactic rule. (Stilwell, 
569 F.3d at 519 (``[A]gencies can, of course, adopt prophylactic rules 
to prevent potential problems before they arise. An agency need not 
suffer the flood before building the levee.''); see also Ethyl Corp. v. 
Envtl. Prot. Agency, 541 F.2d 1, 25 (D.C. Cir. 1976) (``Awaiting 
certainty will often allow for only reactive, not preventive, 
regulation.'').)
    As we discussed in prior rulemakings, including the 1998 proposed 
rule, a number of studies prior to the enactment of the physician self-
referral law found that physicians who had financial relationships with 
entities to which they referred patients ordered more services than 
physicians without such financial relationships (63 FR 1661). Studies 
conducted since that time, including recent studies by GAO, indicate 
that financial self-interest continues to affect physicians' medical 
decision making. We note that the commenter agreed that, as a general 
matter, ``physician financial interests can affect the utilization of 
medical tests and procedures.'' Nonetheless, the regulations finalized 
in this rulemaking at Sec.  411.357(a)(5)(ii)(B), (b)(4)(ii)(B), 
(l)(3)(ii), and (p)(1)(ii)(B) are based not merely on general 
propositions regarding financial self-interest, but on input from 
stakeholders and public comments to proposed rulemaking, as well as our 
own conclusions and those of our law enforcement partners regarding the 
risks of per-click compensation arrangements. Contrary to the 
commenter's contention that we cited ``no industry developments since 
the [physician self-referral] law was enacted--or since the 2001 [Phase 
I] regulations,'' we stated in the CY 2017 PFS proposed rule and repeat 
here that commenters responding to our proposal in the CY 2008 PFS 
proposed rule to impose additional requirements for office space and 
equipment lease arrangements provided compelling information regarding 
potential program or patient abuse. In addition, commenters responding 
to our proposal in the CY 2017 PFS proposed rule supported the 
continuation of the per-click bans finalized in the FY 2009 IPPS final 
rule. We note that, even in the absence of the information upon which 
we relied in the FY 2009 IPPS final rule and in this final rule (all of 
which was developed after the publication of the Phase I interim final 
rule with comment period), the commenter is incorrect that we are now 
prohibited from determining that additional conditions on certain per-
click compensation formulas are needed to protect against program or 
patient abuse. It is axiomatic that ``agencies are entitled to alter 
their policies `with or without a change in circumstances,' so long as 
they satisfactorily explain why they have done so.'' (Nat'l Audubon 
Soc'y v. Hester, 801 F.2d 405, 408 (D.C. Cir. 1986) (per curiam) 
(quoting State Farm, 463 U.S. at 57).)
    In the FY 2009 IPPS final rule and the CY 2017 PFS proposed rule, 
we discussed in detail our rationale for the limitation on per-unit of 
service rental

[[Page 80533]]

charges in arrangements for the rental of office space or equipment. We 
explained that under a per-unit of service rental arrangement, the more 
referrals that a physician lessor makes, the more revenue he or she 
earns. (73 FR 48715 and 48718; 81 FR 46452-46453). We noted primary 
concerns regarding the potential for overutilization, patient steering, 
and reduction in quality of care and patient outcomes, as well as 
concerns regarding the potential for increased costs to the Medicare 
program. In summarizing the comments to our proposals in the CY 2008 
PFS proposed rule and explaining our rationale for finalizing those 
proposals, we stated in the FY 2009 IPPS final rule that numerous 
commenters--including physicians, physician groups, and others--
specifically agreed that these risks were raised by per-click leasing 
arrangements. For example, we noted that one commenter, a radiation 
oncologist, said that some leasing arrangements are abusive and provide 
incentives to physicians to narrow their choice of treatment options to 
those for which they will realize a profit (73 FR 48714). We further 
noted that another commenter, an association of radiologists, stated 
that it strongly supports banning use-of-service based leases because 
such leases fuel an incentive to order unnecessary examinations. (Id.) 
Other commenters expressed similar concerns. We also emphasized in the 
FY 2009 IPPS final rule that, even with respect to referrals for 
therapeutic (as opposed to diagnostic) services, the risks of 
overutilization and abuse may be substantial (73 FR 48718). Regardless 
of the use for the equipment at issue, there remains the potential for 
a physician lessor, in order to protect his or her investment or gain 
additional profits, to refer patients to the lessee of that equipment. 
(Id.) As an example of overutilized therapeutic treatments, we noted 
that a large hospital system had settled a case involving several of 
their physicians who were accused of performing unnecessary cardiac 
surgeries. In that case, federal officials alleged that the physicians 
had entered into a scheme to cause patients to undergo unneeded, 
invasive cardiac procedures such as artery bypass and heart valve 
replacement surgeries in order to generate additional revenue. We noted 
that the hospital system agreed to pay $54 million to settle the 
federal case. (Id.)
    For the reasons set forth in the FY 2009 IPPS final rule and the CY 
2017 PFS proposed rule, some of which are restated below, we continue 
to believe that, in order to protect against program or patient abuse, 
it is necessary to impose additional requirements on arrangements for 
the rental of office space or equipment. Specifically, we believe that 
it is necessary to prohibit rental charges that are determined using a 
formula based on per-unit of service rental charges to the extent that 
such charges reflect services provided to patients referred by the 
lessor to the lessee of the office space or equipment.
    We were persuaded to finalize in the FY 2009 IPPS final rule 
requirements limiting per-unit of service rental charges in the 
exceptions applicable to the rental of office space or equipment, and 
agree with the commenters to the CY 2017 PFS proposed rule that these 
requirements continue to be necessary, due to our concerns that ``per-
click'' lease arrangements in which the lessor makes referrals to the 
lessee that generate payments to the lessor--
     Create an incentive for overutilization of imaging 
services (as described by MedPAC in its comments to our proposal in the 
CY 2008 PFS proposed rule), as well as other services, including 
therapeutic services;
     Create an incentive for physicians to narrow their choice 
of treatment options to those for which they will realize a profit, 
even where the best course of action may be no treatment;
     Influence physicians to refer to the lessee instead of 
referring to another entity that utilizes the same or different (and 
perhaps more efficacious) technology to treat the patient's condition;
     Result in physicians steering patients to equipment they 
own, even if it means having the patient travel to a non-convenient 
site for services using the leased equipment; and
     Increase costs to the Medicare program when referring 
physicians pressure hospitals to use their leasing company despite not 
being the low cost provider. (See 73 FR 48715-48718).
    We note also that, in the CY 2016 PFS final rule, we expressed our 
continued concern that, when physicians have a financial incentive to 
refer a patient to a particular entity, 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 is 
diminished 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 if new competitors cannot win business with superior quality, 
service, or price (80 FR 41926). In that rule, in establishing the 
exception at Sec.  411.357(y) for timeshare arrangements, we determined 
it necessary to exclude from the exception any timeshare arrangements 
that incorporate compensation formulas based on: (1) A percentage of 
the revenue raised, earned, billed, collected, or otherwise 
attributable to the services provided while using the timeshare; or (2) 
per-unit of service fees, to the extent that such fees reflect services 
provided to patients referred by the party granting permission to use 
the timeshare to the party to which the permission is granted. We 
explained our belief that timeshare arrangements based on percentage 
compensation or per-unit of service compensation formulas present a 
risk of program or patient abuse because they may incentivize 
overutilization and patient steering. We noted, by way of example, that 
a per-patient compensation formula could incent the timeshare grantor 
to refer patients (potentially for unnecessary consultations or 
services) to the party using the timeshare because the grantor will 
receive a payment each time the premises, equipment, personnel, items, 
supplies, or services are used (80 FR 71331 through 71332). Similarly, 
we believe that arrangements utilizing rental charges for the rental of 
office space or equipment that are determined using a formula that 
rewards the lessor for each service the lessor refers to the lessee are 
susceptible to this and other abuse. Simply put, per-click lease 
arrangements create an incentive for overutilization because the 
physician knows that the more referrals he or she makes to the lessee, 
the more revenue that that physician will earn.
    For all of these reasons, and because we believe that there is a 
continued need to protect the program and its beneficiaries against the 
potential abuses of per-click office space and equipment leases, we are 
finalizing without modification the re-proposed regulations at Sec.  
411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B), 
which include a requirement that the rental charges for the lease of 
office space or equipment are not determined using a formula based on 
per-unit of service rental charges, to the extent that such charges 
reflect services provided to patients referred by the lessor to the 
lessee.
    Comment: Although not commenting specifically on our actual 
proposals, two commenters suggested that we analyze

[[Page 80534]]

the physician self-referral law regulations and any revisions to the 
regulations to consider the impact on stakeholders' work to develop 
beneficial arrangements that advance health care payment and delivery 
reforms.
    Response: We note that the restrictions on per-unit of service 
compensation formulas have been in place since October 1, 2009. 
Although we are cognizant of the impact of the physician self-referral 
law on health care payment and delivery reform efforts, we must balance 
concerns about impeding such efforts against protecting the Medicare 
program and its beneficiaries. For the reasons stated in the FY 2009 
IPPS final rule, the CY 2017 PFS proposed rule, and in this final rule, 
we believe these restrictions are necessary to protect the Medicare 
program and its beneficiaries against abuse.
    Comment: Two commenters requested that we confirm that FAQ 9780 
regarding lithotripsy services provided ``under arrangements'' to a 
hospital by a physician-owned lithotripsy vendor remains CMS policy 
despite our re-proposal of the regulations at Sec.  
411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B). One 
of the commenters indicated it would oppose re-proposed Sec.  
411.357(a)(5)(ii)(B), (b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B) if 
the intent of the re-proposed regulations is to reverse the policy set 
forth in FAQ 9780. This commenter requested that, if we are indeed 
reversing the policy set forth in FAQ 9780, we do so by proposing 
regulatory language and offering the opportunity for public comment.
    Response: The policy established in FAQ 9780 remains our policy 
regarding lithotripsy service arrangements between physician-owned 
lithotripsy vendors and hospitals. FAQ 9780 is available on the CMS Web 
site at https://questions.cms.gov/faq.php?id=5005&faqId=9780 and states 
that, provided that a lithotripsy vendor is actually furnishing a 
service (or a package of services) to the hospital, and not merely 
leasing equipment over which the hospital would have dominion and 
control, the hospital may compensate the lithotripsy vendor using a 
per-unit or percentage-based compensation formula, as long as all of 
the requirements of a relevant exception are satisfied.
    Comment: Many commenters requested that we revise our regulations 
in ways other than as re-proposed in the CY 2017 PFS proposed rule. 
These comments suggested variously that we ``modernize'' the 
definitions and exceptions in the regulations to (1) keep pace with the 
rapidly evolving provider landscape and efforts to integrate medical 
professionals into accountable networks of integrated providers or (2) 
permit hospitals to subsidize the start-up costs needed to meet the 
objectives of value-based purchasing, MIPS, and participation in 
alternative payment models; modify the in-office ancillary services 
exception at Sec.  411.355(b) to exclude certain designated health 
services from the coverage of the exception; revise the definition of 
``entity'' and our policy regarding services furnished ``under 
arrangements'' to an entity furnishing designated health services; 
revise the requirements for ``group practices'' to remove the 
requirement at Sec.  411.352(g) prohibiting compensation to group 
practice physicians that takes into account the volume or value of 
referrals; and establish exceptions to or grant waivers of the 
physician self-referral law's referral and billing prohibitions similar 
to those for ACOs participating in the MSSP and certain CMMI models 
that would enable physicians to participate in alternative payment 
modes and earn incentives through MIPS.
    Response: Although we appreciate the commenters' thoughtful 
consideration of the impact of the physician self-referral law on 
physicians and entities furnishing designated health services, our 
proposals in the CY 2017 PFS proposed rule relate only to the per-click 
compensation formula restrictions at Sec.  411.357(a)(5)(ii)(B), 
(b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B) and our advisory opinion 
regulations at Sec.  411.372. Therefore, the suggested revisions are 
outside the scope of this rulemaking.
    After considering the comments, for the reasons set forth above and 
in the CY 2017 proposed rule (81 FR 46448), we are finalizing without 
modification our proposal to include at Sec.  411.357(a)(5)(ii)(B), 
(b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B) a requirement that the 
rental charges for the lease of office space or equipment are not 
determined using a formula based on per-unit of service rental charges, 
to the extent that such charges reflect services provided to patients 
referred by the lessor to the lessee.
2. Technical Correction: Advisory Opinions Relating to Physician 
Referrals, Procedure for Submitting a Request
    We proposed to revise Sec.  411.372(a) by making a minor technical 
correction to change the instructions for submitting a request for an 
advisory opinion relating to physician referrals. We noted that the 
current language in this subsection directs a requesting party to 
submit its request to a physical address that is out of date. In an 
effort to expedite the receipt and processing of these requests, and to 
account for any future changes, we proposed to revise paragraph (a) to 
state that a party or parties must submit a request for an advisory 
opinion to CMS according to the instructions specified on the CMS Web 
site.
    We noted that, at the time of the proposed rule, the correct 
address for such advisory opinion requests was: Centers for Medicare & 
Medicaid Services, Department of Health and Human Services, Office of 
Financial Management, Division of Premium Billing and Collections, Mail 
Stop C3-09-27, Attention: Advisory Opinions, 7500 Security Boulevard, 
Baltimore, MD 21244-1850. However, we noted that this address is 
subject to change, per this technical correction, and that parties 
seeking to submit a request for an advisory opinion relating to 
physician referrals would need to refer to the instructions on the CMS 
Web site.
    We received no comments regarding this technical correction and are 
finalizing it without modification.

N. Physician Self-Referral Law: Annual Update to the List of CPT/HCPCS 
Codes

1. General
    Section 1877 of the Act prohibits a physician from referring a 
Medicare beneficiary for certain designated health services (DHS) to an 
entity with which the physician (or a member of the physician's 
immediate family) has a financial relationship, unless an exception 
applies. Section 1877 of the Act also prohibits the DHS entity from 
submitting claims to Medicare or billing the beneficiary or any other 
entity for Medicare DHS that are furnished as a result of a prohibited 
referral.
    Section 1877(h)(6) of the Act and Sec.  411.351 of our regulations 
specify that the following services are DHS:
     Clinical laboratory services.
     Physical therapy services.
     Occupational therapy services.
     Outpatient speech-language pathology services.
     Radiology services.
     Radiation therapy services and supplies.
     Durable medical equipment and supplies.
     Parenteral and enteral nutrients, equipment, and supplies.
     Prosthetics, orthotics, and prosthetic devices and 
supplies.
     Home health services.
     Outpatient prescription drugs.
     Inpatient and outpatient hospital services.

[[Page 80535]]

2. Annual Update to the Code List
a. Background
    In Sec.  411.351, we specify that the entire scope of four DHS 
categories is defined in a list of CPT/HCPCS codes (the Code List), 
which is updated annually to account for changes in the most recent CPT 
and HCPCS Level II publications. The DHS categories defined and updated 
in this manner are:
     Clinical laboratory services.
     Physical therapy, occupational therapy, and outpatient 
speech-language pathology services.
     Radiology and certain other imaging services.
     Radiation therapy services and supplies.
    The Code List also identifies those items and services that may 
qualify for either of the following two exceptions to the physician 
self-referral prohibition:
     EPO and other dialysis-related drugs furnished in or by an 
ESRD facility (Sec.  411.355(g)).
     Preventive screening tests, immunizations, or vaccines 
(Sec.  411.355(h)).
    The definition of DHS at Sec.  411.351 excludes services for which 
payment is made by Medicare as part of a composite rate (unless the 
services are specifically identified as DHS and are themselves payable 
through a composite rate, such as home health and inpatient and 
outpatient hospital services). Effective January 1, 2011, EPO and 
dialysis-related drugs furnished in or by an ESRD facility (except 
drugs for which there are no injectable equivalents or other forms of 
administration), have been reimbursed under a composite rate known as 
the ESRD prospective payment system (ESRD PPS) (75 FR 49030). 
Accordingly, EPO and any dialysis-related drugs that are paid for under 
ESRD PPS are not DHS and are not listed among the drugs that could 
qualify for the exception at Sec.  411.355(g) for EPO and other 
dialysis-related drugs furnished by an ESRD facility.
    Drugs for which there are no injectable equivalents or other forms 
of administration were scheduled to be paid under ESRD PPS beginning 
January 1, 2014 (75 FR 49044). However, there have been several delays 
of the implementation of payment of these drugs under ESRD PPS. Most 
recently, on December 19, 2014, section 204 of the Achieving a Better 
Life Experience Act of 2014 (ABLE) (Pub. L. 113-295) was enacted and 
delayed the inclusion of these drugs under the ESRD PPS until 2025. 
Until that time, such drugs furnished in or by an ESRD facility are not 
paid as part of a composite rate and thus, are DHS. For purposes of the 
exception at Sec.  411.355(g), only those drugs that are required for 
the efficacy of dialysis may be identified on the List of CPT/HCPCS 
Codes as eligible for the exception. As we have explained previously in 
the CY 2010 PFS final rule with comment period (75 FR 73583), we do not 
believe any of these drugs are required for the efficacy of dialysis. 
Therefore, we have not included any such drugs on the list of drugs 
that can qualify for the exception.
    The Code List was last updated in Tables 50 and 51 of the CY 2016 
PFS final rule with comment period (80 FR 71342).
b. Response to Comments
    We received one public comment relating to the Code List that 
became effective January 1, 2016.
    Comment: One commenter asked that the screening breast 
tomosynthesis code 77063 be added to the list of ``Preventive Screening 
Tests, Immunizations and Vaccines'' to which the physician self-
referral law does not apply. The commenter indicated that adding this 
code is necessary to conform with various CMS policy statements and 
noted that the other screening mammography services codes payable by 
Medicare are on this list.
    Response: We agree and have added code 77063 to the list of 
``Preventive Screening Tests, Immunizations and Vaccines'' to which the 
physician self-referral law does not apply.
c. Revisions Effective for CY 2017
    The updated, comprehensive Code List effective January 1, 2017, is 
available on our Web site at http://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/List_of_Codes.html.
    Additions and deletions to the Code List conform it to the most 
recent publications of CPT and HCPCS Level II and to changes in 
Medicare coverage policy and payment status.
    Tables 45 and 46 identify the additions and deletions, 
respectively, to the comprehensive Code List that become effective 
January 1, 2017. Tables 45 and 46 also identify the additions and 
deletions to the list of codes used to identify the items and services 
that may qualify for the exception in Sec.  411.355(g) (regarding 
dialysis-related outpatient prescription drugs furnished in or by an 
ESRD facility) and in Sec.  411.355(h) (regarding preventive screening 
tests, immunizations, and vaccines).

 Table 45--Additions to the Physician Self-Referral List of CPT 1/ HCPCS
                                  Codes
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                      Clinical Laboratory Services
------------------------------------------------------------------------
0008M Onc breast risk score
------------------------------------------------------------------------
 Physical Therapy, Occupational Therapy, and Outpatient Speech-Language
                           Pathology Services
------------------------------------------------------------------------
97161 Pt eval low complex 20 min
97162 Pt eval mod complex 30 min
97163 Pt eval high complex 45 min
97164 Pt re-eval est plan care
97165 Ot eval low complex 30 min
97166 Ot eval mod complex 45 min
97167 Ot eval high complex 60 min
97168 Ot re-eval est plan care
------------------------------------------------------------------------
              Radiology and Certain Other Imaging Services
------------------------------------------------------------------------
0422T Tactile breast img uni/bi
76706 Us abdl aorta screen aaa
77065 Dx mammo incl cad uni
77066 Dx mammo incl cad bi
77067 Scr mammo bi incl cad
A9515 Choline c-11
A9587 Gallium Ga-68
A9588 Fluciclovine F-18
A9597 Pet, dx, for tumor id, noc
A9598 Pet dx for non-tumor id, noc
C9461 Choline C 11, diagnostic
C9744 Abd us w/contrast
Q9982 Flutemetamol f18 diagnostic
Q9983 Florbetaben f18 diagnostic
------------------------------------------------------------------------
                 Radiation Therapy Services and Supplies
------------------------------------------------------------------------
{No additions{time}
------------------------------------------------------------------------
               Drugs Used by Patients Undergoing Dialysis
------------------------------------------------------------------------
{No additions{time}
------------------------------------------------------------------------
         Preventive Screening Tests, Immunizations and Vaccines
------------------------------------------------------------------------
77063 Breast tomosynthesis bi
77067 Scr mammo bi incl cad
90674 CCIIV4 vac no prsv 0.5 ml im
90687 IIV4 vacc splt 0.25 ml im
G0499 HepB screen high risk indiv
------------------------------------------------------------------------
\1\ CPT codes and descriptions only are copyright 2016 AMA. All rights
  are reserved and applicable FARS/DFARS clauses apply.


   Table 46--Deletions From the Physician Self-Referral List of CPT 1/
                               HCPCS Codes
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                      Clinical Laboratory Services
------------------------------------------------------------------------
{No deletions{time}
------------------------------------------------------------------------
 Physical Therapy, Occupational Therapy, and Outpatient Speech-Language
                           Pathology Services
------------------------------------------------------------------------
97001 Pt evaluation
97002 Pt re-evaluation
97003 Ot evaluation
97004 Ot re-evaluation
------------------------------------------------------------------------
              Radiology and Certain Other Imaging Services
------------------------------------------------------------------------
77051 Computer dx mammogram add-on
77052 Comp screen mammogram add-on
77055 Mammogram one breast
77056 Mammogram both breasts
77057 Mammogram screening
A9544 I131 tositumomab, dx

[[Page 80536]]

 
C9458 Florbetaben f18
C9459 Flutemetamol f18
------------------------------------------------------------------------
                 Radiation Therapy Services and Supplies
------------------------------------------------------------------------
0019T Extracorp shock wv tx ms nos
A9545 I131 tositumomab, rx
------------------------------------------------------------------------
               Drugs Used by Patients Undergoing Dialysis
------------------------------------------------------------------------
{No deletions{time}
------------------------------------------------------------------------
         Preventive Screening Tests, Immunizations and Vaccines
------------------------------------------------------------------------
77052 Comp screen mammogram add-on
77057 Mammogram screening
------------------------------------------------------------------------
\1\ CPT codes and descriptions only are copyright 2016 AMA. All rights
  are reserved and applicable FARS/DFARS clauses apply.

IV. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. Chapter 
35), we are required to publish a 30-day notice in the Federal Register 
and solicit public comment before a collection of information 
requirement is submitted to the Office of Management and Budget (OMB) 
for review and approval.
    To fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the PRA 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.
    In the CY 2017 PFS proposed rule (81 FR 46456-46457) we solicited 
public comment on each of the section 3506(c)(2)(A)-required issues for 
the following information collection requirements. PRA-related comments 
were received as indicated below under section IV.B.2.

A. Wage Estimates

    To derive average costs, we used data from the U.S. Bureau of Labor 
Statistics' May 2015 National Occupational Employment and Wage 
Estimates for all salary estimates. In this regard, Table 47 presents 
the mean hourly wage, the cost of fringe benefits (calculated at 100 
percent of salary), and the adjusted hourly wage.

                          Table 47--National Occupational Employment and Wage Estimates
----------------------------------------------------------------------------------------------------------------
                                                                                                     Adjusted
                Occupation title                    Occupation      Mean hourly   Fringe benefit  hourly wage ($/
                                                       code         wage ($/hr)       ($/hr)            hr)
----------------------------------------------------------------------------------------------------------------
Compliance Officer..............................         13-1041           33.26           33.26           66.52
Epidemiologist..................................         19-1040           36.97           36.97           73.94
Medical Scientist...............................         19-1042           45.06           45.06           90.12
Medical Secretary...............................         43-6013           16.50           16.50           33.00
Non-Physician Practitioner (Health Diagnosing            29-1000           46.65           46.65           93.90
 and Treating Practitioners)....................
Office and Administrative Support Operations....         43-0000           17.47           17.47           34.94
Physicians and Surgeons.........................         29-1060           97.33           97.33          194.66
Physicians and Surgeons, All Other..............         29-1069           95.05           95.05          190.10
Statistician....................................         15-2041           40.60           40.60           81.20
----------------------------------------------------------------------------------------------------------------

    As indicated, 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. Information Collection Requirements (ICRs) and Burden Estimates

1. ICRs Regarding the Physician Quality Reporting System (PQRS) (Sec.  
414.90)
    For individual EPs or group practices, who choose to separately 
report quality measures during the secondary PQRS reporting period for 
the 2017 PQRS payment adjustment, who bill under the TIN of an ACO 
participant if the ACO failed to report on behalf of such EPs or group 
practices during the previously established reporting period for the 
2017 PQRS payment adjustment, we do not believe the individual EP or 
group practice incurs any additional burden. The associated reporting 
burden which is currently approved by OMB under control number 0938-
1059 (CMS-10276) explains that the PQRS annual burden estimate was 
calculated separately for (1) individual eligible professionals and 
group practices using the claims (for eligible professionals only), (2) 
qualified registry and QCDR, (3) EHR-based reporting mechanisms, and 
(4) group practices using the GPRO. We estimated 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. This is a high estimate according 
to the 2014 PQRS Reporting Experience and Trends Report which found 
approximately 822,000 EPs participated in PQRS in 2014. Therefore, the 
additional EPs who choose to report separately from the ACOs have 
already been accounted for in the PQRS burden. We estimate there were 
approximately 1,947 EPs that are part of the 218 participant TINs that 
are under the 8 ACOs that failed to successfully report their 2015 
quality data. There is no change in the reporting mechanisms or 
reporting criteria for PQRS. It is important to note that if the ACO 
fails to report on behalf of an EP or group practice and the EP or 
group practice does not utilize this secondary reporting period they 
may be subject to a downward adjustment.
    We did not receive any comments pertaining to our position that the 
proposed rule would not set out any additional requirements or burden. 
Consequently, we are restating our position without change.
2. ICRs Regarding Appropriate Use Criteria for Advanced Diagnostic 
Imaging Services (Sec.  414.94)
    Consistent with section 1834(q) of the Act (as amended by section 
218(b) of the PAMA), we have established specific requirements for 
clinical decision support mechanisms (CDSMs) that can be qualified 
CDSMs under Sec.  414.94 as

[[Page 80537]]

part of the Medicare appropriate use criteria (AUC) program. CDSMs that 
believe they meet the requirements to be qualified CDSMs (for the 
purpose of this section) may apply to CMS to be specified as a 
qualified CDSM.
    Applications must be submitted electronically and demonstrate how 
the CDSM meets the requirements under Sec.  414.94(g)(1). Specifically, 
applications must demonstrate how the CDSM: (1) Makes available 
specified applicable AUC and its related supporting documentation; (2) 
identifies the appropriate use criterion consulted if the CDSM makes 
available more than one criterion relevant to a consultation for a 
patient's specific clinical scenario; (3) makes available, at a 
minimum, specified applicable AUC that reasonably address common and 
important clinical scenarios within all priority clinical areas 
identified in Sec.  414.94(e)(5); (4) is able to incorporate specified 
applicable AUC from more than one qualified PLE; (5) determines, for 
each consultation, the extent to which the applicable imaging service 
is consistent with a specified applicable AUC; (6) generates and 
provides a certification or documentation at the time of order each 
time an ordering professional consults a qualified CDSM that includes a 
unique consultation identifier that documents: Which qualified CDSM was 
consulted, the name and national provider identifier (NPI) of the 
ordering professional that consulted the CDSM, whether the service 
ordered would adhere to specified applicable AUC, whether the service 
ordered would not adhere to specified applicable AUC, or whether the 
specified applicable AUC consulted was not applicable to the service 
ordered; (7) updates AUC content within 12 months from the date the 
qualified PLE updates AUC; (8) has a protocol in place to expeditiously 
remove AUC determined by the qualified PLE to be potentially dangerous 
to patients and/or harmful if followed; (9) makes available specified 
applicable AUC that reasonably address common and important clinical 
scenarios within any new priority clinical area for consultation 
through the qualified CDSM within 12 months of the priority clinical 
area being finalized by CMS; (10) meets privacy and security standards 
under applicable provisions of law; (11) provides the ordering 
professional aggregate feedback regarding their consultations with 
specified applicable AUC in the form of an electronic report on at 
least an annual basis; (12) maintains electronic storage of clinical, 
administrative, and demographic information of each unique consultation 
for a minimum of 6 years; (13) complies with modification(s) to any 
requirements under Sec.  414.94(g)(1) made through rulemaking within 12 
months of the effective date of the modification; and (14) notifies 
ordering professionals upon de-qualification.
    To be specified as a qualified CDSM by CMS, applicants must 
document adherence to the requirements in their application for CMS 
review and use the application process identified in Sec.  414.94(g)(2) 
which includes: (1) Applications submitted by CDSMs documenting 
adherence to each requirement outlined in Sec.  414.94(g)(1) must be 
received annually by January 1 except for the first round of 
applications following publication of the CY 2017 PFS Final Rule which 
will be due by March 1, 2017; (2) CDSMs with applications that document 
adherence to all requirements under Sec.  414.94(g)(1) may receive full 
qualification and CDSMs with applications that cannot document 
adherence to each requirement must document how and when each 
requirement is reasonably expected to be met and may receive 
preliminary qualification; (3) the preliminary qualification period 
begins June 30, 2017 and ends when CMS implements sections 
1834(q)(4)(A) and 1834(q)(4)(B) of the Act; (4) CDSMs with preliminary 
qualification that fail to meet all requirements by the end of the 
preliminary qualification period will not be automatically converted to 
qualified status; (5) all qualified CDSMs specified by CMS in each year 
will be included on the list of specified qualified CDSMs posted to the 
CMS Web site by June 30 of that year; (6) qualified CDSMs are specified 
by CMS as such for a period of 5 years; and (7) qualified CDSMs are 
required to re-apply during the 5th year after they are specified by 
CMS to maintain their status as qualified CDSMs and the applications 
must be received by CMS by January 1 of the 5th year after the most 
recent approval date. If a qualified CDSM is found to be non-adherent 
to the requirements identified above, CMS may terminate its qualified 
status or may consider this information during re-qualification.
    The one-time burden associated with the requirements under Sec.  
414.94(g)(2) is the time and effort it will take each of the 
approximately 30 CDSM developers (as estimated by CMS, the Office of 
the National Coordinator (ONC), and the Agency for Healthcare Research 
and Quality (AHRQ)) that have interests in incorporating AUC 
consultation into their mechanisms' functionality to compile, review 
and submit documentation demonstrating adherence to the CDSM 
requirements. We anticipate 30 respondents based on the number of 
existing CDSMs that have expressed an interest in incorporating AUC for 
advanced diagnostic imaging, as well as our estimation of the number of 
CDSM developers that may be interested in incorporating AUC for 
advanced diagnostic imaging in the future as their mechanisms develop 
and evolve. Each respondent will voluntarily compile, review and submit 
documentation that demonstrates their adherence to the CDSM 
requirements listed above.
    We estimate it will take 10 hours at $68.18/hr for a business 
operations specialist to compile, prepare and submit the required 
information, 2.5 hours at $86.72/hr for a computer system analyst to 
review and approve the submission, 2.5 hours at $135.58/hr for a 
computer and information systems manager to review and approve the 
submission, and 5 hours at $131.02/hr for a lawyer to review and 
approve the submission. In this regard, we estimate 20 hours per 
submission at a cost of $1,892.65. In aggregate, we estimate 600 hours 
(20 hr x 30 submissions) at $56,779.50 ($1,892.65 x 30 submissions).
    After the anticipated initial 30 respondents, we expect less than 
10 applicants to apply to become qualified CDSMs annually. Since we 
estimate fewer than 10 respondents, the information collection 
requirements and burden are exempt (5 CFR 1320.2(c)) from the 
requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et 
seq).
    Given that qualified CDSMs must re-apply every 5 years, in years 6-
10, we expect 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 CDSM developers will be able to make 
modifications to their original application which should result in a 
burden of 5 hours at $68.18/hr for a business operations specialist to 
compile, prepare and submit the required information, 1.25 hours at 
$86.72/hr for a computer system analyst to review and approve the 
submission, 1.25 hours at $135.58/hr for a computer and information 
systems manager to review and approve the submission, and 2.5 hours at 
$131.02/hr for a lawyer to review and approve the submission. Annually, 
we estimate 10 hours per submission at a cost of $946.33 per CDSM 
developer. In aggregate, we estimate 300 hours (10 hr x 30

[[Page 80538]]

submissions) at $28,389.90 ($946.33 x 30 submissions).
    In response to public comments, we added a new requirement under 
Sec.  414.94(g)(1)(xii) whereby CDSMs are required to notify ordering 
professionals upon de-qualification. We estimate that 1 CDSM will be 
de-qualified each year. Because this disclosure is required of less 
than 10 entities, the PRA is not applicable.
    The aforementioned requirements and burden will be submitted to OMB 
under control number 0938-1315 (CMS-10624).
    As regulatory requirements become more complex, we will look to 
innovative technologies that minimize the burden on an organizations' 
budget and manpower. To this end, the CDSM functionality requirements 
identified in Sec.  414.94(g)(1) will help practitioners meet the 
requirements of the AUC program. While the CDSM application process in 
Sec.  414.94(g)(2) is a new burden under this program, the CDSM 
functionality requirements in Sec.  414.94(g)(1) do not add burden as 
they are functions of the CDSM. These mechanisms function consistently 
with their voluntary and individualized design so the requirements in 
Sec.  414.94(g)(1) are either part of a mechanism's functionality or 
not. If CDSM developers wish their CDSMs to become qualified under this 
program, they may choose to develop the functionality of their 
mechanisms consistent with these requirements to be qualified, but all 
CDSMs are not required to participate in this program. For example, a 
CDSM that does not incorporate AUC for any advanced diagnostic imaging 
services would likely choose not to seek to become qualified under this 
Medicare AUC program. As such, only CDSMs that wish to participate in 
the Medicare AUC for advanced diagnostic imaging services program are 
required to apply for qualification and, in choosing to seek 
qualification, CDSM developers would also choose to incorporate the 
requirements into their mechanism's functionality.
    We received public comments (see below) regarding our proposed 
requirements and burden estimates. We considered the comments and are 
largely adopting the proposed provisions with minimal changes to 
improve clarity. Three areas where we have made more significant 
changes include: (1) Revising the proposed requirement for CDSMs to 
``reasonably encompass the entire clinical scope of all priority 
clinical areas'' to now ``reasonably address common and important 
clinical scenarios within all priority clinical areas;'' (2) a new 
requirement that qualified CDSMs notify ordering professionals upon de-
qualification; and (3) a new preliminary qualification period for CDSMs 
that apply for qualification during the first application period but do 
not fully meet all requirements under Sec.  414.94(g)(1).
    Comment: The majority of commenters addressed the proposal to 
require CDSMs to contain, at a minimum, AUC that encompass the entire 
clinical scope of priority clinical areas. Commenters were split 
regarding the proposed requirement. Some commenters suggested that 
CDSMs requiring minimum AUC content would add cost and be unnecessary 
for CDSMs that serve specialists. They favored CDSMs determining, along 
with the ordering practitioners they serve, what AUC content would be 
made available. Other commenters favored requiring every CDSM to 
contain comprehensive AUC. Those commenters said this was the intent of 
the PAMA since ordering professionals must consult for every advanced 
diagnostic imaging order and takes into account the lessons learned 
from the MID to avoid ordering practitioners from consulting for 
imaging services and not finding relevant AUC within their CDSM. Other 
commenters agreed with a minimum floor of AUC but expressed concerned 
about the way CMS proposed that the priority clinical areas must be 
addressed stating that encompassing the entire clinical scope of 
priority clinical areas is not preferred and would draw in AUC without 
a strong evidence base.
    Response: We understand the significance of this aspect of the 
proposal, as well as the statements made by the commenters both for and 
against the requirement of an AUC floor related to priority clinical 
areas. We reiterate that, in alignment with statute, ordering 
professionals must consult for each advanced diagnostic imaging service 
ordered. Therefore, we believe many professionals will choose a 
qualified CDSM that best fits their ordering patterns and clinical 
practice. Those ordering a wide array of imaging services or perhaps 
infrequently ordering imaging services across a spectrum will align 
themselves with a mechanism that fits their needs and contains 
comprehensive specified applicable AUC so when the qualified CDSM is 
consulted they will lessen their chances of the qualified CDSM 
identifying no applicable AUC as this was a major frustration of the 
MID.
    Specialists may seek to align themselves with a qualified CDSM that 
contains AUC more exhaustive in one area of medicine to reflect the 
imaging services that they order most often.
    We continue to believe that all tools should contain the specified 
applicable AUC needed by the ordering professionals they serve, as well 
as contain specified applicable AUC related to the priority clinical 
areas to ensure that if the professional needs to order an imaging 
service then they will not have to go outside their regular qualified 
CDSM for the consultation. We reiterate that we envision having a given 
qualified CDSM allow efficient access to ordering professionals of one 
or more specialty-focused specified applicable AUC sets along with more 
comprehensive specified applicable AUC sets. We believe the 
determination of which AUC sets are made accessible through a given 
CDSM should be demand-driven by ordering professionals, who would be 
choosing from a marketplace of options for both CDSMs and AUC, all of 
which meet basic CMS qualifications to ensure implementation of the 
PAMA statutory requirements.
    To balance the requirement for the minimum floor, we believe it is 
important to reconsider the extent to which specified applicable AUC 
encompass the entire clinical scope of priority clinical areas. We 
agree that requiring the entire clinical scope may not yield 
consultation of the highest quality specified applicable AUC and that 
ordering professionals, particularly specialists, may not require 
specified applicable AUC addressing the entire clinical scope of a 
priority clinical area. Therefore, we agree with commenters who 
suggested we keep the AUC floor but allow the requirement to be 
fulfilled if specified applicable AUC address less than the entire 
scope of the priority clinical areas and instead reasonably address the 
common and important clinical scenarios within each priority clinical 
area.
    Comment: Some commenters expressed concerns regarding CDSMs that 
either fail to requalify after the first 5-year qualification period or 
are found to no longer be adherent to CDSM requirements during the 5-
year qualification period. One commenter recommended that CDSMs be 
temporarily suspended before being disqualified. Other commenters 
recommended that CMS ensure providers using these mechanisms not be 
penalized while they seek a new mechanism for consultation. Another 
commenter suggested that the CDSM be required to notify ordering 
professionals of such a disqualification. Other commenters requested 
that qualification of CDSMs not be disrupted due to

[[Page 80539]]

standard technical updates to CDSMs made during the 5-year 
qualification period.
    Response: We agree and do not foresee penalties under these 
circumstances or disqualification of a CDSM due to a standard update 
assuming no changes are made to functionality that result in non-
adherence to the CDSM requirements in Sec.  414.94(g)(1). We agree that 
qualified CDSMs be required to notify ordering professionals in the 
event of disqualification and have added this requirement under Sec.  
414.94(g)(1).
    Comment: Some commenters cited insufficient time for CDSMs to 
incorporate requirements between the release of the final CDSM 
requirements, on or around November 1, 2016, and the January 1, 2017 
due date for qualified CDSM applications. These commenters requested 
that CMS delay the deadline and accept applications later into the year 
for this first round of applicants. Due to the limited time between 
finalization of CDSM requirements and the application deadline, another 
commenter recommended that CDSMs be qualified based on their commitment 
to support required functionality, rather than an attestation that the 
existing functionality is fully implemented in a CDSM.
    Response: We recognize the challenge CDSM developers may have 
submitting applications by January 1, 2017, and have extended the 
deadline only for the first round of applications to March 1, 2017. To 
this end, all CDSMs qualified in this round only, receive preliminary 
qualification to conclude at such time as we implement the consultation 
and reporting requirements of this AUC program.
3. ICRs Regarding the Enrollment of MA Providers, Suppliers, and First-
Tier, Downstream, and Related Entities (FDRs) (Sec.  422.222)
    There are approximately 1.9 million providers and suppliers 
nationwide that are enrolled in Medicare. Through our analysis of 
currently available encounter data provided by MA organizations, we 
have found that some providers and suppliers that furnish items or 
services to MA organization enrollees are not enrolled in Medicare in 
an approved status. Based on preliminary data, we estimate that 64,000 
MA providers and suppliers will have to enroll in Medicare under Sec.  
422.222 in order to treat enrollees.
    About half of the approximately 64,000 unenrolled providers and 
suppliers, or 32,000, are individuals and the other half are 
organizations. We do not have data at this point to confirm the number 
of unenrolled individuals who are physicians as opposed to non-
physician practitioners. For purposes of fulfilling the requirements of 
the PRA, we will project that one-half (16,000) are physicians and the 
other half (16,000) are practitioners.
    Consistent with our prior time (per respondent) estimates, we 
project that it will take 3 hours at $194.66/hr for a physician and 
$93.30/hr for a non-physician practitioner to complete their individual 
enrollments. For organizations (office and administrative support 
personnel), we estimate it will take 6 hours at $34.94/hr, since 
organizational enrollees typically must submit more data than 
individual enrollees. For physicians, we estimate a total burden of 
48,000 hours (16,000 applicants x 3 hours) at a cost of $9,343,680 
(48,000 hr x $194.66/hr). For non-physician practitioners, we estimate 
48,000 hours (16,000 applicants x 3 hours) at a cost of $4,478,400 
(48,000 hr x $93.30/hr). For organizations, we estimate 192,000 hours 
(32,000 applicants x 6 hours) at a cost of $6,708,480 (192,000 hr x 
$34.94). In aggregate, we estimate 288,000 hours at $20,530,560.
    When projected annually over OMB's maximum 3-year approval period, 
we estimate 96,000 hours at a cost of $6,843,520.
    For physicians and non-physician practitioners, the requirements 
and annualized burden (32,000 hours) will be submitted to OMB under 
control number 0938-0685 (Form CMS-855I) because physicians and non-
physician practitioners enroll via the Form CMS-855I. For 
organizations, the requirements and annualized burden of 64,000 hours 
(192,000 hours/3 years) will be submitted to OMB under control number 
0938-0685 (21,333.3 hours for Form CMS-855A and 21,333.3 hours for Form 
CMS-855B) and control number 0938-1056 (21,333.3 hours for Form CMS-
855S). The specific form to be completed will depend upon the provider 
or supplier type at issue. For instance, and consistent with current 
enrollment policy, certified providers and certain certified suppliers 
will complete the Form CMS-855A; group practices, ambulance suppliers, 
and certain other supplier types will complete the Form CMS-855B; 
suppliers of durable medical equipment, prosthetics, orthotics and 
supplies (DMEPOS) will complete the Form CMS-855S.
    Please note that breakout of the organization burden (dividing 
64,000 hours by 3 forms) is an estimate. Logistically, this is 
necessary for the purposes of submitting burden for approval. We have 
no way of estimating the number of providers/suppliers that will 
complete the individual forms. We welcomed comments on this issue to 
help us derive a more reliable breakout but received none. Nor did we 
receive comments pertaining to any other aspects of the proposed 
requirements or burden. Consequently, we are adopting our proposed 
requirements and burden estimates without change.

                  Table 48--CMS-855 Burden Implications
------------------------------------------------------------------------
                               Individuals (32,000      Organizations
                               total respondents)       (32,000 total
                                    (3 hours/          respondents) (6
                                  application)       hours/application)
------------------------------------------------------------------------
CMS-855-I (32,000)..........  32,000 respondents,
                               96,000 hours.
Physicians (16,000) $194.66/  16,000 physicians x
 hour.                         3 hours = 48,000
                               hours @$194.66 =
                               $9,343,680.00.
Non-physician Practitioners   16,000 non-physician
 (16,000) $93.30/hour.         practitioners x 3
                               hours = 48,000
                               hours @$93.30 =
                               $4,478,400.00.
CMS-855-A (10,666) $34.94/    ....................  10,666 respondents x
 hour.                                               6 hours = 63,996
                                                     hours
                                                    10,666 respondents x
                                                     6 hours = 63,996
                                                     hours @$34.94 =
                                                     $2,236,020.24
CMS-855-B (10,666)..........  ....................  10,666 respondents x
                                                     6 hours = 63,996
                                                     hours
                                                    10,666 respondents x
                                                     6 hours = 63,996
                                                     hours @$34.94 =
                                                     $2,236,020.24

[[Page 80540]]

 
CMS-855-S (10,666)..........  ....................  10,666 respondents x
                                                     6 hours = 63,996
                                                     hours
                                                    10,666 respondents x
                                                     6 hours = 63,996
                                                     hours @$34.94 =
                                                     $2,236,020.24
                             -------------------------------------------
    Sub-total respondents...  32,000 respondents..  32,000 respondents
    Sub-total hours.........  96,000 hours........  192,000 hours
    Sub-total cost..........  $13,822,080.00......  $6,708,060.72
                             -------------------------------------------
        Total...............      64,000 respondents, 288,000 hours,
                                             $20,530,140.72
------------------------------------------------------------------------

4. ICRs Regarding the Release of Medicare Advantage Bid Pricing Data 
(Sec.  422.272) and the Release of Part C and Part D Medical Loss Ratio 
(MLR) Data (Sec. Sec.  422.2490 and 423.2490)
    In the proposed rule, new Sec.  422.272 proposed an annual public 
release of MA bid pricing data (with specified exceptions from 
release), which would occur after the first Monday in October and would 
contain MA bid pricing data that was approved by CMS for a contract 
year at least 5 years prior to the upcoming calendar year. Under Part 
C, MA organizations (MAOs) are required to submit bid data to CMS each 
year for MA plans they wish to offer in the upcoming contract year 
(calendar year), under current authority at Sec.  422.254.
    Proposed Sec. Sec.  422.2490 (for Part C) and 423.2490 (for Part D) 
also provided for the public release of Part C and Part D MLR data for 
each contract year, which would occur no sooner than 18 months after 
the end of the contract year for which the MLR Report was submitted. 
Starting with contract year 2014, if an MAO or Part D sponsor fails to 
spend at least 85 percent of the revenue received under an MA or Part D 
contract on incurred claims and quality improvement activities, the MAO 
or Part D sponsor must remit to the Secretary the product of: (1) The 
contract's total revenue; and (2) the difference between 85 percent and 
the contract's MLR. For each contract year, each MAO and Part D sponsor 
must submit an MLR Report to CMS which includes the data needed by the 
MAO or Part D sponsor to calculate and verify the MLR and remittance 
amount, if any, for each contract. The proposed rule provided for the 
release of the Part C and Part D MLR data contained in the MLR Reports 
that we receive from MAOs and Part D sponsors, with specified 
exceptions to release.
    We determined for the proposed rule that the proposed provisions on 
the release of MA bid pricing data and the release of Part C and Part D 
MLR data did not change any of the existing requirements regarding 
submission of bid data and MLR data by MAOs or Part D plan sponsors, 
nor did the proposed rule propose any new or revised reporting, 
recordkeeping, or third-party disclosure requirements. We noted that 
although the proposed provisions have no impact on respondent 
requirements or burden, the changes have been submitted to OMB for 
approval under control number 0938-0944 (CMS-10142) for MA bid pricing 
data and 0938-1232 (CMS-10476) for Part C and Part D MLR data.
    We did not receive any comments on the proposed requirements or 
burden and are finalizing them without change.
5. ICRs Regarding Application Requirements (Sec.  422.501) and 
Termination of Contract by CMS (Sec.  422.510)
    Changes to Sec. Sec.  422.501 and 422.510 involve only CMS contract 
changes and will not result in any external charges or operational 
costs to MA organizations. Many MA organizations already require 
Medicare enrollment for all their network providers and suppliers. So 
there will be no additional costs to most MA and MA-PD plans. The only 
tangible costs will be to those providers or suppliers that are not 
enrolled and those costs are estimated in section IV.B.3. of this final 
rule.
6. ICRs Regarding Payment to Organizations That Provide Medicare 
Diabetes Prevention Program Services (Sec.  424.59)
    Section 1115A(d)(3) of the Social Security Act exempts the Center 
for Medicare and Medicaid Innovation (CMMI) model tests and expansions, 
including the Medicare Diabetes Prevention Program expansion, from the 
PRA. The section provides that Chapter 35 of title 44, United States 
Code, which includes such provisions as the PRA, shall not apply to the 
testing and evaluation of CMMI models or expansion of such models.
7. ICRs Regarding the Medicare Shared Savings Program (Part 425)
    Section 1899(e) of the Act provides that chapter 35 of title 44 of 
the U.S. Code, which includes such provisions as the PRA, shall not 
apply to any information collection activities under the Shared Savings 
Program.

C. Summary of Annual Burden Estimates

                                                Table 49--Annual Recordkeeping and Reporting Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                      Burden per
  Regulation section(s) under      OMB control     Respondents    Total responses      response      Total annual       Labor cost of     Total cost ($)
      title 42 of the CFR              No.                                              (hours)     burden (hours)      reporting ($)            *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.   414.94(g)(2)............       0938-1315              30  30...............              20             600  varies..............          56,780
Sec.   414.94(g)(2) (reapply)..                                  30...............              10             300  varies..............          28,390
Sec.   422.222 (physicians and        0938-0685          32,000  10,666.6 (32,000                3          32,000  varies..............       4,607,360
 non-physician practitioners).                                    responses
                                                                  annualized over
                                                                  3 years).

[[Page 80541]]

 
Sec.   422.222 (organizations).       0938-0685          32,000  7,111.1 for two                 6        42,666.6  34.94...............       1,490,771
                                                                  CMS-855 forms
                                                                  (21,333.3
                                                                  responses
                                                                  annualized over
                                                                  3 years).
Sec.   422.222 (organizations).       0938-1056  ..............  3,555.6 for one                 6        21,333.3  34.94...............         745,386
                                                                  CMS-855 form.
                                ------------------------------------------------------------------------------------------------------------------------
    Total......................  ..............          64,030  21,393...........  ..............          96,900  varies..............       6,928,687
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This rule does not set out any non-labor costs.

D. Associated Information Collections Not Specified in Regulatory Text

    This rule references three information collection requirements that 
do not pertain to the amendments in the regulatory text. While the 
activities meet the PRA's definition of an information collection 
requirement, section 220 of the Protecting Access to Medicare Act 
(PAMA) of 2014 (Pub. L. 113-93) provides that the activities are exempt 
from the requirements of under the PRA. The exemption applies to 
information collected to ensure the accurate valuation of services 
under the Physician Fee Schedule which includes but is not limited to 
surveys of physicians, other suppliers, providers of services, 
manufacturers, and vendors; surgical logs, billing systems, or other 
practice or facility records; electronic health records; and, any other 
mechanism deemed appropriate by the Secretary.
    The activities consist of the following:
1. Global Surgical Services
    Section II.D.2. of this final rule details our plans for a claims-
based reporting program for global surgical services. Our claims-based 
data collection is applicable to 10- and 90-day global services 
furnished on or after January 1, 2017, which will set out: Who will be 
required to report, what they will be required to report, and how the 
reports will be submitted.
2. Survey of Practitioners
    As discussed earlier in section II.D.6.e.(1) through (2) of this 
final rule, we intend to conduct a survey of practitioners to help us 
explore options and collect data with respect to assessing and 
revaluing the global surgery services.
3. Data Collection for Accountable Care Organizations
    In section II. D.6.e.(3) of this final rule, we intend to conduct a 
survey of ACOs on a number of issues surrounding pre- and post-
operative surgical services. In addition to the PRA exemption as 
described above under PAMA, the survey is also exempt from the PRA 
under section 3022 of the Affordable Care Act which exempts collections 
associated with the Medicare Shared Savings Program.

E. Submission of PRA-Related Comments

    We have submitted a copy of this rule's information collection and 
recordkeeping requirements to OMB for review and approval. The 
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 collections discussed above, please visit CMS' Web site at 
http://www.cms.hhs.gov/PaperworkReductionActof1995, 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 identify the rule (CMS-
1654-F) and submit your comments to the OMB desk officer via one of the 
following transmissions:
    Mail: OMB, Office of Information and Regulatory Affairs, Attention: 
CMS Desk Officer,
    Fax Number: 202-395-5806 OR,
    Email: [email protected].
    PRA-related comments must be received on/by December 2, 2016.

V. Regulatory Impact Analysis

A. Statement of Need

    This final rule makes payment and policy changes under the Medicare 
PFS and makes required statutory changes under the MACRA, ABLE, PAMA, 
and the Consolidated Appropriations Act of 2016. This final rule also 
makes changes to payment policy and other related policies for Medicare 
Part B, Part D, and Medicare Advantage.

B. Overall Impact

    We 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 (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 in this section, that the PFS provisions 
included in this final rule would 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 prepared an 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

[[Page 80542]]

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 
final rule is intended to comply with the RFA requirements regarding 
significant impact on a substantial number of small entities.
    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 604 of the RFA. For purposes of section 
1102(b) of the Act, we define a small rural hospital as a hospital that 
is located outside of a Metropolitan Statistical Area for Medicare 
payment regulations and has fewer than 100 beds. We did not prepare an 
analysis for section 1102(b) of the Act because we determined, and the 
Secretary certified, that this final 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 2016, that 
threshold is approximately $146 million. This final rule will 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 issues 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 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 final 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 final rule, we 
are implementing 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 implementing 
statutory provisions. We provide information for each of the policy 
changes in the relevant sections of this final rule. We are unaware of 
any relevant federal rules that duplicate, overlap, or conflict with 
this final rule. The relevant sections of this final 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 expenditures for PFS services 
compare payment rates for CY 2016 with proposed payment rates for CY 
2017 using CY 2015 Medicare utilization. The payment impacts in this 
final rule reflect averages by specialty based on Medicare utilization. 
The payment impact for an individual practitioner could vary from the 
average and would depend on the mix of services he or she 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). Section 101(a) of the MACRA 
repealed the previous statutory update formula and amended section 
1848(d) of the Act to specify the update adjustment factors for 
calendar years 2015 and beyond. For CY 2017, the specified update is 
0.5 percent before applying other adjustments.
    Section 220(d) of the PAMA added 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. Section 
1848(c)(2)(O)(iii) of the 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. We estimate the 
CY 2017 net reduction in expenditures resulting from adjustments to 
relative values of misvalued codes to be 0.32 percent. Since this 
amount does not meet the 0.5 percent target established by the 
Achieving a Better Life Experience Act of 2014 (ABLE) (Division B of 
Pub. L. 113-295, enacted December 19, 2014), payments under the fee 
schedule must be reduced by the difference between the target for the 
year and the estimated net reduction in expenditures, known as the 
target recapture amount. As a result, we estimate that the CY 2017 
target

[[Page 80543]]

recapture amount will produce a reduction to the conversion factor of -
0.18 percent.
    Effective January 1, 2012, we implemented an MPPR of 25 percent on 
the professional component (PC) of advanced imaging services. Section 
502(a)(2)(A) of Division O, Title V of the Consolidated Appropriations 
Act of 2016 (Pub. L 114-113, enacted on December 18, 2015) added a new 
section 1848(b)(10) of the Act, which revises the MPPR on the 
professional component of imaging services from 25 percent to 5 
percent, effective January 1, 2017. Section 502(a)(2)(B) of Division O, 
Title V of the Consolidated Appropriations Act of 2016 added a new 
subclause at section 1848(c)(2)(B)(v)(XI) which exempts the MPPR 
reductions attributable to the new 5 percent MPPR on the PC of imaging 
from the PFS budget neutrality provision. However, the provision does 
not exempt the change attributable to the 25 percent MPPR from PFS 
budget neutrality. Therefore, for CY 2017 we must calculate PFS rates 
in a manner that exempts the 5 percent MPPR from budget neutrality but 
ensures that the elimination of the 25 percent MPPR is included in PFS 
budget neutrality. We note that the application of the 25 percent MPPR 
has been applied in a budget neutral fashion to date.
    The CY 2017 final PFS rates exclude the 5 percent MPPR for the 
professional component of imaging services by calculating the rates as 
if the discount does not occur, consistent with our approach to other 
discounts that occur outside of PFS budget neutrality. In order to 
implement the change from the 25 percent discount in 2016 to the 5 
percent discount in 2017 within PFS budget neutrality, we measured the 
difference in total RVUs for the relevant services, assuming an MPPR of 
25 percent and the total RVUs for the same services without an MPPR, 
and then applied that difference as an adjustment to the conversion 
factor to account for the increased expenditures attributable to the 
change, within PFS budget neutrality. This approach is consistent with 
the statutory provision that requires the 5 percent MPPR to be 
implemented outside of PFS budget neutrality.
    To calculate the final conversion factor for this year, we 
multiplied the product of the current year conversion factor and the 
update adjustment factor by the target recapture amount, the budget 
neutrality adjustment and the imaging MPPR adjustment described in the 
preceding paragraphs. We estimate the CY 2017 PFS conversion factor to 
be 35.8887, which reflects the budget neutrality adjustment, the 0.5 
percent update adjustment factor specified under section 1848(d)(18) of 
the Act, the adjustment due to the non-budget neutral 5 percent MPPR 
for the professional component of imaging services, and the -0.18 
percent target recapture amount required under section 
1848(c)(2)(O)(iv) of the Act and described above. We estimate the CY 
2017 anesthesia conversion factor to be 22.0454, which reflects the 
same overall PFS adjustments.
    We note that the proposed RVU budget neutrality adjustment was 
negative, due to the estimated overall increases in proposed RVUs 
relative to 2016. However, because we did not finalize the proposed 
changes to make separate payment for the additional resource costs 
involved in mobility impairment services, we are finalizing an overall 
decrease in RVUs relative to 2016. This results in an RVU budget 
neutrality adjustment that is positive.

    Table 50--Calculation of the Final CY 2017 PFS Conversion Factor
------------------------------------------------------------------------
 Conversion factor in effect in CY
               2016                                           35.8043
------------------------------------------------------------------------
Update Factor.....................  0.50 percent
                                     (1.0050).
CY 2017 RVU Budget Neutrality       -0.013 percent
 Adjustment.                         (0.99987).
CY 2017 Target Recapture Amount...  -0.18 percent
                                     (0.9982).
CY 2017 Imaging MPPR Adjustment...  -0.07 percent
                                     (0.9993).
CY 2017 Conversion Factor.........  ....................         35.8887
------------------------------------------------------------------------


 Table 51--Calculation of the Final CY 2017 Anesthesia Conversion Factor
                              (CM Estimate)
------------------------------------------------------------------------
     CY 2016 National Average
   Anesthesia Conversion Factor                               21.9935
------------------------------------------------------------------------
Update Factor.....................  0.50 percent
                                     (1.0050).
CY 2017 RVU Budget Neutrality       0.013 percent
 Adjustment.                         (0.99987).
CY 2017 Target Recapture Amount...  -0.18 percent
                                     (0.9982).
CY 2017 Imaging MPPR Adjustment...  -0.07 percent
                                     (0.9993).
CY 2017 Conversion Factor.........  ....................         22.0454
------------------------------------------------------------------------

    Table 52 shows the payment impact on PFS services of the proposals 
contained in this final 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 would be different from 
those shown in Table 52 (CY 2017 PFS Estimated Impact on Total Allowed 
Charges by Specialty). The following is an explanation of the 
information represented in Table 52.
     Column A (Specialty): Identifies the specialty for which 
data are shown.
     Column B (Allowed Charges): The aggregate estimated PFS 
allowed charges for the specialty based on CY 2015 utilization and CY 
2016 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 2017 impact on total allowed charges of the 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 2017 impact on total allowed charges of the changes in the 
PE RVUs.
     Column E (Impact of MP RVU Changes): This column shows the 
estimated CY 2017 impact on total allowed charges of the changes in the 
MP RVUs, which are primarily driven

[[Page 80544]]

by the required five-year review and update of MP RVUs.
     Column F (Combined Impact): This column shows the 
estimated CY 2017 combined impact on total allowed charges of all the 
changes in the previous columns. Column F may not equal the sum of 
columns C, D, and E due to rounding.

                 Table 52--CY 2017 PFS Estimated Impact on Total Allowed Charges by Specialty *
----------------------------------------------------------------------------------------------------------------
                                                   (C) Impact of   (D) Impact of   (E) Impact of
          (A) Specialty             (B) Allowed      work RVU     PE RVU changes  MP RVU changes   (F) Combined
                                   charges (mil)    changes (%)         (%)             (%)        impact ** (%)
----------------------------------------------------------------------------------------------------------------
TOTAL...........................         $89,866               0               0               0               0
ALLERGY/IMMUNOLOGY..............             231               0               1               0               1
ANESTHESIOLOGY..................           1,982               0               0               0               0
AUDIOLOGIST.....................              61               0               0               0               0
CARDIAC SURGERY.................             324               0               0               0               0
CARDIOLOGY......................           6,485               0               0               0               0
CHIROPRACTOR....................             784               0               0               0               0
CLINICAL PSYCHOLOGIST...........             734               0               0               0               0
CLINICAL SOCIAL WORKER..........             606               0               0               0               0
COLON AND RECTAL SURGERY........             161               0               0               0               0
CRITICAL CARE...................             311               0               0               0               0
DERMATOLOGY.....................           3,308               0               0               0               0
DIAGNOSTIC TESTING FACILITY.....             754               0              -1               0              -1
EMERGENCY MEDICINE..............           3,145               0               0               0               0
ENDOCRINOLOGY...................             460               0               0               0               0
FAMILY PRACTICE.................           6,110               0               1               0               1
GASTROENTEROLOGY................           1,747              -1               0               0              -1
GENERAL PRACTICE................             456               0               0               0               1
GENERAL SURGERY.................           2,172               0               0               0               0
GERIATRICS......................             213               0               1               0               1
HAND SURGERY....................             182               0               0               0               0
HEMATOLOGY/ONCOLOGY.............           1,751               0               0               0               0
INDEPENDENT LABORATORY..........             706               0              -5               0              -5
INFECTIOUS DISEASE..............             656               0               0               0               0
INTERNAL MEDICINE...............          10,915               0               1               0               1
INTERVENTIONAL PAIN MGMT........             769               0              -1               0               0
INTERVENTIONAL RADIOLOGY........             317              -1               0               0              -1
MULTISPECIALTY CLINIC/OTHER PHYS             129               0               0               0               1
NEPHROLOGY......................           2,210               0               0               0               0
NEUROLOGY.......................           1,521               0               0               0               0
NEUROSURGERY....................             789              -1               0               0              -1
NUCLEAR MEDICINE................              47               0               0               0               0
NURSE ANES/ANES ASST............           1,214               0               0               0               0
NURSE PRACTITIONER..............           2,988               0               0               0               0
OBSTETRICS/GYNECOLOGY...........             651               0               0               0               0
OPHTHALMOLOGY...................           5,492              -1              -2               0              -2
OPTOMETRY.......................           1,219               0              -1               0              -1
ORAL/MAXILLOFACIAL SURGERY......              49               0              -1               0              -1
ORTHOPEDIC SURGERY..............           3,695               0               0               0               0
OTHER...........................              27               0               0               0               0
OTOLARNGOLOGY...................           1,210               0               0               0              -1
PATHOLOGY.......................           1,135               0              -2               0              -1
PEDIATRICS......................              61               0               0               0               0
PHYSICAL MEDICINE...............           1,068               0               0               0               0
PHYSICAL/OCCUPATIONAL THERAPY...           3,407               0               1               0               1
PHYSICIAN ASSISTANT.............           1,964               0               0               0               0
PLASTIC SURGERY.................             378               0               0               0               0
PODIATRY........................           1,972               0               0               0               0
PORTABLE X-RAY SUPPLIER.........             106               0               0               0               0
PSYCHIATRY......................           1,265               0               0               0               0
PULMONARY DISEASE...............           1,765               0               0               0               0
RADIATION ONCOLOGY..............           1,726               0               0               0               0
RADIATION THERAPY CENTERS.......              44               0               0               0               0
RADIOLOGY.......................           4,683               0               0               0              -1
RHEUMATOLOGY....................             537               0               0               0               0
THORACIC SURGERY................             357               0               0               0               0
UROLOGY.........................           1,772              -1               0               0              -2
VASCULAR SURGERY................           1,046               0               0               0              -1
----------------------------------------------------------------------------------------------------------------
** Column F may not equal the sum of columns C, D, and E due to rounding.


[[Page 80545]]

2. CY 2017 PFS Impact Discussion
a. Changes in RVUs
    The most widespread specialty impacts of the final RVU changes are 
generally related to the changes to RVUs for specific services 
resulting from the Misvalued Code Initiative, including finalized RVUs 
for new and revised codes. Several specialties, including 
interventional radiology and independent labs, would experience 
significant decreases to overall payments for services that they 
frequently furnish as a result of revisions to the coding structure or 
the final inputs used to develop RVUs for the codes that describe 
particular services. Other specialties, including endocrinology and 
family practice, would experience significant increases to payments for 
similar reasons.
    We note that the positive impact for CY 2017 several specialties is 
lower than it was in the proposed rule, especially for certain 
specialties disproportionately likely to have reported the proposed 
code related to mobility impairment services. Because we did not 
finalize that proposal, we do not anticipate that shift in payment for 
CY 2017. However, we note that we believe that many practitioners of 
those same specialties will likely report the several other new codes 
described in section F of this final rule. Based on the history with 
other, similar codes, we would anticipate significant changes in 
allowed charges for these specialties over a longer period of time 
thanis shown by the single year comparison that we believe is more 
generally relevant in displaying the impacts of changes in payment 
under the PFS.
    We often receive comments regarding the changes in RVUs displayed 
on the specialty impact table, including comments received in response 
to the proposed rates for the current year. We remind stakeholders that 
although the estimated impacts are displayed at the specialty level, 
typically the changes are driven by the valuation of a relatively small 
number of new and/or potentially misvalued codes. The percentages in 
the table are based upon aggregate estimated PFS allowed charges summed 
across all services furnished by physicians, practitioners, and 
suppliers within a specialty to arrive at the total allowed charges for 
the specialty, and compared to the same summed total from the previous 
calendar year. They are therefore averages, and may not necessarily be 
representative of what is happening to the particular services 
furnished by a single practitioner within any given specialty.
b. Impact
    Column F of Table 52 displays the estimated CY 2017 impact on total 
allowed charges, by specialty, of all the RVU changes. A table shows 
the estimated impact on total payments for selected high volume 
procedures of all of the changes is available under ``downloads'' on 
the CY 2017 PFS final rule Web site at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/. 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 on the 
CMS Web site at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/.

D. Effect of Changes in Telehealth List

    As discussed in section II.I. of this final rule, we added 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 
additions relative to overall PFS expenditures.

E. Geographic Practice Cost Indices (GPCIs)

    Based upon statutory requirements, we proposed new GPCIs for each 
Medicare payment locality. The final GPCIs incorporate updated data and 
cost share weights as discussed in section II.I. The Act requires that 
updated GPCIs be phased in over two years. Addendum D shows the 
estimated effects of the revised GPCIs on area GAFs for the transition 
year (CY 2017) and the fully implemented year (CY 2018). The GAFs 
reflect the use of the updated underlying GPCI data, and the cost share 
weights remain unchanged from the previous (seventh) GPCI update. The 
GAFs are a weighted composite of each area's work, PE and malpractice 
expense GPCIs using the national GPCI cost share weights. Although we 
do not actually use the GAFs in computing the PFS payment for a 
specific service, they are useful in comparing overall areas costs and 
payments. The actual effect on payment for any actual service will 
deviate from the GAF to the extent that the proportions of work, PE and 
malpractice expense RVUs for the service differ from those of the GAF.
    The most significant changes occur in 19 non-California payment 
localities, where the fully implemented (CY 2018) GAF moves up by more 
than 1 percent (14 payment localities) or down by more than 2 percent 
(5 payment localities). These changes, required by section 1848(e)(6) 
of the Act, are discussed in section II.I. of this final rule.

F. Other Provisions of the Proposed Regulation

1. Impact of Changing the Direct Supervision Requirement to General 
Supervision for CCM Services Furnished Incident to RHCs and FQHCs, and 
Impact of Revising the CCM Requirements for RHCs and FQHCs
    We are finalizing our proposal to revise Sec.  405.2413(a)(5) and 
Sec.  405.2415(a)(5) to state that services and supplies furnished 
incident to TCM and CCM services can be furnished under general 
supervision of a RHC or FQHC practitioner. This regulatory change was 
already made for CCM services furnished by practitioners billing the 
PFS, and changes to RHC and FQHC regulations have no impact on 
regulations for practitioners billing under the PFS. The impact of this 
change on RHCs and FQHCs in 2017 is negligible, as estimates are 
rounded to the nearest 5 million and 2017 was too small of an impact to 
have a notable effect on the estimate.
    We are also finalizing our proposal to revise the CCM requirements 
for RHCs and FQHCs to be consistent with the proposed revisions to the 
CCM requirements for practitioners billing under the PFS. These 
revisions will allow RHCs and FQHCs to provide TCM and CCM services at 
the level that was projected when the programs were authorized, and 
therefore, no impact on spending is expected.
2. FQHC-Specific Market Basket
    As discussed in section III.B of this final rule, we are finalizing 
our proposal to create a 2013-based FQHC market basket to update the 
FQHC PPS base payment rate. Table 53 shows the 5-year and 10-year 
fiscal cost estimates from switching from a MEI-adjusted base payment 
rate to a FQHC PPS market basket-adjusted base payment rate. This was 
determined by compiling data on historical FQHC spending, projecting it 
forward, and creating two separate baselines. The first baseline 
assumed an MEI price update and the second baseline assumed an FQHC 
specific market basket price update which was created by the Office of 
the Actuary within CMS. The utilization of services was held constant 
between the two

[[Page 80546]]

baselines, and therefore, the impact table specifically captures the 
change in price from now growing at an FQHC MB update relative to how 
it was growing at the MEI updates. We estimate that this will cost 
approximately 210 million dollars over 10 years from FY 2017-2026, 45 
million of which would be paid for through beneficiary premiums and the 
remaining 165 million would be paid for through Part B.

   Table 53--5-Year and 10-Year Fiscal Cost Estimates From Switching From an MEI-Adjusted Base Payment Rate to a FQHC PPS Market Basket-Adjusted Base
                                                                      Payment Rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                      5-year    10-year
               Estimate  (in millions)                  2016   2017   2018   2019   2020   2021   2022   2023   2024   2025   2026    impact     impact
                                                                                                                                    2017-2021  2017-2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY Cash Impact (with MC)
    Part B
        Benefits.....................................  .....      5     10     10     15     16     20     25     30     35     45        55        210
        Premium Offset...............................  .....  .....  .....  .....    (5)    (5)    (5)    (5)    (5)   (10)   (10)      (10)       (45)
        Total Part B.................................  .....      5     10     10     10     10     15     20     25     25     35        45        165
--------------------------------------------------------------------------------------------------------------------------------------------------------

3. Appropriate Use Criteria for Advanced Diagnostic Imaging Services
    The clinical decision support mechanism (CDSM) requirements, as 
well as the application process that CDSM developers must comply with 
for their mechanisms to be specified as qualified under this program do 
not impact CY 2017 physician payments under the PFS.
4. Reports of Payments or Other Transfers of Value to Covered 
Recipients
    We solicited comments to inform future rulemaking. We do not intend 
to finalize any requirements directly as a result of this final rule; 
so there is no impact to CY 2017 physician payments under the PFS.
5. Release of Part C Medicare Advantage Bid Pricing Data and Part C and 
Part D Medical Loss Ratio (MLR) Data
    Under section III.E. of the preamble of this final rule, we 
describe our proposal to revise the existing regulations by adding 
Sec.  422.272 to provide for an annual public release of MA bid pricing 
data (with specified exceptions from release). We proposed that the 
annual release would occur after the first Monday in October and would 
contain MA bid pricing data that was accepted or approved by CMS for a 
contract year at least 5 years prior to the upcoming calendar year. We 
noted that under current authority at Sec.  422.254, MA organizations 
(MAOs) are required to submit bid pricing data to CMS each year for MA 
plans they wish to offer in the upcoming contract year (calendar year).
    In addition, we proposed to add Sec.  422.2490 for Part C and Sec.  
423.2490 for Part D to provide for an annual public release of Part C 
and Part D medical loss ratio (MLR) data (with specified exceptions 
from release). This annual release would occur no sooner than 18 months 
after the end of the contract year for which MLR data was reported to 
us. Starting with contract year 2014, each MAO or Part D sponsor that 
fails to spend at least 85 percent of revenue received under an MA or 
Part D contract on incurred claims and quality improving activities 
must remit the difference to the government. Under current authority at 
Sec.  422.2460 and Sec.  423.2460, each year MAOs and Part D sponsors 
must submit an MLR Report to us, which includes the data needed by the 
MAO or Part D sponsor to calculate and verify the MLR and remittance 
amount, if any, for each contract.
    We proposed to add regulatory language to permit our release of 
such data to the public. In the proposed rule, we determined that the 
proposed regulatory amendments do not impose any mandatory costs on the 
public or entities that seek to download and use the released data. We 
expect that this data will be available to the public from the CMS Web 
site (https://www.cms.gov/). The public may elect to download the data 
files, which will not impose mandatory costs on any user. Therefore, we 
determined that there were not any significant effects of the proposed 
provisions. We also determined that the proposed regulatory amendments 
would not impose a burden on the entity requesting or downloading the 
data files. We did not receive any public comments on our proposed 
regulatory impact analysis and are finalizing our language as proposed.
6. Prohibition on Billing Qualified Medicare Beneficiary Individuals 
for Medicare Cost-Sharing
    We are restating information to inform providers to take steps to 
educate themselves and their staff about QMB billing prohibitions and 
to exempt QMB individuals from Medicare cost-sharing billing and 
related collection efforts. Therefore, there is no impact to CY 2017 
physician payments under the PFS.
7. Recoupment or Offset of Payments to Providers Sharing the Same 
Taxpayer Identification Number
    This final rule implements section 1866(j) of the Act which grants 
the Secretary the authority to make any necessary adjustments to the 
payments of an applicable provider of services or supplier who shares a 
TIN with an obligated provider of services or supplier that has an 
outstanding Medicare overpayment. The Secretary is authorized to adjust 
the payments of such applicable provider, regardless of whether that 
applicable provider is assigned a different Medicare billing number or 
National Provider Identifier (NPI) number from the obligated provider 
with the outstanding Medicare overpayment. The concept of offsetting or 
recouping payments of providers sharing a TIN to satisfy a Medicare 
overpayment is analogous to Treasury's current practice of offsetting 
against entities that share a TIN to collect Medicare overpayments. 
This final rule will help support our efforts to safeguard the Medicare 
Trust Funds by collecting its own overpayments more quickly and 
reducing the accounts receivable delinquency rates reported in the 
Treasury Report on Receivables. This final rule also helps the 
obligated provider because we will collect the overpayments more 
quickly; thus reducing the additional interest assessments that would 
continue on the provider's outstanding delinquent balance until paid in 
full. Therefore, there is no impact to CY 2017 physician payments under 
the PFS.
8. Medicare Advantage Provider Enrollment
    This final rule will require that providers and suppliers must be 
enrolled in Medicare in approved status

[[Page 80547]]

in order to render services to beneficiaries in the Medicare Advantage 
program. This final rule will not have a significant economic impact on 
a substantial number of small businesses because the total number of 
non-enrolled providers and suppliers required to enroll in Medicare to 
comply with this rule appears to be small in comparison to the general 
population of providers and suppliers. The completion of the Form CMS-
855 (as explained in section III.) will be required very infrequently, 
in many cases either only one time or once every several years. Also, 
the hour and cost burden per provider or supplier will not pose a 
significant burden on a provider and supplier, especially when 
considering the overall revenue that providers and suppliers receive 
per year. We thus do not believe our proposal will impact a substantial 
number of small businesses.
    Virtually all of the quantifiable costs associated with this final 
rule involve the paperwork burden to providers and suppliers (see 
section IV. of this final rule). The estimates presented in this 
section do not address the potential financial benefits of this final 
rule from the standpoint of the rule's effectiveness in preventing or 
deterring certain providers from enrolling in or maintaining their 
enrollment in Medicare. We simply have no means of quantifying these 
benefits in monetary terms.
    There are three main uncertainties associated with this final rule. 
First, we are uncertain as to the number of providers and suppliers 
that will be required to enroll in Medicare under Sec.  422.222. 
Second, we cannot estimate the savings in fraud and abuse prevention 
that will accrue from this rule. Third, since we have no systematic 
method to know how many FDRs may be used by MA or MA-PD organizations 
to deliver services to Medicare beneficiaries, therefore, we cannot 
estimate the possible impact to FDRs.
9. Expansion of the Diabetes Prevention Program (DPP) Model
    We proposed to expand the Diabetes Prevention Program (DPP) Model 
in accordance with section 1115A(c) of the Act, and we proposed to 
refer to this expanded model as the Medicare Diabetes Prevention 
Program (MDPP). We proposed that MDPP would become effective January 1, 
2018, and we would continue to test and evaluate MDPP as finalized. In 
the future, we will assess whether the nationwide implementation of the 
MDPP is continuing to either reduce Medicare spending without reducing 
quality of care or improve the quality of patient care without 
increasing spending, and could modify the nationwide MDPP as 
appropriate. In this final rule, we are finalizing the framework for 
expansion and finalizing details of the MDPP benefit, beneficiary 
eligibility criteria, and MDPP supplier eligibility criteria and 
enrollment policies. We will engage in additional rulemaking within the 
next year to address payment, delivery of virtual MDPP services, the 
preliminary recognition standard, use of coach information during 
enrollment and monitoring, and other program integrity safeguards. MDPP 
policies finalized in this rule and those proposed in future rulemaking 
will result in changes to our current financial projections and 
therefore affect economic impact estimates of MDPP. For these reasons, 
it is premature to provide an impact statement at this time. We intend 
to provide an impact statement in future rulemaking.
10. Medicare Shared Savings Program
    We are finalizing certain rules having to do with ACO quality 
reporting: (1) We are finalizing conforming changes to align with the 
policies adopted for the Merit-Based Incentive Payment System (MIPS) 
and Alternative Payment Models (APMs) in the QPP final rule with 
comment period including changes to the quality measure set; (2) we are 
finalizing a policy to streamline the quality validation audit process 
and, absent unusual circumstances, to use the results to modify an 
ACO's overall quality score; (3) we are finalizing revisions to 
references to the Quality Performance Standard and Minimum Attainment 
Level; (4) we are revising our policies regarding the application of 
flat percentages to provide that measures calculated as ratios are 
excluded from use of flat percentages when such benchmarks appear 
``clustered'' or ``topped out''; and (5) we are modifying our PQRS 
alignment rules to permit flexibility for EPs to report quality data to 
PQRS to avoid the PQRS and VM downward adjustments for 2017 and 2018 in 
cases where an ACO fails to report on their behalf. (The rule can be 
accessed at https://qpp.cms.gov/education.) In addition, we are 
updating the assignment methodology to include beneficiaries who 
identify ACO professionals as being responsible for coordinating their 
overall care.
    We are also finalizing additional beneficiary protections when ACOs 
in Track 3 make use of the SNF 3-day rule waiver under the Shared 
Savings Program. Finally, we are finalizing certain technical changes 
and clarifications related to financial reconciliation for ACOs that 
fall below 5,000 assigned beneficiaries and related to our policies for 
consideration of claims billed by merged and acquired TINs.
    Because the final policies are not expected to substantially change 
the quality reporting burden for ACOs participating in the Shared 
Savings Program and their ACO participants or financial calculations 
under the Shared Savings Program, we do not anticipate any impact for 
these final policies.
11. 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, as well 
as those physicians and groups of physicians that failed to avoid the 
PQRS payment adjustment as a group or as individuals.
    In the CY 2015 PFS final rule with comment period (79 FR 67936 and 
67941 through 67942), 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, including physicians that 
participate in an ACO under the Shared Savings Program. In the CY 2014 
PFS final rule with comment period (78 FR 74771 through 74772), we 
established CY 2015 as the performance period for the VM that will be 
applied to payments during CY 2017. In CY 2017, the VM will be waived 
for groups and solo practitioners, as identified by their TIN, if at 
least one EP who billed for Medicare PFS items and services under the 
TIN during 2015 participated in the Pioneer ACO Model or the 
Comprehensive Primary Care initiative in 2015 (80 FR 71288).
    In the CY 2015 PFS final rule with comment period (79 FR 67938 
through 67939), we adopted a two-category approach for the CY 2017 VM 
based on participation in the PQRS by groups and solo practitioners. 
Category 1 will include those groups that meet the criteria to avoid 
the PQRS payment adjustment for CY 2017 as a group

[[Page 80548]]

practice participating in the PQRS GPRO in CY 2015. We finalized in the 
CY 2016 PFS final rule with comment period (80 FR 71280 through 71281) 
that, for the CY 2017 VM, Category 1 will also include 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. In determining 
whether a group will be included in Category 1, we will consider 
whether the 50 percent threshold has been met regardless of whether the 
group registered to participate in the PQRS GPRO in CY 2015. Lastly, 
Category 1 will include those solo practitioners that meet the criteria 
to avoid the PQRS payment adjustment for CY 2017 as individuals.
    For groups and solo practitioners that participated in an ACO under 
the Shared Savings Program in CY 2015, they are considered to be 
Category 1 for the CY 2017 VM if the ACO in which they participated 
successfully reported on quality measures via the GPRO Web Interface in 
CY 2015 (79 FR 67946). As discussed in sections III.H. and III.K.1.e. 
of this final rule, we are finalizing our proposal to remove the 
prohibition on EPs who are part of a group or solo practitioner that 
participates in a Shared Savings Program ACO, for purposes of PQRS 
reporting for the CY 2017 and CY 2018 payment adjustments, to report 
outside the ACO. In section III.L.3.b. of this final rule, we are 
finalizing that for the CY 2017 payment adjustment period, if a Shared 
Savings Program ACO did not successfully report quality data as 
required by the Shared Savings Program under Sec.  425.504 for the CY 
2017 PQRS payment adjustment, then we will use the data reported to the 
PQRS by the EPs (as a group using one of the group registry, QCDR, or 
EHR reporting options or as individuals using the registry, QCDR, or 
EHR reporting option) under the participant TIN) outside of the ACO 
during the secondary PQRS reporting period to determine whether the TIN 
will fall in Category 1 or Category 2 under the VM. We are finalizing 
that groups that meet the criteria to avoid PQRS payment adjustment for 
CY 2018 as a group practice participating in the PQRS GPRO (using one 
of the group registry, QCDR, or EHR reporting options) or have at least 
50 percent of the group's EPs meet the criteria to avoid the PQRS 
payment adjustment for CY 2018 as individuals (using the registry, 
QCDR, or EHR reporting option), based on data submitted outside the ACO 
and during the secondary PQRS reporting period, will be included in 
Category 1 for the CY 2017 VM. We are also finalizing that solo 
practitioners that meet the criteria to avoid the PQRS payment 
adjustment for CY 2018 as individuals using the registry, QCDR, or EHR 
reporting option, based on data submitted outside the ACO and during 
the secondary PQRS reporting period, will be included in Category 1 for 
the CY 2017 VM and be classified as ``average quality'' and ``average 
cost'' under the quality-tiering methodology. Category 2 will include 
those groups and solo practitioners subject to the CY 2017 VM that 
participate in a Shared Savings Program ACO 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 of physicians 
with 10 or more EPs and -2.0 percent for groups of physicians with 
between 2 to 9 EPs and physician solo practitioners.
    In the CY 2015 PFS final rule with comment period (79 FR 67939 
through 67941), we finalized that quality-tiering, which is the 
methodology for evaluating performance on quality and cost measures for 
the VM, will apply to all groups of physicians and physician solo 
practitioners in Category 1 for the VM for CY 2017. However, groups of 
physicians with between 2 to 9 EPs and physician solo practitioners 
will be subject only to upward or neutral adjustments derived under 
quality-tiering, while groups of physicians with 10 or more EPs will be 
subject to upward, neutral, or downward adjustments derived under 
quality-tiering. That is, groups of physicians with between 2 to 9 EPs 
and physician solo practitioners in Category 1 will be held harmless 
from any downward adjustments derived under quality-tiering for the CY 
2017 VM.
    Under the quality-tiering methodology, each group and solo 
practitioner's quality and cost composites will be 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 will compare their quality of 
care composite classification with the cost composite classification to 
determine their VM adjustment for the CY 2017 payment adjustment period 
according to the amounts in Tables 54 and 55.

 Table 54--CY 2017 VM Payment Adjustment Amounts Under Quality-Tiering for Groups of Physicians With Two to Nine
                                      EPs and Physician Solo Practitioners
----------------------------------------------------------------------------------------------------------------
                      Cost/quality                          Low quality      Average 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 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 55--CY 2017 VM Payment Adjustment Amounts Under Quality-Tiering for Groups of Physicians With Ten or More
                                                       EPs
----------------------------------------------------------------------------------------------------------------
                      Cost/quality                          Low quality      Average 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 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.

    Under the quality-tiering methodology, for groups and solo 
practitioners that participated in a Shared Savings ACO that 
successfully reports quality data for CY 2015, the cost composite will 
be classified as

[[Page 80549]]

``Average'' and the quality of care composite will be based on ACO-
level quality measures. We will compare their quality of care composite 
classification with the ``Average'' cost composite classification to 
determine their VM adjustment for the CY 2017 payment adjustment period 
according to the amounts in Tables 54 and 55.
    We are finalizing in section III.L.3.b. of this final rule, for 
groups and solo practitioners that participate in a Shared Savings 
Program ACO that did not successfully report quality data for CY 2015 
and are in Category 1 as a result of reporting quality data to the PQRS 
outside of the ACO using the secondary PQRS reporting period, our 
proposal to classify their quality composite for the VM for the CY 2017 
payment adjustment period as ``average quality.'' Their cost composite 
will be classified as ``average cost'' (79 FR 67943).
    To ensure budget neutrality, we first aggregate the downward 
payment adjustments in Tables 54 and 55 for those groups and solo 
practitioners in Category 1 with the automatic downward payment 
adjustments of -2.0 percent or -4.0 percent for groups and solo 
practitioners 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). We plan to incorporate 
assumptions about the number of physicians in groups and physician solo 
practitioners in the ACOs that did not successfully report their CY 
2015 quality data whose status could potentially change from Category 2 
to Category 1 if the group or solo practitioner satisfactorily report 
their 2016 data during the secondary PQRS reporting period. 
Additionally, as we had done when calculating the upward payment 
adjustment factor for the 2016 VM, we will also incorporate adjustments 
made for estimated changes in physician behavior (i.e., changes in the 
volume and/or intensity of services delivered and shifting of services 
to TINs that receive higher VM adjustments) and estimated impact of 
pending PQRS and VM informal reviews. These calculations will be done 
after the performance period has ended and announced around the start 
of the payment adjustment year after the informal review period ends.
    On September 26, 2016, we made the 2015 Annual QRURs available to 
all groups and solo practitioners based on their performance in CY 
2015. We also completed a preliminary analysis (based on results 
included in the 2015 Annual QRURs and prior to accounting for the 
informal review process) of the impact of the VM in CY 2017 on 
physicians in groups with 2 or more EPs and physician solo 
practitioners based on their performance in CY 2015. A summary of the 
results for groups and solo practitioners subject to the 2017 VM is 
presented below.
    There are 208,832 groups and physician solo practitioners (as 
identified by their Taxpayer Identification Number (TIN)) consisting of 
885,108 physicians whose physicians' payments under the Medicare PFS 
will be subject to the VM in the CY 2017 payment adjustment period. 
These counts include both TINs that participated in a Shared Savings 
Program ACO in CY 2015 and TINs that did not. Of all the physicians 
subject to the CY 2017 VM, approximately 65 percent of the physicians 
(577,959 physicians) are in TINs that met the criteria for inclusion in 
Category 1 and are subject to the quality-tiering methodology in order 
to calculate their CY 2017 VM; and approximately 35 percent of the 
physicians (307,149 physicians) are in TINs that are Category 2. 
Physicians in Category 2 TINs with between 1 to 9 EPs will be subject 
to an automatic -2.0 percent payment adjustment, while physicians in 
Category 2 TINs with 10 or more EPs will be subject to an automatic -
4.0 percent payment adjustment under the VM during the CY 2017 payment 
adjustment period for failing to meet quality reporting requirements.
    For physicians (428,461) that are in Category 1 TINs that did not 
participate in a Shared Savings Program ACO (61,445) in CY 2015, Tables 
56 and 57 show the distribution of these physicians and TINs with 
between 1 to 9 EPs and 10 or more EPs, respectively, into the various 
quality and cost tiers. The results show that 2,351 TINs consisting of 
12,026 physicians will receive an upward payment adjustment; 58,099 
TINs consisting of 384,922 physicians will receive a neutral payment 
adjustment; and 995 TINs consisting of 31,513 physicians will receive a 
downward payment adjustment under the VM in CY 2017.

  Table 56--Preliminary Distribution of Category 1 Non-Shared Savings Program TINs With Between 1 to 9 EPs (and
                                  Physicians in the TINs) Under the CY 2017 VM
                                        [53,119 TINs; 101,168 physicians]
----------------------------------------------------------------------------------------------------------------
             Cost/quality                    Low quality            Average quality            High quality
----------------------------------------------------------------------------------------------------------------
Low Cost.............................  +0.0% (6 TINs; 7         +1.0x (36 TINs; 72       +2.0x (8 TINs; 28
                                        physicians).             physicians).             physicians).
                                                                +2.0x* (36 TINs; 75      +3.0x* (11 TINs; 32
                                                                 physicians).             physicians).
Average Cost.........................  +0.0% (4,632 TINs;       +0.0% (44,895 TINs;      +1.0x (1,478 TINs;
                                        9,009 physicians).       85,466 physicians).      2,480 physicians)
                                                                                         +2.0x* (531 TINs; 1,104
                                                                                          physicians).
High Cost............................  +0.0% (516 TINs; 943     +0.0% (948 TINs; 1,889   +0.0% (22 TINs; 63
                                        physicians).             physicians).             physicians).
----------------------------------------------------------------------------------------------------------------
* These TINs were eligible for an additional +1.0x for reporting measures and having an average beneficiary risk
  score in the top 25 percent of all beneficiary risk scores.


    Table 57--Preliminary Distribution of Category 1 Non-Shared Savings Program TINs With 10 or More EPs (and
                                  Physicians in the TINs) Under the CY 2017 VM
                                        [8,326 TINs; 327,293 physicians]
----------------------------------------------------------------------------------------------------------------
             Cost/quality                    Low quality            Average quality            High quality
----------------------------------------------------------------------------------------------------------------
Low Cost.............................  +0.0% (3 TINs; 149       +2.0x (11 TINs; 383      +4.0x (0 TINs; 0
                                        physicians).             physicians).             physicians).
                                                                +3.0x* (24 TINs; 2,414   +5.0x* (3 TINs; 69
                                                                 physicians).             physicians).
Average Cost.........................  -2.0% (612 TINs; 17,272  +0.0% (7,069 TINs;       +2.0x (95 TINs; 2,439
                                        physicians).             287,111 physicians).     physicians)
                                                                                         +3.0x* (118 TINs; 2,930
                                                                                          physicians).

[[Page 80550]]

 
High Cost............................  -4.0% (122 TINs; 4,051   -2.0% (261 TINs; 10,190  +0.0% (8 TINs; 285
                                        physicians).             physicians).             physicians)
----------------------------------------------------------------------------------------------------------------
* These TINs were eligible for an additional +1.0x for reporting measures and having an average beneficiary risk
  score in the top 25 percent of all beneficiary risk scores.

    For physicians (149,498) that are in Category 1 TINs that 
participated in a Shared Savings Program ACO (12,500) in CY 2015, Table 
58 shows the distribution of the 389 ACOs into the various quality 
tiers along with the number of physicians in the ACOs. The results show 
that physicians in participant TINs in 3 ACOs will receive an upward 
payment adjustment; physicians in participant TINs in 382 ACOs will 
receive a neutral payment adjustment; and physicians in participant 
TINS with 10 or more EPs in 4 ACOs will receive a downward payment 
adjustment under the VM in CY 2017. Physicians in ACO TINs are more 
likely to be in a Category 1 TIN compared to those in non-ACO TINs and 
are less likely to get the downward adjustment based on performance 
compared to those in Category 1 non-ACO TINs. Physicians in ACOs are 
also more likely to get either an average or upward adjustment under 
the VM compared to physicians overall. The VM is applied at the TIN-
level, and the amount of the upward or downward adjustment will vary 
based on the size of the ACO's participant TIN.

    Table 58--Preliminary Distribution of Category 1 Shared Savings Program ACOs (and Physicians in the ACOs'
                                     Participant TINs) Under the CY 2017 VM
                                         [389 ACOs; 149,498 physicians]
----------------------------------------------------------------------------------------------------------------
             Cost/quality                    Low quality            Average quality            High quality
----------------------------------------------------------------------------------------------------------------
Low Cost.............................  Does not apply.........  Does not apply.........  Does not apply.
Average Cost.........................  4 ACOs.................  382 ACOs...............  3 ACOs.
High Cost............................  Does not apply.........  Does not apply.........  Does not apply.
----------------------------------------------------------------------------------------------------------------
* These TINs were eligible for an additional +1.0x for reporting measures and having an average beneficiary risk
  score in the top 25 percent of all beneficiary risk scores.

    The numbers presented above are preliminary numbers and may be 
subject to change as a result of the informal review process. In late 
2016, after the conclusion of the informal review period, we will 
release updates to the number of TINs receiving upward, neutral, and 
downward adjustments, along with the adjustment factor for the CY 2017 
VM on the CMS Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeedbackProgram/2015-QRUR.html. We note 
that in the 2015 QRUR Experience Report, which we intend to release in 
early 2017, we will provide a detailed analysis of the impact of the 
2017 VM policies on physicians in groups of 2 or more EPs and physician 
solo practitioners subject to the VM in CY 2017, including findings 
based on the data contained in the 2015 Annual QRURs for all groups and 
solo practitioners.
12. Physician Self-Referral Updates
    The physician self-referral update provisions are discussed in 
section III.M of this final rule. We re-issued regulatory provisions 
prohibiting certain per-unit of service compensation formulas for 
determining rental charges in the exceptions for the rental of office 
space, rental of equipment, fair market value compensation, and 
indirect compensation arrangements. These provisions are necessary to 
protect against potential abuses such as overutilization and stifling 
patient choice. We believe that most parties comply with these 
regulatory provisions since they originally became effective on October 
1, 2009, and the re-issued regulations text is identical to the 
existing regulations text. Therefore, we do not believe that the 
provisions will have a significant burden.

G. Alternatives Considered

    This final 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. For purposes of the 
payment impact on PFS services of the policies contained in this final 
rule, we presented the estimated impact on total allowed charges by 
specialty. The alternatives we considered, as discussed in the 
preceding preamble sections, will result in different final payment 
rates, and therefore, result in different estimates than those shown in 
Table 52 (CY 2017 PFS Estimated Impact on Total Allowed Charges by 
Specialty). For example, the estimated increases to primary care 
specialties would be lessened without the revised payment policies for 
certain care management and patient-specific services as described in 
section II.E. of this final rule with comment period. However, because 
PFS rates are based on relative value units, the final rates reflect 
all of the final changes and eliminate some of the proposed changes 
that might have multi-faceted impacts on the payment rates for other 
services.

H. Impact on Beneficiaries

    There are a number of changes in this final rule that would have an 
effect on beneficiaries. In general, we believe that many of these 
changes, including those intended to improve accuracy in payment 
through revisions to the inputs used to calculate payments under the 
PFS, would have a positive impact and improve the quality and value of 
care provided to Medicare beneficiaries. In particular, we believe that 
improving payment for primary care and care management services based 
on more accurate assessment of patient needs and the resources involved 
in caring for them will benefit beneficiaries by improving care 
coordination and

[[Page 80551]]

providing more effective treatment, particularly to those beneficiaries 
with behavioral health conditions.
    Most of the aforementioned final 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 our public use file Impact on Payment for 
Selected Procedures available on the CMS Web site at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/, the CY 2016 national payment amount in the 
nonfacility setting for CPT code 99203 (Office/outpatient visit, new) 
was $108.85, which means that in CY 2016, a beneficiary would be 
responsible for 20 percent of this amount, or $21.77. Based on this 
final rule, using the CY 2017 CF, the CY 2017 national payment amount 
in the nonfacility setting for CPT code 99203, as shown in the Impact 
on Payment for Selected Procedures table, is $109.46, which means that, 
in CY 2017, the final beneficiary coinsurance for this service would be 
$21.89.
    As discussed in section III.B of this final rule, we proposed that 
beginning on January 1, 2017, the FQHC base rate would be updated using 
a FQHC-specific market basket instead of using the MEI to more 
accurately reflect changes in the cost of furnishing FQHC services. 
This would result in a higher payment to FQHCs, and since coinsurance 
is 20 percent of the lesser of the FQHC's charge for the specific 
payment code or the PPS rate, beneficiary coinsurance would also 
increase. The FQHC market basket cost estimates in Table 53 include a 
premium offset line which is the amount of cost that would be offset by 
the beneficiaries. The beneficiaries would pay approximately $5 million 
and $35 million over the 5 and 10 year projection windows.

I. Accounting Statement

    As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Tables 59 and 60 
(Accounting Statements), we have prepared an accounting statement. This 
estimate includes growth in incurred benefits from CY 2016 to CY 2017 
based on the FY 2017 President's Budget baseline.

Table 59--Accounting Statement: Classification of Estimated Expenditures
------------------------------------------------------------------------
                 Category                             Transfers
------------------------------------------------------------------------
CY 2017 Annualized Monetized Transfers      Estimated increase in
                                             expenditures of $0.2
                                             billion for PFS CF update
From Whom To Whom?                          Federal Government to
                                             physicians, other
                                             practitioners and providers
                                             and suppliers who receive
                                             payment under Medicare.
------------------------------------------------------------------------


   Table 60--Accounting Statement: Classification of Estimated Costs,
                          Transfer, and Savings
------------------------------------------------------------------------
                 Category                             Transfer
------------------------------------------------------------------------
CY 2017 Annualized Monetized Transfers of   $0.0 billion.
 beneficiary cost coinsurance
From Whom to Whom?                          Federal Government to
                                             Beneficiaries.
------------------------------------------------------------------------

J. Conclusion

    The analysis in the previous sections, together with the remainder 
of this preamble, provided 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, Biologics, Drugs, Health 
facilities, Health professions, Kidney diseases, Medicare, Reporting 
and recordkeeping requirements.

42 CFR Part 417

    Administrative practice and procedure, Grant programs-health, 
Health care, Health insurance, Health maintenance organizations (HMO), 
Loan programs-health, Medicare, Reporting and recordkeeping 
requirements.

42 CFR Part 422

    Administrative practice and procedure, Health facilities, Health 
maintenance organizations (HMO), Medicare, Penalties, Privacy, 
Reporting and recordkeeping requirements.

42 CFR Part 423

    Administrative practice and procedure, Emergency medical services, 
Health facilities, Health maintenance organizations (HMO), Medicare, 
Penalties, Privacy, Reporting and recordkeeping requirements.

42 CFR Part 424

    Emergency medical services, Health facilities, Health professions, 
Medicare, Reporting and recordkeeping requirements.

42 CFR Part 425

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

42 CFR Part 460

    Aged, Health care, Health records, Medicaid, Medicare, Reporting 
and recordkeeping requirements.

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services amends 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 405.373 is amended by--
0
a. Revising paragraphs (a) introductory text and (b).
0
b. Adding paragraph (f).
    The revisions and addition read as follows:


Sec.  405.373  Proceeding for offset or recoupment.

    (a) General rule. Except as specified in paragraphs (b) and (f) of 
this section, if

[[Page 80552]]

the Medicare Administrative Contractor or CMS has determined that an 
offset or recoupment of payments under Sec.  405.371(a)(3) should be 
put into effect, the Medicare Administrative Contractor must--
* * * * *
    (b) Exception to recouping payment. Paragraph (a) of this section 
does not apply if the Medicare Administrative Contractor, after 
furnishing a provider a written notice of the amount of program 
reimbursement in accordance with Sec.  405.1803, recoups payment under 
paragraph (c) of Sec.  405.1803. (For provider rights in this 
circumstance, see Sec. Sec.  405.1809, 405.1811, 405.1815, 405.1835, 
and 405.1843.)
* * * * *
    (f) Exception to offset or recoupment of payments for shared 
Taxpayer Identification Number. Paragraph (a) of this section does not 
apply in instances where the Medicare Administrative Contractor intends 
to offset or recoup payments to the applicable provider of services or 
supplier to satisfy an amount due from an obligated provider of 
services or supplier when the applicable and obligated provider of 
services or supplier share the same Taxpayer Identification Number.

0
3. Section 405.2413 is amended by revising paragraph (a)(5) to read as 
follows:


Sec.  405.2413  Services and supplies incident to a physician's 
services.

    (a) * * *
    (5) Furnished under the direct supervision of a physician, except 
that services and supplies furnished incident to transitional care 
management and chronic care management services can be furnished under 
general supervision of a physician when these services or supplies are 
furnished by auxiliary personnel, as defined in Sec.  410.26(a)(1) of 
this chapter.
* * * * *

0
4. Section 405.2415 is amended by revising paragraph (a)(5) to read as 
follows:


Sec.  405.2415  Incident to services and direct supervision.

    (a) * * *
    (5) Furnished under the direct supervision of a nurse practitioner, 
physician assistant, or certified nurse-midwife, except that services 
and supplies furnished incident to transitional care management and 
chronic care management services can be furnished under general 
supervision of a nurse practitioner, physician assistant, or certified 
nurse-midwife, when these services or supplies are furnished by 
auxiliary personnel, as defined in Sec.  410.26(a)(1) of this chapter.
* * * * *

PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

0
5. 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
6. Section 410.26 is amended by--
0
a. Redesignating paragraphs (a)(3) through (7) as paragraphs (a)(4) 
through (8), respectively.
0
b. Adding new paragraph (a)(3).
0
c. Revising paragraph (b)(5).
    The addition and revision reads as follows:


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

    (a) * * *
    (3) General supervision means the service is furnished under the 
physician's (or other practitioner's) overall direction and control, 
but the physician's (or other practitioner's) presence is not required 
during the performance of the service.
* * * * *
    (b) * * *
    (5) In general, services and supplies must be furnished under the 
direct supervision of the physician (or other practitioner). Designated 
care management services can be furnished under general supervision of 
the physician (or other practitioner) when these services or supplies 
are provided incident to the services of a physician (or other 
practitioner). The physician (or other practitioner) supervising the 
auxiliary personnel need not be the same physician (or other 
practitioner) who is treating the patient more broadly. However, only 
the supervising physician (or other practitioner) may bill Medicare for 
incident to services.
* * * * *

0
7. Section 410.79 is added to subpart B to read as follows:


Sec.  410.79   Medicare diabetes prevention program expanded model: 
Conditions of coverage.

    (a) Medicare Diabetes Prevention Program (MDPP) services will be 
available beginning on January 1, 2018.
    (b) Definitions. For purposes of this section, the following 
definitions apply:
    Baseline weight refers to the eligible beneficiary's body weight 
recorded during that beneficiary's first core session.
    CDC-approved DPP curriculum refers to the content of the core 
sessions, core maintenance sessions, and ongoing maintenance sessions. 
The curriculum may be either the CDC-preferred curriculum as designated 
by the CDC DPRP Standards or an alternative curriculum approved for use 
in DPP by the CDC.
    Coach refers to an individual who furnishes MDPP services on behalf 
of an MDPP supplier as an employee, contractor, or volunteer.
    Core maintenance sessions refer to at least 6 monthly sessions 
furnished over the MDPP core benefit's months 6-12 and furnished after 
the core sessions, regardless of weight loss.
    Core sessions refer to at least 16 weekly sessions that are 
furnished over the MDPP core benefit's months 1-6.
    Diabetes Prevention Recognition Program (DPRP) refers to a program 
administered by the Centers for Disease Control and Prevention (CDC) 
that recognizes organizations that are able to furnish diabetes 
prevention program (DPP) services, follow a CDC-approved DPP 
curriculum, and meet CDC's performance standards and reporting 
requirements.
    Evaluation weight refers to the beneficiary's body weight updated 
from the first core session and recorded before or during that 
beneficiary's final core session.
    Full CDC DPRP recognition refers to the designation from the CDC 
that an organization has consistently furnished CDC-approved DPP 
sessions, met CDC-performance standards and met CDC reporting 
requirements for at least 24-36 months following the organization's 
application to participate in the DPRP.
    Maintenance of weight loss refers to achieving the required minimum 
weight loss from baseline weight at any point during each 3-month core 
maintenance or ongoing maintenance session bundle.
    Maintenance session bundle refers to each 3-month interval of core 
maintenance or ongoing maintenance sessions. They must include at least 
one maintenance session furnished in each of the 3 months, for a 
minimum of three sessions in each bundle.
    MDPP core benefit refers to a 12-month intensive behavioral change 
program that applies a CDC-approved curriculum. The core benefit 
consists of at least 16 weekly core sessions over the first 6 months 
and at least 6 monthly core maintenance sessions over the second 6 
months, furnished regardless of weight loss.
    MDPP eligible beneficiary refers to an individual who satisfies the 
criteria defined in paragraph (c)(1) of this section.

[[Page 80553]]

    MDPP services refer to structural health behavior change sessions 
with the goal of preventing diabetes among individuals with pre-
diabetes. MDPP services consist of core sessions, core maintenance 
sessions, and ongoing maintenance sessions that follow a CDC-approved 
curriculum. The sessions provide practical training in long-term 
dietary change, increased physical activity, and problem-solving 
strategies for overcoming challenges to maintaining weight loss and a 
healthy lifestyle.
    MDPP supplier refers to an entity that has enrolled in Medicare, 
furnishes MDPP services, and has either preliminary or full CDC DPRP 
recognition.
    Medicare Diabetes Prevention Program (MDPP) refers to an expanded 
model test under section 1115A(c) of the Act that makes MDPP services 
available to MDPP eligible beneficiaries.
    National Diabetes Prevention Program (DPP) refers to an evidence-
based intervention targeted to individuals with pre-diabetes that is 
furnished in community and health care settings and administered by the 
Centers for Disease Control and Prevention (CDC).
    Ongoing maintenance sessions refer to monthly sessions furnished 
after the 12-month core benefit has been completed and that teach a 
CDC-approved curriculum.
    Required minimum weight loss refers to the percentage by which the 
beneficiary's evaluation weight is less than the baseline weight. The 
required minimum weight loss percentage is 5 percent.
    (c) Program requirements--(1) Beneficiary eligibility. Medicare 
beneficiaries are eligible for MDPP services if they meet all of the 
following criteria:
    (i) Are enrolled in Medicare Part B.
    (ii) Have as of the date of attendance at the first core session a 
body mass index (BMI) of at least 25 if not self-identified as Asian 
and a BMI of at least 23 if self-identified as Asian.
    (iii) Have, within the 12 months prior to attending the first core 
session, a hemoglobin A1c test with a value between 5.7 and 6.4 
percent, a fasting plasma glucose of 110-125 mg/dL, or a 2-hour plasma 
glucose of 140-199 mg/dL (oral glucose tolerance test).
    (iv) Have no previous diagnosis of type 1 or type 2 diabetes.
    (v) Do not have end-stage renal disease (ESRD).
    (2) MDPP services--(i) Core sessions and core maintenance sessions. 
MDPP suppliers must furnish to MDPP beneficiaries the MDPP core 
benefit. 16 core sessions must be furnished at least a week apart over 
a period of at least 16 weeks to 26 weeks. At least one core 
maintenance session must be furnished in each of the second 6 months. 
All core sessions and core maintenance sessions must have a duration of 
approximately one hour. MDPP suppliers must address at least 16 
different curriculum topics in the core sessions and at least 6 
different curriculum topics in the core maintenance sessions.
    (ii) Ongoing maintenance sessions. MDPP suppliers must furnish each 
ongoing maintenance session bundle after the core benefit to MDPP 
eligible beneficiaries who have achieved maintenance of weight loss 
during the previous maintenance session bundle. All ongoing maintenance 
sessions must have a duration of approximately one hour. All curriculum 
topics may be offered except for the introductory sessions.
    (d) Limitations on coverage of MDPP services. (1) The MDPP core 
benefit is available only once per lifetime per MDPP eligible 
beneficiary.
    (2) Ongoing maintenance sessions are available only if the MDPP 
eligible beneficiary has achieved maintenance of weight loss.

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

0
8. The authority citation for part 411 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
9. Section 411.357 is amended by revising paragraphs (a)(5)(ii)(B), 
(b)(4)(ii)(B), (l)(3)(ii), and (p)(1)(ii)(B) to read as follows:


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

* * * * *
    (a) * * *
    (5) * * *
    (ii) * * *
    (B) Per-unit of service rental charges, to the extent that such 
charges reflect services provided to patients referred by the lessor to 
the lessee.
* * * * *
    (b) * * *
    (4) * * *
    (ii) * * *
    (B) Per-unit of service rental charges, to the extent that such 
charges reflect services provided to patients referred by the lessor to 
the lessee.
* * * * *
    (l) * * *
    (3) * * *
    (ii) Per-unit of service rental charges, to the extent that such 
charges reflect services provided to patients referred by the lessor to 
the lessee.
* * * * *
    (p) * * *
    (1) * * *
    (ii) * * *
    (B) Per-unit of service rental charges, to the extent that such 
charges reflect services provided to patients referred by the lessor to 
the lessee.
* * * * *

0
10. Section 411.372 is amended by revising paragraph (a) to read as 
follows:


Sec.  411.372   Procedure for submitting a request.

    (a) Format for a request. A party or parties must submit a request 
for an advisory opinion to CMS according to the instructions specified 
on the CMS Web site.
* * * * *

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

0
11. 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
12. Section 414.22 is amended by revising paragraphs (b)(5) 
introductory text and (b)(5)(i)(A) and (B) to read as follows:


Sec.  414.22   Relative value units (RVUs).

* * * * *
    (b) * * *
    (5) For services furnished in 2002 and subsequent years, the 
practice expense RVUs are based entirely on relative practice expense 
resources.
    (i) * * *
    (A) Facility practice expense RVUs. The facility practice expense 
RVUs apply to services furnished to patients in a hospital, a skilled 
nursing facility, a community mental health center, a hospice, or an 
ambulatory surgical center, or in a wholly owned or wholly operated 
entity providing preadmission services under Sec.  412.2(c)(5) of this 
chapter, or via telehealth under Sec.  410.78 of this chapter.
    (B) Nonfacility practice expense RVUs. The nonfacility practice 
expense RVUs apply to services furnished to patients in all locations 
other than those listed in paragraph (b)(5)(i)(A) of this section, but 
not limited to, a physician's office, the patient's home, a nursing 
facility, or a comprehensive outpatient rehabilitation facility (CORF).
* * * * *

[[Page 80554]]

Sec.  414.32   [Removed]

0
13. Section 414.32 is removed.

0
14. Section 414.90 is amended by adding paragraphs (j)(1)(ii), 
(j)(4)(v), (j)(7)(viii) and (k)(4)(ii) to read as follows:


Sec.  414.90   Physician Quality Reporting System (PQRS).

* * * * *
    (j) * * *
    (1) * * *
    (ii) Secondary Reporting Period for the 2017 PQRS payment 
adjustment for certain eligible professionals or group practices- 
Individual eligible professionals or group practices, who bill under 
the TIN of an ACO participant if the ACO failed to report data on 
behalf of such EPs or group practices during the previously established 
reporting period for the 2017 PQRS payment adjustment, may separately 
report during a secondary reporting period for the 2017 PQRS payment 
adjustment. The secondary reporting period for the 2017 PQRS payment 
adjustment for the affected individual eligible professionals or group 
practices is January 1, 2016 through December 31, 2016.
* * * * *
    (4) * * *
    (v) Paragraphs (j)(8)(ii), (iii), and (iv) of this section apply to 
individuals reporting using the secondary reporting period established 
under paragraph (j)(1)(ii) of this section for the 2017 PQRS payment 
adjustment.
* * * * *
    (7) * * *
    (viii) Paragraphs (j)(9)(ii), (iii), and (iv) of this section apply 
to group practices reporting using the secondary reporting period 
established under paragraph (j)(1)(ii) of this section for the 2017 
PQRS payment adjustment.
* * * * *
    (k) * * *
    (4) * * *
    (ii) Section 414.90(k)(5) applies to individuals and group 
practices reporting using the secondary reporting period established 
under paragraph (j)(1)(ii) of this section for the 2017 PQRS payment 
adjustment.
* * * * *

0
15. Section 414.94 is amended by--
0
a. Amending paragraph (b) to add the definitions of ``Applicable 
payment system'' and ``Clinical decision support mechanism'' in 
alphabetical order.
0
b. Adding paragraphs (e)(5), (g), (h), and (i).
    The additions read as follows:


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

* * * * *
    (b) * * *
    Applicable payment system means the following:
    (i) The physician fee schedule established under section 1848(b) of 
the Act;
    (ii) The prospective payment system for hospital outpatient 
department services under section 1833(t) of the Act; and
    (iii) The ambulatory surgical center payment systems under section 
1833(i) of the Act.
* * * * *
    Clinical decision support mechanism (CDSM) means the following: an 
interactive, electronic tool for use by clinicians that communicates 
AUC information to the user and assists them in making the most 
appropriate treatment decision for a patient's specific clinical 
condition. Tools may be modules within or available through certified 
EHR technology (as defined in section 1848(o)(4)) of the Act or private 
sector mechanisms independent from certified EHR technology or 
established by the Secretary.
* * * * *
    (e) * * *
    (5) Priority clinical areas include the following:
    (i) Coronary artery disease (suspected or diagnosed).
    (ii) Suspected pulmonary embolism.
    (iii) Headache (traumatic and non-traumatic).
    (iv) Hip pain.
    (v) Low back pain.
    (vi) Shoulder pain (to include suspected rotator cuff injury).
    (vii) Cancer of the lung (primary or metastatic, suspected or 
diagnosed).
    (viii) Cervical or neck pain.
* * * * *
    (g) Qualified clinical decision support mechanisms (CDSMs). 
Qualified CDSMs are those specified as such by CMS. Qualified CDSMs 
must adhere to the requirements described in paragraph (g)(1) of this 
section.
    (1) Requirements for qualification of CDSMs. A CDSM must meet all 
of the following requirements:
    (i) Make available specified applicable AUC and its related 
supporting documentation.
    (ii) Identify the appropriate use criterion consulted if the CDSM 
makes available more than one criterion relevant to a consultation for 
a patient's specific clinical scenario.
    (iii) Make available, at a minimum, specified applicable AUC that 
reasonably address common and important clinical scenarios within all 
priority clinical areas identified in paragraph (e)(5) of this section.
    (iv) Be able to incorporate specified applicable AUC from more than 
one qualified PLE.
    (v) Determines, for each consultation, the extent to which the 
applicable imaging service is consistent with specified applicable AUC.
    (vi) Generate and provide a certification or documentation at the 
time of order that documents which qualified CDSM was consulted; the 
name and national provider identifier (NPI) of the ordering 
professional that consulted the CDSM; whether the service ordered would 
adhere to specified applicable AUC; whether the service ordered would 
not adhere to specified applicable AUC; or whether the specified 
applicable AUC consulted was not applicable to the service ordered. 
Certification or documentation must:
    (A) Be generated each time an ordering professional consults a 
qualified CDSM.
    (B) Include a unique consultation identifier generated by the CDSM.
    (vii) Modifications to AUC within the CDSM must comply with the 
following timeline requirements:
    (A) Make available updated AUC content within 12 months from the 
date the qualified PLE updates AUC.
    (B) A protocol must be in place to expeditiously remove AUC 
determined by the qualified PLE to be potentially dangerous to patients 
and/or harmful if followed.
    (C) Specified applicable AUC that reasonably address common and 
important clinical scenarios within any new priority clinical area must 
be made available for consultation through the qualified CDSM within 12 
months of the priority clinical area being finalized by CMS.
    (viii) Meet privacy and security standards under applicable 
provisions of law.
    (ix) Provide to the ordering professional aggregate feedback 
regarding their consultations with specified applicable AUC in the form 
of an electronic report on at least an annual basis.
    (x) Maintain electronic storage of clinical, administrative, and 
demographic information of each unique consultation for a minimum of 6 
years.
    (xi) Comply with modification(s) to any requirements under 
paragraph (g)(1) of this section made through rulemaking within 12 
months of the effective date of the modification.
    (xii) Notify ordering professionals upon de-qualification.
    (2) Process to specify qualified CDSMs. (i) The CDSM developer must

[[Page 80555]]

submit an application to CMS for review that documents adherence to 
each of the CDSM requirements outlined in paragraph (g)(1) of this 
section;
    (ii) Receipt of applications. (A) Applications must be received by 
CMS annually by January 1 (except as stated in paragraph (g)(2)(ii)(B) 
of this section).
    (B) For CDSM applicants seeking qualification in CY 2017, 
applications must be submitted by March 1, 2017; and
    (1) Applications that document current adherence to qualified CDSM 
requirements will receive full qualification.
    (2) Applications that do not document current adherence to each 
qualified CDSM requirement, but that document how and when each 
requirement is reasonably expected to be met, will receive preliminary 
qualification.
    (3) A preliminary qualification period begins under paragraph (2) 
on June 30, 2017 and ends on the effective date of the requirements 
under sections 1834(q)(4)(A) and 1834(q)(4)(B) of the Act.
    (4) A CDSM with preliminary qualification will become fully 
qualified by the end of the preliminary qualification period, or 
earlier if CMS determines that the CDSM has demonstrated adherence to 
each qualified CDSM requirement, unless we determine that the CDSM 
fails to meet all requirements (including those requirements they 
expected to meet in paragraph (g)(2)(ii)(B)(2) of this section) by the 
end of the preliminary qualification period.
    (iii) All qualified CDSMs specified by CMS in each year will be 
included on the list of specified qualified CDSMs posted to the CMS Web 
site by June 30 of that year; and
    (iv) Qualified CDSMs are specified by CMS as such for a period of 5 
years.
    (v) Qualified CDSMs are required to re-apply during the fifth year 
after they are specified by CMS in order to maintain their status as 
qualified CDSMs. This application must be received by CMS by January 1 
of the 5th year after the most recent approval date.
    (h) Identification of non-adherence to requirements for qualified 
CDSMs. (1) If a qualified CDSM is found non-adherent to the 
requirements in paragraph (g)(1) of this section, CMS may terminate its 
qualified status or may consider this information during 
requalification.
    (i) Exceptions. Consulting and reporting requirements are not 
required for orders for applicable imaging services made by ordering 
professionals under the following circumstances:
    (1) Emergency services when provided to individuals with emergency 
medical conditions as defined in section 1867(e)(1) of the Act.
    (2) For an inpatient and for which payment is made under Medicare 
Part A.
    (3) Ordering professionals who are granted a significant hardship 
exception to the Medicare EHR Incentive Program payment adjustment for 
that year under Sec.  495.102(d)(4) of this chapter, except for those 
granted such an exception under Sec.  495.102(d)(4)(iv)(C) of this 
chapter.

0
16. Section 414.1210 is amended by revising paragraphs (b)(2)(i)(B), 
(C), (D), and (F) to read as follows:


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

* * * * *
    (b) * * *
    (2) * * *
    (i) * * *
    (B) For groups and solo practitioners that participate in a Shared 
Savings Program ACO that successfully reports quality data as required 
by the Shared Savings Program under Sec.  425.504 of this chapter, 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. For the CY 2017 and 2018 payment adjustment periods, for groups 
and solo practitioners who participate in a Shared Savings Program ACO 
that does not successfully report quality data as required by the 
Shared Savings Program under Sec.  425.504 and who meet the 
requirements to avoid the PQRS payment adjustment for CY 2018 by 
reporting to the PQRS outside the ACO, the quality composite is 
classified as ``average'' under Sec.  414.1275(b).
    (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 (or groups and solo practitioners that participate in 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 of physicians with 10 or 
more eligible professionals and equal to -2% for groups of physicians 
with two to nine eligible professionals and for physician 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 of 
physician or physician 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 +3 x 
(rather than +2 x) if the group has 10 or more eligible professionals 
or +2 x (rather than +1 x) for 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 (or groups and solo practitioners that participate in 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 +3 x 
(rather than +2 x) if the group of physicians has 10 or more eligible 
professionals, +2 x (rather than +1 x) for a physician solo 
practitioner or if the group of physicians has two to nine eligible 
professionals, or +2 x (rather than +1 x) for a solo practitioner who 
is a nonphysician eligible professional or if the group consists of 
nonphysician eligible professionals.
* * * * *
    (F) For groups and solo practitioners that participate in a Shared 
Savings Program ACO that successfully reports quality data as required 
by the Shared Savings Program under Sec.  425.504 of this chapter, 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

[[Page 80556]]

participated in the ACO during the performance period.
* * * * *

PART 417--HEALTH MAINTENANCE ORGANIZATIONS, COMPETITIVE MEDICAL 
PLANS, AND HEALTH CARE PREPAYMENT PLANS

0
17. The authority citation for part 417 continues to read as follows:

    Authority:  Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh), secs. 1301, 1306, and 1310 of the Public 
Health Service Act (42 U.S.C. 300e, 300e-5, and 300e-9), and 31 
U.S.C. 9701.


0
18. Section 417.478 is amended by adding paragraph (e) to read as 
follows:


Sec.  417.478   Requirements of other laws and regulations.

* * * * *
    (e) Sections 422.222 and 422.224 of this chapter which requires all 
providers or suppliers that are types of individuals or entities that 
can enroll in Medicare in accordance with section 1861 of the Act, to 
be enrolled in Medicare in an approved status and prohibits payment to 
providers and suppliers that are excluded or revoked. This includes 
locum tenens suppliers and, if applicable, incident-to suppliers.

0
19. Section 417.484 is amended by adding paragraph (b)(3) to read as 
follows:


Sec.  417.484   Requirement applicable to related entities.

* * * * *
    (b) * * *
    (3) All providers or suppliers that are types of individuals or 
entities that can enroll in Medicare in accordance with section 1861 of 
the Act, are enrolled in Medicare in an approved status.

PART 422--MEDICARE ADVANTAGE PROGRAM

0
20. The authority citation for part 422 continues to read as follows:

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


0
21. Section 422.1 is amended by redesignating paragraphs (a)(1)(i) 
through (x) as paragraphs (a)(1)(ii) through (xi) and adding new 
paragraph (a)(1)(i) to read as follows:


Sec.  422.1   Basis and scope.

    (a) * * *
    (1) * * *
    (i) 1106--Disclosure of information in possession of agency.
* * * * *

0
22. Section 422.204 is amended by adding paragraph (b)(5) to read as 
follows:


Sec.  422.204   Provider selection and credentialing.

* * * * *
    (b) * * *
    (5) Ensures compliance with the provider and supplier enrollment 
requirements at Sec.  422.222.

0
23. Section 422.222 is added to subpart E to read as follows:


Sec.  422.222   Enrollment of MA organization network providers and 
suppliers; first-tier, downstream, and related entities (FDRs); cost 
HMO or CMP, and demonstration and pilot programs.

    (a) Providers or suppliers that are types of individuals or 
entities that can enroll in Medicare in accordance with section 1861 of 
the Act, must be enrolled in Medicare and be in an approved status in 
Medicare in order to provide health care items or services to a 
Medicare enrollee who receives his or her Medicare benefit through an 
MA organization. This requirement applies to all of the following 
providers and suppliers:
    (1) Network providers and suppliers.
    (2) First-tier, downstream, and related entities (FDR).
    (3) Providers and suppliers in Cost HMOs or CMPs, as defined in 42 
CFR part 417.
    (4) Providers and suppliers participating in demonstration 
programs.
    (5) Providers and suppliers in pilot programs.
    (6) Locum tenens suppliers.
    (7) Incident-to suppliers.
    (b) MA organizations that do not ensure that providers and 
suppliers comply with paragraph (a) of this section, may be subject to 
sanctions under Sec.  422.750 and termination under Sec.  422.510.

0
24. Section 422.224 is added to subpart E to read as follows:


Sec.  422.224   Payment to providers or suppliers excluded or revoked.

    (a) An MA organization may not pay, directly or indirectly, on any 
basis, for items or services (other than emergency and urgently needed 
services as defined in Sec.  422.113) furnished to a Medicare enrollee 
by any individual or entity that is excluded by the Office of the 
Inspector General (OIG) or is revoked from the Medicare program except 
as provided.
    (b) If an MA organization receives a request for payment by, or on 
behalf of, an individual or entity that is excluded by the OIG or is 
revoked in the Medicare program, the MA organization must notify the 
enrollee and the excluded or revoked individual or entity in writing, 
as directed by contract or other direction provided by CMS, that 
payments will not be made. Payment may not be made to, or on behalf of, 
an individual or entity that is excluded by the OIG or is revoked in 
the Medicare program.

0
25. Section 422.250 is revised to read as follows:


Sec.  422.250   Basis and scope.

    This subpart is based largely on section 1854 of the Act, but also 
includes provisions from sections 1853 and 1858 of the Act, and is also 
based on section 1106 of the Act. It sets forth the requirements for 
the Medicare Advantage bidding payment methodology, including CMS' 
calculation of benchmarks, submission of plan bids by Medicare 
Advantage (MA) organizations, establishment of beneficiary premiums and 
rebates through comparison of plan bids and benchmarks, negotiation and 
approval of bids by CMS, and the release of MA bid submission data.

0
26. Section 422.272 is added to subpart F to read as follows:


Sec.  422.272   Release of MA bid pricing data.

    (a) Terminology. For purposes of this section, the term ``MA bid 
pricing data'' means the following information that MA organizations 
must submit for each MA plan bid for the annual bid submission:
    (1) The pricing-related information described at Sec.  
422.254(a)(1); and
    (2) The information required for MSA plans, described at Sec.  
422.254(e).
    (b) Release of MA bid pricing data. Subject to paragraph (c) of 
this section and to the annual timing identified in paragraph (d) of 
this section, CMS will release to the public MA bid pricing data for MA 
plan bids accepted or approved by CMS for a contract year under Sec.  
422.256. The annual release will contain MA bid pricing data from the 
final list of MA plan bids accepted or approved by CMS for a contract 
year that is at least 5 years prior to the upcoming calendar year.
    (c) Exclusions from release of MA bid pricing data. For the purpose 
of this section, the following information is excluded from the data 
released under paragraph (b) of this section:
    (1) For an MA plan bid that includes Part D benefits, the 
information described at Sec.  422.254(b)(1)(ii), (c)(3)(ii), and 
(c)(7).
    (2) Additional information that CMS requires to verify the 
actuarial bases of

[[Page 80557]]

the bids for MA plans for the annual bid submission, as follows:
    (i) Narrative information on base period factors, manual rates, 
cost-sharing methodology, optional supplement benefits, and other 
required narratives.
    (ii) Supporting documentation.
    (3) Any information that could be used to identify Medicare 
beneficiaries or other individuals.
    (4) Bid review correspondence and reports.
    (d) Timing of data release. CMS will release MA bid pricing data as 
provided in paragraph (b) of this section on an annual basis after the 
first Monday in October.

0
27. Section 422.501 is amended by adding paragraph (c)(1)(iv) and 
revising paragraph (c)(2) to read as follows:


Sec.  422.501   Application requirements.

* * * * *
    (c) * * *
    (1) * * *
    (iv) Documentation that all providers or suppliers in the MA or MA-
PD plan that are types of individuals or entities that can enroll in 
Medicare in accordance with section 1861 of the Act, are enrolled in an 
approved status.
    (2) The authorized individual must thoroughly describe how the 
entity and MA plan meet, or will meet, all the requirements described 
in this part, including providing documentation that all providers and 
suppliers referenced in Sec.  422.222 are enrolled in Medicare in an 
approved status.
* * * * *

0
28. Section 422.504 is amended by--
0
a. Revising paragraph (a)(6).
0
b. Adding paragraph (i)(2)(v).
0
c. Revising paragraph (n).
    The revisions and addition read as follows:


Sec.  422.504   Contract provisions.

* * * * *
    (a) * * *
    (6) To comply with all applicable provider and supplier 
requirements in subpart E of this part, including provider 
certification requirements, anti-discrimination requirements, provider 
participation and consultation requirements, the prohibition on 
interference with provider advice, limits on provider indemnification, 
rules governing payments to providers, limits on physician incentive 
plans, and Medicare provider and supplier enrollment requirements.
* * * * *
    (i) * * *
    (2) * * *
    (v) They will require all of their providers and suppliers to be 
enrolled in Medicare in an approved status consistent with Sec.  
422.222.
* * * * *
    (n) Acknowledgements of CMS release of data--(1) Summary CMS 
payment data. The contract must provide that the MA organization 
acknowledges that CMS releases to the public summary reconciled CMS 
payment data after the reconciliation of Part C and Part D payments for 
the contract year as follows:
    (i) For Part C, the following data--
    (A) Average per member per month CMS payment amount for A/B 
(original Medicare) benefits for each MA plan offered, standardized to 
the 1.0 (average risk score) beneficiary.
    (B) Average per member per month CMS rebate payment amount for each 
MA plan offered (or, in the case of MSA plans, the monthly MSA deposit 
amount).
    (C) Average Part C risk score for each MA plan offered.
    (D) County level average per member per month CMS payment amount 
for each plan type in that county, weighted by enrollment and 
standardized to the 1.0 (average risk score) beneficiary in that 
county.
    (ii) For Part D plan sponsors, plan payment data in accordance with 
Sec.  423.505(o) of this subchapter.
    (2) MA bid pricing data and Part C MLR data. The contract must 
provide that the MA organization acknowledges that CMS releases to the 
public data as described at Sec. Sec.  422.272 and 422.2490.
* * * * *

0
29. Section 422.510 is amended by adding paragraph (a)(4)(xiii) to read 
as follows:


Sec.  422.510   Termination of contract by CMS.

    (a) * * *
    (4) * * *
    (xiii) Fails to meet provider and supplier enrollment requirements 
in accordance with Sec. Sec.  422.222 and 422.224.
* * * * *

0
30. Section 422.752 is amended by adding paragraph (a)(13) to read as 
follows:


Sec.  422.752   Basis for imposing intermediate sanctions and civil 
money penalties.

    (a) * * *
    (13) Fails to comply with Sec. Sec.  422.222 and 422.224, that 
requires the MA organization to ensure providers and suppliers are 
enrolled in Medicare and not make payment to excluded or revoked 
individuals or entities.
* * * * *

0
31. Section 422.2400 is revised to read as follows:


Sec.  422.2400   Basis and scope.

    This subpart is based on sections 1857(e)(4), 1860D-12(b)(3)(D), 
and 1106 of the Act, and sets forth medical loss ratio requirements for 
Medicare Advantage organizations, financial penalties and sanctions 
against MA organizations when minimum medical loss ratios are not 
achieved by MA organizations, and release of medical loss ratio data to 
entities outside of CMS.

0
32. Section 422.2490 is added to subpart X to read as follows:


Sec.  422.2490   Release of Part C MLR data.

    (a) Terminology. Subject to the exclusions in paragraph (b) of this 
section, Part C MLR data consists of the information contained in 
reports submitted under Sec.  422.2460.
    (b) Exclusions from Part C MLR data. For the purpose of this 
section, the following items are excluded from Part C MLR data:
    (1) Narrative descriptions that MA organizations submit to support 
the information reported to CMS pursuant to the reporting requirements 
at Sec.  422.2460, such as descriptions of expense allocation methods.
    (2) Information that is reported at the plan level, such as the 
number of member months associated with each plan under a contract, 
including information submitted for a contract consisting of only one 
plan.
    (3) Any information that could be used to identify Medicare 
beneficiaries or other individuals.
    (4) MLR review correspondence.
    (5) Any information for a contract for those contract years for 
which the contract is determined to be non-credible, as defined in 
accordance with Sec.  422.2440(d).
    (c) Data release. CMS releases to the public Part C MLR data, for 
each contract for each contract year, no earlier than 18 months after 
the end of the applicable contract year.

PART 423--VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT

0
33. The authority citation for part 423 continues to read as follows:

    Authority:  Sections 1102, 1106, 1860D-1 through 1860D-42, and 
1871 of the Social Security Act (42 U.S.C. 1302, 1306, 1395w-101 
through 1395w-152, and 1395hh).

0
34. Section 423.505 is amended by revising paragraph (o) to read as 
follows:


Sec.  423.505   Contract provisions.

* * * * *
    (o) Acknowledgements of CMS release of data--(1) Summary CMS 
payment data. The contract must provide that the

[[Page 80558]]

Part D sponsor acknowledges that CMS releases to the public summary 
reconciled Part D payment data after the reconciliation of Part D 
payments for the contract year as follows:
    (i) The average per member per month Part D direct subsidy 
standardized to the 1.0 (average risk score) beneficiary for each Part 
D plan offered.
    (ii) The average Part D risk score for each Part D plan offered.
    (iii) The average per member per month Part D plan low-income cost 
sharing subsidy for each Part D plan offered.
    (iv) The average per member per month Part D Federal reinsurance 
subsidy for each Part D plan offered.
    (v) The actual Part D reconciliation payment data summarized at the 
Parent Organization level including breakouts of risk sharing, 
reinsurance, and low income cost sharing reconciliation amounts.
    (2) Part D MLR data. The contract must provide that the Part D 
sponsor acknowledges that CMS releases to the public data as described 
at Sec.  423.2490.
* * * * *

0
35. Section 423.2400 is revised to read as follows:


Sec.  423.2400   Basis and scope.

    This subpart is based on sections 1857(e)(4), 1860D-12(b)(3)(D), 
and 1106 of the Act, and sets forth medical loss ratio requirements for 
Part D sponsors, financial penalties and sanctions against Part D 
sponsors when minimum medical loss ratios are not achieved by Part D 
sponsors and release of medical loss ratio data to entities outside of 
CMS.

0
36. Section 423.2490 is added to subpart X to read as follows:


Sec.  423.2490   Release of Part D MLR data.

    (a) Terminology. Subject to the exclusions in paragraph (b) of this 
section, Part D MLR data consists of the information contained in 
reports submitted under Sec.  423.2460.
    (b) Exclusions from Part D MLR data. For the purpose of this 
section, the following items are excluded from Part D MLR data:
    (1) Narrative descriptions that Part D sponsors submit to support 
the information reported to CMS pursuant to the reporting requirements 
at Sec.  423.2460, such as descriptions of expense allocation methods.
    (2) Information that is reported at the plan level, such as the 
number of member months associated with each plan under a contract, 
including information submitted for a contract consisting of only one 
plan.
    (3) Any information that could be used to identify Medicare 
beneficiaries or other individuals.
    (4) MLR review correspondence.
    (5) Any information for a contract for those contract years for 
which the contract is determined to be non-credible, as defined in 
accordance with Sec.  423.2440(d).
    (c) Data release. CMS releases to the public Part D MLR data, for 
each contract for each contract year, no earlier than 18 months after 
the end of the applicable contract year.

PART 424--CONDITIONS FOR MEDICARE PAYMENT

0
37. The authority citation for part 424 continues to read as follows:

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


0
38. Section 424.59 is added to subpart D to read as follows:


Sec.  424.59   Requirements for Medicare diabetes prevention program 
suppliers.

    (a) Conditions for enrollment. An entity may enroll as an MDPP 
supplier if it satisfies all of the following criteria and meets all 
other applicable Medicare enrollment requirements:
    (1) At the time of enrollment has either preliminary or full CDC 
DPRP recognition.
    (2) Has obtained and maintains an active and valid TIN and NPI at 
the organizational level.
    (3) Has passed application screening at a high categorical risk 
level per Sec.  424.518(c).
    (4) All coaches who will be furnishing MDPP services on the 
entity's behalf have obtained and maintain active and valid NPIs.
    (5) Submits a roster of all coaches who will be furnishing MDPP 
services on the entity's behalf that includes the coaches' first and 
last names, date of birth, SSN, and NPI.
    (b) Documentation retention and provision requirements. An MDPP 
supplier must maintain all documentation in accordance with Sec.  
424.516(f) and all other federal and state laws. The MDPP supplier must 
submit any documentation requested by the government or a contractor to 
substantiate the attestations or claims submitted for payment under the 
Medicare program.
    (1) The records must contain documentation of the services 
furnished including evidence of the beneficiary's eligibility, specific 
session topics attended, the NPI of the coach who furnished the session 
attended, the date and place of service of sessions attended, and 
weight.
    (2) MDPP suppliers are required to maintain and handle any 
beneficiary PII and PHI in compliance with HIPAA, other applicable 
privacy laws and CMS standards.
    (3) The MDPP supplier must maintain a crosswalk between the 
beneficiary identifiers submitted to CMS for billing and the 
beneficiary identifiers submitted to CDC for beneficiary level-clinical 
data.
    (4) The records must include an attestation from the supplier that 
the MDPP eligible beneficiary for which it is submitting a claim:
    (i) Has attended 1, 4 or 9 core sessions, or
    (ii) Has achieved the required minimum weight loss percentage 
specified in Sec.  410.79 of this chapter, or
    (iii) Has achieved maintenance of weight loss and attended core 
maintenance sessions, or
    (iv) Has achieved maintenance of weight loss and attended ongoing 
maintenance sessions.
    (c) Conditions for payment of claims for MDPP services furnished. 
An MDPP supplier must meet all of the following requirements in order 
to receive payment for claims made for MDPP services furnished:
    (1) Establishes and maintains all enrollment and program 
requirements under Title 42.
    (2) Submits attestation as specified in paragraph (b) of this 
section.
    (d) Revocation of MDPP supplier enrollment. An MDPP supplier is 
subject to revocation of its MDPP supplier enrollment if:
    (1) It loses its CDC DPRP recognition or withdraws from seeking CDC 
DPRP recognition.
    (2) One of the revocation reasons specified in Sec.  424.535 
applies.
    (e) Procedures for revoking or denying MDPP supplier enrollment. 
(1) MDPP suppliers are subject to the enrollment regulations set forth 
in subpart P of this part.
    (2) An MDPP supplier that has had its MDPP supplier enrollment 
revoked may:
    (i) Become eligible to bill for MDPP services again if it reapplies 
for CDC DPRP recognition, successfully achieves preliminary CDC DPRP 
recognition, and enrolls again Medicare as an MDPP supplier subject to 
paragraph (a) of this section.
    (ii) Appeal in accordance with the procedures specified in 42 CFR 
part 405, subpart H, 42 CFR part 424, and 42 CFR part 498. References 
to suppliers in these sections apply to MDPP suppliers.

[[Page 80559]]

PART 425--MEDICARE SHARED SAVINGS PROGRAM

0
39. Authority: Secs. 1102, 1106, 1871, and 1899 of the Social Security 
Act (42 U.S.C. 1302, 1306, 1395hh, and 1395jjj).

0
40. Section 425.110 is amended by revising paragraph (b)(1) to read as 
follows:


Sec.  425.110   Number of ACO professionals and beneficiaries.

* * * * *
    (b) * * *
    (1) While under the CAP, the ACO remains eligible for shared 
savings and losses.
    (i) For ACOs with a variable MSR and MLR (if applicable), the MSR 
and MLR (if applicable) will be set at a level consistent with the 
number of assigned beneficiaries.
    (ii) For ACOs with a fixed MSR/MLR, the MSR/MLR will remain fixed 
at the level consistent with the choice of MSR and MLR that the ACO 
made at the start of the agreement period.
* * * * *


Sec.  425.204   [Amended]

0
41. Sec.  425.204 is amended by--
0
a. Amending paragraph (g) heading to remove the phrase ``and acquired 
Medicare-enrolled TINs'' and adding in its place the phrase ``and 
acquired entities' TINs''.
0
b. Amending paragraph (g) introductory text to remove the phrase 
``claims billed by Medicare-enrolled entities' TINs that'' and adding 
in its place the phrase ``claims billed under the TINs of entities 
that''.
0
 c. Amending paragraph (g)(1) introductory text to remove the phrase 
``an acquired Medicare-enrolled entity's TIN'' and adding in its place 
the phrase ``an acquired entity's TIN''.
0
d. Amending paragraph (g)(1)(i) to remove the phrase ``the acquired 
entity's Medicare-enrolled TIN'' and adding in its place the phrase 
``the acquired entity's TIN''
0
e. Amending paragraph (g)(2)(i)(A) to remove the phrase ``Identifies by 
Medicare-enrolled TIN'' and adding in its place the phrase ``Identifies 
by TIN''.


Sec.  425.316   [Amended]

0
42. Amend 425.316--
0
a. In paragraph (c)(1), by removing the phrase ``minimum attainment 
level in one or more domains as determined under Sec.  425.502 and may 
be subject to a CAP. CMS, may forgo the issuance'' and adding in its 
place the phrase ``minimum attainment level on at least 70 percent of 
the measures, as determined under Sec.  425.502, in one or more domains 
and may be subject to a CAP. CMS may forgo the issuance''.
0
b. In paragraph (c)(2) by removing the phrase ``quality performance 
standards'' and adding in its place the phrase ``quality performance 
standard''.

0
43. Section 425.402 is amended by--
0
a. In paragraph (b) introductory text, removing the phrase 
``beneficiaries to an ACO:'' and adding in its place the phrase 
``beneficiaries to an ACO based on available claims information:''
0
b. Adding paragraph (e).
    The addition reads as follows:


Sec.  425.402   Basic assignment methodology.

* * * * *
    (e) For performance year 2018 and subsequent performance years, if 
a system is available to allow a beneficiary to designate a provider or 
supplier as responsible for coordinating their overall care and for CMS 
to process the designation electronically, CMS will supplement the 
claims-based assignment methodology described in this section with 
information provided by beneficiaries regarding the provider or 
supplier they consider responsible for coordinating their overall care. 
Such designations must be made in the form and manner and by a deadline 
determined by CMS.
    (1) Notwithstanding the assignment methodology under paragraph (b) 
of this section, beneficiaries who designate an ACO professional 
participating in an ACO as responsible for coordinating their overall 
care are prospectively assigned to that ACO, regardless of track, 
annually at the beginning of each benchmark and performance year based 
on available data at the time assignment lists are determined for the 
benchmark and performance year.
    (2) Beneficiaries will be added to the ACO's list of assigned 
beneficiaries if all of the following conditions are satisfied:
    (i) The beneficiary must have had at least one primary care service 
during the assignment window as defined under Sec.  425.20 with a 
physician who is an ACO professional in the ACO who is a primary care 
physician as defined under Sec.  425.20 or who has one of the primary 
specialty designations included in paragraph (c) of this section.
    (ii) The beneficiary meets the eligibility criteria established at 
Sec.  425.401(a) and must not be excluded by the criteria at Sec.  
425.401(b). The exclusion criteria at Sec.  425.401(b) apply for 
purposes of determining beneficiary eligibility for alignment to ACOs 
under all tracks based on the beneficiary's designation of an ACO 
professional as responsible for coordinating their overall care under 
paragraph (e) of this section.
    (iii) The beneficiary must have designated an ACO professional who 
is a primary care physician as defined at Sec.  425.20, a physician 
with a specialty designation included at paragraph (c) of this section, 
or a nurse practitioner, physician assistant, or clinical nurse 
specialist as responsible for coordinating their overall care.
    (iv) If a beneficiary has designated a provider or supplier outside 
the ACO who is a primary care physician as defined at Sec.  425.20, a 
physician with a specialty designation included at paragraph (c) of 
this section, or a nurse practitioner, physician assistant, or clinical 
nurse specialist, as responsible for coordinating their overall care, 
the beneficiary will not be added to the ACO's list of assigned 
beneficiaries for a performance year under the assignment methodology 
in paragraph (b) of this section.
    (3) The ACO, ACO participants, ACO providers/suppliers, ACO 
professionals, and other individuals or entities performing functions 
and services related to ACO activities are prohibited from providing or 
offering gifts or other remuneration to Medicare beneficiaries as 
inducements for influencing a Medicare beneficiary's decision to 
designate or not to designate an ACO professional under paragraph (e) 
of this section. The ACO, ACO participants, ACO providers/suppliers, 
ACO professionals, and other individuals or entities performing 
functions and services related to ACO activities must not, directly or 
indirectly, commit any act or omission, nor adopt any policy that 
coerces or otherwise influences a Medicare beneficiary's decision to 
designate or not to designate an ACO professional as responsible for 
coordinating their overall care under paragraph (e) of this section, 
including but not limited to the following:
    (i) Offering anything of value to the Medicare beneficiary as an 
inducement to influence the Medicare beneficiary's decision to 
designate or not to designate an ACO professional as responsible for 
coordinating their overall care under paragraph (e) of this section. 
Any items or services provided in violation of paragraph (e)(3) will 
not be considered to have a reasonable connection to the medical care 
of the beneficiary, as required under Sec.  425.304(a)(2).
    (ii) Withholding or threatening to withhold medical services or 
limiting or threatening to limit access to care.

0
44. Section 425.500 is amended by revising paragraphs (e)(2) and (3) to 
read as follows:

[[Page 80560]]

Sec.  425.500   Measures to assess the quality of care furnished by an 
ACO.

* * * * *
    (e) * * *
    (2) If, at the conclusion of the audit process the overall audit 
match rate between the quality data reported and the medical records 
provided under paragraph (e)(1) of this section is less than 90 
percent, absent unusual circumstances, CMS will adjust the ACO's 
overall quality score proportional to the ACO's audit performance.
    (3) If, at the conclusion of the audit process CMS determines there 
is an audit match rate of less than 90 percent, the ACO may be required 
to submit a CAP under Sec.  425.216 for CMS approval.
* * * * *

0
45. Section 425.502 is amended by--
0
a. Revising paragraph (a) introductory text.
0
b. In paragraph (a)(1), removing the phrase ``period, CMS, CMS 
defines'' and adding in its place the phrase ``period, CMS defines''.
0
c. In paragraphs (a)(2) and (3), removing the phrase ``level of certain 
measures'' and adding in its place ``level of all measures''.
0
d. In paragraph (a)(4), removing the phrases ``The quality performance 
standard for a newly'' and ``periods, the quality performance standard 
for the measure'' and adding in their place the phrases ``A newly'' and 
``periods, the measure'', respectively.
0
e. In paragraph (b)(2)(ii), removing the phrase ``95 percentt'' and 
adding in its place the phrase ``95 percent''.
0
f. Revising paragraph (b)(3).
0
g. In paragraph (c)(2), removing the phrase ``level for a measure'' and 
adding in its place the phrase ``level for a pay-for-performance 
measure''.
0
h. Adding paragraph (c)(5).
0
i. In paragraph (d) heading, removing the phrase ``quality performance 
requirements'' and adding in its place the phrase ``quality 
requirements''.
0
j. In paragraph (d)(1) introductory text, removing the phrase 
``individual quality performance standard measures'' and adding in its 
place the phrase ``individual measures''.
0
k. In paragraph (d)(2) introductory text, removing the phrase ``quality 
performance requirements'' and adding in its place the phrase ``quality 
requirements''.
0
l. Revising paragraph (d)(2)(ii).
    The revisions and addition read as follows:


Sec.  425.502   Calculating the ACO quality performance score.

    (a) Establishing a quality performance standard. CMS designates the 
quality performance standard in each performance year. The quality 
performance standard is the overall standard the ACO must meet in order 
to be eligible for shared savings.
* * * * *
    (b) * * *
    (3) The minimum attainment level for pay for performance measures 
is set at 30 percent or the 30th percentile of the performance 
benchmark. The minimum attainment level for pay for reporting measures 
is set at the level of complete and accurate reporting.
* * * * *
    (c) * * *
    (5) Performance equal to or greater than the minimum attainment 
level for pay-for-reporting measures will receive the maximum available 
points.
    (d) * * *
    (2) * * *
    (ii) CMS may take the compliance actions described in Sec.  425.216 
for ACOs exhibiting poor performance on a domain, as determined by CMS 
under Sec.  425.316.
* * * * *

0
46. Section 425.504 is amended by--
0
a. Amending paragraph (c) to remove the phrase ``for 2016 and 
subsequent years'' everywhere it appears and adding in its place the 
phrase ``for 2016''.
0
b. Redesignating paragraph (d) as paragraph (c)(5).
0
c. Adding new paragraph (d).
    The addition reads as follows:


Sec.  425.504   Incorporating reporting requirements related to the 
Physician Quality Reporting System Incentive and Payment Adjustment.

* * * * *
    (d) Physician Quality Reporting System payment adjustment for 2017 
and 2018. (1) ACOs, on behalf of eligible professionals who bill under 
the TIN of an ACO participant, must submit all of the ACO GPRO measures 
determined under Sec.  425.500 using a CMS web interface, to 
satisfactorily report on behalf of their eligible professionals for 
purposes of the Physician Quality Reporting System payment adjustment 
under the Shared Savings Program for 2017 and 2018.
    (2) Eligible professionals who bill under the TIN of an ACO 
participant within an ACO participate under their ACO participant TIN 
as a group practice under the Physician Quality Reporting System Group 
Practice Reporting Option of the Shared Savings Program for purposes of 
the Physician Quality Reporting System payment adjustment under the 
Shared Savings Program for 2017 and 2018.
    (3) If an ACO, on behalf of eligible professionals who bill under 
the TIN of an ACO participant, does not satisfactorily report for 
purposes of the Physician Quality Reporting System payment adjustment 
for 2017 or 2018, each eligible professional who bills under the TIN of 
an ACO participant will receive a payment adjustment, as described in 
Sec.  414.90(e) of this chapter, unless such eligible professionals 
have reported quality measures apart from the ACO in the form and 
manner required by the Physician Quality Reporting System.
    (4) For eligible professionals subject to the Physician Quality 
Reporting System payment adjustment under the Medicare Shared Savings 
Program for 2017 or 2018, the Medicare Part B Physician Fee Schedule 
amount for covered professional services furnished during the program 
year is equal to the applicable percent of the Medicare Part B 
Physician Fee Schedule amount that would otherwise apply to such 
services under section 1848 of the Act, as described in Sec.  414.90(e) 
of this chapter.
    (5) The reporting period for a year is the calendar year from 
January 1 through December 31 that occurs 2 years prior to the program 
year in which the payment adjustment is applied, unless otherwise 
specified by CMS under the Physician Quality Reporting System.

0
47. Section 425.506 is amended by--
0
a. Revising the section heading.
0
b. Amending paragraph (d) introductory text to remove the phrase 
``Eligible professionals participating in an ACO'' and adding in its 
place the phrase ``Through reporting period 2016, eligible 
professionals participating in an ACO''
0
c. Adding paragraph (e).
    The revision and addition read as follows:


Sec.  425.506   Incorporating reporting requirements related to 
adoption of certified electronic health record technology.

* * * * *
    (e) For 2017 and subsequent years, CMS will annually assess the 
degree of use of certified EHR technology by eligible clinicians 
billing through the TINs of ACO participants for purposes of meeting 
the CEHRT criterion necessary for Advanced Alternative Payment Models 
under the Quality Payment Program.
    (1) During years in which the measure is designated as pay for 
reporting, in order to demonstrate complete and accurate reporting, at 
least one eligible clinician billing through the TIN of an ACO 
participant must meet the reporting requirements under the Advancing 
Clinical Information category under the Quality Payment Program.

[[Page 80561]]

    (2) During years in which the measure is designated as pay for 
performance, the quality measure regarding EHR adoption will be 
measured based on a sliding scale.

0
48. Section 425.508 is added to subpart F to read as follows:


Sec.  425.508   Incorporating quality reporting requirements related to 
the Quality Payment Program.

    (a) For 2017 and subsequent reporting years. ACOs, on behalf of 
eligible clinicians who bill under the TIN of an ACO participant, must 
submit all of the CMS web interface measures determined under Sec.  
425.500 to satisfactorily report on behalf of their eligible clinicians 
for purposes of the quality performance category of the Quality Payment 
Program.
    (b) [Reserved]

0
49. Section 425.612 is amended by--
0
a. Amending paragraph (a)(1) introductory text to remove the phrase 
``ACOs participating in Track 3 that receive otherwise'' and adding in 
its place the phrase ``ACOs participating in Track 3, and as provided 
in paragraph (a)(1)(iv) of this section during a grace period for 
beneficiaries excluded from prospective assignment to a Track 3 ACO, 
who receive otherwise''.
0
b. Adding paragraphs (a)(1)(iv), (a)(1)(v), and (d)(4).
    The additions read as follows:


Sec.  425.612   Waivers of payment rules or other Medicare 
requirements.

    (a) * * *
    (1) * * *
    (iv) For a beneficiary who was included on the prospective 
assignment list under Sec.  425.400(a)(3) for a performance year for a 
Track 3 ACO for which a waiver of the SNF 3-day rule has been approved 
under paragraph (a)(1) of this section, but who was subsequently 
excluded from the ACO's prospective assignment list, CMS makes payment 
for SNF services furnished to the beneficiary by a SNF affiliate if the 
following conditions are met:
    (A) The beneficiary was prospectively assigned to the ACO at the 
beginning of the applicable performance year but was excluded in the 
most recent quarterly update to the prospective assignment list under 
Sec.  425.401(b).
    (B) The SNF services are furnished to a beneficiary who was 
admitted to a SNF affiliate within 90 days following the date that CMS 
delivers the quarterly exclusion list to the ACO.
    (C) But for the beneficiary's exclusion from the ACO's prospective 
assignment list, CMS would have made payment to the SNF affiliate for 
such services under the waiver under paragraph (a)(1) of this section.
    (v) The following beneficiary protections apply when a beneficiary 
receives SNF services without a prior 3-day inpatient hospital stay 
from a SNF affiliate that intended to provide services pursuant to a 
SNF 3-day rule waiver under paragraph (a)(1) of this section, but the 
beneficiary was not prospectively assigned to the ACO and was not in 
the 90 day grace period under paragraph (a)(1)(iv) of this section. The 
SNF affiliate services must be non-covered only because the SNF 
affiliate stay was not preceded by a qualifying hospital stay under 
section 1861(i) of the Act.
    (A) A SNF is presumed to intend to provide services pursuant to the 
SNF 3-day rule waiver under paragraph (a)(1) of this section if the SNF 
submitting the claim is a SNF affiliate of an ACO for which such a 
waiver has been approved.
    (B) CMS makes no payments for SNF services to a SNF affiliate of an 
ACO for which a waiver of the SNF 3-day rule has been approved when the 
SNF affiliate admits a FFS beneficiary who was never prospectively 
assigned to the ACO or was prospectively assigned but was later 
excluded and the 90 day grace period under paragraph (a)(1)(iv) of this 
section has lapsed.
    (C) In the event that CMS makes no payment for SNF services 
furnished by a SNF affiliate as a result of paragraph (a)(1)(v)(B) of 
this section and the only reason the claim was non-covered is due to 
the lack of a qualifying inpatient stay, the following beneficiary 
protections will apply:
    (1) The SNF must not charge the beneficiary for the expenses 
incurred for such services; and
    (2) The SNF must return to the beneficiary any monies collected for 
such services; and
    (3) The ACO may be required to submit a corrective action plan 
under Sec.  425.216(b) for CMS approval. If after being given an 
opportunity to act upon the corrective action plan the ACO fails to 
come into compliance with the requirements of paragraph (a)(1), 
approval for the SNF 3-day rule waiver under this section will be 
terminated as provided under paragraph (d) of this section.
* * * * *
    (d) * * *
    (4) CMS reserves the right to take compliance action, including 
termination, against an ACO for noncompliance with program rules, 
including misuse of a waiver under this section, as specified at 
Sec. Sec.  425.216 and 425.218.
* * * * *

PART 460--PROGRAMS OF ALL-INCLUSIVE CARE FOR THE ELDERLY (PACE)

0
50. The authority citation for part 460 continues to read as follows:

    Authority:  Secs. 1102, 1871, 1894(f), and 1934(f) of the Social 
Security Act (42 U.S.C. 1302, 1395, 1395eee(f), and 1396u-4(f)).


0
51. Section 460.40 is amended by adding paragraph (j) to read as 
follows:


Sec.  460.40   Violations for which CMS may impose sanctions.

* * * * *
    (j) Employs or contracts with any provider or supplier that is a 
type of individual or entity that can enroll in Medicare in accordance 
with section 1861 of the Act, that is not enrolled in Medicare in an 
approved status.

0
52. Section 460.50 is amended by revising paragraph (b)(1)(ii) to read 
as follows:


Sec.  460.50   Termination of PACE program agreement.

* * * * *
    (b) * * *
    (1) * * *
    (ii) The PACE organization failed to comply substantially with 
conditions for a PACE program or PACE organization under this part, or 
with terms of its PACE program agreement, including employing or 
contracting with any provider or supplier that are types of individuals 
or entities that can enroll in Medicare in accordance with section 1861 
of the Act, that is not enrolled in Medicare in an approved status.
* * * * *

0
53. Section 460.68 is amended by adding paragraph (a)(4) to read as 
follows:


Sec.  460.68   Program integrity.

    (a) * * *
    (4) That are not enrolled in Medicare in an approved status, if the 
providers or suppliers are of the types of individuals or entities that 
can enroll in Medicare in accordance with section 1861 of the Act.
* * * * *

0
54. Section 460.70 is amended by adding paragraph (b)(1)(iv) to read as 
follows:


Sec.  460.70   Contracted services.

* * * * *
    (b) * * *
    (1) * * *
    (iv) Providers or suppliers that are types of individuals or 
entities that can enroll in Medicare in accordance with section 1861 of 
the Act, must be enrolled in Medicare and be in an

[[Page 80562]]

approved status in Medicare in order to provide health care items or 
services to a PACE participant who receives his or her Medicare benefit 
through a PACE organization.
* * * * *

0
58. Section 460.71 is amended by adding paragraph (b)(7) to read as 
follows:


Sec.  460.71   Oversight of direct participant care.

* * * * *
    (b) * * *
    (7) Providers or suppliers that are types of individuals or 
entities that can enroll in Medicare in accordance with section 1861 of 
the Act, must be enrolled in Medicare and be in an approved status in 
Medicare in order to provide health care items or services to a PACE 
participant who receives his or her Medicare benefit through a PACE 
organization.

0
59. Section 460.86 is added to subpart E to read as follows:


Sec.  460.86   Payment to providers or suppliers excluded or revoked.

    (a) A PACE organization may not pay, directly or indirectly, on any 
basis, for items or services (other than emergency or urgently needed 
services as defined in Sec.  460.100) furnished to a Medicare enrollee 
by any individual or entity that is excluded by the Office of the 
Inspector General (OIG) or is revoked from the Medicare program.
    (b) If a PACE organization receives a request for payment by, or on 
behalf of, an individual or entity that is excluded by the OIG or is 
revoked in the Medicare program, the PACE organization must notify the 
enrollee and the excluded or revoked individual or entity in writing, 
as directed by contract or other direction provided by CMS, that 
payments will not be made. Payment may not be made to, or on behalf of, 
an individual or entity that is exclude by the OIG or is revoked in the 
Medicare program.

    Dated: October 24, 2016.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
    Dated: October 27, 2016.
Sylvia M. Burwell,
Secretary, Department of Health and Human Services.
[FR Doc. 2016-26668 Filed 11-2-16; 4:15 pm]
 BILLING CODE 4120-01-P