[Federal Register Volume 82, Number 219 (Wednesday, November 15, 2017)]
[Rules and Regulations]
[Pages 52976-53371]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-23953]



[[Page 52975]]

Vol. 82

Wednesday,

No. 219

November 15, 2017

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, 414, et al.





Medicare Program; Revisions to Payment Policies Under the Physician Fee 
Schedule and Other Revisions to Part B for CY 2018; Medicare Shared 
Savings Program Requirements; and Medicare Diabetes Prevention Program; 
Final Rule

Federal Register / Vol. 82 , No. 219 / Wednesday, November 15, 2017 / 
Rules and Regulations

[[Page 52976]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 405, 410, 414, 424, and 425

[CMS-1676-F]
RIN 0938-AT02


Medicare Program; Revisions to Payment Policies Under the 
Physician Fee Schedule and Other Revisions to Part B for CY 2018; 
Medicare Shared Savings Program Requirements; and Medicare Diabetes 
Prevention Program

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

ACTION: Final rule.

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SUMMARY: This major final rule addresses changes to the Medicare 
physician fee schedule (PFS) and other Medicare Part B payment policies 
such as changes to the Medicare Shared Savings Program, 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 policies necessary to begin 
offering the expanded Medicare Diabetes Prevention Program model.

DATES: These regulations are effective on January 1, 2018.

FOR FURTHER INFORMATION CONTACT: Jessica Bruton, (410) 786-5991, for 
any physician payment issues not identified below.
    Lindsey Baldwin, (410) 786-1694, and Emily Yoder, (410) 786-1804, 
for issues related to telehealth services and primary care.
    Roberta Epps, (410) 786-4503, for issues related to PAMA section 
218(a) policy and transition from traditional X-ray imaging to digital 
radiography.
    Isadora Gil, (410) 786-4532, for issues related to the valuation of 
cardiovascular services, bone marrow services, surgical respiratory 
services, dermatological procedures, and payment rates for nonexcepted 
items and services furnished by nonexcepted off-campus provider-based 
departments of a hospital.
    Donta Henson, (410) 786-1947, for issues related to ophthalmology 
services.
    Jamie Hermansen, (410) 786-2064, for issues related to the 
valuation of anesthesia services.
    Tourette Jackson, (410) 786-4735, for issues related to the 
valuation of musculoskeletal services, allergy and clinical immunology 
services, endocrinology services, genital surgical services, nervous 
system services, INR monitoring services, injections and infusions, and 
chemotherapy services.
    Ann Marshall, (410) 786-3059, for issues related to primary care, 
chronic care management (CCM), and evaluation and management (E/M) 
services.
    Geri Mondowney, (410) 786-1172, for issues related to malpractice 
RVUs.
    Patrick Sartini, (410) 786-9252, for issues related to the 
valuation of imaging services and malpractice RVUs.
    Michael Soracoe, (410) 786-6312, for issues related to the practice 
expense methodology, impacts, conversion factor, and valuation of 
pathology and surgical procedures.
    Pamela West, (410) 786-2302, for issues related to therapy 
services.
    Corinne Axelrod, (410) 786-5620, for issues related to rural health 
clinics or federally qualified health centers.
    Felicia Eggleston, (410) 786-9287, for issues related to DME 
infusion drugs.
    Rasheeda Johnson, (410) 786-3434, for issues related to initial 
data collection and reporting periods for the clinical laboratory fee 
schedule.
    Edmund Kasaitis, (410) 786-0477, for issues related to biosimilars.
    JoAnna Baldwin, (410) 786-7205, or Sarah Fulton, (410) 786-2749, 
for issues related to appropriate use criteria for advanced diagnostic 
imaging services.
    Crystal Kellam, (410) 786-7970, for issues related to physician 
quality reporting system.
    Alesia Hovatter, (410) 786-6861, for issues related to Physician 
Compare.
    Alexandra Mugge, (410) 786-4457, for issues related to the EHR 
incentive program.
    Kari Vandegrift, (410) 786-4008, or ACO@cms.hhs.gov, 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.
    Wilfred Agbenyikey, (410) 786-4399, for issues related to MACRA 
patient relationship categories and codes.
    Carlye Burd, (410) 786-1972, or Albert Wesley, (410) 786-4204, for 
issues related to the Medicare Diabetes Prevention Program expanded 
model.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Executive Summary
II. Provisions of the Proposed Rule and Analysis of and Responses to 
Public Comments
    A. Background
    B. Determination of Practice Expense (PE) Relative Value Units 
(RVUs)
    C. Determination of Malpractice Relative Value Units (RVUs)
    D. Medicare Telehealth Services
    E. Potentially Misvalued Services Under the PFS
    F. Payment Incentive for the Transition from Traditional X-Ray 
Imaging to Digital Radiography and Other Imaging Services
    G. Establishment of Payment Rates Under the Medicare PFS for 
Nonexcepted Items and Services Furnished by Nonexcepted Off-Campus 
Provider-Based Departments of a Hospital
    H. Valuation of Specific Codes
    I. Evaluation & Management (E/M) Guidelines and Care Management 
Services
    J. Therapy Caps
III. Other Provisions of the Proposed Rule
    A. New Care Coordination Services and Payment for Rural Health 
Clinics (RHCs) and Federally Qualified Health Centers (FQHCs)
    B. Part B Drug Payment: Infusion Drugs Furnished Through an Item 
of Durable Medical Equipment (DME)
    C. Solicitation of Public Comments on Initial Data Collection 
and Reporting Periods for Clinical Laboratory Fee Schedule
    D. Payment for Biosimilar Biological Products Under Section 
1847A of the Act
    E. Appropriate Use Criteria for Advanced Diagnostic Imaging 
Services
    F. Physician Quality Reporting System Criteria for Satisfactory 
Reporting for Individual EPs and Group Practices for the 2018 PQRS 
Payment Adjustment
    G. Clinical Quality Measurement for Eligible Professionals 
Participating in the Electronic Health Record (EHR) Incentive 
Program for 2016
    H. Medicare Shared Savings Program
    I. Value-Based Payment Modifier and Physician Feedback Program
    J. MACRA Patient Relationship Categories and Codes
    K. Changes to the Medicare Diabetes Prevention Program (MDPP) 
Expanded Model
    L. Physician Self-Referral Law: Annual Update to the List of 
CPT/HCPCS Codes
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
ABLE Achieving a Better Life Experience Act of 2014 (Pub. L. 113-
295)
ACI Advancing Care Information
ACO Accountable care organization
AMA American Medical Association
APM Alternative Payment Model
ASC Ambulatory surgical center
ATA American Telehealth Association
ATRA American Taxpayer Relief Act (Pub. L. 112-240)
AUC Appropriate Use Criteria

[[Page 52977]]

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)
BHI Behavioral health integration
BLS Bureau of Labor Statistics
CAD Coronary artery disease
CAH Critical access hospital
CBSA Core-Based Statistical Area
CCM Chronic care management
CDSM Clinical Decision Support Mechanism
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
CoCM Collaborative care model
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)
MIPS Merit-based Incentive Payment System
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
PLE Provider-led Entity
PLI Professional Liability Insurance
PMA Premarket approval
PMH-NP Psychiatric mental health nurse practitioner
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 
Scale 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 on the CMS Web site at 
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. Click on the 
link on the left side of the screen titled, ``PFS Federal Regulations 
Notices'' for a chronological list of PFS Federal Register and other 
related documents. For the CY 2018 PFS Final Rule, refer to item CMS-
1676-F. Readers with questions related to accessing any of the Addenda 
or other supporting documents referenced in this final 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 2016 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.

[[Page 52978]]

I. Executive Summary

A. Purpose

    This final rule makes payment and policy changes under the Medicare 
Physician Fee Schedule (PFS) and implements required statutory changes 
under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) 
(Pub. L. 114-10), Achieving a Better Life Experience Act of 2014 (ABLE) 
(Pub. L. 113-295), Protecting Access to Medicare Act of 2014 (PAMA) 
(Pub. L. 113-93), and the Consolidated Appropriations Act of 2016 (Pub. 
L. 114-113). This final rule also makes changes to payment policy and 
other related policies for Medicare Part B, Part D, and Medicare 
Advantage.
1. Summary of the Major Provisions
    Section 1848 of the Social Security Act (the Act) requires us to 
establish payments under the PFS based on national uniform relative 
value units (RVUs) that account for the relative resources used in 
furnishing a service. The 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 2018 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 discussions and finalized policies regarding:
     Potentially Misvalued Codes.
     Telehealth Services.
     Establishing Values for New, Revised, and Misvalued Codes.
     Establishing Payment Rates under the PFS for Nonexcepted 
Items and Services Furnished by Nonexcepted Off-Campus Provider-Based 
Departments of a Hospital.
     Evaluation & Management (E/M) Guidelines and Care 
Management Services.
     Care Coordination Services and Payment for Rural Health 
Clinics (RHCs) and Federally Qualified Health Centers (FQHCs).
     Part B Drug Payment: Infusion Drugs Furnished Through an 
Item of Durable Medical Equipment (DME).
     Solicitation of Public Comments on Initial Data Collection 
and Reporting Periods for Clinical Laboratory Fee Schedule.
     Payment for Biosimilar Biological Products under Section 
1847A of the Act.
     Appropriate Use Criteria for Advanced Diagnostic Imaging 
Services.
     PQRS Criteria for Satisfactory Reporting for Individual 
EPs and Group Practices for the 2018 PQRS Payment Adjustment.
     Clinical Quality Measurement for Eligible Professionals 
Participating in the Electronic Health Record (EHR) Incentive Program 
for 2016.
     Medicare Shared Savings Program.
     Value-Based Payment Modifier and the Physician Feedback 
Program.
     MACRA Patient Relationship Categories and Codes.
     Changes to the Medicare Diabetes Prevention Program (MDPP) 
Expanded Model.
     Physician Self Referral Law: Annual Update to the List of 
CPT/HCPCS Codes.
     Therapy Caps.
2. 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. We have determined that this major final rule is 
economically significant. For a detailed discussion of the economic 
impacts, see section V. of this final rule.

II. Provisions of the Final Rule, and Analysis of and Responses to 
Public Comments for PFS

A. Background

    Since January 1, 1992, Medicare has paid for physicians' services 
under section 1848 of 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 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 Scale 
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

[[Page 52979]]

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.C. 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 5-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 5-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 identify, review and adjust values for potentially 
misvalued codes.
e. Application of Budget Neutrality to Adjustments of RVUs
    As described in section V.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 do 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

[[Page 52980]]

is calculated based on a statutory formula by CMS's Office of the 
Actuary (OACT). The formula for calculating the Medicare PFS 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 CF, 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 CF 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.

B. 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 5 Year Review of Work Relative Value 
Units under the PFS and Proposed Changes to the Practice Expense 
Methodology proposed notice (71 FR 37242) and the CY 2007 PFS final 
rule with comment period (71 FR 69629).
b. Indirect Practice Expense per Hour Data
    We use survey data on indirect PEs incurred per hour worked in 
developing the indirect portion of the PE RVUs. Prior to CY 2010, we 
primarily used the PE/HR by specialty that was obtained from the AMA's 
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 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 use crosswalks for specialties 
that did not participate in the PPIS. These crosswalks have been 
generally established through notice and comment rulemaking and are 
available in the file called ``CY 2018 PFS Final Rule PE/HR'' on the 
CMS Web site under downloads for the CY 2018 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    Comment: Several commenters recommended that it was time to 
consider a new nationwide all specialty

[[Page 52981]]

PE/HR survey, given the amount of time that has passed since the last 
survey was conducted. The commenters stated that the practice of 
medicine has significantly and substantially evolved in the past decade 
and that many specialties have had extensive changes in physician 
employment models during that time. The commenters stated that 
continued use of the outdated PPIS survey leads to an inappropriate and 
inaccurate distortion of the PE RVUs for current practice.
    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 through 74247). Even when we first incorporated 
the survey data into the PE methodology beginning in CY 1999 (63 FR 
58814), many commenters 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
    We allocate the indirect costs to the code level on the basis of 
the direct costs specifically associated with a code and the greater of 
either the clinical labor costs or the work RVUs. We also incorporate 
the survey data described earlier in the PE/HR discussion (see section 
II.B.2.b of this final rule). The general approach to developing the 
indirect portion of the PE RVUs is as follows:
     For a given service, we use the direct portion of the PE 
RVUs calculated as previously described and the average percentage that 
direct costs represent of total costs (based on survey data) across the 
specialties that furnish the service to determine an initial indirect 
allocator. That is, the initial indirect allocator is calculated so 
that the direct costs equal the average percentage of direct costs of 
those specialties furnishing the service. For example, if the direct 
portion of the PE RVUs for a given service is 2.00 and direct costs, on 
average, represent 25 percent of total costs for the specialties that 
furnish 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 add the greater of the work RVUs or clinical 
labor portion of the direct portion of the PE RVUs to this initial 
indirect allocator. In our example, if this service had 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.
    Comment: One commenter requested that CMS develop nonfacility PE 
RVUs for CPT code 31255 (Nasal/sinus endoscopy, surgical; with 
ethmoidectomy, total (anterior and posterior)), stating that this would 
be consistent with the migration of many sinus surgery procedures to 
the office setting. The commenter indicated that the availability of 
new technology has transformed these services to become minimally 
invasive, and as a result, they can be safely and effectively performed 
in the office setting for many patients.
    Response: We appreciate the information provided by the commenter. 
However, we note that CPT code 31255 was reviewed by the RUC for the 
current CY 2018 rule cycle, and the RUC did not recommend any direct PE 
inputs for this code in the nonfacility setting. We welcome an ongoing 
dialogue with stakeholders regarding the direct PE inputs for this 
code, which we will take under consideration for future rulemaking. We 
also note that pricing in a particular setting does not constitute a 
coverage determination.
(4) Services With Technical Components and Professional Components
    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.)

[[Page 52982]]

(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 2018 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 in this final rule 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 CF to 
calculate a direct PE scaling adjustment to ensure that the aggregate 
pool of direct PE costs calculated in Step 3 does not vary from the 
aggregate pool of direct PE costs for the current year. Apply the 
scaling adjustment to the direct costs for each service (as calculated 
in Step 1).
    Step 5: Convert the results of Step 4 to a 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 would result in different direct PE scaling 
adjustments, but this has no effect on the final direct cost PE RVUs 
since changes in the CFs and changes in the associated direct scaling 
adjustments 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 generally use an average of the 3 most recent years of available 
Medicare claims data to determine the specialty mix assigned to each 
code. Prior to implementing that policy, we used the most recent year 
of available claims data to determine the specialty mix assigned to 
each code.
    Under either of these approaches, codes with low Medicare service 
volume require special attention since billing or enrollment 
irregularities for a given year can result in significant changes in 
specialty mix assignment. Prior to adopting the 3-year average of data, 
for low-volume services (fewer than 100 Medicare allowed services), we 
assigned the values associated with the specialty that most frequently 
reported the service in the most recent claims data (dominant 
specialty). For some time, stakeholders, including the RUC, have 
requested that we use a recommended ``expected'' specialty for all low 
volume services instead of the information contained in the claims 
data. Currently, in the development of PE RVUs we use ``expected 
specialty'' overrides for only several dozen services based on several 
code-specific policies we established in prior rulemaking. As we stated 
in the CY 2016 final rule with comment period (80 FR 70894), we hoped 
that the 3-year average would mitigate the need to use dominant or 
expected specialty instead of the specialty identified using 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 provided a first opportunity to 
determine whether service-level overrides of claims data are necessary.
    Although we believe that the use of the 3-year average of claims 
data to determine specialty mix has led to an improvement in the 
stability of PE and MP RVUs from year to year, after reviewing the RVUs 
for low volume services, we continue to see possible distortions and 
wide variability from year to year in PE and MP RVUs for low volume 
services. Several stakeholders have suggested that CMS implement 
service-level overrides based on the expected specialty in order to 
determine the specialty mix for these low volume procedures. The RUC 
previously supplied us with a list of nearly 2,000 lower volume codes 
and their suggested specialty overrides. After reviewing the finalized 
PE RVUs for the CY 2017 PFS final rule, we agree that the use of 
service-level overrides for low volume services would help mitigate 
annual fluctuations and provide greater stability in the valuation of 
these services. While the use of the 3-year average of claims data to 
determine specialty mix has helped to mitigate some of the year to year 
variability for low volume services, it has not fully mitigated what 
appear to be anomalies for many of these lower volume codes.
    Therefore, we proposed to use the most recent year of claims data 
to determine which codes are low volume for the coming year (those that 
have fewer than 100 allowed services in the Medicare claims data). For 
codes that fall into this category, instead of assigning specialty mix 
based on the specialties of the practitioners reporting the services in 
the claims data, we proposed to instead use the expected specialty that 
we identify on a list. For CY 2018, we proposed to use a list that was 
developed based on our medical review of the list most recently 
recommended by the RUC, in addition to our own proposed expected 
specialty for certain other low-volume codes for which we have 
historically used expected specialty assignments. We would display this 
list as part of the annual set of data files we make available as part 
of notice and comment rulemaking. We proposed to consider 
recommendations from the RUC and other stakeholders on changes to this 
list on an annual basis.
    We also proposed to apply these service-level overrides for both PE 
and MP, rather than one or the other category. We believe that this 
would simplify the implementation of service-level overrides for PE and 
MP, and would also address stakeholder concerns about the year-to-year 
variability for low volume services. We solicited public comment on the 
proposal to use service-level overrides to determine the specialty mix 
for low volume procedures, as well as on the proposed list of expected 
specialty overrides itself, which is largely based on the 
recommendations submitted by the RUC last year. The proposed list of 
expected specialty assignments for individual low volume services is 
available on our Web site under downloads for the CY 2018 PFS proposed 
rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-

[[Page 52983]]

Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. Services 
for which the specialty is automatically assigned based on previously 
finalized policies under our established methodology (for example, 
``always therapy'' services) would be unaffected by this proposal.
    The following is a summary of the public comments received on our 
proposal to use service-level overrides to determine the specialty mix 
for low volume procedures and our responses:
    Comment: Many commenters supported the use of the expected 
specialty assignments and urged CMS to finalize the proposal. 
Commenters stated that the proposal was consistent with a longstanding 
RUC recommendation and the use of the expected specialty assignments 
would help mitigate some of the year to year variability for low volume 
services. Commenters supported the creation of a list of these service-
level overrides and its maintenance on an annual basis, with several 
commenters stating that the RUC should review updated claims data each 
year to determine if any new codes fall below 100 claims and submit an 
expected specialty recommendation for these additional codes.
    Response: We appreciate the comments in support of the proposal. As 
we stated in the proposed rule, we will consider recommendations from 
the RUC and other stakeholders on changes to the list of expected 
specialty assignments on an annual basis.
    Comment: Several commenters made specific recommendations about the 
proposed list of expected specialty assignments for individual low 
volume services. One commenter recommended that the following CPT codes 
should be added to the list of expected specialty assignments: 
Cardiology: 33477; Cardiac surgery: 33238, 33514, 33548, 33951, 33953, 
33955, 33957, 33958, 33959, 33962, 33963, 33964, 33965, 33969, 33973, 
33985, 33987, 33988, 33989, 33991, 35271; General Surgery: 35251, 
43325; Thoracic Surgery: 32672, 33025, 33215, 43135. The same commenter 
recommended the following changes to the indicated codes on the low 
volume override list:
     CPT codes 33363 and 33364: The commenter recommended 
changing the override specialty from cardiology to cardiac surgery.
     CPT codes 33516, 33976 and 35812: The commenter 
recommended changing the override specialty from thoracic surgery to 
cardiac surgery.
     CPT codes 35311 and 35526: The commenter recommended 
changing the override specialty from vascular surgery to cardiac 
surgery.
     CPT codes 38382, 43108, 43118, 43123, 43360, 43405 and 
43425: The commenter recommended changing the override specialty from 
general surgery to thoracic surgery.
    In addition, a different commenter recommended changing the 
proposed expected specialty for CPT code 43754 from gastroenterology to 
emergency medicine.
    Response: We appreciate the submission of specific recommendations 
to the proposed list of expected specialty assignments. These 
recommendations from the commenter included newer information about the 
typical practice of these CPT codes than what we possessed when 
initially proposing the low volume services list, which was based, in 
part, upon a review that took place in CY 2016. After reviewing the 
recommendations provided by the commenters, and in light of the 
additional information supplied by the commenter about these codes, we 
are finalizing the addition of these updated recommendations to the 
list.
    Comment: Several commenters expressed concern regarding the 
treatment of existing codes with no Medicare volume (as distinct from 
low volume) reported for any given year. Under the methodology used in 
the proposed rule, these codes with no utilization data received the 
average risk factor for all physician specialties rather than the 
expected specialty assignments on the list of service-level overrides. 
The commenters recommended that the proposed list of expected specialty 
overrides be utilized for both low volume and no volume codes.
    Response: We agree with the commenters that the RVUs for services 
with no Medicare volume should be calculated in a manner that is 
consistent with services with low Medicare volume because our proposal 
was for fewer than 100 allowed services, and no-volume services would 
fit within that standard. Therefore, we are finalizing the 
recommendation from the commenters to use the proposed list of expected 
specialty overrides for both low volume and no volume codes.
    Comment: A commenter agreed with the CMS proposal that there would 
no longer be a need to apply service-level MP RVU crosswalks for new or 
revised codes in order to assign a specialty-mix risk factor. The 
commenter stated that CMS would be able to derive the specialty mix 
assumption in the first year for a new or revised code from the 
specialty mix used for purposes of ratesetting. The commenter indicated 
their support for this change to calculating MP RVUs for new or revised 
codes.
    Response: We are finalizing our proposal to remove service-level MP 
RVU crosswalks for new or revised codes, and we will instead derive the 
specialty mix assumption for the first year for a new or revised code 
from the specialty mix used for purposes of ratesetting.
    Comment: One commenter supported the CMS proposal and requested the 
use of the phrase ``Family Medicine'' for the list of expected 
specialty assignments rather than the phrase ``Family Practice'', which 
the commenter stated was a more outdated term.
    Response: Regarding the requested update to the name assigned to a 
specialty, we would direct the commenter to the standard process for 
updating specialty designations. This change would have to be made to 
the Medicare enrollment specialty and lies outside the scope of the 
proposal.
    After consideration of comments received, we are finalizing our 
proposal to use service-level overrides to determine the specialty mix 
for low volume procedures, with the modifications as discussed in this 
section. Based on comments, we are also finalizing the use of service-
level overrides to determine the specialty mix for no volume 
procedures. In addition, we are finalizing the proposed list of 
expected specialty overrides with modifications. We are finalizing the 
addition of certain CPT codes to the list and updated specialty 
assignments for certain CPT codes.
    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

[[Page 52984]]

RVUs and the clinical labor PE RVUs. We do this to recognize that, for 
the PC service, indirect PEs would be allocated using the work RVUs, 
and for the TC service, indirect PEs would 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 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 final rule.)
    Step 19: Apply the phase-in of significant RVU reductions and its 
associated adjustment. 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 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. To comply 
with section 1848(c)(7) of the Act, we adjust the PE RVUs to ensure 
that the total RVUs for all services that are not new or revised codes 
decrease by no more than 19 percent, and then apply a relativity 
adjustment to ensure that the total pool of aggregate PE RVUs remains 
relative to the pool of work and MP RVUs. For a more detailed 
description of the methodology for the phase-in of significant RVU 
changes, we refer readers to the CY 2016 PFS final rule with comment 
period (80 FR 70927 through 70931).
    Comment: One commenter stated that CMS should take a phased in 
approach to avoid any beneficiary access issues presented by the 
significant payment decreases caused by PE decreases for imaging 
services. These decreases could affect the viability of many practices 
providing these critical services as the new payment rates might create 
economic hardships for continuation of these services. The commenter 
stated that CMS should implement the RUC-recommended practice expenses 
over a phased in period to reduce the financial impact of the PE 
changes, particularly for codes with a proposed decrease of more than 
10 percent.
    Response: We agree with the commenter that there is a need to 
ensure access to patient care and mitigate the potential for economic 
hardship on the part of providers facing decreases in the valuation of 
services. We note in response to the commenter that section 1848(c)(7) 
of the Act already stipulates 19 percent as the maximum 1-year 
reduction for any service not described by a new or revised code. This 
phase-in methodology has been in use for PFS ratesetting since CY 2016.
(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.

[[Page 52985]]

 
51...........................  Medical supply company with certified
                                orthotist.
52...........................  Medical supply company with certified
                                prosthetist.
53...........................  Medical supply company with certified
                                prosthetist[dash]orthotist.
54...........................  Medical supply company not included in
                                51, 52, or 53.
55...........................  Individual certified orthotist.
56...........................  Individual certified prosthetist.
57...........................  Individual certified
                                prosthetist[dash]orthotist.
58...........................  Medical supply company with registered
                                pharmacist.
59...........................  Ambulance service supplier, e.g., private
                                ambulance companies, funeral homes, etc.
60...........................  Public health or welfare agencies.
61...........................  Voluntary health or charitable agencies.
73...........................  Mass immunization roster biller.
74...........................  Radiation therapy centers.
87...........................  All other suppliers (e.g., drug and
                                department stores).
88...........................  Unknown supplier/provider specialty.
89...........................  Certified clinical nurse specialist.
96...........................  Optician.
97...........................  Physician assistant.
A0...........................  Hospital.
A1...........................  SNF.
A2...........................  Intermediate care nursing facility.
A3...........................  Nursing facility, other.
A4...........................  HHA.
A5...........................  Pharmacy.
A6...........................  Medical supply company with respiratory
                                therapist.
A7...........................  Department store.
B2...........................  Pedorthic personnel.
B3...........................  Medical supply company with pedorthic
                                personnel.
------------------------------------------------------------------------

     Crosswalk certain low volume physician specialties: 
Crosswalk the utilization of certain specialties with relatively low 
PFS utilization to the associated specialties.
     Physical therapy utilization: Crosswalk the utilization 
associated with all physical therapy services to the specialty of 
physical therapy.
     Identify professional and technical services not 
identified under the usual TC and 26 modifiers: Flag the services that 
are PC and TC services but do not use TC and 26 modifiers (for example, 
electrocardiograms). This flag associates the PC and TC with the 
associated global code for use in creating the indirect PE RVUs. For 
example, the professional service, CPT code 93010 (Electrocardiogram, 
routine ECG with at least 12 leads; interpretation and report only), is 
associated with the global service, CPT code 93000 (Electrocardiogram, 
routine ECG with at least 12 leads; with interpretation and report).
     Payment modifiers: Payment modifiers are accounted for in 
the creation of the file consistent with current payment policy as 
implemented in claims processing. For example, services billed with the 
assistant at surgery modifier are paid 16 percent of the PFS amount for 
that service; therefore, the utilization file is modified to only 
account for 16 percent of any service that contains the assistant at 
surgery modifier. Similarly, for those services to which volume 
adjustments are made to account for the payment modifiers, time 
adjustments are applied as well. For time adjustments to surgical 
services, the intraoperative portion in the work time file is used; 
where it is not present, the intraoperative percentage from the payment 
files used by contractors to process Medicare claims is used instead. 
Where neither is available, we use the payment adjustment ratio to 
adjust the time accordingly. Table 2 details the manner in which the 
modifiers are applied.

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


[[Page 52986]]

    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:

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

Where:

minutes per year = maximum minutes per year if usage were continuous 
(that is, usage = 1); generally 150,000 minutes.
usage = variable, see discussion in this final rule.
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 in this final rule.

    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.
    Comment: One commenter stated that most ophthalmology diagnostic 
equipment is in use far less than 50 percent of the time. The commenter 
indicated that they had developed a survey instrument that asked 
ophthalmic technicians to provide time usage estimates for the 16 most-
utilized pieces of diagnostic testing equipment. The commenter stated 
that their preliminary survey results produced a utilization rate of 22 
percent, much lower than the 50 percent assumption currently used by 
CMS. The commenter suggested that CMS should work with the RUC to do a 
robust survey to help determine a more valid utilization rate, 
including the possibility of specialty-specific equipment utilization 
rates.
    Response: We are always looking for more accurate information to 
improve our PE methodology. We appreciate and share stakeholders' 
interest in using the most accurate assumption regarding the equipment 
utilization rate for particular equipment items, and we will review any 
information that the RUC's PE Subcommittee or other stakeholders are 
willing to submit through the public comment process. We concur with 
the commenter that a wide-ranging survey or similar study designed to 
address the subject of equipment utilization rates would be an 
appropriate tool to investigate this subject in further detail. At the 
moment, 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 
further submission of data that illustrates an alternative rate.
    Maintenance: This factor for maintenance was finalized in the CY 
1998 PFS final rule with comment period (62 FR 33164).
    Comment: Several commenters addressed the issue of equipment 
maintenance costs. One commenter stated that the current maintenance 
percentage of 5 percent across all types of medical equipment does not 
adequately address the maintenance costs of imaging equipment in 
general and particularly not for advanced imaging modalities like CT 
and MRI. This commenter stated that a CT scanner would have an 
estimated annual maintenance cost of 7.2 percent. Another commenter 
supported our willingness to investigate potential avenues for 
determining variable equipment maintenance costs across a broad range 
of equipment items. The commenter stated that the standard equipment 
rate assumption fails to appreciate the significant costs associated 
with the maintenance of highly technical and particularly complex 
equipment items, and indicated that that CMS should not persist in an 
inaccurate approach while it collects additional data.
    Response: We appreciate the additional information regarding 
equipment maintenance rates from the commenters. As we previously 
stated in the CY 2016 final rule with comment period (80 FR 70897), we 
agree with the commenters that we do not believe the annual maintenance 
factor for all equipment is precisely 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. We do not believe that voluntary submissions regarding 
the maintenance costs of individual equipment items would be an 
appropriate methodology for determining costs. 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 (see 77 FR 68902 for a thorough 
discussion of this issue). 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). We 
did not propose any changes to these interest rates for CY 2018. The 
interest rates are listed in Table 3.

[[Page 52987]]



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

3. Changes to Direct PE Inputs for Specific Services
    This section focuses on specific PE inputs. The direct PE inputs 
are included in the CY 2018 direct PE input database, which is 
available on the CMS Web site under downloads for the CY 2018 PFS final 
rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
(a) PE Inputs for Digital Imaging Services
    In the CY 2017 PFS final rule (81 FR 80179 through 80184), we 
finalized our proposal to add a professional PACS workstation (ED053) 
used for interpretation of digital images to a series of CPT codes and 
to address costs related to the use of film that had previously been 
incorporated as direct PE inputs for these services. We finalized the 
following criteria for the inclusion of a professional PACS 
workstation:
     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 that 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 
professional PACS 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 also did not add the professional PACS workstation to 
image guidance codes where the dominant provider is not a radiologist 
according to the most recent year of claims data, because we believe a 
single technical PACS workstation would be more typical in those cases.
     We agreed 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. Based on information 
provided by commenters and our own medical review, we stated that we 
believe that the use of the professional PACS workstation is typical 
for many of the specific codes that were identified. We added the 
workstation to many of the therapeutic codes requested by commenters, 
specifically CPT codes listed outside the 70000 series, where we agreed 
that use of the professional PACS workstation was typical.
     For CPT codes in the 80000 and 90000 series, we expressed 
our concerns about whether it is appropriate to include the technical 
PACS workstation in 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 did not remove the technical PACS workstation from these 
codes at that time, we did not believe that a professional PACS 
workstation should be added to these procedures.
    Prior to the publication of this CY 2018 PFS proposed rule, a 
stakeholder expressed concern about our decision not to include the 
professional PACS workstation in a series of vascular ultrasound codes 
that use technical PACS workstations. The stakeholder indicated that 
the vascular ultrasound codes in question do make use of a professional 
PACS workstation, and that the dominant specialty provider requirement 
(that is, that the code's dominant specialty provider be diagnostic 
radiology) would exclude codes for which the professional PACS 
workstation is typical based on a mistaken assumption. The stakeholder 
stated that to furnish vascular ultrasound services following the 
transition from film to digital imaging, both a technical and a 
professional PACS workstation are required, regardless of whether the 
practitioner furnishing the service is a radiologist, cardiologist, 
neurologist, or vascular surgeon.
    We appreciate the submission of this additional information 
regarding the use of the professional PACS workstation in vascular 
ultrasound codes. Therefore, we solicited comments regarding whether or 
not the use of the professional PACS workstation would be typical in 
the following list of CPT and HCPCS codes. The codes brought to our 
attention by the stakeholder are CPT codes 93880, 93882, 93886, 93888, 
93890, 93892, 93893, 93922, 93923, 93924, 93925, 93926, 93930, 93931, 
93965, 93970, 93971, 93975, 93976, 93978, 93979, 93980, 93981, 93990, 
and 76706, and HCPCS code G0365. We considered information submitted in 
comments to determine whether the professional PACS workstation should 
be included as a direct PE input for these codes.
    The following is a summary of the public comments received 
regarding whether or not the use of the professional PACS workstation 
would be typical in the previous list of CPT and HCPCS codes and our 
responses:
    Comment: Several commenters stated that the finalized policy in CY 
2017 that did not add the professional PACS workstation to image 
guidance codes where the dominant practitioner is not a radiologist was 
an arbitrary decision. The commenters stated that CMS did not provide 
any rationale for this policy, and that for many services, both a 
technical and a professional PACS workstation would be typically used 
regardless of whether the practitioner performing the service is a 
radiologist or in another specialty. These commenters urged CMS to add 
a professional PACS workstation in services where its use would be 
typical without concern for whether diagnostic radiology is the 
dominant provider.
    Response: We agree with the commenters that equipment allocated to 
each code should be determined based on the resources typically 
required to furnish the service. In general, we believe that examining 
Medicare claims data for dominant specialty is a useful and data-driven 
approach to making educated assumptions regarding typical resources 
involved in furnishing particular procedures. However, in this case, we 
are persuaded by commenters who stated that other specialties, outside 
of diagnostic radiology, utilize the professional PACS workstation. 
After reviewing the information supplied by the commenters, we agree 
the use of both a technical and a professional PACS workstation may be 
typical in some services where diagnostic radiology is not the dominant 
provider. We welcome feedback from stakeholders in identifying 
additional services where the use of a professional PACS workstation 
would be typical.
    Comment: One commenter disagreed with the exclusion of add-on codes 
from the list of codes that included a professional PACS workstation. 
The commenter stated that the add-on codes 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

[[Page 52988]]

physician using the professional PACS workstation.
    Response: We disagree with the commenter. We continue to believe it 
would be duplicative to add additional equipment time for the 
professional PACS workstation in the add-on code, as the base codes 
already include equipment time for the practitioner's use following the 
service.
    Comment: Many commenters stated that the use of a professional PACS 
workstation would be typical in the 26 CPT codes detailed previously. 
Commenters stated that in the wake of the transition from film to 
digital imaging, use of both a technical and a professional PACS 
workstations has become typical for many diagnostic imaging services, 
including vascular ultrasound and digital pathology services. One 
commenter indicated that the use of the professional PACS workstation 
served a vital part in coordination of care for their treatment of 
vascular access issues related to ESRD patients. Another commenter 
stated that HCPCS code G0365 may have been mistakenly included on this 
list, as it already includes a professional PACS workstation added in 
CY 2017, while CPT code 93965 should not be considered for the 
professional PACS workstation as the code was previously deleted.
    Response: We agree with the commenters that the use of the 
professional PACS workstation would be typical in 21 of the 26 codes 
listed in the proposed rule. As mentioned by one commenter, CPT code 
93965 has been deleted while code G0365 already includes a professional 
PACS workstation. We disagree with adding a professional PACS 
workstation to CPT codes 93922, 93923, and 93924 because these codes do 
not include a technical PACS workstation and we continue to believe 
that procedures that do not include a technical workstation would not 
require a professional workstation. We will assign equipment time for 
the professional PACS workstation in the nonfacility setting according 
to the equipment time formula finalized in CY 2017. For diagnostic 
codes, we are assigning equipment minutes equal to half the preservice 
physician work time plus the full intraservice physician work time, 
consistent with the previously finalized policy. 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, consistent with the previously finalized policy. 
The equipment time to be added is shown in Table 4.

      Table 4--Additional Codes With Professional PACS Workstation
------------------------------------------------------------------------
                                                                ED053
             HCPCS                     Procedure type          minutes
------------------------------------------------------------------------
93880.........................  Diagnostic.................           18
93882.........................  Diagnostic.................           13
93886.........................  Diagnostic.................           20
93888.........................  Diagnostic.................           13
93890.........................  Diagnostic.................           20
93892.........................  Diagnostic.................           25
93893.........................  Diagnostic.................           25
93925.........................  Diagnostic.................           18
93926.........................  Diagnostic.................           13
93930.........................  Diagnostic.................           18
93931.........................  Diagnostic.................           13
93970.........................  Diagnostic.................           17
93971.........................  Diagnostic.................           12
93975.........................  Diagnostic.................           23
93976.........................  Diagnostic.................           18
93978.........................  Diagnostic.................           18
93979.........................  Diagnostic.................           13
93980.........................  Diagnostic.................           21
93981.........................  Diagnostic.................           10
93990.........................  Diagnostic.................           14
76706.........................  Diagnostic.................           13
------------------------------------------------------------------------

    Comment: One commenter stated that the costs associated with 
storing digital images should be included as a direct PE. The commenter 
noted that CMS treated film as a supply item for purposes of direct 
cost determination and cited an MRI study in the 2010 direct PE 
database with 12 pieces of 14 x 17 film at a price of $1.17 each or 
$14.04. The commenter stated that this film was not replaced and that 
digital imaging studies need to be recorded and then archived. The 
commenter suggested that storage costs for digital images should be 
added as a maintenance percentage for digital imaging services.
    Response: We disagree with the commenter that the costs associated 
with storing digital images are excluded from digital imaging services, 
as these costs are incorporated into the indirect PE methodology that 
cover administrative costs and office rent. We do not pay separately 
for the storage of digital images as these expenses are not allocable 
to individual services, just as we do not explicitly incorporate the 
storage costs of electronic health records (EHRs) as direct PE inputs 
for the range of practitioners that use EHRs. We understand and agree 
that we previously treated film itself as direct PE input. However, the 
film was allocable to an individual patient. We believe that the better 
analog for the storage of images under the previous assumptions would 
be the office cabinets and office space in which the film was stored. 
These items were clearly considered to be indirect PE expenses and, 
therefore, such costs are included in the specialty-specific data that 
is used to allocate indirect PE RVUs. We previously replaced the direct 
PE components of imaging services during the film-to-digital transition 
that took place in CY 2015 (79 FR 67561).
    Comment: One commenter recommended that CMS revisit its definition 
of room time for imaging procedures. Under the current policy, room 
time for imaging studies is defined as the time it takes to acquire the 
images 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. The commenter stated that this definition was 
inconsistent with how imaging centers actually function, as most 
patient-related activities take place in the imaging room with the 
involvement of multiple technologists. The commenter suggested that CMS 
should return to the previous definition, in which equipment time for 
highly technical equipment was based on total technologist time.
    Response: We disagree with the commenter regarding the current 
standard equipment time formula for highly technical equipment. As we 
wrote in the CY 2011 final rule with comment period (75 FR 73350), 
certain highly technical pieces of equipment and equipment rooms are 
less likely to be used by a clinician over the full course of a 
procedure and are typically available for other patients during time 
that may still be in the intraservice portion of the service. When we 
identify these services, we adjust those equipment times accordingly. 
For example, CPT code 74178 (Computed tomography, abdomen and pelvis; 
without contrast material in more than one body region) includes 3 
minutes of intra-service clinical labor time associated with obtaining 
the patient's consent for the procedure. Since we believe that it would 
be atypical for this activity to occur within the CT room, we believe 
these 3 minutes should not be attributed to the CT room. We agree with 
the commenter that the standard formula used to determine equipment 
time for highly technical equipment may not be typical for all 
services, which is why we evaluate equipment time on a case-by-case 
basis as services are reviewed. We appreciate the information submitted 
by the commenter, and we will take these comments under consideration 
as we evaluate codes on an individual basis.
    After consideration of comments received, we are finalizing the 
addition of a professional PACS workstation to the codes listed in 
Table 4 with the equipment time detailed.

[[Page 52989]]

(2) Standardization of Clinical Labor Tasks
    As we noted in the CY 2015 PFS final rule with comment period (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 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.
    The following is a summary of the public comments received 
regarding the standardization of clinical labor tasks and our 
responses:
    Comment: One commenter supported the efforts of the AMA RUC to 
standardize clinical labor activities in the new PE worksheet and urged 
CMS to accept these standards.
    Response: We appreciate the efforts to establish greater 
organizational consistency through the RUC's use of the new PE 
worksheet and new clinical labor activity codes in developing and 
making recommendations to CMS.
    Comment: Several commenters stated that, while they supported the 
revisions to the direct PE database providing the number of clinical 
labor minutes assigned for each clinical labor activity for each code, 
they had concerns regarding the over-standardization of clinical labor 
activities. These commenters indicated that each service requires 
different clinical labor resources and creating standard times is not 
possible for all clinical labor activities. Commenters stated that the 
RUC's PE Subcommittee is the entity best suited to make service-level 
determinations for clinical labor, and that blanket changes to 
standardize clinical labor activities outside of RUC review would lead 
to misvaluation of codes.
    Response: We agree with the commenters that there are often 
important differences between services and that no two services are 
necessarily identical. We also acknowledge that there is a balance 
between establishing standards for clinical labor activities and the 
need for individual review of each code. We concur with the commenters 
that some services require greater or less time than the clinical labor 
standards, and we have frequently finalized clinical labor times 
outside the standard values. The standard times for clinical labor 
activities are a starting point for our clinical review of individual 
services, not necessarily an ending point. As we have written in past 
rulemaking, we believe that the establishment of standard times helps 
to facilitate greater transparency of information and maintain 
consistency in review patterns over time. Our goal is to maintain 
relativity among services, and we believe that the creation of clinical 
labor standards helps to facilitate that goal.
    Comment: One commenter stated that the proposed standardized 
clinical labor times for CT and MRI codes required additional time due 
to a need to assess patients for any special needs, review screening 
sheets with patients, and obtain a clinical history from the patient.
    Response: When reviewing clinical labor times for individual codes, 
we typically work closely with the recommendations provided by the RUC, 
which did not include additional clinical labor time for these specific 
activities in these services. While we appreciate the additional 
information from the commenter, we do not agree that it would serve 
overall PFS relativity to include additional clinical labor time for 
these services based on this rationale.
    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. Preservice Clinical Labor for 0-Day and 10-Day Global Services
    Several years ago, the RUC's PE Subcommittee reviewed the 
preservice clinical labor times for CPT codes with 0-day and 10-day 
global periods. The RUC concluded that these codes are assumed to have 
no preservice clinical staff time (standard time of 0 minutes) unless 
the specialty can provide evidence that the preservice time is 
appropriate. In other words, for minor procedures, it is assumed that 
there is no clinical staff time typically spent preparing for the 
specific procedure prior to the patient's arrival. However, we note 
that for CY 2018, 41 of the 53 reviewed codes with 0-day or 10-day 
global periods include preservice clinical labor of some kind, 
suggesting that it is typical for clinical staff to prepare for the 
procedure prior to the patient's arrival. As we review misvalued codes, 
we believe that the general adherence to values that we have 
established as standards supports relativity within the PFS. Because 77 
percent of the reviewed codes for the current calendar year deviate 
from the ``standard,'' we sought comment on the value and appropriate 
application of the standard in our review of RUC recommendations in 
future rulemaking. In reviewing the inputs included in the direct PE 
inputs database, we found that for the 1,142 total 0-day global codes, 
741 of them had preservice clinical labor of some kind (65 percent). We 
also noticed a general correlation between preservice clinical labor 
time and the recent review. We sought comment specifically on whether 
the standard preservice clinical labor time of 0 minutes should be 
consistently applied for 0-day and 10-day global codes in future 
rulemaking.
    The following is a summary of the public comments received 
regarding whether the standard preservice clinical labor time of 0 
minutes should be consistently applied for 0-day and 10-day global 
codes in future rulemaking and our responses:
    Comment: Many commenters opposed eliminating clinical staff 
preservice time from all 0-day and 10-day global procedures in future 
rulemaking. Several commenters stated that although it is accurate to 
assume that no clinical staff time is necessary for minor procedures, 
it is no longer true that all 0-day and 10-day globals can be 
classified as minor procedures, as increasingly complex services are 
now performed using this global period. For example, there are several 
cardiothoracic surgery procedures that in the past would have been 
valued as

[[Page 52990]]

90-day global services but instead were implemented as 0-day global 
procedures to allow additional flexibility in the delivery of patient 
care. One commenter stated that the ``trend'' identified in the 
proposed rule occurred only because of the significant number of 0-day 
endoscopy and interventional codes that have recently been reviewed. 
Other commenters stated that the standard preservice clinical labor 
time of 0 minutes is only applicable if specialties cannot provide 
evidence of the need for preservice clinical labor, and that the rise 
in preservice clinical labor time indicated the growing recognition 
that the use of clinical staff is typical for these services. Many 
commenters stated that the RUC's PE Subcommittee should review the 
evidence on a case-by-case basis to determine if individual services 
justify preservice clinical labor time. Commenters urged CMS to work 
with the RUC to identify circumstances where deviations from the 
standard clinical labor times would be appropriate and develop clear 
definitions and criteria that support compelling reasons for clinical 
staff time that deviates from the standard for 0-day and 10-day global 
procedures. A few commenters, including the RUC, acknowledged that the 
high number of preservice clinical labor exceptions raised the question 
of the utility of the standard given this high number of exemptions.
    Response: We appreciate the responses from the commenters. We note 
that several commenters also acknowledged the problematic nature of 
having so many exceptions to the established standard for preservice 
clinical labor. We appreciate in particular the additional information 
regarding the increasing use of the 0-day and 10-day global periods for 
procedures that are not minor in nature. In light of this information, 
we agree with the commenters who suggested that there is a need to 
identify circumstances where deviations from the standard clinical 
labor times would be appropriate and develop clear definitions and 
criteria for these situations. If an increasingly large number of major 
procedures are performed using the 0-day and 10-day global periods, we 
believe that there will be a need for the establishment of new 
guidelines for the typical allotment of preservice clinical labor. We 
agree with the commenters that preservice clinical labor must be 
determined on an individual basis based on the resources typically 
required to furnish the service. However, the need for individual 
review of services does not preclude the development of standards 
which, as we stated above, helps to facilitate greater transparency of 
information and maintain consistency in review patterns over time.
    After consideration of comments received, we do not believe that 
the standard preservice clinical labor time of 0 minutes should be 
consistently applied for 0-day and 10-day global codes in future 
rulemaking. We look forward to working with stakeholders and seeing 
their recommendations for preservice clinical labor that maintain 
relativity among the different kind of procedures classified as 0-day 
and 10-day globals.
b. Obtain Vital Signs Clinical Labor
    The direct PE inputs for each CPT code paid under the PFS include 
minutes assigned to a series of standard clinical labor tasks assumed 
to be typical for the service in question. The minutes assigned to each 
of these tasks for each CPT code have been developed over several 
decades, and what was previously considered to be a standard value in 
the review of the codes has changed over time. Because each year we 
perform a detailed review of all of the inputs for only several hundred 
of the over 7,000 CPT codes paid under the PFS, valuation for 
individual services can be influenced by shifts in review standards 
over time rather than purely based on changes in practice.
    For example, we traditionally assigned a clinical labor time of 3 
minutes for the ``Obtain vital signs'' clinical labor activity, based 
on the amount of time typically required to check a patient's vitals. 
Over time, that number of minutes has increased as codes are reviewed. 
For example, many of the reviewed codes for the current CY 2018 
rulemaking cycle have a recommended clinical labor time of 5 minutes 
for ``Obtain vital signs,'' based on the understanding that these 
services are measuring two additional vital signs: the patient's height 
and weight. We do not have any reason to believe that measuring a 
patient's height and weight is only typical for services described by 
recently reviewed codes. Instead, we believe that the review standards 
have changed, perhaps in conjunction with changes in medical practice, 
and that the change in the minutes assigned for the ``Obtain vital 
signs'' task for newer-reviewed services is detrimental to relativity 
among PFS services.
    Therefore, to preserve relativity among the PFS codes, we proposed 
to assign 5 minutes of clinical labor time for all codes that include 
the ``Obtain vital signs'' task, regardless of the date of last review. 
We proposed to assign this 5 minutes of clinical labor time for all 
codes that include at least 1 minute previously assigned to this task. 
We also proposed to update the equipment times of the codes with this 
clinical labor task accordingly to match the changes in clinical labor 
time. For codes that were not recently reviewed and for which we lacked 
a breakdown of how the equipment time was derived from the clinical 
labor tasks, we could not determine if the equipment time included time 
assigned for the ``Obtain vital signs'' task. In these cases, we 
proposed to adjust the equipment time of any equipment item that 
matched the clinical labor time of the full service period to match the 
change in the ``Obtain vital signs'' clinical labor time. The list of 
all codes affected by these proposed vital signs changes to direct PE 
inputs is available on the CMS Web site under downloads for the CY 2018 
PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    The following is a summary of the public comments received on the 
list of all codes affected by these proposed vital signs changes to 
direct PE inputs proposals and our responses:
    Comment: Many commenters supported the CMS proposal. Commenters 
agreed that these differences in the minutes assigned to the ``Obtain 
vital signs'' clinical labor task appeared to be attributed to 
variances in review standards over time rather than reflecting actual 
variations in practice. One commenter stated that medical practice 
typically requires measurement of height and weight when vital signs 
are measured, while another commenter stated that the new standard time 
would be an administrative simplification for stakeholders and help 
streamline reviews. These commenters urged CMS to finalize the proposal 
to help preserve relativity between PFS codes.
    Response: We appreciate the support from the commenters for the 
proposal.
    Comment: Other commenters disagreed with the proposal to establish 
5 minutes as the new clinical labor standard for the ``Obtain vital 
signs'' task. These commenters stated that the RUC PE Subcommittee's 
standard for vital signs clinical labor, based on the number of vital 
signs being taken, remained accurate and was the best way to make sure 
that individual codes are allocated the correct amount of time. These 
commenters were opposed to changing the clinical labor time of a large 
number of codes at once, and stressed the need for individual review

[[Page 52991]]

of each service. Commenters urged CMS not to finalize this proposal and 
suggested the issue should be referred to the RUC and its Practice 
Expense Advisory Committee for further review and input.
    Response: We generally agree with commenters that the 
determinations for individual clinical labor activities are typically 
made at the code level, such as those recommended by the RUC's PE 
subcommittee. Therefore, we are not finalizing our proposal to use 5 
minutes as the universal input for this clinical labor task. However, 
since even the comments opposing the proposal did not suggest that the 
clinical labor associated with taking vital signs has changed over 
time, only the review standards associated with them, we will assign 5 
minutes as the input for all codes that include the ``Obtain vital 
signs'' task for CY 2018, as proposed. For future rulemaking we will 
consider code-level recommendations that will help distinguish services 
that may require fewer or greater than 5 minutes for this activity. We 
believe that finalizing 5 minutes for the codes as proposed will serve 
to mitigate the detrimental impact of review standards shifting over 
time while preserving the principle that the number of minutes involved 
in obtaining vital signs may vary for different services.
    Comment: One commenter asked if CMS would accept vital sign data 
from fitness wearable devices such as an Apple watch, Garmin, or 
Fitbit.
    Response: Our proposal concerns the number of minutes assumed to be 
involved in obtaining vital signs for purposes of PFS ratesetting and 
is not intended to establish requirements regarding how vital signs are 
obtained.
    After consideration of comments received, we are not finalizing our 
proposal to establish 5 minutes as the new standard for the ``Obtain 
vital signs'' clinical labor task. However, since we continue to 
believe that the review standards associated with the clinical labor 
time for obtaining vital signs have changed over time, we will assign 5 
minutes as the input for all codes that include the ``Obtain vital 
signs'' task for CY 2018, as proposed.
c. Establishment of Clinical Labor Activity Codes
    Historically, the RUC has submitted a ``PE worksheet'' that details 
the recommended direct PE inputs for our use in developing PE RVUs. The 
format of the PE worksheet has varied over time and among the medical 
specialties developing the recommendations. These variations have made 
it difficult for both the RUC's development and our review of code 
values for individual codes. Beginning for the CY 2019 PFS rulemaking 
cycle, we understand that the RUC intends to mandate the use of a new 
PE worksheet for purposes of their recommendation development process 
that standardizes the clinical labor tasks and assigns them a clinical 
labor activity code. We believe the RUC's use of the new PE worksheet 
in developing and submitting recommendations to us would, in turn, help 
us to simplify and standardize the hundreds of different clinical labor 
tasks currently listed in our direct PE database.
    To help facilitate this transition to the new clinical labor 
activity codes, we developed a crosswalk to link the old clinical labor 
tasks to the new clinical labor activity codes. Our crosswalk is for 
informational purposes only, and would not change either the direct PE 
input values or the PE RVUs for codes. Instead, we hope that the 
crosswalk would help us to translate the sprawling, existing data set 
into a condensed version that would significantly improve the 
standardization of clinical labor recommendations and improve the 
ability of commenters to identify concerns with our proposed valuation. 
For CY 2018 rulemaking, we are displaying two versions of the Labor 
Task Detail public use file: One version with the old listing of 
clinical labor tasks, and one with the same tasks as described by the 
new listing of clinical labor activity codes. These lists are available 
on the CMS Web site under downloads for the CY 2018 PFS final rule at 
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
(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 proposed to 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 was 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 scope video 
systems, while the non-video scopes would not. The 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 planned to propose

[[Page 52992]]

input prices for these equipment items through future rulemaking.
    We proposed these changes only for the reviewed codes for CY 2017 
that made use of scopes, along with updated prices for the equipment 
items related to scopes utilized by these services. But, we did not 
propose to apply these policies to codes with inputs reviewed prior to 
CY 2017. 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. In 
response to comments, we finalized the addition of a digital capture 
device to the endoscopy video system (ES031) in the CY 2017 PFS final 
rule. We finalized our proposal to price the system at $33,391, based 
on component prices of $9,000 for the processor, $18,346 for the 
digital capture device, $2,000 for the monitor, $2,295 for the printer, 
and $1,750 for the cart. We also finalized a price of $16,843.87 for 
the stroboscopy system scope accessory (ES065). We did not finalize 
price increases for a series of other scopes and scope accessories, as 
the invoices submitted for these components indicated that they are 
different forms of equipment with different product IDs and different 
prices. We did not receive any data to indicate that the equipment on 
the newly submitted invoices was more typical in its use than the 
equipment that we were currently using for pricing.
    We did not make further changes to existing scope equipment in CY 
2017 in order to allow the RUC's PE Subcommittee the opportunity to 
provide feedback. However, we believed there was some miscommunication 
on this point, as the RUC's PE Subcommittee workgroup that was created 
to address scope systems stated that no further action was required 
following the finalization of our proposal. Therefore, we made further 
proposals to continue clarifying scope equipment inputs, and sought 
comments regarding the new set of scope proposals. We welcomed feedback 
from all stakeholders, including practitioners with direct experience 
in the use of scope equipment.
    We sought comment on several potential categories of scope system 
PE inputs. We are considering creating a single scope equipment code 
for each of the five categories detailed in this rule: (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. Under the current classification system, there are many 
different scopes in each category depending on the medical specialty 
furnishing the service and the part of the body affected. We believe 
that the variation between these scopes is not significant enough to 
warrant maintaining these distinctions, and we believe that creating 
and pricing a single scope equipment code for each category would help 
provide additional clarity. We sought public comment on the merits of 
this potential scope organization, as well as any pricing information 
regarding these five new scope categories.
    For CY 2018, we proposed two minor changes to PE inputs related to 
scopes. We proposed to add an LED light source into the cost of the 
scope video system (ES031), which would remove the need for a separate 
light source in these procedures. If this proposal were to be 
finalized, we would remove the equipment time for the separate light 
source from CPT codes that include the scope video system. We also 
proposed an increase to the price of the scope video system of 
$1,000.00 to cover the expense of miscellaneous small equipment 
associated with the system that falls below the threshold of individual 
equipment pricing as scope accessories (such as cables, microphones, 
foot pedals, etc.) We sought comments on the inclusion of the LED light 
in the scope video system, and the appropriate pricing of the system 
with the inclusion of these additional equipment items.
    We anticipate adopting detailed changes to scope systems at the 
code level through rulemaking for CY 2019, because we believe that 
additional feedback from expert stakeholders will improve the details 
of the proposed changes. We did not propose any additional pricing 
changes to scope equipment for CY 2018 due to the proposed 
reorganization into a single type of scope equipment for each of the 
five scope categories. However, we would consider updating prices for 
these equipment items through the public request process for price 
updates, or based on information submitted as part of RUC 
recommendations.
    The following is a summary of the public comments received on the 
continued organization of scope equipment and our responses:
    Comment: Many commenters disagreed with the CMS proposal to create 
and price a single scope equipment code for each category. Commenters 
stated that there were significant differences in the scopes used by 
different specialties, and the proposal to establish a single scope for 
each category would not sufficiently capture variations across 
specialties in terms of typical scopes and typical costs. As an 
example, one commenter stated that the price difference between scopes 
could be as large as $10,000. Many commenters suggested that CMS should 
create packages on a per-specialty basis for these five categories of 
scopes, as applicable.
    Response: In light of the information supplied by commenters 
regarding the significant differences in price and usage across 
specialties, we will not finalize our proposal to create and price a 
single scope equipment code for each of the five categories previously 
identified.
    Comment: Commenters supported the CMS proposal to add an LED light 
source and miscellaneous costs into the price of the scope video system 
(ES031). Commenters indicated that the addition of the light and 
$1,000.00 for small various small items like foot pedals and 
microphones would more accurately describe the resource costs of the 
scope video system.
    Response: We appreciate the comments supporting the proposal. 
However, we are not finalizing the proposal to add an LED light source 
and an increase of $1,000 for miscellaneous small equipment to the 
price of scope video systems for CY 2018. We intend to update the price 
of the scope video system with these changes for CY 2019 as part of the 
scope reorganization project.
    Comment: Many commenters agreed with the proposal to delay 
implementation of these proposed changes until CY 2019 and encouraged 
CMS to request that the RUC review this issue and provide guidance on 
the correct pricing.
    Response: We agree that the anticipated delay on implementation 
until CY 2019 will allow additional time for stakeholders to provide 
recommendations on the proper organization and pricing of scope 
equipment.
    Comment: One commenter disagreed with the five categories of scope 
equipment that CMS identified and finalized in CY 2017. This commenter 
stated that these five categories did not represent all scope equipment 
categories and recommended adding a sixth category, a multi-channeled 
flexible video scope.
    Response: We will take the recommendation from the commenter into 
consideration. We look forward to receiving additional feedback from 
stakeholders regarding whether adding a sixth category for multi-
channeled flexible video scopes would be appropriate as part of the 
project to organize scope equipment.

[[Page 52993]]

    Comment: Several commenters stated that some of the scope equipment 
currently in use was inaccurately priced, and appeared to reflect older 
technology that has become outdated. One commenter submitted an 
extensive list of invoices related to the pricing of scope equipment.
    Response: We appreciate the submission of additional information 
related to scope pricing from the commenters. We stated in the proposed 
rule that we anticipated adopting detailed changes to scope systems at 
the code level for CY 2019 in order to incorporate additional feedback 
from expert stakeholders. Since we did not propose any additional 
pricing changes to scope equipment for CY 2018 due to this proposed 
reorganization, we believe that it would be more appropriate to delay 
any price updates until the following year rather than make changes for 
CY 2018 and, again, shortly thereafter. The general reorganization of 
scopes taking place in CY 2019 will include updates to scope pricing.
    After consideration of comments received, we will not finalize our 
proposal to create and price a single scope equipment code for each of 
the five categories previously identified. Instead, we are supportive 
of the recommendation from the commenters to create scope equipment 
codes on a per-specialty basis for these five, or potentially six, 
categories of scopes as applicable. Our goal is to create an 
administratively simple scheme that will be easier to maintain and 
helps to reduce administrative burden. We look forward to receiving 
detailed recommendations from expert stakeholders regarding the number 
of these scope equipment items that would be typically required for 
each scope category as well as the proper pricing for each scope.
    We are not finalizing our proposal to add an LED light source and 
an increase to the price of the scope video system of $1,000.00 to 
cover the expense of miscellaneous small equipment associated. We 
intend to address these changes for CY 2019 in order to incorporate the 
aforementioned feedback from expert stakeholders.
(4) Clarivein Kit for Mechanochemical Vein Ablation
    In the CY 2017 PFS final rule, we finalized work RVUs and direct PE 
inputs for two new codes related to mechanochemical vein ablation, CPT 
codes 36473 (Endovenous ablation therapy of incompetent vein, 
extremity, inclusive of all imaging guidance and monitoring, 
percutaneous, mechanochemical; first vein treated) and 36474 
(Endovenous ablation therapy 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). Following the publication of the final rule, 
stakeholders contacted CMS and requested that a Clarivein kit supply 
item (SA122) be added to the direct PE inputs for CPT code 36474, the 
add-on code for ablation of subsequent veins. They stated that the 
Clarivein kit was accidentally omitted from the RUC recommendations, 
and that an additional kit is necessary to perform the service 
described by the add-on procedure. We solicited comment regarding the 
use of multiple kits during procedures described by the base and add-on 
codes to determine whether or not this supply should be included as a 
direct PE input for CPT code 36474 for CY 2018.
    The following is a summary of the public comments received 
regarding the use of the Clarivein kit supply in CPT code 36474 for CY 
2018 and our responses:
    Comment: A device manufacturer wrote to explain the proper assembly 
and use of the Clarivein kit in great detail. The commenter stated that 
the kit is used to treat a single vein and a separate Clarivein kit is 
necessary for each vein treated to ensure functionality and safety. The 
commenter cited an informal survey of their customers which suggested 
that more than 50 percent of mechanochemical vein ablation procedures 
require treatment of a subsequent vein. The commenter urged that CMS 
include the Clarivein kit as a supply input for CPT code 36474.
    Response: We appreciate the additional information from the 
commenter regarding the use of the Clarivein kit supply.
    Comment: Several commenters disagreed with the proposed inclusion 
of the Clarivein kit as a supply input for CPT code 36474. A commenter 
indicated that a second Clarivein kit might be needed for CPT code 
36474 in some cases, but noted that the mechanochemical vein ablation 
codes have been flagged as new technology and will be reviewed by the 
RUC during the next two years. This commenter recommended that the 
number of Clarivein kits necessary for CPT code 36474 should be 
reviewed at that time.
    Response: We agree with the commenter that the decision on whether 
to include a Clarivein kit in CPT code 36474 should be made as part of 
a broader review of the direct PE inputs that are typically required to 
furnish the procedure. We also note that if physicians do not typically 
use the kit when furnishing services described by the add-on codes, 
then including the kit as part of the direct PE inputs for the add-on 
code would represent a significant misvaluation. After consideration of 
comments received, we are not finalizing the addition of the Clarivein 
kit to CPT code 36474 at this time, though we will review any 
recommendations received for consideration in future rulemaking.
(5) Removal of Oxygen From Non-Moderate Sedation Post-Procedure 
Monitoring
    After finalizing the creation of separately billable codes for 
moderate sedation during the CY 2017 PFS final rule, we received 
additional recommendations to remove the oxygen gas supply item (SD084) 
from a series of CPT codes that were previously valued with moderate 
sedation as an inherent part of the procedure. Because oxygen gas is 
included in the moderate sedation pack contained within the separately 
billed moderate sedation codes, we believe that the continued inclusion 
of the oxygen gas in these codes is a duplicative supply. Therefore, we 
proposed to remove the oxygen gas from the codes in Table 5.

  Table 5--CY 2018 Proposed Removal of Oxygen (SD084) From Non-Moderate
                   Sedation Post-Procedure Monitoring
------------------------------------------------------------------------
                                              Current
             HCPCS                NF/F       (liters)          Cost
------------------------------------------------------------------------
31622.........................  NF                    90           -0.27
31625.........................  NF                   105           -0.32
31626.........................  NF                   135           -0.41
31627.........................  NF                   150           -0.45

[[Page 52994]]

 
31628.........................  NF                   120           -0.36
31629.........................  NF                   105           -0.32
31632.........................  NF                    54           -0.16
31633.........................  NF                    60           -0.18
31652.........................  NF                   180           -0.54
31653.........................  NF                   225           -0.68
31654.........................  NF                    90           -0.27
52647.........................  NF                    10           -0.03
52648.........................  NF                    10           -0.03
90870.........................  NF                   198           -0.59
------------------------------------------------------------------------

    Comment: Several commenters supported our proposal to remove the 
oxygen gas for this list of codes.
    Response: We appreciate the support for our proposal. After 
consideration of the comments, we are finalizing our proposal to remove 
the oxygen gas from the codes listed in Table 5.
(6) Technical Corrections to Direct PE Input Database and Supporting 
Files
    Subsequent to the publication of the CY 2017 PFS final rule, 
stakeholders alerted us to several clerical inconsistencies in the 
direct PE database. We proposed to correct these inconsistencies as 
described in the proposed rule and reflected in the CY 2018 proposed 
direct PE input database displayed on the CMS Web site under downloads 
for the CY 2018 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    For CY 2018, we proposed to address the following inconsistencies:
     For CY 2018, we proposed to make direct PE changes for CPT 
code 96416 (Chemotherapy administration, intravenous infusion 
technique; initiation of prolonged chemotherapy infusion (more than 8 
hours), requiring use of a portable or implantable pump) to improve 
payment accuracy, in response to a stakeholder inquiry regarding the 
use of the ambulatory IV pump equipment for this service. We proposed 
to add 6 additional minutes of RN/OCN clinical labor (L056A), 4 minutes 
for the ``Review charts by chemo nurse regarding course of treatment & 
obtain chemotherapy-related medical hx'' task, and 2 minutes for the 
``Greet patient and provide gowning'' task. We proposed to add 1 
quantity of the IV infusion set supply (SC018) and proposed to lower 
the quantity from 2 to 1 of the 20 ml syringe supply (SC053). We 
proposed to add 1800 minutes for the new ambulatory IV pump equipment, 
and we proposed to increase the equipment time of the medical recliner 
chair (EF009) from 83 minutes to 89 minutes to match the increase in 
RN/OCN clinical labor. For CY 2018, these proposed direct PE changes 
would be used to calculate the PE RVU for CPT code 96416. We sought 
comments on these proposed direct PE refinements.
     We proposed to correct an anomaly in the postservice work 
time for CPT code 91200 (Liver elastography, mechanically induced shear 
wave (e.g., vibration), without imaging, with interpretation and 
report) by changing it from 5 minutes to 3 minutes, which also results 
in a refinement in the total work time for the code from 18 minutes to 
16 minutes.
     In the process of making updates to our direct PE 
database, we discovered a series of discrepancies between the finalized 
direct PE inputs and the values entered into the database from previous 
calendar years. To reconcile these discrepancies, we proposed the 
following direct PE refinements:

                       Table 6--Direct PE Database Data Discrepancies and Proposed Changes
----------------------------------------------------------------------------------------------------------------
                                         Input code
      HCPCS            Input code        description      NF/F          Old             New            Cost
----------------------------------------------------------------------------------------------------------------
11307............  SF033............  scalpel with      NF                     1               2            0.69
                                       blade, surgical
                                       (#10-20).
11311............  SG056............  gauze, sterile    NF                     1               2            0.80
                                       4in x 4in (10
                                       pack uou).
11311............  SH046............  lidocaine 1% w-   NF                    10               4           -0.38
                                       epi inj
                                       (Xylocaine w-
                                       epi).
11719............  L037D............  Greet patient,    NF                     1               3            0.74
                                       provide
                                       gowning, ensure
                                       appropriate
                                       medical records
                                       are available.
11719............  L037D............  Provide pre-      NF                     1               2            0.37
                                       service
                                       education/
                                       obtain consent.
11719............  L037D............  Prepare room,     NF                     1               2            0.37
                                       equipment,
                                       supplies.
11719............  L037D............  Clean room/       NF                     1               3            0.74
                                       equipment by
                                       physician staff.
17312............  SL097............  OCT Tissue-Tek..  NF                     8               6           -0.12
17313............  SF004............  blade, microtome  NF                     1               0           -1.72
17313............  SF044............  blade, surgical,  NF                     0               1            4.17
                                       super-sharp.
17313............  SG056............  gauze, sterile    NF                     3               0           -2.39
                                       4in x 4in (10
                                       pack uou).
17313............  SG088............  tape, foam,       NF                    10               8           -0.01
                                       elastic, 2in
                                       (Microfoam).
17314............  SG056............  gauze, sterile    NF                     2               0           -1.60
                                       4in x 4in (10
                                       pack uou).
17314............  SL097............  OCT Tissue-Tek..  NF                     8               6           -0.12
17315............  SL078............  histology         NF                     0             0.2            0.29
                                       freezing spray
                                       (Freeze-It).
19283............  L043A............  Service total     NF                    55              54           -0.43
                                       costs.
19286............  L051B............  Service total     NF                    30              31            0.51
                                       costs.
19286............  EL015............  room,             NF                    19              20            1.40
                                       ultrasound,
                                       general.
19286............  EQ168............  light, exam.....  NF                    19              20            0.00
23333............  L037D............  Post service      F                     63              90            9.99
                                       total costs.
28045............  SC029............  needle, 18-27g..  NF                     2               1           -0.09

[[Page 52995]]

 
32405............  L041B............  Service total     NF                    52              57            2.05
                                       costs.
37765............  L037D............  Service total     NF                    91              94            1.11
                                       costs.
37766............  L037D............  Service total     NF                   121             124            1.11
                                       costs.
45171............  SJ052............  swab, procto      F                      2               3            0.12
                                       16in.
45172............  L037D............  Service total     F                      6              12            2.22
                                       costs.
45172............  SJ052............  swab, procto      F                      2               3            0.12
                                       16in.
52214............  SH047............  lidocaine 1%-2%   NF                     1              50            1.72
                                       inj (Xylocaine).
72120............  EL012............  room, basic       NF                    16              17            0.48
                                       radiology.
72148............  L047A............  Service total     NF                    47              49            0.84
                                       costs.
74230............  L041B............  Technologist      NF                     0               2            0.82
                                       QC's images in
                                       PACS, checking
                                       for all images,
                                       reformats, and
                                       dose page.
91013............  EF023............  table, exam.....  NF                     0               9            0.03
91013............  EF015............  mayo stand......  NF                     0               9            0.01
91013............  EQ235............  suction machine   NF                     0               9            0.02
                                       (Gomco).
91013............  EQ181............  manometry system  NF                     0               9            1.15
                                       (computer,
                                       transducers,
                                       catheter).
91013............  EQ339............  manometry         NF                     0               9            0.05
                                       accessory cable.
91013............  ED050............  PACS Workstation  NF                     0               9            0.20
                                       Proxy.
91132............  EQ019............  EGG monitoring    NF                    22              30            0.83
                                       system.
92227............  EL006............  lane, screening   NF                    12               0           -1.07
                                       (oph).
92227............  EL005............  lane, exam (oph)  NF                     0              12            1.15
93017............  L051A............  Preservice total  NF                    15               5           -5.10
                                       costs.
95819............  SG079............  tape, surgical    NF                     6              42            0.07
                                       paper 1in
                                       (Micropore).
----------------------------------------------------------------------------------------------------------------

    The proposed PE RVUs displayed in Addendum B on our Web site were 
calculated with the inputs displayed in the CY 2018 proposed direct PE 
input database.
    The following is a summary of the public comments received on these 
proposed direct PE refinements and our responses:
    Comment: Several commenters indicated their support for the 
proposed direct PE changes for CPT code 96416. Commenters stated that 
the proposed changes accurately reflected provider time and intensity 
in providing this service and would help to ensure that cancer care and 
treatment are appropriately valued and reimbursed. There were no 
comments opposed to the proposed changes.
    Response: We appreciate the support for our proposal from the 
commenters. We are finalizing the direct PE changes to CPT code 96416 
as proposed.
    Comment: One commenter was uncertain how CMS arrived at the 
conclusion that there were discrepancies of the direct PE inputs for 
the identified codes in Table 5 of the proposed rule. The commenter 
disagreed with several of the proposed changes to the data 
discrepancies and requested that CMS clarify the method used to 
determine these discrepancies in the direct PE inputs.
    Response: Prior to the publication of the CY 2018 proposed rule, we 
identified a series of anomalies in our direct PE database where the 
entered data did not match the values that had been finalized through 
rulemaking. For example, in CY 2013 we finalized the RUC recommendation 
to include 1 surgical super-sharp blade (SF044) in CPT code 17313. 
However, the direct PE database for CPT code 17313 instead included 1 
microtome blade (SF004), which was not included in the finalized PE 
inputs at all. This discrepancy was due to a technical issue that 
occurred while inputting the values into the database during the CY 
2013 rule cycle. The same pattern applies to the other discrepancies in 
the data that we identified for the codes on the table above: the 
information in the database was discrepant with the direct PE inputs 
that had been finalized in previous calendar years. We proposed this 
series of changes in order to ensure that the PE inputs in our database 
matched the inputs that have been finalized through rulemaking. We did 
not propose to make changes in the direct PE inputs of these codes 
based on clinical judgment or new recommendations, only to correct the 
technical anomalies that had crept into the direct PE database via user 
error. As a result, after consideration of comments received, we are 
finalizing the proposed changes to the direct PE database detailed in 
the previous table.
    Comment: One commenter alerted CMS to a series of similar technical 
corrections in the Physician Work Time file. The commenter stated that 
there was an issue with 108 codes that had incorrect immediate 
postservice times and total times that had been identified in the CY 
2014 final rule as due to an inadvertent error. The commenter also 
stated that in the CY 2014 PFS final rule with comment period physician 
work time file, CMS implemented the correct number and level of 
postoperative visits and correct total times, though inadvertently kept 
erroneously inflated immediate postservice times for these codes. In 
addition, the commenter stated that for CY 2015 up to the present, this 
erroneous immediate postservice time was added back into the total 
time, resulting in the total times being again incorrect for these 100+ 
services. The commenter submitted additional data for these codes and 
requested that CMS implement a technical correction.
    Response: After reviewing the data supplied by the commenter, we 
agree that these 108 codes contained an erroneous amount of total time. 
As the commenter mentioned, we previously addressed these codes in the 
CY 2014 PFS final rule with comment period (78 FR 74259) with a 
technical correction. We believe this correction will populate the 
physician time file with data that, absent the inadvertent error, would 
have been present in the time file. We are finalizing a technical 
correction to the physician work time of these codes as noted in Table 
7.

       Table 7--Technical Correction to Physician Work Total Time
------------------------------------------------------------------------
                                                  CY 2017      CY 2018
                   CPT code                      total time   total time
------------------------------------------------------------------------
19368.........................................          830          770
19369.........................................          755          690
20100.........................................          296          266
20816.........................................          809          697
20822.........................................          685          590
20824.........................................          784          690
20827.........................................          728          625

[[Page 52996]]

 
20838.........................................         1085          986
20955.........................................         1095          957
20969.........................................         1216         1048
20970.........................................         1156          988
20973.........................................         1156          988
21139.........................................          458          466
21151.........................................          715          686
21154.........................................          857          853
21155.........................................          972          939
21188.........................................          570          572
22100.........................................          475          372
22101.........................................          490          387
22110.........................................          595          479
22112.........................................          675          530
22114.........................................          685          530
22210.........................................          763          609
22212.........................................          788          640
22214.........................................          763          624
22220.........................................          733          585
22222.........................................          818          651
22224.........................................          808          666
22315.........................................          315          252
22325.........................................          652          528
22326.........................................          600          480
22327.........................................          723          604
22548.........................................          800          673
22556.........................................          693          557
22590.........................................          630          501
22595.........................................          650          521
22600.........................................          595          490
22610.........................................          656          549
22630.........................................          599          487
22800.........................................          695          571
22802.........................................          670          538
22804.........................................          768          595
22808.........................................          691          530
22810.........................................          751          595
22812.........................................          854          700
32650.........................................          400          290
32656.........................................          517          377
32658.........................................          420          330
32659.........................................          492          357
32661.........................................          400          300
32664.........................................          420          330
32820.........................................         1054          854
33236.........................................          376          346
33237.........................................          516          456
33238.........................................          517          472
33243.........................................          642          537
33321.........................................          949          754
33417.........................................         1003          750
33502.........................................          973          688
33503.........................................         1213          838
33504.........................................         1043          789
33600.........................................          958          628
33602.........................................          928          628
33606.........................................         1058          728
33608.........................................          938          668
33690.........................................          883          636
33702.........................................          956          751
33722.........................................          908          608
33732.........................................          848          578
33735.........................................         1073          770
33736.........................................          848          548
33750.........................................          968          722
33764.........................................         1023          750
33767.........................................          938          608
33774.........................................         1348          998
33788.........................................         1033          736
33802.........................................          751          556
33803.........................................          811          586
33820.........................................          558          414
33824.........................................          811          615
33840.........................................          831          639
33845.........................................          978          726
33851.........................................          891          700
33852.........................................          951          719
33853.........................................          998          668
33917.........................................          878          608
33920.........................................          958          658
33922.........................................          756          546
33974.........................................          464          314
34502.........................................          951          741
35091.........................................          995          790
35694.........................................          546          456
35901.........................................          602          482
35903.........................................          506          416
49422.........................................          212          182
49429.........................................          407          317
50320.........................................          598          524
50845.........................................          823          613
56632.........................................         1013          683
60520.........................................          624          474
60521.........................................          595          445
60522.........................................          703          533
61557.........................................          627          510
63700.........................................          497          401
63702.........................................          567          463
63704.........................................          732          609
63706.........................................          800          679
64712.........................................          245          294
------------------------------------------------------------------------

    We note that the technical correction to the total work time of 
these codes will not have a direct effect on the calculation of their 
individual RVUs, as changes to work time affect code valuation at the 
specialty level, not the service level, in the ratesetting methodology. 
For additional information, please see section II.B.2.c. of this final 
rule regarding the allocation of PE to services.
    Comment: In addition to these 108 codes detailed above, the same 
commenter identified seven additional codes with a need for potential 
technical corrections in their physician work times. Listed in order, 
the commenter identified these issues:
     For CPT code 28122 (Partial excision (craterization, 
saucerization, sequestrectomy, or diaphysectomy) bone (e.g., 
osteomyelitis or bossing); tarsal or metatarsal bone, except talus or 
calcaneus), in the CY2012 Final Rule CMS finalized 0.5 99238 discharge 
visits. The commenter stated that the CY 2018 Physician Work Time file 
incorrectly still listed this service as having one 99238 visit.
     For CPT code 46900 (Destruction of lesion(s), anus (e.g., 
condyloma, papilloma, molluscum contagiosum, herpetic vesicle), simple; 
chemical), the commenter stated that the CY 2018 Physician Work Time 
file inadvertently omitted one 99213 post-operative visit for this 10-
day global service. When this service was last reviewed by the PEAC in 
March 2004, the PEAC recommended and CMS finalized 36 minutes of RN/
LPN/MTA post-service period time, which corresponds with one 99213 
office visit bundled into the 10-day global period. Therefore, the 
commenter stated that the CY 2018 direct PE inputs and the physician 
work time file for this service did not match.
     For CPT code 47562 (Laparoscopy, surgical; 
cholecystectomy), the CY 2013 final rule only detailed refining the 
preservice work time and made no mention of not accepting the RUC 
recommended postoperative visits. The commenter stated that the work 
time file should have two 99213 post-operative visits instead of one.
     For CPT code 76948 (Ultrasonic guidance for aspiration of 
ova, imaging supervision and interpretation), the commenter stated that 
the CY 2014 final rule did not mention any refinements to the RUC-
recommended times for the interim final valuation of this service. For 
the CY 2015 final rule, the preamble text discussed removing preservice 
and postservice work times for a different service in this family of 
codes, CPT code 76945. The commenter stated that it appeared that this 
refinement was inadvertently applied to both CPT codes 76948 and 76945 
in the work time file.
     For CPT code 77767 (Remote afterloading high dose rate 
radionuclide skin surface brachytherapy, includes basic dosimetry, when 
performed; lesion diameter up to 2.0 cm or 1 channel), the commenter 
stated that the CY 2016 NPRM work time file included the RUC-
recommended preservice, intraservice and postservice work times but 
incorrectly summed the total time (listed as CPT dummy code number 
7778A). The commenter stated that this error appeared to have been 
carried forward to the present, since there was no mention of any work 
time refinements for this code in the CY 2016 final rule.
     For CPT codes (93668 Peripheral arterial disease (PAD) 
rehabilitation, per session) and 96904 (Whole body integumentary 
photography, for monitoring of high risk patients with dysplastic nevus 
syndrome or a history of dysplastic nevi, or patients with a personal 
or familial history of melanoma), the RUC had recommended and CMS had 
agreed that these services do not include physician work. However, the 
commenter stated that the CY 2018 physician work time file

[[Page 52997]]

erroneously listed physician time for these services.
    The commenter requested for the work time for these services to be 
corrected in the CY 2018 Physician Work Time file for the CY 2018 final 
rule.
    Response: After reviewing the data supplied by the commenter, we 
agree that six of the seven codes identified by the commenter contained 
an erroneous amount of work time. We do not agree with the commenter 
regarding CPT code 76948, as the refinements to work time that took 
place were finalized as intended, and were not due to confusion with 
CPT code 76945 (80 FR 70970-70971). For the other six codes, we are 
finalizing technical corrections to the work time file as described by 
the commenter.
    After consideration of comments received, we are finalizing the 
direct PE changes to CPT code 96416 as proposed, the correction to an 
anomaly in the postservice work time for CPT code 91200 as proposed, 
and the proposed changes to the direct PE database detailed in Table 6. 
We are also finalizing technical corrections in physician work times as 
detailed above in the preceding paragraphs.
(7) 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 2018, 
we proposed the following price updates for existing direct PE inputs.
    We proposed to update the price of thirteen supplies and one 
equipment item in response to the public submission of invoices. For 
the details of these proposed price updates, please refer to section 
II.H, of this final rule, Table 16: Invoices Received for Existing 
Direct PE Inputs.
    We did not propose to update the price of the blood warmer (EQ072), 
the cell separator system (EQ084), or the photopheresor system (EQ206) 
equipment items. The only pricing information that we received for 
these three equipment items was an invoice that included a hand-written 
price over redacted information. We were unable to verify the accuracy 
of this invoice. We are also not proposing to update the price of the 
DNA image analyzer (ACIS) (EP001) equipment item, due to the inclusion 
of many components on the submitted invoice that are not part of the 
price of the DNA image analyzer. We were unable to determine which of 
these components were included in the cost of the DNA image analyzer, 
and which of these components were unrelated types of equipment. To 
price these equipment items accurately, we believe that we need 
additional information. We continued to use the current price for these 
equipment items pending the submission of additional pricing 
information. We welcomed the submission of updated pricing information 
regarding these equipment items through valid invoices from commenters 
and other stakeholders.
    We also proposed to change the name of the ED050 equipment from the 
``PACS Workstation Proxy'' to the ``Technologist PACS workstation.'' In 
the CY 2017 final rule (81 FR 80180-80182), we finalized a policy to 
add a professional PACS workstation (ED053) to the list of approved 
equipment items, and we believe that renaming ED050 to the technologist 
PACS workstation would help to alleviate potential confusion between 
the two PACS workstations.
    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 2018, we note that 
some stakeholders have submitted invoices for new, revised, or 
potentially misvalued codes after the February 10th deadline 
established for code valuation recommendations. To be included in a 
given year's proposed rule, we generally need to receive invoices by 
the same February 10th deadline. However, we would consider invoices 
submitted as public comments during the comment period following the 
publication of the proposed rule, and would consider any invoices 
received after February or outside of the public comment process as 
part of our established annual process for requests to update supply 
and equipment prices.
    The following is a summary of the public comments received on 
updates to prices for new and existing direct PE inputs and our 
responses:
    Comment: Several commenters supported the price changes that CMS 
proposed in response to the submission of invoices.
    Response: We appreciate the response from the commenters, as well 
as the timely submission of these invoices prior to the February 10th 
deadline.
    Comment: One commenter, in response to the CMS request for 
additional updated pricing information for the blood warmer (EQ072), 
the cell separator system (EQ084), the photopheresor system (EQ206), 
and the DNA image analyzer (EP001) equipment items, submitted an 
attachment with current valid invoices. The commenter urged CMS to use 
these invoices to update the price of these equipment items.
    Response: We appreciate the additional invoices from the commenter 
in response to our request for more information in the proposed rule. 
We are finalizing updated prices for all four of these equipment items 
as detailed in Table 16: Invoices Received for Existing Direct PE 
Inputs. For the first three equipment items, we are finalizing the 
price indicated on their respective invoices. For the DNA image 
analyzer (EP001), we are finalizing a price of $248,946.30, based on 
the submitted price of $258,042.30 minus the price of the user training 
($6,800.00), the instructor-led online training ($646.00) and the 
shipping and handling costs ($1,650.00). These costs are allocated 
through the indirect allocation under the established PE methodology. 
We are also finalizing a change in the name of the EP001 equipment from 
``DNA image analyzer'' to ``DNA/digital image analyzer'' as requested 
by commenters.
    Comment: Several commenters disagreed with the proposed price of 
$4.10 for the UV goggles (SJ027) supply and the proposal to treat the 
patient and clinician goggles used for photodynamic therapy as the same 
SJ027 supply item rather than create a new supply code. One commenter 
stated they were concerned with the blended price methodology used by 
CMS to calculate the proposed price, and indicated that the current 
market price was higher than the proposed price for the SJ027 supply. 
Another commenter stated that the goggles used for photodynamic therapy 
are proprietary to the company that produces aminolevulinic acid and 
are not available through other sources, which made the use of the 
proposed blended price inappropriate. Commenters submitted several 
additional invoices for the price of both the UV goggles and the 
patient/clinician goggles used for photodynamic therapy.
    Response: We appreciate the additional information supplied by the 
commenters regarding these different types of goggles, especially the 
additional pricing information included in the invoices. After 
consideration of the comments, we agree that these are two separate 
supply items and that it would not be appropriate to blend their prices 
together. We are finalizing a price of $7.95 for the UV goggles (SJ027) 
and a price of $6.00 for the new patient/clinician goggles (SD326). 
Regarding the

[[Page 52998]]

new SD326 supply, since these very similar goggles were produced by the 
same company and sold for the same price, we did not agree that each of 
them should be described by a separate supply code and will instead 
group them together as ``patient/clinician goggles'' under a single 
supply code.
    Comment: Several commenters disagreed with the price update to the 
LMX 4% anesthetic cream (SH092) supply and the use of an online price 
quote found by CMS. A commenter stated that physicians' only purchased 
drugs from reputable medical suppliers in order to ensure the safety of 
their patients and that the current price of the SH092 supply was 
accurate. The commenters also submitted three additional invoices for 
the SH092 supply.
    Response: We disagree with the commenters that the use of prices 
obtained online carries an elevated risk of patient complications due 
to false or improperly prepared medication. We have no reason to 
believe that healthcare providers will typically purchase medical 
supplies and equipment at higher than rates generally available on the 
market, and LMX 4% anesthetic cream is a widely available non-
prescription supply item that can be commonly found both online and in 
pharmaceutical stores. We have no reason to believe the price quote 
that we obtained online is atypical of market rates or reflects an 
inferior product that represents a danger to patients. However, given 
commenters' suggestions that some physicians purchase the item at 
prices higher than the best market price, we will average together our 
online price quote together with the three invoices submitted by the 
commenters. We are therefore finalizing a price of $1.357 for the SH092 
supply based on the use of this methodology.
    Comment: One commenter addressed the proposed update to the price 
of the INR test strips (SJ055) supply. The commenter stated that the 
price change would lead to substantial reductions for HCPCS codes G0248 
and G0249, and while the commenter agreed that the market price for INR 
test strips had changed since the item was priced initially 15 years 
ago, the current direct PE inputs for these codes did not reflect the 
resources typically required to furnish the services.
    Response: We appreciate the additional information submitted by the 
commenter. Although we are finalizing the price of the INR test strip 
(SJ055) at the proposed rate of $5.66, we agree that the current direct 
PE inputs for these services may not reflect the typical resources that 
they require. For additional details regarding the INR Monitoring codes 
and refinements to their direct PE inputs, please refer to the code 
valuation section (II.H) of this final rule.
    Comment: One commenter requested that the cytology, preservative 
and vial, (cytospin) 88108--30ml (SL501) supply should be deleted from 
the CMS supply database. The commenter stated that this supply is 
redundant with the cytology, preservative and vial (Preserv-cyt) 
(SL040) supply and that the quantity of SL040 for CPT code 88108 should 
be 1 item. The commenter stated that this was an error made in 2014 and 
in 2015 when CPT code 88108 code was reviewed and urged CMS to correct 
this error.
    Response: After reviewing the supply inputs for CPT code 88108, we 
agree with the commenter. The SL501 supply appeared in no other CPT 
codes and did not have a price. We agree that the resources typically 
required to furnish CPT code 88108 are more accurately described by 
including 1 quantity of the SL040 supply. We are finalizing this 
addition to CPT code 88108 and the removal of the SL501 supply from our 
database.
    Comment: One commenter called attention to the fact that there are 
a number of supply and equipment items that currently do not have a 
price. The commenter stated that the lack of a price adversely affects 
the specialties when they use these supply and equipment items since 
the cost of the item is not being factored into the formula used to 
determine the PE RVU. The commenter stated that CMS should ensure that 
all supplies and equipment have a price included in the database in 
order to facilitate payment for all the resources associated with a 
service.
    Response: We appreciate the extra attention drawn by the commenter 
to the supply and equipment items currently present in our database 
that lack a price. We encourage commenters to submit invoices to update 
the pricing of these supplies and equipment items through the process 
detailed above.
    Comment: One commenter stated that CMS provides no additional 
payments for drug-coated balloons and bundles those payments within the 
payments of existing procedures for office-based procedures. The 
commenter indicated that CMS proposed to package the device costs of 
drug coated balloons into the costs of the procedures with which the 
device is utilized, which meant that angioplasty procedures with drug 
coated balloons and plain balloons will receive the same payment 
amount. The commenter detailed the clinical benefits of drug coated 
balloons in angioplasty and requested an alternate payment structure to 
avoid patient access barriers to this technology.
    Response: We appreciate the additional information supplied by the 
commenter regarding the use of drug coated balloons. We encourage 
stakeholders to submit comments with additional information when 
practice patterns for services may change over time, which may lead to 
the nomination of individual services as potentially misvalued. 
However, the commenter did not provide specific CPT codes in which 
these new treatments would be utilized, nor did the commenter supply 
evidence to indicate that the use of these drug coated balloons would 
be typical. We also did not receive recommendations from the RUC or 
other medical specialty groups requesting the addition of drug coated 
balloons as a new supply item. As a result, we will retain the current 
direct PE inputs for angioplasty services unless otherwise mentioned in 
this final rule.
    Comment: One commenter stated concerns regarding the need for more 
accurate pricing of expensive equipment and disposable supplies. The 
commenter noted that the current pricing of supplies and equipment, 
based on the voluntary submission of small numbers of invoices, creates 
the potential for highly biased, non-representative invoices, and makes 
these cost inputs relatively unreliable. This potential overestimation 
of resource costs augments the reimbursement disparities between 
proceduralists and primary care physicians, inappropriately rewards 
physicians who perform procedures, and provides an improper incentive 
for overuse of these services. The commenter suggested addressing this 
issue through subjecting expensive equipment and supplies to fixed 
discounting of their costs over time.
    Response: We agree with the commenter that the methodology used for 
price updates to new and existing supplies and equipment has the 
potential to create disparities in resource cost. As we have stated in 
past rulemaking, such as in the CY 2016 final rule with comment period 
(80 FR 70896), we do not believe that very small numbers of voluntarily 
submitted invoices are likely to reflect typical resource costs and 
create the potential for overestimation of supply and equipment costs. 
As part of our authority under section 1848(c)(2)(M) of the Act to 
collect and use information on physicians' services in the 
determination of relative values under the PFS, which was added to the 
statute by section 220(a)(1) of the PAMA, we

[[Page 52999]]

have initiated a contract to collect data that we hope will facilitate 
more accurate prices for supplies and equipment. Based on the data 
collected and additional stakeholder feedback, we may make proposals to 
update supply and equipment pricing in future rulemaking. We will also 
consider other suggestions to address the issues involving high cost 
supplies and equipment, such as the fixed discounting recommended by 
the commenter.
    After consideration of comments received, we are finalizing the 
updated supply and equipment prices as detailed in Table 16: Invoices 
Received for Existing Direct PE Inputs.
4. Adjustment to Allocation of Indirect PE for Some Office-Based 
Services
    As we explain in section II.B.2.c.(2) of this final rule, we 
allocate indirect costs for each code 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. Indirect expenses include 
administrative labor, office expense, and all other expenses. For PFS 
services priced in both the facility and non-facility settings, the 
difference in indirect PE RVUs between the settings is driven by 
differences in direct PE inputs for those settings since the other 
allocator of indirect PE, the work RVU, does not differ between 
settings. For most services, the direct PE input costs are higher in 
the nonfacility setting than in the facility setting. As a result, 
indirect PE RVUs allocated to these services are higher in the 
nonfacility setting than in the facility setting. When direct PE inputs 
for a service are very low, however, the allocation of indirect PE RVUs 
is almost exclusively based on work RVUs, which results in a very small 
(or no) site of service differential between the total PE RVUs in the 
facility and nonfacility setting.
    Some stakeholders have suggested that for codes in which direct PE 
inputs for a service are very low, this allocation methodology does not 
allow for a site of service differential that accurately reflects the 
relative indirect costs involved in furnishing services in nonfacility 
settings. Among the services most affected by this anomaly are the 
primary therapy and counseling services available to Medicare 
beneficiaries for treatment of behavioral health conditions, including 
substance use disorders. For example, for the most commonly reported 
psychotherapy service (CPT code 90834), the difference between the 
nonfacility and facility PE RVUs is only 0.02 RVUs, which seems 
unlikely to represent the difference in relative resource costs in 
terms of administrative labor, office expense, and all other expenses 
incurred by the billing practitioner for 45 minutes of psychotherapy 
services when furnished in the office setting versus the facility 
setting.
    We agree with these stakeholders that the site of service 
differential for these services that is produced by our PE methodology 
seems unlikely to reflect the relative resource costs for the 
practitioners furnishing these services in nonfacility settings. For 
example, we believe the 0.02 RVUs, which translates to approximately 
$0.72, would be unlikely to reflect the relative administrative labor, 
office rent, and other overhead involved in furnishing the 45 minute 
psychotherapy service in a nonfacility setting. Consequently, we 
believe it would be appropriate to modify the existing methodology for 
allocating indirect PE RVUs in order to better reflect the relative 
indirect PE resources involved in furnishing these kinds of services in 
the nonfacility setting.
    In examining the range of services furnished in the nonfacility 
setting that are most affected by this circumstance, we identified 
HCPCS codes that describe face-to-face services, have work RVUs greater 
than zero, and are priced in both the facility and nonfacility setting. 
From among these codes, we further selected those with the lowest ratio 
between nonfacility PE RVUs and work RVUs. We selected 0.4 as an 
appropriate threshold based on several factors, including the range of 
nonfacility PE RVU to work RVU ratios among the codes identified. Based 
on these criteria, there were fewer than 50 codes that we identified 
with a ratio of less than 0.4 nonfacility PE RVUs for each work RVU, 
most of which are primarily furnished by behavioral health 
professionals, for a potential modification to our indirect PE 
allocation methodology.
    In considering how to address the anomaly and ensure that an 
appropriate number of indirect PE RVUs are allocated to these services 
in the nonfacility setting, we looked at the indirect, nonfacility PE 
RVU for the most commonly billed physician office visit, CPT code 
99213, which is billed by a wide range of physicians and non-physician 
practitioners under the PFS. We believe that the indirect PE costs 
allocated to services reported with CPT code 99213, including 
administrative labor and office rent, would be common for a broad range 
of physicians and non-physician practitioners across the PFS. We 
recognize that the services we seek to address are primarily furnished 
by behavioral health professionals who may be unlikely to incur some of 
the costs incurred by other practitioners furnishing a broader range of 
medical services. For instance, a practitioner furnishing a broader 
range of primary care services likely requires separate office and 
examination room space, and storage for disposable medical supplies and 
equipment. Some costs, however, such as those for office staff and 
records maintenance, would be analogous.
    We looked at the relationship between indirect PE and work RVUs for 
CPT code 99213 as a marker because that is the most commonly and 
broadly reported PFS code that describes face-to-face office-based 
services. We compared the relationship between indirect PE and work 
RVUs for the set of HCPCS codes that we identified using the criteria 
discussed above and found that for the significant majority of codes, 
that ratio was at least 0.4 nonfacility PE RVUs for each work RVU. We 
believe the 0.4 nonfacility PE RVUs can serve as an appropriate marker 
that appropriately reflects the relative resources involved in 
furnishing these services.
    For the fewer than 50 outlier codes identified using the criteria 
above, we believe it would be appropriate to establish a minimum 
nonfacility indirect PE RVU that would be a better reflection the 
resources involved in furnishing these services. We propose to set the 
nonfacility indirect PE RVUs for these codes using the indirect PE RVU 
to work RVU ratio for the most commonly furnished office-based, face-
to-face service (CPT 99213) as a marker. Specifically, for each of 
these outlier codes, we propose to compare the ratio between indirect 
PE RVUs and work RVUs that result from the preliminary application of 
the standard methodology to the ratio for the marker code, CPT code 
99213. Our proposed change in the methodology would then increase the 
allocation of indirect PE RVUs to the outlier codes to at least one 
quarter of the difference between the two ratios. We believe this 
approach reflects a reasonable minimum allocation of indirect PE RVUs, 
but we do not currently have empirical data that would be useful in 
establishing a more precise number.
    In developing the proposed PE RVUs for CY 2018, we proposed to 
implement only one quarter of this proposed minimum value for 
nonfacility indirect PE for the outlier codes. We recognize that this 
change in the PE methodology could have a significant impact on the 
allocation of indirect PE RVUs across all PFS services. In making 
significant changes to the PE methodology in

[[Page 53000]]

previous years, we have implemented such changes using 4 year 
transitions, based largely on concerns that some specialties experience 
significant payment reductions with changes in PE relativity, and a 
transition period allows for a more gradual adjustment for affected 
practitioners. Under the approach we proposed, we estimate that 
approximately $40 million, or approximately 0.04 percent of total PFS 
allowed charges, would shift within the PE methodology for each year of 
the proposed 4-year transition, including for CY 2018. We also note 
that we proposed to exclude the codes directly subject to this proposed 
change from the misvalued code target calculation because the proposed 
change is a methodological change to address an anomaly produced by our 
indirect PE allocation process as opposed to a change to address 
misvalued codes. The PE RVUs displayed in Addendum B on our Web site 
were calculated with the one quarter of the indirect PE adjustment 
factor implemented.
    The following is a summary of the public comments received on our 
proposed change to the indirect PE methodology for some office-based 
services.
    Comment: Several commenters supported the CMS proposal. Commenters 
stated that the proposal would more accurately reflect the resource 
costs incurred by psychiatrists providing services for patients with 
mental health and substance use disorders in nonfacility settings. One 
commenter indicated their support for the commitment of greater 
resources toward behavioral and mental health services given the 
ongoing opioid crisis. Commenters were also supportive of the proposal 
to exclude the codes directly impacted by this change in methodology 
from the misvalued code target.
    Response: We appreciate the support from the commenters for our 
proposal.
    Comment: One commenter disagreed with the CMS proposal. The 
commenter stated that this change to PE methodology could have a 
significant impact on the allocation of indirect PE RVUs across all PFS 
services, with approximately 0.04 percent of the total PFS allowed 
charges shifting within the PE methodology. The commenter recommended 
that the proposal should not be finalized until it was discussed 
through the RUC process, and that the codes in question should be 
placed on the misvalued code list.
    Response: We appreciate the feedback from the commenter on our 
proposal. We note that the RUC has generally provided recommendations 
on a routine basis regarding work, work time, and direct PE inputs. We 
do not believe that placing these codes on the misvalued code list for 
additional RUC review would serve to address the issues identified in 
our proposal, as we do not have reason to believe that the work or 
direct PE inputs assigned to these services are inaccurate. However, we 
welcome recommendations from the RUC or other interested stakeholders 
on any aspects of the PFS ratesetting methodology, including elements 
that have not traditionally been provided such as indirect PE 
allocation. We believe that CMS receiving public input on potential 
changes to the methodology is critical and that notice and comment 
rulemaking is the best way to obtain such input. We do not agree that 
changes in the methodology need to be developed or discussed as part of 
the RUC process prior to being implemented through notice and comment 
rulemaking.
    After consideration of comments received, we are finalizing our 
proposed change to the indirect PE methodology for some office-based 
services.

C. 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. 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 composed 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 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 adjusted (or scaled) 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 was 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 
was applied for the new/revised code and source code, but the work RVU 
for the new/revised code was 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, 
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. Under 
this approach, for new and revised codes, we generally assign a 
specialty risk factor to individual codes based on the same utilization 
assumptions we make regarding the specialty mix we use for calculating 
PE RVUs and for PFS budget neutrality. We continue to use the work RVU 
or clinical labor RVU to adjust the MP RVU for each code for intensity 
and complexity. In finalizing this policy, we stated 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.
    In CY 2017, we finalized the eighth GPCI update, which reflected 
updated MP premium data. We did not propose to use the updated MP 
premium data to propose updates for CY 2017 to the specialty risk 
factors used in the calculation of MP RVUs because it was inconsistent 
with the policy we previously finalized in the CY 2016 PFS

[[Page 53001]]

final rule with comment period, whereby 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. However, we 
solicited comment on whether we should consider doing so, perhaps as 
early as for CY 2018, prior to the fourth review and update of MP RVUs 
that must occur no later than CY 2020. After consideration of the 
comments received, we stated that we would 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 (81 FR 80191 through 80192). Since MP premium data 
are used to update both the MP GPCIs and the MP RVUs, going forward we 
believe it would be logical to align the update of MP premium data used 
to determine the MP RVUs with the update of the MP GPCI. Section 
1848(e)(1)(C) of the Act requires us to review and, if necessary, 
adjust the GPCIs at least every 3 years. The next review of the GPCIs 
must occur by CY 2020.
    In the CY 2018 PFS proposed rule, we proposed to use the most 
recent data for the MP RVUs for CY 2018 and to align the update of MP 
premium data and MP GPCIs to once every 3 years. We sought comment on 
these proposals, and we also sought comment on methodologies and 
sources that we might use to improve the next update of MP premium 
data.
2. Methodology for the Revision of Resource Based Malpractice RVUs
a. General Discussion
    The proposed MP RVUs were calculated based on updated malpractice 
premium data obtained from state insurance rate filings by a CMS 
contractor. The methodology used in calculating the proposed CY 2018 
review and update of resource based MP RVUs largely paralleled the 
process used in the CY 2015 update. The calculation requires using 
information on specialty-specific malpractice premiums linked to 
specific services based upon the relative risk factors of the various 
specialties that furnish a particular service. Because malpractice 
premiums vary by state and specialty, the malpractice premium 
information must be weighted geographically and by specialty. 
Accordingly, the proposed MP RVUs were based upon four data sources: CY 
2014 and CY 2015 malpractice premium data; CY 2016 and 2017 Medicare 
payment and utilization data; CY 2017 GPCIs, and CY 2018 proposed work 
and clinical labor RVUs.
    Similar to the previous update, we calculated the proposed MP RVUs 
using specialty-specific malpractice premium data because they 
represent the actual expense incurred by practitioners to obtain 
malpractice insurance. We obtained malpractice premium data exclusively 
from the most recently available data published in the 2014 and 2015 
Market Share Reports accessed from the National Association of 
Insurance Commissioners (NAIC) Web site. We used information obtained 
from malpractice insurance rate filings with effective dates in 2014 
and 2015. These were the most current data available during our data 
collection process.
    We collected malpractice insurance premium data from all 50 States, 
the District of Columbia, and Puerto Rico. Rate filings were not 
available in American Samoa, Guam or the Virgin Islands. Premiums were 
for $1 million/$3 million, mature, claims-made policies (policies 
covering claims made, rather than those covering services furnished, 
during the policy term). A $1 million/$3 million liability limit policy 
means that the most that would be paid on any claim is $1 million and 
the most that the policy would pay for claims over the timeframe of the 
policy is $3 million. We made adjustments to the premium data to 
reflect mandatory surcharges for patient compensation funds (funds to 
pay for any claim beyond the statutory amount, thereby limiting an 
individual physician's liability in cases of a large suit) in states 
where participation in such funds is mandatory.
    We included premium information for all physician and NPP 
specialties, and all risk classifications available in the collected 
rate filings. Although we collected premium data from all states, the 
District of Columbia, and Puerto Rico, not all specialties had distinct 
premium data in the rate filings from all states. Additionally, for 
some specialties, MP premiums were not available from the rate filings 
in any state. Therefore, for specialties for which there were not 
premium data for at least 35 states, and specialties for which there 
were not distinct premium data in the rate filings, we crosswalked the 
specialty to a similar specialty, either conceptually or by available 
premium data, for which we did have sufficient and reliable data.
    For example, for radiation oncology, data were only available from 
23 states, and therefore this specialty does not meet our 35-state 
threshold, which determines whether or not a specialty is deemed to 
have premium data sufficient to construct a unique risk factor. 
However, based on the 23 states' worth of rate filings for radiation 
oncology, the resource costs for the premiums suggests a similar, 
though slightly lesser average than that of the premiums for diagnostic 
radiology. We developed the proposed MP RVUs for radiation oncology by 
crosswalking the risk factor for diagnostic radiology as a similar 
specialty with similar premium data. We sought comment as to the 
appropriateness of this and the other crosswalks used in developing MP 
RVUs.
    For the proposed CY 2018 MP RVU update, sufficient and reliable 
premium data were available for 43 specialty types, representing over 
76 percent of allowed Medicare PFS services, which we used to develop 
specialty specific malpractice risk factors.
b. Steps for Calculating Malpractice RVUs
    Calculation of the proposed MP RVUs conceptually follows the 
specialty-weighted approach used in the CY 2015 final rule with comment 
period (79 FR 67591). The specialty-weighted approach bases the MP RVUs 
for a given service upon a weighted average of the risk factors of all 
specialties furnishing the service. This approach ensures that all 
specialties furnishing a given service are accounted for in the 
calculation of the MP RVUs. The steps for calculating the proposed MP 
RVUs are described below.
    Step (1): Compute a preliminary national average premium for each 
specialty.
    Insurance rating area malpractice premiums for each specialty are 
mapped to the county level. The specialty premium for each county is 
then multiplied by its share of the total U.S. population (from the 
U.S. Census Bureau's 2014 American Community Survey (ACS) estimates). 
This is in contrast to the method used for creating national average 
premiums for each specialty in the 2015 update; in that update, 
specialty premiums were weighted by the total RVU per county, rather 
than by the county share of the total U.S. population. We refer readers 
to the CY 2016 PFS final rule with comment period (80 FR 70909) for a 
discussion of why we have adopted a weighting method based on a share 
of the total U.S. population. This calculation is then divided by the 
average MP GPCI across all counties for each specialty to yield a 
normalized national average premium for each specialty. The specialty 
premiums are normalized for geographic variation so that the locality 
cost differences (as

[[Page 53002]]

reflected by the GPCIs) would not be counted twice. Without the 
geographic variation adjustment, the cost differences among fee 
schedule areas would be reflected once under the methodology used to 
calculate the MP RVUs and again when computing the service specific 
payment amount for a given fee schedule area.
    Step (2): Determine which premium class(es) to use within each 
specialty.
    Some specialties had premium rates that differed for surgery, 
surgery with obstetrics, and non-surgery. These premium classes are 
designed to reflect differences in risk of professional liability and 
the cost of malpractice claims if they occur. To account for the 
presence of different classes in the malpractice premium data and the 
task of mapping these premiums to procedures, we calculated distinct 
risk factors for surgical, surgical with obstetrics, and nonsurgical 
procedures. However, the availability of data by surgery and non-
surgery varied across specialties. Consistent with the CY 2015 MP RVU 
update, because no single approach accurately addressed the variability 
in premium class among specialties, we employed several methods for 
calculating average premiums by specialty. These methods are discussed 
below.
    (a) Substantial Data for Each Class: For 10 out of 86 specialties, 
we determined that there were sufficient data for surgery and non-
surgery premiums, as well as sufficient differences in rates between 
classes. Therefore, we calculated a national average surgical premium 
and non-surgical premium. We noted that, unlike in the CY 2015 MP RVU 
update, for CY 2018, there were no specialties that fell under the 
``unspecified dominates'' specialty/surgery class scenario; therefore, 
we omitted that surgical class category.
    (b) Major Surgery Dominates: For 9 surgical specialties, rate 
filings that included non-surgical premiums were relatively rare. For 
most of these surgical specialties, the rate filing did not include an 
``unspecified'' premium. When it did, the unspecified premium was lower 
than the major surgery rate. For these surgical specialties, we 
calculated only a surgical premium and used the premium for major 
surgery for all procedures furnished by this specialty.
    (c) Blend All Available: For the remaining specialties, there was 
wide variation across the rate filings in terms of whether or not 
premium classes were reported and which categories were reported. 
Because there was no clear strategy for these remaining specialties, we 
blended the available rate information into one general premium rate. 
For these specialties, we developed a weighted average ``blended'' 
premium at the national level, according to the percentage of work RVUs 
correlated with the premium classes within each specialty. For example, 
the surgical premiums for a given specialty were weighted by that 
specialty's work RVUs for surgical services; the nonsurgical premiums 
were weighted by the work RVUs for non-surgical services and the 
unspecified premiums were weighted by all work RVUs for the specialty 
type.
    Step (3): Calculate a risk factor for each specialty.
    The relative differences in national average premiums between 
specialties are expressed in our methodology as a specialty risk 
factor. These risk factors are an index calculated by dividing the 
national average premium for each specialty by the national average 
premium for the specialty with the lowest premiums for which we had 
sufficient and reliable data, allergy and immunology. For specialties 
with sufficient surgical and non-surgical premium data, we calculated 
both a surgical and non-surgical risk factor. For specialties with rate 
filings that distinguished surgical premiums with obstetrics, we 
calculated a separate surgical with obstetrics risk factor. For all 
other specialties, we calculated a single risk factor and applied the 
specialty risk factor to both surgery and non-surgery services.
    We noted that for determining the risk factor for suppliers of TC-
only services in the CY 2015 update, we updated the premium data for 
independent diagnostic testing facilities (IDTFs) that we used in the 
CY 2010 update. These data were obtained from a survey conducted by the 
Radiology Business Management Association (RBMA) in 2009; we ultimately 
used these data to calculate an updated TC specialty risk factor. We 
applied the updated TC specialty risk factor to suppliers of TC-only 
services. In the CY 2015 final rule with comment period (79 FR 67595), 
RBMA voluntarily submitted updated MP premium information collected 
from independent diagnostic testing facilities (IDTFs) in 2014, and 
requested that we use the data for calculating the CY 2015 MP RVUs for 
TC services. We declined to utilize the data and stated that we believe 
further study is necessary and we would consider this matter and 
propose any changes through future rulemaking. We believed that data 
for a broader set of technical component services are needed, and 
sought comment on appropriate, comparable data sources for such 
information. We also sought comment on whether the data for IDTFs are 
comparable and appropriate as a proxy for the broader set of TC 
services. We endeavor to, in the next update of specialty risk factors, 
collect more data across a broader set of the technical component 
services, not just for radiology (as is currently reflected in the RBMA 
data), but data for services performed by other non-physician 
practitioners including cytotechnologists, and cardiovascular 
technologists. In the interim, for CY 2018, we proposed to assign a TC 
risk factor of 1.0, which corresponds to the lowest physician specialty 
risk factor.
    We assigned the risk factor of 1.0 to the TC services because we 
did not have comparable professional liability premium data for the 
full range of clinicians that furnish these services. In lieu of 
comprehensive, comparable data, we used 1.0 as the default minimum risk 
factor, though we sought information on the best available data sources 
for use in the next update, as well as empirical information that would 
support assignment of an alternative risk factor for these services.
    Step (4): Calculate malpractice RVUs for each HCPCS code.
    Resource-based MP RVUs were calculated for each HCPCS code that has 
work or PE RVUs. The first step was to identify the percentage of 
services furnished by each specialty for each respective HCPCS code. 
This percentage was then multiplied by each respective specialty's risk 
factor as calculated in Step 3. The products for all specialties for 
the HCPCS code were then added together, yielding a specialty-weighted 
service specific risk factor reflecting the weighted malpractice costs 
across all specialties furnishing that procedure. The service specific 
risk factor was multiplied by the greater of the work RVU or PE 
clinical labor index for that service to reflect differences in the 
complexity and risk-of-service between services.
    Low volume service codes: As we discussed in section II.B. of this 
final rule, we proposed to use a list of expected specialties instead 
of the claims-based specialty mix for low volume services in order to 
address stakeholder concerns about the year to year variability in PE 
and MP RVUs for low volume services. We solicited comments on the 
proposal to use these service-level overrides to determine the 
specialty for low volume procedures, as well as on the list of 
overrides itself.
    The proposed list of codes and expected specialties is available on 
our Web site under downloads for the CY 2018 PFS proposed rule at 
http://www.cms.gov/Medicare/Medicare-Fee-

[[Page 53003]]

for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-
Notices.html. In previous MP RVU updates, as discussed in the CY 2015 
final rule with comment period (79 FR 40354), we assigned specialty for 
low volume services based on dominant specialty. As discussed in the CY 
2012 final rule with comment period (76 FR 73187 through 73189), we 
applied an additional list of service-level overrides for purposes of 
calculating MP RVUs for a number of cardiothoracic surgery codes. 
Therefore, we noted that there are certain codes for which we have 
previously applied expected specialty overrides for purposes of 
calculating MP RVUs based on assumptions regarding low Medicare volume. 
Because we are consolidating policies for low volume service expected 
specialty overrides into a single list for PE and MP, and because we 
did not believe that there is a reason to assume different specialties 
for purposes of calculating PE RVUs than for MP RVUs for any particular 
code, we also proposed to assign the specialty mix solely based on the 
claims data for any code that does not meet the low volume threshold of 
99 allowed services or fewer in the previous year, for the purposes of 
calculating MP RVUs.
    Given that we now annually recalibrate MP RVUs based on claims 
data, and in light of our proposed introduction of the service-level 
specialty override for low volume services, we believed that there 
would no longer be a need to apply service-level MP crosswalks in order 
to assign a specialty-mix risk factor. Contingent on finalizing this 
proposal, we also proposed to eliminate general use of an MP-specific 
specialty-mix crosswalk for new and revised codes. However, we would 
continue to consider, in conjunction with annual recommendations, 
specific recommendations from the public and the RUC regarding 
specialty mix assignments for new and revised codes, particularly in 
cases where coding changes are expected to result in differential 
reporting of services by specialty, or where the new or revised code is 
expected to be low-volume. Absent such information, we would derive the 
specialty mix assumption for the first year for a new or revised code 
from the specialty mix used for purposes of ratesetting. In subsequent 
years when claims data are available, we would assign the specialty 
based on claims data unless the service does not exceed the low volume 
threshold (99 or fewer allowed services). If the service is low volume, 
we would assign the expected specialty, establishing a new expected 
specialty through rulemaking as needed, which is consistent with our 
approach for developing PE RVUs.
    Step (5): Rescale for budget neutrality.
    The statute requires that changes to fee schedule RVUs must be 
budget neutral. Thus, the last step is to adjust for relativity by 
rescaling the proposed MP RVUs so that the total proposed resource 
based MP RVUs are equal to the total current resource based MP RVUs 
scaled by the ratio of current aggregate MP and work RVUs. This scaling 
is necessary in order to maintain the work RVUs for individual services 
from year to year while also maintaining the overall relationship among 
work, PE, and MP RVUs.
    Additional information on our proposed methodology for updating the 
MP RVUs may be found in our contractor's report, ``Interim Report on 
Malpractice RVUs for the CY 2018 PFS Proposed Rule,'' which is 
available on the CMS Web site under the downloads section of the CY 
2018 PFS proposed rule located at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
    We sought comments on these proposals for calculating the MP RVUs 
for CY 2018. The following is a summary of the public comments received 
on our proposals and our responses:
    Comment: Several commenters, including the RUC, expressed concerns 
about the proposed valuation changes, which they believe were not 
indicative of what is occurring in the professional liability premium 
market. The RUC stated that, generally, the market has not reflected 
significant changes in the past several years. The commenters stated 
that the premium data collected for this update were insufficient, and 
many noted changes in specialty premiums and risk factors compared to 
the last update as particularly concerning. Some commenters expressed 
concern that CMS was unable to obtain sufficient data from all states 
for common specialties and questioned the validity of the data being 
used to propose new MP RVUs for CY 2018. The RUC stated that while the 
crosswalks proposed by CMS appear to be appropriate, they were 
concerned with the data collection process, and recommended that rather 
than crosswalking, CMS should acquire adequate premium data. Several 
commenters, including the RUC, specifically expressed concern about the 
proposed Cardiology surgical risk factor. The commenters disagreed with 
the risk factor for Cardiology being classified as a blend rather than 
split into distinct surgical and non-surgical risk factors as it had 
been in the past, and recommended that CMS use the Cardiac Surgery Risk 
Factor as a more appropriate crosswalk to establish a Cardiology 
surgical risk factor or otherwise maintain the existing risk factors 
while additional data are gathered. Several commenters, including the 
RUC, stated that CMS should consider delaying implementation of new 
premium data until CMS has the opportunity to seek additional data to 
avoid blending risk factors and crosswalking. While some commenters 
were generally supportive of more frequent updates of MP premium data 
and aligning updates of MP RVUs with the triennial MP GPCI updates, 
they stated that given concerns about accuracy and flaws in the 
methodology for calculating MP risk factors, that CMS should not 
accelerate the schedule for updating MP RVUs based on the MP GPCI data 
at this time. A few commenters recommended that CMS not modify the 
current 5-year cycle of updating the MP premium data used in the MP RVU 
calculations to every 3 years; one commenter stated that more frequent 
updates will cause greater variation in the MP RVU calculations.
    Response: We agree that some of the changes are substantial 
compared to the last update and merit further consideration. However, 
we believe it is important to delineate the precise cause of these 
changes, as the shifts were primarily driven by changes in how the rate 
filings were classified by specialty, rather than inherent deficiencies 
in the raw rate filing data. We collected malpractice premium data from 
the NAIC's System for Electronic Rate and Form Filing (SERFF) Access 
Interface, which is a standardized data source that includes many rate 
filings from the same insurers that were used in the CY 2015 MP RVU 
update, as well as additional data. Using SERFF enabled us to collect 
malpractice data for 32 states. For states that do not participate in 
the SERFF Access Interface, we contacted state departments of insurance 
and requested medical malpractice rate filings. Using these methods, we 
were able to collect a total of 7,212 raw rate filings from all 50 
states, the District of Columbia, and Puerto Rico. This is an 
improvement on the CY 2015 update, for which 3,473 raw rate filings 
were collected. We note that the number of specialties with sufficient 
data in this proposed update is very similar to prior years. In the CY 
2010 update, sufficient data were found for 44 specialties. In the CY 
2015 update, sufficient data were found for 41 specialties, and we 
found sufficient

[[Page 53004]]

data for 43 specialties in the proposed CY 2018 update. Overall, there 
is very little change in the total number of specialties with 
sufficient data.
    For the the comments that noted differences in which specialties 
had sufficient data this year, compared to the CY 2015 update, we have 
determined that this is due to differences in the codes that insurance 
issuers use to identify the physician speciality on the descriptions on 
the raw rate filings and/or how these raw data were categorized into 
CMS specialties. CMS specialty coding information is not available on 
the raw rate filings, and Insurance Services Office (ISO) codes are 
only sometimes present. Thus, it is always necessary to use a crosswalk 
to map malpractice premium data to the CMS specialty classifications. 
This means that changes in malpractice insurers' premium coding 
practices or the rate filing categorization process can easily lead to 
shifts in the number of rate filings across related specialties, which 
in turn may skew the weighting of the data, which is what we observed 
in the CY 2018 proposed update.
    The Cardiology specialty is illustrative of this issue. In the last 
update, Cardiology had a surgical risk factor of 6.98 and a non-
surgical risk factor of 1.93. In this update, Cardiology did not have 
sufficient data to compute separate surgical and non-surgical risk 
factors and was proposed to receive a blended risk factor of 1.90. This 
change was understandably concerning to several commenters. The reason 
that Cardiology did not have sufficient data to compute a surgical risk 
factor was directly due to how the raw rate filings were categorized 
rather than the data availability itself. In the past, some rate 
filings that referred to cardiac surgery and interventional cardiology 
in their specialty descriptions were categorized as Specialty 06: 
Cardiology, but comparable filings for this year's proposal were 
categorized as Specialty 78: Cardiac Surgery and C3: Interventional 
Cardiology. As several commenters suggested, it is possible to mitigate 
this problem by assigning Cardiology to receive the surgical risk 
factor of Cardiac Surgery. In the long-term, we understand commenters' 
concerns and in order to alleviate this issue, we intend to revisit how 
we categorize all rate filings by specialty. This is particularly 
important because some physicians may not have updated their specialty 
codes despite performing surgical and interventional cardiac 
procedures, and we want to ensure that their rates are properly 
adjusted if they are still registered as part of the general Cardiology 
specialty. We also understand that this issue may have occurred for 
other groups of related specialties and intend to do a comprehensive 
assessment in the future to avoid potential discrepancies such as those 
previously described. For these reasons, we are not finalizing our 
proposal to use the most recent data for the CY 2018 MP RVUs and to 
align the update of MP premium data and MP GPCIs to once every 3 years. 
We recognize that, going forward, we need to resolve differences 
regarding the variances in the descriptions on the raw rate filings as 
well as how these raw data were categorized to conform with the CMS 
specialties.
    Comment: One commenter expressed concern that the average premiums 
and risk factors for Interventional Cardiology were not proposed. The 
Interventional Cardiology specialty code went into effect in January 
2015, so the commenter urged CMS to establish risk factors for this 
specialty.
    Response: Because the malpractice rate filings collected for this 
update were from 2014 and 2015, very little data were available for 
Interventional Cardiology. Until more data are available, it will be 
necessary to crosswalk this specialty to receive average premiums and 
risk factors from cardiac specialties that carry similar levels of 
risk.
    Comment: A few commenters expressed concern about a lack of 
transparency in the proposed changes to the determination of MP RVUs, 
and some stated that stakeholders were at a disadvantage and unable to 
respond to the changes and assumptions used in the proposed update to 
MP RVUs.
    Response: We would like to note that the methodology as well as the 
steps for calculating MP RVUs were outlined in the preamble text to the 
proposed rule, and are also included in this final rule; we sought 
comments on these proposals in the proposed rule. The documentation 
included in the Downloads section on the CMS Web site support and 
provide additional technical details and information used in 
establishing the proposed policies. To the extent that the supporting 
documentation is material to the proposals we made in the proposed 
rule, we believe they are within the scope of the rule. Information 
that provides more context and understanding of the data, and how the 
data is collected, which can be found in the contractor's report, is 
material to the rulemaking process, so when stakeholders provide 
concerns about the supporting documentation we consider those concerns 
as comments in response to the proposals. We also note that this has 
been our longstanding process.
    Comment: Several commenters, including the RUC, stated that CMS 
should not crosswalk non-physician specialties to the lowest physician 
risk factor specialty for which it has premium rates, which is Allergy 
Immunology. The commenters stated that CMS should collect premium data 
for the non-physician specialties or otherwise use the data from the 
AMA's Physician Practice Expense Information Survey from 2006. The 
commenters expressed that this crosswalk would likely serve as an 
overestimate of professional liability for non-physician specialties.
    Response: We thank commenters for their feedback, and would like to 
clarify that we did collect whatever data was available for non-
physician specialties during our data collection process. This enabled 
us to find sufficient data for one major non-physician specialty--Nurse 
Practitioner, which received a blended risk factor of 1.95. 
Additionally, we note that not all non-physician specialties were 
mapped to Allergy/Immunology. For example, Certified Nurse Midwife was 
mapped to Obstetrics and Gynecology, and Certified Registered Nurse 
Anesthesiologist was mapped to Anesthesiology, which both reflect 
higher risk than Allergy/Immunology. We revisited the malpractice rate 
filings we collected for other non-physician specialties, and although 
they did not meet the 35-state threshold for sufficient data to compute 
specialty premiums and risk factors, some of the data we do have 
indicate premiums and risk factors that are close to that of Allergy/
Immunology. Therefore, we believe that the proposed crosswalks were 
reasonable. However, we are not finalizing our proposal.
    Comment: One commenter highlighted that the Sleep Medicine 
specialty did not have sufficient data in this proposed update and was 
crosswalked to General Practice, which the commenter did not believe 
was appropriate.
    Response: We appreciate the commenter's feedback, and note that 
this is the same crosswalk that was used in the last update. 
Additionally, while the surgical risk factor decreases for General 
Practice in the proposed update, the non-surgical factor increased. We 
revisited the malpractice rate filings we collected for Sleep Medicine 
and, although they did not meet the 35-state threshold for sufficient 
data to compute specialty premiums and risk factors, the data we do 
have indicate premiums and risk factors that are close to that of 
General Practice.

[[Page 53005]]

Therefore, we believe that the proposed crosswalk was reasonable. 
However, we are not finalizing our proposal.
    Comment: A few specialty societies expressed support for the 
proposed crosswalks as an appropriate course of action given the lack 
of available data for most non-physician specialties. One commenter 
expressed concern that insufficient data was found for Hospice and 
Palliative Care and it was mapped to Allergy/Immunology. Another 
commenter expressed support for crosswalking Certified Registered Nurse 
Anesthesiologist (CRNA) to Anesthesiology, though they question whether 
Anesthesiology Assistant should have been crosswalked the same way.
    Response: We appreciate the commenters' feedback and support. We 
reviewed the malpractice rate filings that were collected for Hospice 
and Palliative Care, and although they did not meet the 35-state 
threshold for sufficient data to compute specialty premiums and risk 
factors, the data we do have indicate premiums and risk factors that 
are close to Allergy/Immunology; we also note that insufficient data 
for this specialty were found in the last update and it was previously 
crosswalked to Allergy/Immunology. We also reviewed the malpractice 
rate filings that were collected for Anesthesiology Assistant and 
similarly, although they did not meet the threshold for sufficient 
data, the data we do have indicate premium and risk factors that are 
close to that of Anesthesiology. Therefore, we believe that the 
proposed crosswalks were reasonable. However, we are not finalizing our 
proposal.
    Comment: A few commenters, including the RUC, questioned whether 
the 35-state threshold for rate filing data was too high, and suggested 
that fewer specialties would need to be crosswalked to receive premiums 
and risk factors from other specialties if that requirement were 
lowered or removed.
    Response: While we agree that lowering the threshold would allow 
more specialties to receive dedicated premiums and risk factors, we 
believe that lowering the 35 state threshold would have a direct trade-
off with the accuracy and the reliability of the results. Removing or 
lowering the threshold would increase the likelihood that the resulting 
premiums and risk factors could fluctuate due to outliers. 
Additionally, the 35-state threshold is consistent with the past 
updates to MP RVUs.
    Comment: A few commenters urged CMS to use work RVUs instead of 
regional population counts to weight geographic differences to 
calculate national average premiums.
    Response: We thank the commenters for their feedback, and note this 
population weighting refinement to the MP RVU methodology was issued 
through notice and comment rulemaking in the CY 2016 PFS final rule 
with comment period (80 FR 70909 through 70910), and there were no 
additional proposals with regard to this matter for CY 2018.
    Comment: One commenter recommended that CMS use the phrase ``Family 
Medicine'' rather than ``Family Practice'' on the basis that the latter 
is considered outdated.
    Response: We appreciate the commenter's feedback. We did not 
propose changes to the specialty nomenclature; however, we will 
consider this in future updates.
    Comment: A commenter requested that we add HCPCS codes 92992 and 
92993 to the list of invasive cardiology procedures classified as 
surgery for purposes of assigning service level risk factors because 
cardiac catheterization and angioplasty procedures are similar to 
surgical procedures for the purpose of establishing MP premium rates 
and risk factors.
    Response: HCPCS codes 92992 and 92993 are contractor-priced codes, 
for which the Medicare Administrative Contractors (MACs) establish RVUs 
and payment amounts. Therefore, we are not adding HCPCS codes 92992 and 
92993 to the ``Invasive Cardiology Outside of Surgical Range'' list.
    Comment: Several commenters, including the RUC, were supportive of 
the proposal to override claims data for low volume services with an 
expected specialty for both the PE RVU, and MP RVU valuation process. 
The commenters also recommended that CMS use the expected specialty 
overrides lists for codes with no Medicare volume for a given year, as 
well as low volume codes.
    Response: We thank commenters for their support. We refer 
commenters to section II.B. of this final rule for further discussion 
of low volume service codes.
    After consideration of the comments received, we are not finalizing 
our proposal to use the most recent data for the CY 2018 MP RVUs and to 
align the update of MP premium data and MP GPCIs to once every 3 years. 
Similar to CY 2017, the CY 2018 MP RVUs will continue to be based on 
the premium data that was collected for the CY 2015 MP RVU update. For 
CY 2018, the MP RVUs will be calculated based on the existing specialty 
risk factors (the same risk factors that were used to calculate the CY 
2017 MP RVUs); these specialty risk factors are shown in the CY 2018 
Final Rule Malpractice Risk Factors and Premium Amounts by Specialty 
file located on the CMS Web site under the downloads section of the CY 
2018 PFS final rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
    For low volume service codes, we thank the commenters for their 
support, and we are finalizing the proposal to use a list of expected 
specialties, instead of a claims-based specialty mix, for low volume, 
which also includes no volume codes, and to apply these overrides for 
both PE and MP. We believe that this will simplify the implementation 
of service-level overrides for PE and MP, and will also address 
stakeholder concerns about year-to-year variability for low volume 
services. We refer readers to section II.B. of this final rule for 
further discussion regarding the low volume service codes.
    We note that the next MP update must occur by CY 2020. We continue 
to believe that updating the MP premium data on a more frequent basis 
would enable the resulting premiums and RVUs to better reflect market 
trends in malpractice insurance for different specialties. In 
principle, more frequent updates are optimal, and we will consider this 
in future rulemaking.
    Many of the commenters expressed concerns regarding the sufficiency 
of the data. As previously explained, this is not a matter of a lack of 
sufficient or robust data, but an issue regarding how the rate filings 
are being classified by specialty. We re-examined the data and after 
further review, we recognize that going forward we need to resolve 
differences regarding variances in the descriptions on the raw rate 
filings as well as how these raw data were categorized to conform with 
the CMS specialties. Understanding that this is a driver of the 
fluctuations that were reflected in the updated MP RVUs that we 
proposed, moving forward we will be able to prioritize reconciling the 
coding changes and categorizations in the raw rate filings in order to 
avoid data fluctuations between updates that are not representative of 
the actual data. We thank the commenters for their detailed feedback, 
and will continue to take it into consideration as we work to make the 
MP RVUs as accurate as possible for all specialties. We also note that 
a few commenters noted concerns regarding potential errors in the 
proposed MP RVUs for specific codes as a result of the proposed updated 
specialty risk factors; however, since we are not finalizing those MP 
RVUs based on the proposed updated specialty risk

[[Page 53006]]

factors, we are not responding to those comments in this final rule.
    The resource based MP RVUs for CY 2018 are shown in Addendum B, 
which is available on the CMS Web site under the downloads section of 
the CY 2018 PFS final rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.

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.
     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 of 
1973 and section 1557 of the Affordable Care Act, as well as and 
language access for persons with limited English proficiency, as 
required under Title VI of the Civil Rights Act of 1964 and section 
1557 of the Affordable Care Act. For more information, see http://www.hhs.gov/ocr/civilrights/resources/specialtopics/hospitalcommunication.
    Practitioners furnishing Medicare telehealth services submit claims 
for telehealth services to the Medicare Administrative Contractors 
(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. For geographic qualifications, 
our regulation at 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 our 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 with comment 
period (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, which are then reviewed by us. Under this 
process, we assign any submitted request to make additions to the list 
of telehealth services to one of two categories. Revisions to the 
criteria that we use to review requests in the second category were 
finalized in the CY 2012

[[Page 53007]]

PFS final rule with comment period (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 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.
    The list of telehealth services, including the proposed additions 
described below, is included in the Downloads section to this final 
rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.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. To 
be considered during PFS rulemaking for CY 2019, qualifying requests 
must be submitted and received by December 31, 2017. 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 our 
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 2018
    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 PFS 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 2016 to add various services as 
Medicare telehealth services effective for CY 2018. The following 
presents a discussion of these requests, and our proposals for 
additions to the CY 2018 telehealth list. Of the requests received, we 
found that three services were sufficiently similar to 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 2018:

 HCPCS code G0296 (Counseling visit to discuss need for lung 
cancer screening using low dose ct scan (ldct) (service is for 
eligibility determination and shared decision making))

    We found that the service described by HCPCS code G0296 is 
sufficiently similar to office visits currently on the telehealth list. 
We believed that all the components of this service, which include 
assessment of the patient's risk for lung cancer, shared decision 
making, and counseling on the risks and benefits of LDCT, can be 
furnished via interactive telecommunications technology.

 CPT codes 90839 and 90840 (Psychotherapy for crisis; first 60 
minutes) and (Psychotherapy for crisis; each additional 30 minutes 
(List separately in addition to code for primary service))

    We proposed to add CPT codes 90839 and 90840 on a Category 1 basis. 
We found that these services are sufficiently similar to the 
psychotherapy services currently on the telehealth list, even though 
these codes describe patients requiring more urgent care and 
psychotherapeutic interventions to minimize the potential for 
psychological trauma. However, we identified one specific element of 
the services as described in the CPT prefatory language that we 
concluded may or may not be able to be furnished via telehealth, 
depending on the circumstances of the particular service. The CPT 
prefatory language specifies that the treatment described by these 
codes requires, ``mobilization of resources to defuse the crisis and 
restore safety.'' In many cases, we believed that a distant site 
practitioner would have access (via telecommunication technology, 
presumably) to the resources at the originating site that would allow 
for the kind of mobilization required to restore safety. However, we 
also believed that it would be possible that a distant site 
practitioner would not have access to such resources. Therefore we 
proposed to add the codes to the telehealth list with the explicit 
condition of payment that the distant site practitioner be able to 
mobilize resources at the originating site to defuse the crisis and 
restore safety, when applicable, when the codes are furnished via 
telehealth. ``Mobilization of resources'' is a description used in the 
CPT prefatory language. We believed the critical element of 
``mobilizing resources'' is the ability to communicate with and inform 
staff at the originating site to the extent necessary to restore 
safety. We solicited comment on whether our assumption that the remote 
practitioner is able to mobilize resources at the originating site

[[Page 53008]]

to defuse the crisis and restore safety is valid.
    Although we did not receive specific requests, we also proposed to 
add four additional services to the telehealth list based on our review 
of services. All four of these codes are add-on codes that describe 
additional elements of services currently on the telehealth list and 
would only be considered telehealth services when billed as an add-on 
to codes already on the telehealth list. The four codes are:

 CPT code 90785 (Interactive complexity (List separately in 
addition to the code for primary procedure))
 CPT codes 96160 and 96161 (Administration of patient-focused 
health risk assessment instrument (e.g., health hazard appraisal) with 
scoring and documentation, per standardized instrument) and 
(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))
 HCPCS code G0506 (Comprehensive assessment of and care 
planning for patients requiring chronic care management services (list 
separately in addition to primary monthly care management service))

    In the case of CPT codes 96160 and 96161, and HCPCS code G0506, we 
recognized that these services may not necessarily be ordinarily 
furnished in-person with a physician or billing practitioner. 
Ordinarily, services that are typically not considered to be face-to-
face services do not need to be on the list of Medicare telehealth 
services; however, these services would only be considered Medicare 
telehealth services when billed with a base code that is also on the 
telehealth list and would not be considered Medicare telehealth 
services when billed with codes not on the Medicare telehealth list. We 
believed that by adding these services to the telehealth list it will 
be administratively easier for practitioners who report these services 
in association with a visit code that is furnished via telehealth as 
both the base code and the add-on code would be reported with the 
telehealth place of service.
    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 adding the following procedures for physical, occupational, 
and speech therapy, initial hospital care, and online E/M by physician/
qualified healthcare professional to the telehealth list, or changing 
the requirements for ESRD procedure codes furnished via telehealth, for 
the reasons noted in the paragraphs that follow.
    a. Physical and Occupational Therapy and Speech-Language Pathology 
Services: CPT Codes--

 CPT code 97001: Now deleted and reported with CPT codes 97161, 
97162, or 97163, as follows: CPT code 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); CPT code 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); or CPT code 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.)
 CPT code 97002: Now deleted and reported as CPT code 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.)
 CPT code 97003: Now deleted and reported with CPT codes 97165, 
97166, or 97167, as follows: CPT code 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 (e.g., 
physical or verbal) with assessment(s) is not necessary to enable 
completion of evaluation component); CPT code 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 (e.g., physical or verbal) with 
assessment(s) is necessary to enable patient to complete evaluation 
component)); or CPT code 97167 (Occupational therapy evaluation,

[[Page 53009]]

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 identifies 5 or more 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 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 (e.g., physical or verbal) with assessment(s) is necessary 
to enable patient to complete evaluation component.)
 CPT code 97004: Now deleted and reported as CPT code 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.)
 CPT code 97110 (Therapeutic procedure, 1 or more areas, each 
15 minutes; therapeutic exercises to develop strength and endurance, 
range of motion and flexibility)
 CPT code 97112 (Therapeutic procedure, 1 or more areas, each 
15 minutes; neuromuscular reeducation of movement, balance, 
coordination, kinesthetic sense, posture, and/or proprioception for 
sitting and/or standing activities)
 CPT code 97116 (Therapeutic procedure, 1 or more areas, each 
15 minutes; gait training (includes stair climbing))
 CPT code 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)
 CPT code 97750 (Physical performance test or measurement 
(e.g., musculoskeletal, functional capacity), with written report, each 
15 minutes)
 CPT code 97755 (Assistive technology assessment (e.g., to 
restore, augment or compensate for existing function, optimize 
functional tasks and/or maximize environmental accessibility), direct 
one-on-one contact, with written report, each 15 minutes)
 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)
 CPT code 97761 (Prosthetic training, upper and/or lower 
extremity(s), each 15 minutes)
 CPT code 97762 (Checkout for orthotic/prosthetic use, 
established patient, each 15 minutes)

    Section 1834(m)(4)(E) of the Act specifies the types of 
practitioners who may furnish and bill for Medicare telehealth services 
as those practitioners under section 1842(b)(18)(C) of the Act. 
Physical therapists, occupational therapists and speech-language 
pathologists are not among the practitioners identified in section 
1842(b)(18)(C) of the Act. We stated in the CY 2017 PFS final rule (81 
FR 80198) that because these services are predominantly furnished by 
physical therapists, occupational therapists and speech-language 
pathologists, we did not believe it would be appropriate to add them to 
the list of telehealth services at this time. In a subsequent 
submission for 2018, the original requester suggested that we might 
propose these services to be added to the list so that they can be 
furnished via telehealth when furnished by eligible distant site 
practitioners. We considered that possibility; however, since the 
majority of the codes are furnished by therapy professionals over 90 
percent of the time, we believed that adding therapy services to the 
telehealth list that explicitly describe the services of the kinds of 
professionals not included on the statutory list of distant site 
practitioners could result in confusion about who is authorized to 
furnish and bill for these services when furnished via telehealth. We 
also noted that several of these services, such as CPT code 97761, 
require directly physically manipulating the beneficiary, which is not 
possible to do through telecommunications technology. Therefore, we did 
not propose adding these codes to the list of Medicare telehealth 
services.
    b. Initial Hospital Care Services: CPT Codes--

 CPT code 99221 (Initial hospital care, per day, for the 
evaluation and management of a patient, which requires these 3 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/or 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/or family's needs. Usually, the problem(s) 
requiring admission are of low severity.)
 CPT code 99222 (Initial hospital care, per day, for the 
evaluation and management of a patient, which requires these 3 key 
components: A comprehensive history; A comprehensive examination; and 
Medical decision making of moderate complexity. Counseling and/or 
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/or family's needs. Usually, the 
problem(s) requiring admission are of moderate severity.)
 CPT code 99223 (Initial hospital care, per day, for the 
evaluation and management of a patient, which requires these 3 key 
components: A comprehensive history; A comprehensive examination; and 
Medical decision making of high complexity. Counseling and/or 
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/or family's needs. Usually, the 
problem(s) requiring admission are of high severity.)

    We previously considered a request to add these codes to the 
telehealth list. As we stated in the CY 2011 PFS final rule with 
comment period (75 FR 73315), while initial inpatient consultation 
services are currently on the list of approved telehealth services, 
there are no services on the current list of telehealth services that 
resemble initial hospital care for an acutely ill patient by the 
admitting practitioner who has ongoing responsibility for the patient's 
treatment during the course of the hospital stay. Therefore, consistent 
with prior rulemaking, we did not propose that initial hospital care 
services be

[[Page 53010]]

added to the Medicare telehealth services list on a category 1 basis.
    The initial hospital care codes describe the first visit of the 
hospitalized patient by the admitting practitioner who may or may not 
have seen the patient in the decision-making phase regarding 
hospitalization. Based on the description of the services for these 
codes, we believed it is critical that the initial hospital visit by 
the admitting practitioner be conducted in person to ensure that the 
practitioner with ongoing treatment responsibility comprehensively 
assesses the patient's condition upon admission to the hospital through 
a thorough in-person examination. Additionally, the requester submitted 
no additional research or evidence that the use of a telecommunications 
system to furnish the service produces demonstrated clinical benefit to 
the patient; therefore, we also did not propose adding initial hospital 
care services to the Medicare telehealth services list on a category 2 
basis.
    We note that Medicare beneficiaries who are being treated in the 
hospital setting can receive reasonable and necessary E/M services 
using other HCPCS codes that are currently on the Medicare telehealth 
list including those for subsequent hospital care, initial and follow-
up telehealth inpatient and emergency department consultations, as well 
as initial and follow-up critical care telehealth consultations.
    Therefore, we did not propose to add the initial hospital care 
services to the list of Medicare telehealth services for CY 2018.
    c. Online E/M by physician/QHP: CPT Code--

 CPT code 99444 (Online evaluation and management service 
provided by a physician or other qualified health care professional who 
may report evaluation and management services provided to an 
established patient or guardian, not originating from a related E/M 
service provided within the previous 7 days, using the Internet or 
similar electronic communications network)

    As we indicated in the CY 2016 final rule with comment period (80 
FR 71061), CPT code 99444 is assigned a status indicator of ``N'' (Non-
covered service). Under section 1834(m)(2)(A) of the Act, Medicare pays 
the physician or practitioner furnishing a telehealth service an amount 
equal to the amount that would have been paid if the service was 
furnished without the use of a telecommunications system. Because CPT 
code 99444 is currently non-covered, there would be no Medicare payment 
if this service were furnished without the use of a telecommunications 
system. Because this code is a non-covered service for which no 
Medicare payment may be made under the PFS, we did not propose adding 
online E/M services to the list of Medicare telehealth services for CY 
2018.
    d. Monthly Capitation Payment (MCP) for ESRD-Related Services for 
Home Dialysis, by Age: CPT Codes--

 CPT codes 90963 (End-stage renal disease (ESRD) related 
services for home dialysis per full month, for patients younger than 2 
years of age to include monitoring for the adequacy of nutrition, 
assessment of growth and development, and counseling of parents); 90964 
(End-stage renal disease (ESRD) related services for home dialysis per 
full month, for patients 2-11 years of age to include monitoring for 
the adequacy of nutrition, assessment of growth and development, and 
counseling of parents); 90965 (End-stage renal disease (ESRD) related 
services for home dialysis per full month, for patients 12-19 years of 
age to include monitoring for the adequacy of nutrition, assessment of 
growth and development, and counseling of parents); and 90966 (End-
stage renal disease (ESRD) related services for home dialysis per full 
month, for patients 20 years of age and older)
 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); and 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).

    In the CY 2004 PFS final rule with comment period (68 FR 63216), we 
established HCPCS G-codes for ESRD monthly capitation payments (MCPs), 
which were replaced by CPT codes in CY 2009 (73 FR 69898). The services 
described by CPT codes 90963 through 90966 were added to the Medicare 
telehealth list in CY 2005 (69 FR 66276) and CPT codes 90967 through 
90970 were added to the Medicare telehealth list in the CY 2017 PFS 
final rule (81 FR 80194); however, we specified that the required 
clinical examination of the vascular access site must be furnished 
face-to-face ``hands on'' (without the use of an interactive 
telecommunications system) by a physician, clinical nurse specialist 
(CNS), nurse practitioner (NP), or physician assistant (PA). The 
American Telemedicine Association (ATA) submitted a new request for CY 
2018 requesting that we allow telehealth coverage of ESRD procedure 
codes without in-person exam of the catheter access site monthly. Our 
current policy reflects our understanding that evaluation of the 
integrity and functionality of the access site is a critical element of 
the services described by the codes and that this element cannot be 
performed via telecommunications technology. The requester did not 
submit evidence to support the assertion that effective examination of 
the access site can be executed via telecommunications technology. 
Therefore, for CY 2018, we did not propose any changes to the policy 
requiring that the MCP practitioner must furnish at least one face-to-
face encounter with the home dialysis patient per month for clinical 
examination of the catheter access site. However, we are interested in 
more information about current clinically accepted care practices and 
to what extent telecommunications technology can be used to examine the 
access site. We are also interested in information about the clinical 
standards of care regarding the frequency of the evaluation of the 
access site.
    In summary, we proposed adding the following codes to the list of 
Medicare telehealth services beginning in CY 2018 on a category 1 
basis:

 HCPCS code G0296 (Counseling visit to discuss need for lung 
cancer screening using low dose CT scan (ldct) (service is for 
eligibility determination and shared decision making))
 HCPCS code G0506 (Comprehensive assessment of and care 
planning for patients requiring chronic care management services (list 
separately in addition to primary monthly care management service))
 CPT code 90785 (Interactive complexity (List separately in 
addition to the code for primary procedure))
 CPT codes 90839 and 90840 (Psychotherapy for crisis; first 60 
minutes) and (Psychotherapy for crisis; each additional 30 minutes 
(List separately in addition to code for primary procedure))
 CPT codes 96160 and 96161 (Administration of patient-focused 
health risk assessment instrument

[[Page 53011]]

(e.g., health hazard appraisal) with scoring and documentation, per 
standardized instrument) and (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)

    The following is a 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 the counseling visit to discuss need for lung cancer screening 
using low dose CT scan (LDCT) (HCPCS code G0296) and psychotherapy for 
crisis (CPT codes 90839 and 90840) to the Medicare telehealth list for 
CY 2018. Commenters also supported one or more of our proposals to add 
comprehensive assessment of and care planning for patients requiring 
chronic care management services (HCPCS code G0506), interactive 
complexity (CPT code 90785) and administration of health risk 
assessment (CPT codes 96160 and 96161). Commenters noted that by adding 
these services to the Medicare telehealth list, CMS was enhancing 
access and quality of care for Medicare beneficiaries.
    Response: We thank commenters for their support of 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 2018 on a Category 1 basis.
    Comment: Several commenters were supportive of CMS's proposed 
requirement that the distant site practitioner be able to mobilize 
resources at the originating site to defuse the crisis and restore 
safety, when applicable, when furnishing psychotherapy for crisis. One 
commenter stated that CMS' requirements for mobilization of resources 
are very important and the distant site practitioner should be aware of 
available services where the beneficiary is located in the event of a 
crisis. Another commenter pointed out that social workers who provide 
telehealth services are required by the National Association of Social 
Workers to be familiar with the resources in the state in which the 
patient resides. Several commenters requested that CMS clarify what was 
meant by ``mobilization of resources'' and provide applicable examples.
    Response: We appreciate commenters' responses to the explicit 
requirement regarding mobilization of resources for the psychotherapy 
for crisis codes (CPT codes 90839 and 90840). As noted above, 
``mobilization of resources'' is a description used in the CPT 
prefatory language. We would reiterate that, according to CPT, the 
critical element of ``mobilizing resources'' is the ability to 
communicate with and inform staff at the originating site to the extent 
necessary to restore safety.
    Comment: Several commenters disagreed with the proposal not to add 
CPT codes 99221-99223 (inpatient hospital care) to the Medicare 
telehealth list. One commenter stated that they believe these services 
could be furnished via Medicare telehealth. They pointed to the fact 
that for CY 2017, CMS valued the critical care consultation G-codes 
(HCPCS codes G0508 and G0509) with RVUs similar to those for the 
inpatient hospital care codes as evidence that CMS believes they are 
essentially the same service.
    Response: As we discussed in the 2018 PFS proposed rule, we do not 
believe that the full range of services described by CPT codes 99221-
99223 can be furnished via telecommunications technology as we believe 
it is critical that the initial hospital visit by the admitting 
practitioner be conducted in person to ensure that the practitioner 
with ongoing treatment responsibility comprehensively assesses the 
patient's condition upon admission to the hospital through a thorough 
in-person examination.
    We believe that the telehealth critical care consultation codes 
(HCPCS codes G0508 and G0509) more accurately describe the kind of 
services that can be furnished to patients via telehealth than the 
initial inpatient hospital visit E/M codes that describe services with 
elements that can only be furnished in-person. The valuation for HCPCS 
codes G0508 and G0509 was developed based on our assessment that the 
overall work (resources in time and intensity) involved in furnishing 
the services is similar to the in-person critical care service codes, 
not that all elements of the services are the same. Many services paid 
under the PFS share similar, if not exactly the same work RVUs, without 
necessarily describing the exact same elements of the service. For more 
on the critical care consultation codes in the context of telehealth, 
please see the CY 2017 PFS final rule (81 FR 80196 through 80197 and 81 
FR 80352).
    Comment: Several commenters disagreed with our decision not to add 
various physical and occupational therapy, and speech language 
pathology services to the Medicare telehealth list.
    Response: As noted above, the majority of the codes requested are 
furnished by therapy professionals over 90 percent of the time, and we 
believe that adding therapy services to the telehealth list that are 
furnished by professionals not included on the statutory list of 
distant site practitioners could result in confusion about who is 
authorized to bill for these services when furnished via telehealth. 
Additionally, some of the codes involve physical manipulation of the 
patient, which cannot be accomplished via an interactive 
telecommunications system.
    Comment: Several commenters responded to our decision not to remove 
the requirement for a monthly in-person visit to examine the catheter 
access site for ESRD services conducted via telehealth. Another 
commenter encouraged CMS to lessen the requirements by making the in-
person visit a quarterly, as opposed to monthly, requirement. Other 
commenters stated that the examination of the catheter access site 
could be conducted remotely via telecommunications technology.
    Response: We appreciate the feedback on our proposal and we will 
consider the comments on the frequency of the examination of the 
catheter access site and whether the examination could be conducted 
remotely for future rulemaking.
    Comment: One commenter disagreed with the decision not to propose 
to add CPT code 99444 (online E/M) to the Medicare telehealth list, 
stating that this service would increase access to care, especially for 
follow-up visits and medication management.
    Response: As we noted above, CPT code 99444 is currently non-
covered, so there is no Medicare payment for this service. As such, 
there would be no payment for this service even if we were to add it to 
the telehealth list. Additionally, because this service does not 
describe a service typically furnished in-person, it would not be 
considered a telehealth service under the applicable provisions of law. 
For both of these reasons, we continue to believe that it would not be 
appropriate to add CPT code 99444 to the Medicare telehealth list.
    Comment: Many commenters provided recommendations for additional 
services that could be added to the Medicare telehealth list, such as 
an add-on code for patients requiring care planning for cognitive 
impairment, follow-up care for liver transplant patients, emergency 
department visits, oncology and podiatric-specific services, eConsult 
services, Medical Nutrition Therapy (MNT), and Diabetes Self Management 
Training (DSMT).

[[Page 53012]]

    Response: We thank commenters for these suggestions and will 
consider these for future notice and comment rulemaking. We also wish 
to remind commenters that requests for specific services to be added to 
the Medicare telehealth list can be submitted until December 31st of 
each calendar year to be considered for the next rulemaking cycle. For 
more information on submitting a request for an addition to the list of 
Medicare telehealth services, including where to mail these requests, 
see our Web site at https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/index.html.
    Since several commenters requested that we add MNT and DSMT to the 
telehealth list, we also wish to remind commenters that codes for both 
MNT and DSMT are currently on the Medicare telehealth list. The current 
list of Medicare telehealth services can be viewed on our Web site, 
https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/Telehealth-Codes.html.
4. Elimination of the Required Use of the GT Modifier on Professional 
Claims
    We have required distant site practitioners to report one of two 
longstanding HCPCS modifiers when reporting telehealth services. 
Current guidance instructs practitioners to submit claims for 
telehealth services using the appropriate CPT or HCPCS code for the 
professional service along with the telehealth modifier GT (via 
interactive audio and video telecommunications systems). For federal 
telemedicine demonstration programs in Alaska or Hawaii, practitioners 
are instructed to submit claims using the appropriate CPT or HCPCS code 
for the professional service along with the telehealth modifier GQ if 
telehealth services are performed ``via an asynchronous 
telecommunications system.'' By coding and billing these modifiers with 
a service code, practitioners are certifying that both the broad and 
code-specific telehealth requirements have been met.
    In the CY 2017 PFS final rule (81 FR 80201), we finalized payment 
policies regarding Medicare's use of a new Place of Service (POS) Code 
describing services furnished via telehealth. The new POS code became 
effective January 1, 2017, and we believe its use is redundant with the 
requirements to apply the GT modifier for telehealth services. We did 
not propose to implement a change to the modifier requirements during 
CY 2017 rulemaking because at the time of the CY 2017 PFS proposed 
rule, we did not know whether the telehealth POS code would be made 
effective for January 1, 2017. However, we noted in the CY 2017 PFS 
final rule that, like the modifiers, use of the telehealth POS code 
certifies that the service meets the telehealth requirements.
    Because a valid POS code is required on professional claims for all 
services, and the appropriate reporting of the telehealth POS code 
serves to indicate both the provision of the service via telehealth and 
certification that the requirements have been met, we believe that it 
is unnecessary to also require the distant site practitioner report the 
GT modifier on the claim. Therefore, we proposed to eliminate the 
required use of the GT modifier on professional claims. Because 
institutional claims do not use a POS code, we proposed for distant 
site practitioners billing under CAH Method II to continue to use the 
GT modifier on institutional claims. For purposes of the federal 
telemedicine demonstration programs in Alaska or Hawaii, we proposed to 
retain the GQ modifier to maintain the distinction between synchronous 
and asynchronous telehealth services, as reflected in statute.
    The following is a summary of the public comments received on our 
proposal to eliminate the required use of the GT modifier on 
professional claims:
    Comment: The majority of the commenters were supportive of 
eliminating the required use of the GT modifier on professional claims 
and agreed that this would reduce administrative burden.
    Response: We thank the commenters for their support of the 
proposal. After considering the public comments, we are finalizing the 
proposal to eliminate the required use of the GT modifier on 
professional claims.
    Comment: One commenter supported the proposal to no longer require 
the GT modifier on professional claims, but requested that we not 
delete the GT modifier because other payers who receive Medicare 
crossover claims might still require its use.
    Response: We appreciate the commenters' concerns and reiterate that 
the GT modifier will be retained for Medicare for use in CAH Method II 
billing. Our decision to no longer use the modifier for professional 
claims will not affect its use in other appropriate circumstances.
    Comment: One commenter stated that there is significant effort 
involved in updating computer systems to use the new POS code rather 
than a modifier, and encouraged CMS to consider that in future 
rulemaking.
    Response: We appreciate the comment. We note that the required use 
of the telehealth POS code was finalized for CY 2017; however, we have 
a continuing interest in reducing administrative burden and will 
consider this for future rulemaking.
    Comment: One commenter urged CMS to adopt a uniform method for 
identification of telehealth services and suggested that we use the 95 
modifier, the new CPT modifier for CY 2017.
    Response: We appreciate the comment, especially with the 
possibility that this could reduce administrative burdens associated 
with multiple modifiers. We will consider use of the 95 modifier for 
this purpose for future rulemaking.
    Comment: A few commenters noted that the policy on the telehealth 
place of service (POS) code that was finalized for CY 2017 and took 
effect on January 1, 2017 resulted in a decrease in payment for some 
distant site practitioners furnishing services via telehealth in the 
non-facility setting and one commenter requested that we reverse the 
policy to pay the facility rate for all services furnished via 
telehealth.
    Response: We understand the concerns raised about the current 
policy of using the facility rate for payment to distant site 
telehealth practitioners for telehealth services and will also further 
consider this policy for future rulemaking.
5. Comment Solicitation on Medicare Telehealth Services
    We have received numerous requests from stakeholders to expand 
access to telehealth services. As noted above, Medicare payment for 
telehealth services is restricted by statute, which establishes the 
services initially eligible for Medicare telehealth and limits the use 
of telehealth by defining both eligible originating sites (the location 
of the beneficiary) and the distant site practitioners who may furnish 
and bill for telehealth services. Originating sites are limited both by 
geography and provider setting. We have the authority to add to the 
list of telehealth services based on our annual process, but cannot 
change the limitations relating to geography, patient setting, or type 
of furnishing practitioner because these requirements are specified in 
statute. For CY 2018, we sought information regarding ways that we 
might further expand access to telehealth services within the current 
statutory authority and pay appropriately for services that take full 
advantage of communication technologies.
    Comment: We received many thoughtful comments in response to the

[[Page 53013]]

comment solicitation. Commenters were very supportive of CMS expanding 
access to telehealth services. Many commenters noted that Medicare 
payment for telehealth services is restricted by statute, but 
encouraged CMS to continue to explore alternate means to recognize and 
support technological developments in healthcare. Commenters provided 
many suggestions for how CMS could expand access to telehealth services 
within the current statutory authority and pay appropriately for 
services that take full advantage of communication technologies, such 
as waiving portions of the statutory restrictions using demonstration 
authority.
    Response: We thank the commenters for their input. We reiterate our 
commitment to expanding access to telehealth services consistent with 
statutory authority, and paying appropriately for services that 
maximize telecommunications technology. We will carefully review the 
comments and consider commenters' suggestions for future rulemaking and 
any appropriate sub-regulatory changes.
6. Comment Solicitation on Remote Patient Monitoring
    In addition to the broad comment solicitation regarding Medicare 
telehealth services, we also specifically solicited comment on whether 
to make separate payment for CPT codes that describe remote patient 
monitoring. We note that remote patient monitoring services would 
generally not be considered Medicare telehealth services as defined 
under section 1834(m) of the Act. Rather, like the interpretation by a 
physician of an actual electrocardiogram or electroencephalogram 
tracing that has been transmitted electronically, these services 
involve the interpretation of medical information without a direct 
interaction between the practitioner and beneficiary. As such, they are 
paid under the same conditions as in-person physicians' services with 
no additional requirements regarding permissible originating sites or 
use of the telehealth place of service code.
    We noted we were particularly interested in comments regarding CPT 
code 99091 (Collection and interpretation of physiologic data (e.g., 
ECG, blood pressure, glucose monitoring) digitally stored and/or 
transmitted by the patient and/or caregiver to the physician or other 
qualified health care professional, qualified by education, training, 
licensure/regulation (when applicable) requiring a minimum of 30 
minutes of time). This code is currently assigned a procedure status of 
B (bundled). As with many other bundled codes, we currently assign RVUs 
for this code based on existing RUC recommendations, even though we 
have considered the services described by the code to be bundled with 
other services. In addition to comments on the payment status and 
valuation for this code (the RUC-recommended value, specifically) we 
sought information about the circumstances under which this code might 
be reported for separate payment, including how to differentiate the 
time related to these services from other services, including care 
management services. For example, PFS payment for analysis of patient-
generated health data is considered included in chronic care management 
(CCM) services (CPT codes 99487, 99489, and 99490) to the extent that 
this activity is medically necessary and performed as part of CCM (see 
the CY 2015 PFS final rule (79 FR 67727), CY 2016 PFS final rule (81 FR 
80244), and the CMS FAQ available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Downloads/Payment_for_CCM_Services_FAQ.pdf). We also sought comment from 
beneficiaries and beneficiary advocacy organizations on the value of 
such services and what protections might be necessary to assure that 
beneficiaries are properly informed that they are receiving a remote 
monitoring service, since beneficiaries would be required to pay 
standard cost sharing for such services. Finally, regarding CPT code 
99091, we sought available information regarding potential utilization 
assumptions we might make for the service for purposes of PFS 
ratesetting, were we to make it payable for CY 2018 or in the future; 
since making such assumptions would be necessary to implement separate 
payment. We noted that since the PFS is a budget neutral system, any 
increase in payment made for particular services would result in 
decreases in payment for other services, and the degree of that 
decrease would depend, in large part, on the utilization assumptions.
    We also sought comment on other existing codes that describe 
extensive use of communications technology for consideration for future 
rulemaking, including CPT code 99090 (Analysis of clinical data stored 
in computers (e.g., ECGs, blood pressures, hematologic data)). CPT code 
99090 is also assigned a procedure status of B (bundled). CPT code 
99090 also has a payment status of bundled; and we do not have RUC-
recommended values for this service, and therefore, currently do not 
assign RVUs.
    The following is a summary of the public comments received on our 
proposals and our responses:
    Comment: Commenters were generally supportive of CMS recognizing 
the increasing importance of remote patient monitoring. Several 
commenters recommended that CMS make separate payment for CPT code 
99091. Other commenters acknowledged that the current code, which has 
not been separately payable for some time, may not optimally describe 
the services furnished using current technology. Some of these 
commenters encouraged CMS to make the services separately payable for 
CY 2018, but also noted that the CPT Editorial Panel is currently 
working on codes that more accurately describe remote monitoring.
    A few commenters expressed opposition to making CPT codes 99090 
and/or 99091 separately payable, noting that these are generic codes 
and are duplicative of other codes that are more specific, such as CPT 
codes 93297 ((Interrogation device evaluation(s), (remote) up to 30 
days; implantable cardiovascular monitor system, including analysis of 
1 or more recorded physiologic cardiovascular data elements from all 
internal and external sensors, analysis, review(s) and report(s) by a 
physician or other qualified health care professional)) and CPT code 
93228 (External mobile cardiovascular telemetry with 
electrocardiographic recording, concurrent computerized real time data 
analysis and greater than 24 hours of accessible ECG data storage 
(retrievable with query) with ECG triggered and patient selected events 
transmitted to a remote attended surveillance center for up to 30 days; 
review and interpretation with report by a physician or other qualified 
health care professional)). Several commenters encouraged CMS to wait 
for the CPT Editorial Panel to complete its work of reviewing and 
revising the CPT codes and consider valuing the new codes in the 
future. Of the commenters who were supportive of unbundling and making 
separate payment for CPT code 99091, a few suggested that CPT code 
99091 could be billed in association with chronic care management (CCM) 
services.
    Response: We agree with commenters that monitoring services can be 
a significant part of ongoing medical care and that we should recognize 
these services for separate payment as soon as practicable. However, we 
also agree with commenters that the two codes in question may not 
optimally describe these services as currently furnished. In order to 
reconcile these concerns,

[[Page 53014]]

especially considering the expectation that CPT coding revisions are 
expected in the immediate future, we believe that activating CPT code 
99091 for separate payment under Medicare for 2018 will serve to 
facilitate appropriate payment for these services in the short term. 
Unlike CPT code 99090, CPT code 99091 specifies that the information is 
interpreted by a physician or other qualified health care professional, 
and it specifies that this activity requires a minimum of 30 minutes of 
time. After consideration of these differences between the two CPT 
codes, and after consideration of the public comments recommending that 
we make separate payment for CPT code 99091, we were persuaded to 
change the status of CPT code 99091 from bundled to active for CY 2018. 
In addition, as noted in the CY 2018 PFS proposed rule, the RUC had 
already provided CMS with RVUs for CPT code 99091, whereas it did not 
provide CMS with RVUs for CPT code 99090. Also, we did not receive 
specific comments to suggest reasons for changing CPT code 99090 to 
``active'' status, so we are retaining the ``bundled'' status for that 
code. We will consider whether to adopt and establish relative value 
units for CPT codes that may be developed by the CPT Editorial Panel 
under our standard process for future years through notice and comment 
rulemaking. However, the comments make it clear to us that separate 
payment for this code will not mitigate the need for coding revisions. 
In order to account for some of the concerns raised by commenters 
regarding the broad nature of the code that describes professional 
collection and interpretation of the stored patient data, we believe 
that we can apply some of the current requirements regarding chronic 
care management services (CCM) to identify circumstances appropriate 
for reporting the code. Specifically, given the non face-to-face nature 
of the services described by CPT code 99091, we are requiring that the 
practitioner obtain advance beneficiary consent for the service and 
document this in the patient's medical record. Additionally, for new 
patients or patients not seen by the billing practitioner within 1 year 
prior to billing CPT code 99091, we are requiring initiation of the 
service during a face-to-face visit with the billing practitioner, such 
as an Annual Wellness Visit or Initial Preventive Physical Exam, or 
other face-to-face visit with the billing practitioner. Levels 2 
through 5 E/M visits (CPT codes 99212 through 99215) would qualify as 
the face-to-face visit. However, services that do not involve a face-
to-face visit by the billing practitioner or are not separately payable 
under the PFS (such as CPT code 99211, anticoagulant management, online 
services, telephone and other E/M services) do not qualify as 
initiating visits. The face-to-face visit included in transitional care 
management (TCM) services (CPT codes 99495 and 99496) would also 
qualify. We are also adopting the prefatory language for CPT code 
99091, including the requirement that it ``should be reported no more 
than once in a 30-day period to include the physician or other 
qualified health care professional time involved with data accession, 
review and interpretation, modification of care plan as necessary 
(including communication to patient and/or caregiver), and associated 
documentation.''
    Finally, because we believe the kind of analysis involved in 
furnishing this service is complementary to CCM and other care 
management services, for the purposes of Medicare billing, we are 
allowing that CPT code 99091 can be billed once per patient during the 
same service period as CCM (CPT codes 99487, 99489, and 99490), TCM 
(CPT codes 99495 and 99496), and behavioral health integration (BHI) 
(CPT codes 99492, 99493, 99494, and 99484). We note that under current 
billing rules, time counted toward the CCM codes generally refers to 
time spent by clinical staff furnishing care management services; while 
CPT code 99091 refers to practitioner time. We note that time spent 
furnishing these services could not be counted towards the required 
time for both codes for a single month.
    We also note that the new separate payment for CPT code 99091 will 
be excluded from the calculation of the net reduction in expenditures 
due to changes in coding and valuation for purposes of the misvalued 
code target, consistent with policies finalized in the CY 2016 PFS 
final rule with comment period (80 FR 70926). CPT code 99091 describes 
a service that is newly separately reportable, but for which no 
corresponding reduction is being made to existing codes and instead 
reductions under the PFS are being taken exclusively through a budget 
neutrality adjustment.
    We look forward to forthcoming coding changes through the CPT 
process that we anticipate will better describe the role of remote 
patient monitoring in contemporary practice and potentially mitigate 
the need for the additional billing requirements associated with these 
services.
7. Telehealth Originating Site Facility Fee Payment Amount Update
    Section 1834(m)(2)(B) of the Act established 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 Medicare Economic Index 
(MEI) as defined in section 1842(i)(3) of the Act. The originating site 
facility fee for telehealth services furnished in CY 2017 is $25.40. 
The MEI increase for 2018 is 1.4 percent and is based on the most 
recent historical update through 2017Q2 (1.8 percent), and the most 
recent historical MFP through calendar year 2016 (0.4 percent). 
Therefore, for CY 2018, the payment amount for HCPCS code Q3014 
(Telehealth originating site facility fee) is 80 percent of the lesser 
of the actual charge or $25.76. The Medicare telehealth originating 
site facility fee and the MEI increase by the applicable time period is 
shown in Table 8.

     Table 8--The Medicare Telehealth Originating Site Facility Fee
------------------------------------------------------------------------
               Time period                 MEI increase    Facility fee
------------------------------------------------------------------------
10/01/2001-12/31/2002...................             N/A          $20.00
01/01/2003-12/31/2003...................               3           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
01/01/2010-12/31/2010...................             1.2           24.00
01/01/2011-12/31/2011...................             0.4           24.10

[[Page 53015]]

 
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
01/01/2018-12/31/2018...................             1.4           25.76
------------------------------------------------------------------------

E. 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.H. 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 
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 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/docs/default-source/congressional-testimony/testimony-report-to-the-congress-medicare-payment-policy-march-2006-.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/docs/default-source/reports/march-2009-report-to-congress-medicare-payment-policy.pdf), 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.

[[Page 53016]]

    Section 1848(c)(2)(K)(iii) of the Act also specifies that the 
Secretary may use existing processes to receive recommendations on the 
review and appropriate adjustment of potentially misvalued services. In 
addition, the Secretary may conduct surveys, other data collection 
activities, studies, or other analyses, as the Secretary determines to 
be appropriate, to facilitate the review and appropriate adjustment of 
potentially misvalued services. This section also authorizes the use of 
analytic contractors to identify and analyze potentially misvalued 
codes, conduct surveys or collect data, and make recommendations on the 
review and appropriate adjustment of potentially misvalued services. 
Additionally, this section provides that the Secretary may coordinate 
the review and adjustment of any RVU with the periodic review described 
in section 1848(c)(2)(B) of the Act. Section 1848(c)(2)(K)(iii)(V) of 
the Act specifies that the Secretary may make appropriate coding 
revisions (including using existing processes for consideration of 
coding changes) that may include consolidation of individual services 
into bundled codes for payment under the 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 approximately 
1,700 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 (76 
FR 73055 through 73958), we finalized our policy to consolidate the 
review of physician work and PE at the same time, 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 (73 FR 38589), 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. 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 services. 
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.
    In the CY 2017 PFS final rule, we finalized for review a list of 
potentially misvalued services, which included eight codes in the end-
stage renal disease home dialysis family (CPT codes 90963-90970). We 
also finalized as potentially misvalued 19 codes identified through our 
screen for 0-day global services that are typically billed with an 
evaluation and management (E/M) service with modifier 25.
3. CY 2018 Identification and Review of Potentially Misvalued Services
    In the CY 2012 PFS final rule with comment period (76 FR 73058), we 
finalized a process for the public to nominate potentially misvalued 
codes. The public and stakeholders may nominate potentially misvalued 
codes for review by submitting the code with supporting documentation 
by February 10 of each year. Supporting documentation for codes 
nominated for the annual review of potentially misvalued codes may 
include the following:
     Documentation in peer reviewed medical literature or other 
reliable data that there have been changes in physician work due to one 
or more of the following: Technique, knowledge and technology, patient 
population, site-of-service, length of hospital stay, and work time.
     An anomalous relationship between the code being proposed 
for review and other codes.
     Evidence that technology has changed physician work.
     Analysis of other data on time and effort measures, such 
as operating room logs or national and other representative databases.
     Evidence that incorrect assumptions were made in the 
previous valuation of the service, such as a misleading vignette, 
survey, or flawed crosswalk assumptions in a previous evaluation.
     Prices for certain high cost supplies or other direct PE 
inputs that are used to determine PE RVUs are inaccurate and do not 
reflect current information.
     Analyses of work time, work RVU, or direct PE inputs using 
other data sources (for example: Department of Veteran Affairs (VA) 
National Surgical Quality Improvement Program (NSQIP), the Society for 
Thoracic Surgeons (STS) National Database, and the Physician Quality 
Reporting System (PQRS) databases).
     National surveys of work time and intensity from 
professional and management societies and organizations, such as 
hospital associations.
    We evaluate the supporting documentation submitted with the 
nominated codes and assess whether the nominated codes appear to be 
potentially misvalued codes appropriate for review under the annual 
process. In the following year's PFS proposed rule, we publish the list 
of nominated codes and indicate whether we proposed each nominated code 
as a potentially misvalued code. The public has the opportunity to 
comment on these and all other proposed potentially misvalued codes. In 
that year's final rule, we finalize our list of potentially misvalued 
codes.

[[Page 53017]]

a. Public Nomination of Arthrodesis of Sacroiliac Joint (CPT Code 
27279)
    After we issued the CY 2017 PFS final rule, we received a 
nomination and supporting documentation for one code to be considered 
as potentially misvalued. We evaluated the supporting documentation for 
this nominated code to ascertain whether the submitted information 
demonstrated that the code should be proposed as potentially misvalued.
    CPT code 27279 (Arthrodesis, sacroiliac joint, percutaneous or 
minimally invasive (indirect visualization), with image guidance, 
includes obtaining bone graft when performed, and placement of 
transfixing device) was nominated for review as a potentially misvalued 
code because the current work RVU is potentially undervalued and 
stakeholders recommended that it should be increased to 14.23. We 
proposed this code as a potentially misvalued code in the CY 2018 PFS 
proposed rule.
    The following is a summary of the public comments received on 
whether CPT code 27279 should be reviewed under the misvalued code 
initiative and our responses:
    Comment: One commenter disagreed with CMS' proposal of CPT code 
27279 as potentially misvalued, while many other commenters supported 
the proposal because they believe the service is significantly 
undervalued relative to other PFS services. While some commenters 
suggested the work RVU should be increased relative to other joint 
replacement procedures, like 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) which has a work RVU of 
13.18, other commenters recommended increasing the work RVU to 14.23 
because they stated that value better reflects the technical difficulty 
and increased time required to perform the procedure. Other commenters 
suggested specific work RVUs that were higher than 14.23 for similar 
reasons.
    A few commenters noted that CPT code 27279 is scheduled for review 
by the RUC in October 2018 as part of its standard review process. As a 
result, some commenters suggested that CMS should wait until the RUC 
makes a recommendation regarding the appropriate valuation of the code. 
Some commenters noted that the RUC intends to review this service in 
October 2018 and suggested that the timeframe for that review would 
mean that the code could not be appropriately valued prior to CY 2020.
    Response: After reviewing the range of public comments, we agree 
with commenters that CPT code 27279 is a potentially misvalued, and 
believe that a comprehensive review of the code values is warranted.
    While we appreciate the comments that included suggestions 
regarding the specific work RVUs that might represent more appropriate 
valuation, we agree with those commenters that urged us to wait for the 
code to be reviewed by the RUC. We note that should the RUC and other 
relevant stakeholders expedite their review process, we would be able 
to consider making changes during next year's rulemaking. If the RUC 
review process is not completed in time, we may not be able to make 
changes in next year's rulemaking and would wait for the RUC to 
complete its process before making changes in subsequent rulemaking.
b. Comment Solicitation on Dialysis Vascular Access Codes (CPT Codes 
36901-36909)
    In the CY 2017 PFS final rule, we noted that the assertions by some 
commenters regarding appropriate values for the dialysis vascular 
access codes newly created in CY 2017 (CPT codes 36901 through 36909) 
did not include data that would warrant increases to the work RVUs we 
proposed and finalized in that rule (81 FR 80290-80297). However, we 
urged interested stakeholders to consider submitting robust data 
regarding costs for these and other services (81 FR 80290-80297). We 
have continued to receive feedback from stakeholders regarding the work 
valuation of these codes. Stakeholders have expressed concerns 
regarding the typical patient for these procedures as reflected in the 
information included in the RUC recommendations for CY 2017 and the 
importance of appropriate payment for ensuring access to care for 
Medicare beneficiaries. Therefore, we sought additional comment and 
requested robust data regarding the potentially misvalued work RVUs for 
CPT codes 36901 through 36909 and considered alternate work valuations 
for CY 2018, such as the RUC-recommended work RVUs from CY 2017, or 
other potential values based on submission of data through the public 
comment process. We noted that the RUC-recommended work RVUs for these 
services were displayed in the CY 2017 PFS final rule (81 FR 80290 
through 80296).
    The following is a summary of the public comments received on CPT 
codes 36901-36909 and our responses:
    Comment: Many commenters were concerned that the values currently 
assigned to the dialysis circuit family of codes have already and will 
continue to compromise patient access to vascular access services; with 
one commenter specifically requesting that CMS promptly reevaluate 
these codes. Several commenters supported increases to the work RVUs 
and explained that the greater complexity of the patient population for 
these services involved greater relative intensity than other services, 
especially since the codes involve obtaining new access as well as 
secondary access to the dialysis circuit, while the codes used as 
crosswalks for the current valuation involve colonoscopy through an 
existing access.
    The overwhelming majority of commenters suggested we finalize the 
CY 2017 RUC-recommended work RVUs for CPT codes 36901-36909.
    Response: We appreciate commenters' responses to our request for 
new information. After further reflection, we are persuaded by 
commenters' explanations regarding the complexities of care related to 
this patient population specifically and after reviewing these 
additional remarks, agree that these services are currently misvalued. 
Therefore for CY 2018, we are finalizing the CY 2017 RUC-recommended 
work RVUs for CPT codes 36901-36909, consistent with the requests of 
public commenters.
c. CMS Nomination of Flow Cytometry Codes (CPT Codes 88184 and 88185)
    We have received conflicting information about the direct PE inputs 
for CPT codes 88184 (Flow cytometry, cell surface, cytoplasmic, or 
nuclear marker, technical component only; first marker) and 88185 (Flow 
cytometry, cell surface, cytoplasmic, or nuclear marker, technical 
component only; each additional marker (List separately in addition to 
code for first marker)). In the CY 2018 PFS proposed rule, we proposed 
these codes as potentially misvalued so that they can be reviewed again 
because some stakeholders have suggested the clinical labor and 
supplies that were previously finalized are no longer accurate.
    Comment: We received several comments regarding various clinical 
labor and supply inputs for CPT codes 88184 and 88185 urging CMS to use 
the RUC recommendations for CY 2017 in developing final PE RVUs for 
these services instead of recommending additional review of these codes 
under the misvalued code initiative.
    Response: We appreciate these comments and, based on this

[[Page 53018]]

suggestion, we have re-examined the CY 2017 RUC-recommended direct PE 
inputs for these services in light of specific comments. We refer 
readers to section II.H of this final rule. This section describes the 
direct PE input changes between CY 2017 and CY 2018 for specific 
services.
d. Comment Solicitation on Emergency Department Payment Rates (CPT 
Codes 99281-99385)
    We received information suggesting that the work RVUs for emergency 
department visits did not appropriately reflect the full resources 
involved in furnishing these services. Specifically, stakeholders 
expressed concerns that the work RVUs for these services have been 
undervalued given the increased acuity of the patient population and 
the heterogeneity of the sites, such as freestanding and off-campus 
emergency departments, where emergency department visits are furnished. 
Therefore, we sought comment on whether CPT codes 99281-99385 
(Emergency department visits for the evaluation and management of a 
patient) should be reviewed under the misvalued code initiative.
    The following is a summary of the public comments received on 
whether CPT codes 99281-99385 should be reviewed under the misvalued 
code initiative and our responses:
    Comment: Most commenters had no objection to review of these codes. 
Several commenters stated that the work RVUs for the emergency 
department evaluation and management (E/M) services, like most other E/
M services, are undervalued given the increased acuity of the patient 
population and the heterogeneity of the sites where emergency 
department visits are furnished. One commenter suggested that CMS 
evaluate alternatives to the misvalued code initiative for review of 
these codes, but another commenter explicitly stated that review of 
these services should be undertaken by the RUC rather than CMS. In its 
comment, the RUC stated if CMS finalizes the codes as potentially 
misvalued, it will add these codes to its list of potentially misvalued 
services.
    In contrast, one commenter stated that the problem of under-
reimbursement for these services would be better addressed by 
streamlining the E/M process for documenting the higher level of care. 
Another commenter stated that given the significant changes to 
documentation guidelines for E/M services that may be forthcoming in 
this rule cycle, it is premature and somewhat difficult to advise on 
potential revaluation of any E/M codes, pending details on how the 
documentation guideline revisions are resolved.
    Response: We agree with the majority of commenters that these 
services may be potentially misvalued given the increased acuity of the 
patient population and the heterogeneity of the sites where emergency 
department visits are furnished. As a result, we look forward to 
reviewing the RUC's recommendations regarding the appropriate valuation 
of these services for our consideration in future notice and comment 
rulemaking. Additionally, regarding the commenters' concerns about 
documentation guidelines for E/M services, we refer readers to section 
II.I for details regarding our comment solicitation on documentation 
for E/M guidelines more generally.
e. Comment Solicitation on New Potentially Misvalued Code Screens
    For over a decade, CMS has collaborated with the RUC to regularly 
prioritize codes for review by using the categories specified in the 
statute or as determined appropriate. We generally have referred to 
these categories as ``misvalued code screens.'' To supplement ongoing 
RUC identification of potentially misvalued codes through established 
screens, CMS regularly uses PFS rulemaking to identify other screens 
for use in identifying potentially misvalued codes. For example, in 
recent years, CMS has prioritized the following screens:
     Codes with low work RVUs commonly billed in multiple units 
per single encounter.
     Codes with high volume and low work RVUs.
     Codes with site-of-service-anomalies.
     E/M codes.
     PFS high expenditure services.
     Services with standalone PE procedure time.
     Services with anomalous time.
     Contractor Medical Director identified potentially 
misvalued codes.
     Codes with higher total Medicare payments in office than 
in hospital or ASC.
     Publicly nominated potentially misvalued codes.
     0-day global services that are typically billed with an 
evaluation and management (E/M) service with modifier 25.
    Although we did not propose a new screen for CY 2018, we continue 
to believe that it is important to prioritize codes for review under 
the misvalued code initiative. As a result, we solicited public comment 
on the best approach for developing screens, as well as what particular 
new screens we might consider. We will consider these comments for 
future rulemaking.
    The following is a summary of the public comments received on the 
best approach for developing screens, as well as what particular new 
screens we might consider and our responses:
    Comment: One commenter suggested revisiting two recent efforts 
funded by CMS, reports by the Urban Institute and RAND, for 
prioritization of codes for review under the misvalued code initiative. 
Both reports include examination on the relationship between service 
times and work RVUs, in some cases for specific services. One commenter 
suggested that we no longer utilize potentially misvalued code screens 
due to the burden it causes the specialty societies. Other commenters 
suggest that CMS work in collaboration with the RUC to identify 
potentially misvalued codes and to not re-review codes that were 
recently reviewed by the RUC.
    Response: We thank commenters for their input and will consider all 
recommendations for future rulemaking.

F. 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 of 2016 (Pub. L. 114-113) amended section 1848(b) of 
the Act by establishing a new paragraph (9) of subsection (b). Section 
1848(b)(9)(B) of the Act provides for a 7 percent reduction in payments 
for the technical component (TC) for imaging services made under the 
PFS that are X-rays (including the technical component portion of a 
global service) taken using computed radiography technology furnished 
during CYs 2018 through 2022, and for a 10 percent reduction for the 
technical component of such imaging services furnished during CY 2023 
or a subsequent year. Computed radiography technology is defined for 
purposes of this paragraph as cassette-based imaging that utilizes an 
imaging plate to create the image involved. Section 1848(b)(9) of the 
Act also requires implementation of the reduction in payments through 
appropriate mechanisms, which can include the use of modifiers. In 
accordance with section 1848(c)(2)(B)(v)(X) of the Act, the adjustments 
under section 1848(b)(9)(A) of the Act are exempt from the budget 
neutrality requirement.
    We stated in the CY 2017 PFS proposed rule that because the 
required reductions in PFS payment for the TC

[[Page 53019]]

of imaging services (including the TC portion of a global service) that 
are X-rays taken using computed radiography technology did not apply 
for CY 2017, we would address implementation of section 1848(b)(9)(B) 
of the Act in future rulemaking. Therefore, to implement the provisions 
of section 1848(b)(9)(B) of the Act relating to the payment reduction 
for the TC (including the TC portion of a global service) of X-rays 
taken using computed radiography technology during CY 2018 or 
subsequent years, we proposed in the CY 2018 PFS proposed rule to 
establish a new modifier to be used on claims for these services.
    We proposed that beginning January 1, 2018, this modifier would be 
required to be used when reporting imaging services for which payment 
is made under the PFS that are X-rays (including the X-ray component of 
a packaged service) taken using computed radiography technology. The 
modifier would be required on claims for the technical component of the 
X-ray service, including when the service is billed globally because 
the PFS payment adjustment is made to the technical component 
regardless of whether it is billed globally, or billed separately using 
the TC modifier. The modifier must be used to report the specific 
services that are subject to the payment reduction and accurate use is 
subject to audit. The use of this proposed modifier to indicate an X-
ray taken using computed radiography would result in a 7 percent 
reduction for CYs 2018 through 2022 and a 10 percent reduction for CY 
2023 or a subsequent calendar year to the payments for the TC for such 
imaging services furnished as specified under section 1848(b)(9)(B) of 
the Act.
    The following is a summary of the public comments received and our 
responses:
    Comment: One commenter noted support for the computed radiography 
to digital X-ray payment differential but sought clarification 
regarding its implementation. The commenter stated that a new modifier 
will be designated to denote the CPT codes for computed radiography and 
HCPCS X-ray codes that are subject to the payment reduction; however, 
no listing of such codes was provided in the proposed rule. The 
commenter noted that similarly last year it requested a listing of the 
X-ray codes to which the modifier would apply. CMS declined to provide 
such a list on the basis that the payment differential would apply to 
any service performed using the film X-rays. The commenter stated that 
the listing of the film and computed radiography CPT and HCPCS codes 
would facilitate easy implementation, prevent ambiguity, be less 
burdensome, and prevent risk of audit.
    Response: We considered the commenter's concerns and recommendation 
that we maintain a list of CPT and HCPCS codes to which the policy 
applies. However, we do not agree that such a list would facilitate 
easy implementation, prevent ambiguity, be less burdensome, or prevent 
the risk of audit. We believe that the professionals who furnish and 
bill for these services are in the best position to determine whether a 
particular imaging service is appropriately described as X-rays taken 
using computed radiography.
    Comment: Some commenters expressed concern that rural and 
underserved areas are particularly penalized by this provision and that 
the use of a modifier places a burden on all providers and creates 
another opportunity for miscoding.
    Response: We appreciate the commenters' concerns, but under current 
law, we do not currently believe that we have authority to provide 
exemptions from the policy. We believe that the use of a modifier is 
the least burdensome method to identify the services to which the 
payment reduction applies, and to implement the required payment 
reduction for services that are X-rays taken using computed 
radiography.
    Comment: One commenter opined that the continued overall trend in 
imaging payment reductions is not sustainable for any quality imaging 
provider and that CMS should look for more creative solutions such as 
the AUC program, as well as reductions in mandated reporting.
    Response: We thank the commenter for the suggestions and will take 
these recommendations into consideration for future rulemaking.
    Comment: One commenter requested that CMS work with Congress to 
delay or eliminate the payment reductions, and ensure that clinicians 
are thoroughly educated and outreach is provided to ensure that 
stakeholders are thoroughly aware of the new requirements.
    Response: We will include information to educate clinicians 
regarding the new modifier requirement for services that are X-rays 
taken using computed radiography as part of ongoing provider education 
activities, though we acknowledge that we also appreciate assistance 
from private, national organizations, such as medical specialty 
societies in educating their membership. We appreciate the commenters' 
concerns regarding the overall merits of the statutory provision, but 
we do not believe that we have the authority to alter the application 
of the provision.
    Comment: Some commenters urged that physician practices be held 
harmless from financial and criminal penalties if the new modifiers are 
omitted or incorrectly applied at least for the first 3 years of the 
program (2017-2019). In addition, the commenter stated that audits by 
the Recovery Audit Contractors (RACs) related to the implementation of 
the transition from traditional X-ray imaging to digital radiology 
using the modifier should not be approved for the same time period.
    Response: We appreciate these suggestions and concerns but note 
that this final rule specifically addresses the payment policies 
related to the statutory provision. The kinds of enforcement activities 
addressed by these commenters are outside the scope of this final rule.
    Comment: Some commenters supported the use of the modifier to 
implement this requirement, but requested that the modifier be released 
as soon as possible in order to allow radiology practices to work out 
the logistics associated with compliance with the new requirement.
    Response: To implement this provision, we created modifier ``FY'' 
(X-ray taken using computed radiography technology/cassette-based 
imaging). Beginning in 2018, claims for X-rays taken using computed 
radiography/cassette-based imaging must include modifier ``FY'' that 
will result in the applicable payment reduction.
    Comment: One commenter supported the use of the modifier as the 
best indicator for the use of traditional X-rays or digital radiology. 
Another commenter supported the transition to digital imaging services 
because, according to the commenter, it is essential to reach 
widespread interoperability.
    Response: We thank commenters for their support.
    After consideration of the public comments, we are finalizing the 
proposal without modification.

G. Payment Rates Under the Medicare Physician Fee Schedule for 
Nonexcepted Items and Services Furnished by Nonexcepted Off-Campus 
Provider-Based Departments of a Hospital

1. Background
    Sections 1833(t)(1)(B)(v) and (t)(21) of the Act require that 
certain items and

[[Page 53020]]

services furnished by certain off-campus provider-based departments 
(PBDs) (collectively referenced here as nonexcepted items and services 
furnished by nonexcepted off-campus PBDs) shall not be considered 
covered OPD services for purposes of payment under the OPPS, and 
payment for those nonexcepted items and services furnished on or after 
January 1, 2017 shall be made under the applicable payment system. In 
the CY 2017 OPPS/ASC final rule with comment period (81 FR 79713), we 
finalized the PFS as the ``applicable payment system'' for most 
nonexcepted items and services furnished by off-campus PBDs.
    As part of that discussion, we indicated that, in response to 
public comments received on the proposed payment policies for 
nonexcepted items and services, we would issue an interim final rule 
with comment period (the CY 2017 interim final rule, 81 FR 79720 
through 79729) to establish payment policies under the PFS for 
nonexcepted items and services furnished on or after January 1, 2017. 
In the following paragraphs, we summarize what we proposed for the 
payment policies under the PFS for nonexcepted items and services 
furnished during CY 2018. The CY 2017 interim final rule can be found 
on the Internet at https://www.gpo.gov/fdsys/pkg/FR-2016-11-14/pdf/2016-26515.pdf.
2. Payment Mechanism
    Coding and payment policies under the PFS have long recognized the 
differences between the portions of services for which direct costs 
generally are incurred by practitioners and the portions of services 
for which direct costs generally are incurred by facilities. At 
present, the coding and RVUs established for particular groups of 
services under the PFS generally reflect such direct cost differences. 
As described in section II.B of this final rule, we establish separate 
nonfacility and facility RVUs for many HCPCS codes describing 
particular services paid under the PFS. For many other services, we 
establish separate RVUs for the professional component and the 
technical component of the service described by the same HCPCS code. 
For other services, we establish RVUs for the different HCPCS codes 
that segregate and describe the discrete professional and technical 
aspects of particular services.
    Because hospitals with nonexcepted off-campus PBDs that furnish 
nonexcepted items and services are likely to furnish a broader range of 
services than other provider or supplier types for which there is a 
separately valued technical component under the PFS, for CY 2017, we 
established a new set of payment rates under the PFS that reflected the 
relative resource costs of furnishing the technical component of a 
broad range of services to be paid under the PFS specific to the 
nonexcepted off-campus PBD of a hospital with packaging (bundling) 
rules that are unique to the hospital outpatient setting under the 
OPPS.
    In principle, the coding and billing mechanisms required to make 
appropriate payment to hospitals for nonexcepted items and services 
furnished by nonexcepted off-campus PBDs are parallel to those used to 
make payment for the technical component services for a range of 
supplier types paid under the PFS. That is, payments to hospitals are 
made for the technical aspect of services, while physicians and other 
practitioners report the professional aspect of these same services. In 
some cases, the entities reporting the technical aspect of services use 
the same coding that is used by the individuals reporting the 
professional services. In other cases, different coding applies. We 
proposed to maintain this coding and billing mechanism for CY 2018.
    Comment: A number of commenters supported our proposal to continue 
to allow hospitals to bill using an institutional claim with the 
modifier ``PN'' to indicate that the nonexcepted items and services are 
furnished by nonexcepted PBDs.
    Response: We appreciate the comments in support of our proposal to 
allow hospitals to continue to bill for nonexcepted items and services 
furnished by nonexcepted off-campus PBDs using an institutional claim 
for CY 2018.
3. Establishment of Payment Rates
    Using the relativity among OPPS payments to establish rates for the 
nonexcepted items and services furnished by nonexcepted off-campus PBDs 
and billed by hospitals under the PFS was only one aspect of 
establishing the necessary relativity of these services under the PFS 
more broadly. It was necessary to estimate the relativity of these 
services compared to PFS services furnished in other settings paid 
under the PFS. For CY 2017, we used our best estimate of the more 
general relativity between the technical component of PFS services 
furnished in nonexcepted off-campus PBDs and all other PFS services 
furnished in other settings using the limited information available to 
us at that time. As described in the CY 2017 interim final rule (81 FR 
79722 through 79726), we estimated that for CY 2017, scaling the OPPS 
payment rates downward by 50 percent would strike an appropriate 
balance that avoided potentially underestimating the relative resources 
involved in furnishing services in nonexcepted off-campus PBDs as 
compared to the services furnished in other settings for which payment 
was made under the PFS. Specifically, we established site-specific 
rates under the PFS for the technical component of the broad range of 
nonexcepted items and services furnished by nonexcepted off-campus PBDs 
to be paid under the PFS that was based on the OPPS payment amount for 
the same items and services, scaled downward by 50 percent. We called 
this adjustment the ``PFS Relativity Adjuster.'' The PFS Relativity 
Adjuster refers to the percentage of the OPPS payment amount paid under 
the PFS for a nonexcepted item or service to the nonexcepted off-campus 
PBD under this policy.
a. Methodology for Establishing CY 2017 PFS Relativity Adjuster
    In developing the CY 2017 interim final rule, we began by analyzing 
hospital outpatient claims data from January 1 through August 26, 2016, 
that contained the ``PO'' modifier signifying that they were billed by 
an off-campus department of a hospital paid under the OPPS other than a 
remote location, a satellite facility, or a dedicated emergency 
department (ED). We noted that the use of the ``PO'' modifier was a new 
mandatory reporting requirement for CY 2016. We limited our analysis to 
those claims billed on the 13X Type of Bill because those claims were 
used for Medicare Part B billing under the OPPS. We then identified the 
top (most frequently billed) 25 major codes that were billed by claim 
line; that is, items and services that were separately payable or 
conditionally packaged. Specifically, we restricted our analysis to 
codes with OPPS status indicators ``J1'', ``J2'', ``Q1'', ``Q2'', 
``Q3'', ``S'', ``T'', or ``V''. We did not include separately payable 
drugs or biologicals in this analysis because those drugs or 
biologicals were not paid under the PFS under the CY 2017 interim final 
rule. As such, under the CY 2017 interim final rule, the PFS Relativity 
Adjuster did not apply to separately payable drugs and biologicals 
furnished by a nonexcepted off-campus PBD. Similarly, we excluded codes 
assigned an OPPS status indicator ``A'' because the services described 
by those codes were already paid at a rate under a fee schedule other 
than the OPPS and payment for those nonexcepted items and services was 
not changed by the rates established under

[[Page 53021]]

the CY 2017 interim final rule. Next, for the same major codes (or 
analogous codes in the rare instance that different coding applies 
under the OPPS than the PFS), we compared the CY 2016 payment rate 
under the OPPS to a CY 2016 payment rate under the PFS attributable to 
the nonprofessional relative resource costs involved in furnishing the 
services.
    The most frequently billed service with the ``PO'' modifier was 
described by HCPCS code G0463 (Hospital outpatient clinic visit for 
assessment and management of a patient), which is paid under APC 5012; 
the total number of CY 2016 claim lines for that service was 
approximately 6.7 million as of August 2016. In CY 2016, the OPPS 
payment rate for APC 5012 was $102.12. Because there were multiple CPT 
codes (CPT codes 99201 through 99215) used under the PFS for billing 
that service, an exact comparison between the $102.12 OPPS payment rate 
for APC 5012 and the payment rate for a single CPT code billed under 
the PFS was not possible. Therefore, for purposes of the analysis, we 
examined the difference between the nonfacility payment rates and the 
facility payment rates under the PFS for CPT codes 99213 and 99214, 
which were the billing codes for a Level III and a Level IV office 
visit. Although we did not have data to precisely determine the 
equivalent set of PFS visit codes to use for the comparison, we 
believed that, based on the distribution of services billed for the 
visit codes under the PFS and the distribution of the visit codes under 
the OPPS from the last time period the CPT codes were used under the 
OPPS in CY 2014, those two codes provided reliable points of 
comparison. For CPT code 99213, the difference between the nonfacility 
payment rate and the facility payment rate under the PFS in CY 2016 was 
$21.86, which was 21 percent of the OPPS payment rate for APC 5012 of 
$102.12. For CPT code 99214, the difference between the nonfacility 
payment rate and the facility payment rate under the PFS in CY 2016 was 
$29.02, which was 28 percent of the OPPS payment rate for APC 5012. 
However, we recognized that, due to the more extensive packaging that 
occurred under the OPPS for services provided along with clinic visits 
relative to the more limited packaging that occurred under the PFS for 
office visits, those payment rates were not entirely comparable.
    We then assessed the next 24 major codes most frequently billed on 
the 13X claim form by hospitals. We removed HCPCS code 36591 
(Collection of blood specimen from a completely implantable venous 
access device) because, under current PFS policies, the code is used 
only to pay separately under the PFS when no other service was on the 
claim. We also removed HCPCS code G0009 (Administration of Pneumococcal 
Vaccine) because there was no payment for the code under the PFS. For 
the remaining 22 major codes most frequently billed, we estimated the 
amount that would have been paid to the physician in the office setting 
under the PFS for practice expenses not associated with the 
professional component of the service. As indicated in Table 9, this 
amount reflected (1) the difference between the PFS nonfacility payment 
rate and the PFS facility rate, (2) the technical component, or (3) in 
instances where payment would have been made only to the facility or 
only to the physician, the full nonfacility rate. This estimate ranged 
from zero percent to 137.8 percent of the OPPS payment rate for a code. 
Overall, the average (weighted by claim line volume times rate) of the 
nonfacility payment rate estimate for the PFS compared to the estimate 
for the OPPS for the 22 remaining major codes was 45 percent.

Table 9--Comparison of CY 2016 OPPS Payment Rate to CY 2016 PFS Payment Rate for Top Hospital Codes Billed Using
                                               the ``PO'' Modifier
----------------------------------------------------------------------------------------------------------------
                                                                     CY 2016
                                                                    applicable
                                                        CY 2016        PFS       Col (5) as
    HCPCS code        Code description   Total claim      OPPS      technical    a percent       PFS estimate
                                            lines       payment      payment      of OPPS
                                                          rate        amount
                                                                     estimate
(1)                 (2)................          (3)          (4)          (5)               (6)
----------------------------------------------------------------------------------------------------------------
96372.............  Injection beneath        338,444       $42.31       $25.42         60.1  Single rate paid
                     the skin or into                                                         exclusively to
                     muscle for                                                               either
                     therapy,                                                                 practitioner or
                     diagnosis, or                                                            facility: Full
                     prevention.                                                              nonfacility rate.
71020.............  X-ray of chest, 2        333,203        60.80        16.83         27.7  Technical
                     views, front and                                                         component: Full
                     side.                                                                    nonfacility rate.
93005.............  Routine                  318,099        55.94         8.59         15.4  Technical
                     electrocardiogram                                                        component: Full
                     (EKG) with tracing                                                       nonfacility rate.
                     using at least 12
                     leads.
96413.............  Infusion of              254,704       280.27       136.41         48.7  Single rate paid
                     chemotherapy into                                                        exclusively to
                     a vein up to 1                                                           either
                     hour.                                                                    practitioner or
                                                                                              facility: Full
                                                                                              nonfacility rate.
93798.............  Physician services       203,926       103.92        11.10         10.7  Nonfacility rate--
                     for outpatient                                                           Facility rate.
                     heart
                     rehabilitation
                     with continuous
                     EKG monitoring per
                     session.
96375.............  Injection of             189,140        42.31        22.56         53.3  Single rate paid
                     different drug or                                                        exclusively to
                     substance into a                                                         either
                     vein for therapy,                                                        practitioner or
                     diagnosis, or                                                            facility: Full
                     prevention.                                                              nonfacility rate.
93306.............  Ultrasound               179,840       416.80       165.77         39.8  Technical
                     examination of                                                           component: Full
                     heart including                                                          nonfacility rate.
                     color-depicted
                     blood flow rate,
                     direction, and
                     valve function.
77080.............  Bone density             155,513       100.69        31.15         30.9  Technical
                     measurement using                                                        component: Full
                     dedicated X-ray                                                          nonfacility rate.
                     machine.
77412.............  Radiation treatment      137,241       194.35       267.86        137.8  Technical component
                     delivery.                                                                (Full nonfacility
                                                                                              rate) based on
                                                                                              weighted averages
                                                                                              for the following
                                                                                              PFS codes: G6011;
                                                                                              G6012; G6013; and
                                                                                              G6014.
90853.............  Group psychotherapy      123,282        69.65         0.36          0.5  Nonfacility rate--
                                                                                              Facility rate.
96365.............  Infusion into a          122,641       173.18        69.82         40.3  Nonfacility rate--
                     vein for therapy,                                                        Facility rate.
                     prevention, or
                     diagnosis up to 1
                     hour.
20610.............  Aspiration and/or        106,769       223.76        13.96          6.2  Nonfacility rate--
                     injection of large                                                       Facility rate.
                     joint or joint
                     capsule.
11042.............  Removal of skin and       99,134       225.55        54.78         24.3  Nonfacility rate--
                     tissue first 20 sq                                                       Facility rate.
                     cm or less.

[[Page 53022]]

 
96367.............  Infusion into a           98,930        42.31        30.79         72.8  Single rate paid
                     vein for therapy                                                         exclusively to
                     prevention or                                                            either
                     diagnosis                                                                practitioner or
                     additional                                                               facility: Full
                     sequential                                                               nonfacility rate.
                     infusion up to 1
                     hour.
93017.............  Exercise or drug-         96,312       220.35        39.74         18.0  Technical
                     induced heart and                                                        component: Full
                     blood vessel                                                             nonfacility rate.
                     stress test with
                     EKG tracing and
                     monitoring.
77386.............  Radiation therapy         81,925       505.51       347.30         68.7  Technical
                     delivery.                                                                component:
                                                                                              Nonfacility rate
                                                                                              for CPT code G6015
                                                                                              (analogous code
                                                                                              used under the
                                                                                              PFS).
78452.............  Nuclear medicine          79,242     1,108.46       412.82         37.2  Technical
                     study of vessels                                                         component: Full
                     of heart using                                                           nonfacility rate.
                     drugs or exercise--
                     multiple studies.
74177.............  CT scan of abdomen        76,393       347.72       220.20         63.3  Technical
                     and pelvis with                                                          component: Full
                     contrast.                                                                nonfacility rate.
71260.............  CT scan chest with        75,052       236.86       167.21         70.6  Technical
                     contrast.                                                                component: Full
                                                                                              nonfacility rate.
71250.............  CT scan chest......       74,570       112.49       129.61        115.2  Technical
                                                                                              component: Full
                                                                                              nonfacility rate.
73030.............  X-ray of shoulder,        71,330        60.80        19.33         31.8  Technical
                     minimum of 2 views.                                                      component: Full
                                                                                              nonfacility rate.
90834.............  Psychotherapy, 45         70,524       125.04         0.36          0.3  Nonfacility rate--
                     minutes with                                                             Facility rate.
                     patient and/or
                     family member.
----------------------------------------------------------------------------------------------------------------
Weighted Average (claim line volume * rate) of the PFS payment compared to OPPS payment for  45%
 the 22 major codes:
----------------------------------------------------------------------------------------------------------------

    As noted with the clinic visits, we recognized that there were 
limitations to our data analysis, including that OPPS payment rates 
include the costs of packaged items or services billed with the 
separately payable code, and therefore the comparison to rates under 
the PFS was not a one-to-one comparison. Also, we included only a 
limited number of services, and noted that additional services may have 
different patterns than the services described. After considering the 
payment differentials for major codes billed by off-campus departments 
of hospitals with the ``PO'' modifier and based on the data limitations 
of our analysis, we adopted, with some exceptions noted below, a set of 
PFS payment rates that were based on a 50 percent PFS Relativity 
Adjuster to the OPPS payment rates (inclusive of packaging) for 
nonexcepted items and services furnished by nonexcepted off-campus PBDs 
in the CY 2017 interim final rule. Generally speaking, we arrived at 
the 50 percent PFS Relativity Adjuster by examining the 45 percent 
comparison noted above, the ASC payment rate--which was roughly 55 
percent of the OPPS payment rate on average--and the payment rate 
differential for the large number of OPPS and PFS E/M services, as 
described above. We recognized that the equivalent PFS nonfacility 
rates may be higher or lower on a code-specific basis than the rates 
that result from applying the overall PFS Relativity Adjuster to the 
OPPS payment rates on a code-specific basis. However, we believed that, 
on the whole, the percentage reduction did not underestimate the 
overall relativity between the OPPS and the PFS based on the limited 
data that were available. We were concerned, however, that the 50 
percent PFS Relativity Adjuster might overestimate PFS nonfacility 
payments relative to OPPS payments. For example, if we were able at the 
time to sufficiently estimate the effect of the packaging differences 
between the OPPS and PFS, we suspected that the equivalent portion of 
PFS payments for evaluation and management codes, and for PFS services 
on average, would likely have been less than 50 percent for the same 
services. We considered the 50 percent PFS Relativity Adjuster for CY 
2017 to be a transitional policy until such time that we had more 
precise data to better identify and value nonexcepted items and 
services furnished by nonexcepted off-campus PBDs and billed by 
hospitals.
    We established several significant exceptions to the application of 
the 50 percent PFS Relativity Adjuster. For example, we did not apply 
the 50 percent PFS Relativity Adjuster to services that are currently 
paid under the OPPS based on payment rates from other Medicare fee 
schedules (including the PFS) on an institutional claim. The items and 
services that are assigned status indicator ``A'' in Addendum B to the 
CY 2017 OPPS/ASC final rule with comment period (available on the CMS 
Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices-Items/CMS-1656-FC.html) continue to be reported on an 
institutional claim and paid under the required Medicare fee schedule 
such as the PFS, the CLFS, or the Ambulance Fee Schedule without a 
payment reduction. Similarly, drugs and biologicals that are separately 
payable under the OPPS (identified by status indicator ``G'' or ``K'' 
in Addendum B to the CY 2017 OPPS/ASC final rule with comment period) 
are paid in accordance with section 1847A of the Act (that is, 
typically ASP + 6 percent), consistent with payment rules in the 
physician office setting. Drugs and biologicals that are 
unconditionally packaged under the OPPS and are not separately payable 
(that is, those drugs and biologicals assigned status indicator of 
``N'' in Addendum B to the CY 2017 OPPS/ASC final rule with comment 
period) are bundled into the PFS payment and are not separately paid to 
hospitals billing for nonexcepted items and services furnished by 
nonexcepted off-campus PBDs. The full range of exceptions and 
adjustments to the otherwise applicable OPPS payment rate that were 
adopted in the new PFS site-of-service payment rates in the CY 2017 
interim final rule can be found on the CMS Web site at https://
www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/
HospitalOutpatientPPS/Downloads/

[[Page 53023]]

CMS-1656-FC-2017-OPPS-Status-Indicator.zip.
    All nonexcepted items and services furnished by nonexcepted off-
campus PBDs and billed by a hospital on an institutional claim with 
modifier ``PN'' (Nonexcepted service provided at an off-campus, 
outpatient, provider-based department of a hospital) are currently paid 
under the PFS at the rate established in the CY 2017 interim final 
rule. Specifically, nonexcepted off campus PBDs must report modifier 
``PN'' on each UB-04 claim line to indicate a nonexcepted item or 
service, and otherwise continue to bill as they currently do. Further 
billing instructions on the PN modifier can be found in the January 
2017 OPPS Quarterly Update (transmittal 3685, Change Request 9930) 
released December 22, 2016, available on the CMS Web site at https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R3685CP.pdf.
b. PFS Relativity Adjuster
    As noted in the CY 2017 interim final rule, we considered the CY 
2017 PFS Relativity Adjuster of 50 percent to be a transitional policy 
until such time that we had more precise data to better identify and 
value nonexcepted items and services furnished by nonexcepted off-
campus PBDs and billed by hospitals. At present, we do not have more 
precise data than were available when we established the PFS Relativity 
Adjuster in the CY 2017 interim final rule, and we do not anticipate 
having such data until after the end of CY 2017, at the earliest. 
However, in developing a policy for CY 2018, we have continued to 
explore options for modifying the calculation of the CY 2018 PFS 
Relativity Adjuster.
    There is no consensus among stakeholders regarding the appropriate 
PFS Relativity Adjuster. Many stakeholders have suggested that making 
separate facility fee payments to hospitals under the PFS for all 
services that are separately paid under the OPPS itself undermines site 
neutral payment because practitioners are only paid a single combined 
fee for many services when furnished in an office setting, while there 
are two separate fees (professional and facility) paid when the service 
is furnished in the hospital setting. We acknowledge that there are 
many cases where single fees are paid to practitioners for services 
furnished in an office setting while fees for comparable services when 
furnished in the hospital setting are paid to both the professional and 
facility entities. However, we do not agree that this necessarily means 
that overall payment cannot be site neutral. We point out that the sum 
of the professional and the facility portions of payment for a service 
furnished in a nonexcepted off-campus PBD or in a different 
institutional setting could be equivalent to a single fee paid to the 
professional in the office setting. In the case of some services, in 
fact, the single payment made under the PFS at the nonfacility rate 
exceeds the sum of the separate payments Medicare makes to the 
professional at the facility rate under the PFS and to the facility 
under the OPPS. We also note that there are many separately reportable 
services under the PFS (for example, the vast majority of services 
described by add-on codes) for which separate payment is made to 
physician offices but no separate payment is made under either the OPPS 
or under the site-specific PFS payments made to hospitals billing for 
nonexcepted items and services furnished by nonexcepted off-campus 
PBDs. For these reasons, we believe that the overall total payment made 
for services is more relevant to the goal of site neutrality than the 
quantity of individual payments made. Nonetheless, we continue to 
recognize and share stakeholders' concerns regarding the importance of 
equivalent overall payment for services, regardless of setting.
    In considering the appropriate PFS Relativity Adjuster for CY 2018, 
we continue to believe that claims data from CY 2017, which are not yet 
available, are needed to guide potential changes to our general 
approach. In the absence of such data, however, we have continued to 
consider the appropriate PFS Relativity Adjuster based on the 
information that is available. In the analysis we used to establish the 
PFS Relativity Adjuster for CY 2017, we attempted to identify the 
appropriate value by comparing OPPS and PFS payment rates for services 
frequently reported in off-campus departments of a hospital and 
described by the same codes under the two payment systems. As we 
acknowledged in the CY 2017 interim final rule, that data analysis did 
not include the most frequently billed service furnished in off-campus 
departments of a hospital, outpatient clinic visits. Outpatient clinic 
visits are reported using a single G-code under the OPPS and by one of 
ten different codes under the PFS.
    Consistent with our previously stated concern that the PFS 
Relativity Adjuster for CY 2017 might be too small, generally resulting 
in greater overall payments to hospitals for services furnished by 
nonexcepted off-campus PBDs than would otherwise be paid under the PFS 
in the non-facility setting, we believed it was appropriate to propose 
changing the PFS Relativity Adjuster in order to ensure that payment 
made to these nonexcepted off-campus PBDs better aligns with these 
services that are the most frequently furnished in this setting.
    In the CY 2018 PFS proposed rule, we proposed to revise the PFS 
Relativity Adjuster for nonexcepted items and services furnished by 
nonexcepted off-campus PBDs to be 25 percent of the OPPS payment rate. 
We arrived at this PFS Relativity Adjuster by making a code-level 
comparison for the service most commonly billed in the off-campus PBD 
setting under the OPPS: A clinic visit reported using HCPCS code G0463. 
In order to determine the analogous payment for the technical aspects 
of this service under the PFS in nonfacility settings, we compared the 
CY 2017 OPPS national payment rate for HCPCS code G0463 ($102.12) to 
the difference between the nonfacility and facility PFS payment amounts 
under the PFS using CY 2016 rates for the weighted average of 
outpatient visits (CPT codes 99201-99205 and CPT codes 99211-99215) 
billed by physicians and other professionals in an outpatient hospital 
department as the place of service.
    The proposed PFS Relativity Adjuster of 25 percent was based solely 
on the comparison for the single service that reflects more than 50 
percent of services billed in off-campus PBDs. We continue to recognize 
that the comparison between the OPPS and PFS rates for other services 
varies greatly, and that there are other factors, including the 
specific mix of services furnished by nonexcepted off-campus PBDs, 
policies related to packaging of codes under OPPS, and payment 
adjustments like MPPRs and bundling under the PFS that rely on 
empirical information about whether or not codes are billed on the same 
day, that contribute to the differences in aggregate payment amounts 
for a broader range of services. However, for CY 2018, as for CY 2017, 
we are setting the PFS Relativity Adjuster using currently available 
data from CY 2016 because we have not had the opportunity to study the 
CY 2017 claims data that may allow us to consider and incorporate many 
more factors, including the ones stated above. When we established the 
PFS Relativity Adjuster for CY 2017 at 50 percent, we stated that we 
did so with the goal of ensuring adequate payment but remained 
concerned that the resulting reduction was too conservative. For CY 
2018, we were focused on ensuring that we did not overestimate the 
appropriate overall payment relativity for these nonexcepted items and 
services. Until

[[Page 53024]]

we are able to analyze the CY 2017 claims data, we believed that the 
comparison between PFS and OPPS payment for the most common services 
furnished in off-campus PBDs, an outpatient clinic visit, was a better 
proxy to base the adjuster than our previous approach.
    We welcomed stakeholder input with regard to this analysis and the 
resulting PFS Relativity Adjuster. We also requested comment on whether 
we should adopt a different PFS Relativity Adjuster, such as 40 
percent, that represents a relative middle ground between the CY 2017 
PFS Relativity Adjuster, selected to ensure adequate payment to 
hospitals and our proposed CY 2018 PFS Relativity Adjuster, selected to 
ensure that hospitals are not paid more than others would be paid 
through the PFS nonfacility rate. We intend to continue to study this 
issue and welcomed comments regarding potential future refinements to 
payment rates for nonexcepted items and services furnished by 
nonexcepted off-campus PBDs as we gain more experience with these new 
site-of-service PFS rates.
    Finally, we noted that for CY 2018, as in recent years, the annual 
update to OPPS payments exceeds the annual update to PFS payments. 
Because we proposed to make a single, across-the-board and, by 
necessity, imprecise adjustment to OPPS payment rates to establish PFS 
payment rates for nonexcepted items and services furnished by 
nonexcepted off-campus PBDs, we expected that the actual difference 
between OPPS and PFS payment rates for nonexcepted items and services 
furnished by nonexcepted off-campus PBDs falls in a range which 
includes our proposed PFS Relativity Adjuster (that is, the actual 
differential may differ from our proposed PFS Relativity Adjuster). As 
such, taking into account the differential between the OPPS and PFS 
annual updates by making an adjustment to the PFS Relativity Adjuster, 
our proposal for CY 2018 presumed a level of precision in our estimates 
that is simply not present in our analysis. Therefore, we did not 
adjust our proposal to reflect the relative updates to PFS and OPPS 
between CY 2017 and CY 2018, and instead noted that the differential 
between the OPPS and PFS payment update for CY 2018 is a factor that 
suggests that the PFS Relativity Adjuster may underestimate PFS 
nonfacility payment relative to OPPS payments; in future years, we 
intend to more precisely account for any differential between these two 
update factors.
c. Geographic Adjustments
    For CY 2017, we established class-specific geographic practice cost 
indices (GPCIs) under the PFS exclusively used to adjust these site-
specific, technical component rates for nonexcepted items and services 
furnished in nonexcepted off-campus PBDs. These class-specific GPCIs 
are parallel to the geographic adjustments made under the OPPS based on 
the hospital wage index. We believed it was appropriate to adopt the 
hospital wage index areas for purposes of geographic adjustment because 
nonexcepted off-campus PBDs are still considered to be part of a 
hospital, and the PFS payments to these entities will be limited to the 
subset of PFS services furnished by hospitals. We also believed it was 
appropriate, as an initial matter for CY 2017, to adopt the actual wage 
index values for these hospitals in addition to the wage index areas. 
The PFS GPCIs that would otherwise currently apply are not based on the 
hospital wage index areas. For CY 2018, we proposed to continue using 
the authority under section 1848(e)(1)(B) of the Act to maintain a 
class-specific set of GPCIs for these site-specific technical component 
rates that are based both on the hospital wage index areas and the 
hospital wage index value themselves. For purposes of payment to 
hospitals, this means that the geographic adjustments used under the 
OPPS continue to apply.
d. Coding Consistency
    For most services, the same HCPCS codes are used to describe 
services paid under both the PFS and the OPPS. There are two notable 
exceptions that describe high-volume services. The first is the set of 
codes that describe evaluation and management (E/M) services which are 
reported under the PFS using the 5 levels of CPT codes describing new 
or established patient visits (for a total of 10 codes). However, since 
CY 2014, these visits have been reported under the OPPS using the 
single HCPCS code G0463 (Hospital Outpatient Clinic Visit) (see 78 FR 
75042). We proposed to maintain the current coding and PFS payment rate 
for HCPCS code G0463 based on the OPPS payment rate modified by the PFS 
Relativity Adjuster.
    The second exception is a set of radiation treatment delivery and 
imaging guidance services that are reported using different codes under 
the PFS and the OPPS. CMS established HCPCS Level II G-codes to 
describe radiation treatment delivery services when furnished in the 
physician office setting (see 79 FR 67666 through 67667). However, 
these HCPCS G-codes are not recognized under the OPPS; rather, CPT 
codes are used to describe these services when furnished in the HOPD. 
Both sets of codes were implemented for CY 2015 and were maintained for 
CY 2016. Under the PFS, there is a statutory provision under section 
1848(c)(2)(K) of the Act that requires maintenance of the CY 2016 
coding and payment inputs for these services for CY 2017 and also for 
CY 2018. Accordingly, the CY 2018 PFS rates for these services are 
calculated based on the maintenance of the CY 2016 coding and payment 
inputs. Because nonexcepted items and services furnished by a 
nonexcepted off-campus PBD are paid under the PFS starting in CY 2017, 
and we are required to maintain the CY 2016 coding and payment inputs 
for these services under the CY 2018 PFS, we proposed to maintain 
coding and payment amounts for nonexcepted items and services furnished 
by a nonexcepted off-campus PBD consistent with the payments that would 
be made to other facilities under the PFS. That is, nonexcepted off-
campus PBDs submitting claims for these nonexcepted items and services 
will continue to bill the HCPCS G-codes established under the PFS to 
describe radiation treatment delivery services. Under this proposal, 
the nonexcepted off-campus PBD must append modifier ``PN'' to each 
applicable claim line for these nonexcepted items and services, even 
though the PFS Relativity Adjuster will not apply, on the institutional 
claim. The payment amount for these services would be set to reflect 
the technical component rate for the code under the PFS.
4. OPPS Payment Adjustments
    In the CY 2017 interim final rule, we adopted the packaging payment 
rates and MPPR percentage that applied under the OPPS to establish the 
PFS payment rates for nonexcepted items and services furnished by 
nonexcepted off-campus PBDs and billed by hospitals. That is, the 
claims processing logic that was used for payments under the OPPS for 
comprehensive APCs (C-APCs), conditionally and unconditionally packaged 
items and services, and major procedures, was incorporated into the 
newly established PFS rates. We continue to believe it is necessary to 
incorporate the OPPS payment policies for C-APCs, packaged items and 
services, and the MPPR in order to maintain the integrity of the PFS 
Relativity Adjuster because the adjuster is intended, in part, to 
account for the methodological differences between the OPPS and the PFS 
rates that would otherwise apply. We also

[[Page 53025]]

direct interested stakeholders to related policies under the OPPS, 
since prospective changes in the applicable adjustments and policies 
would generally apply to nonexcepted items and services furnished by 
nonexcepted off-campus PBDs for CY 2018. We were interested in comments 
regarding the applicability of particular prospective OPPS adjustments 
to nonexcepted items and services.
    In order to apply these OPPS payment policies and adjustments to 
nonexcepted items and services, we proposed that hospitals continue to 
bill on an institutional claim form that will pass through the 
Outpatient Code Editor and into the OPPS PRICER for calculation of 
payment. This approach will yield data based on claims for nonexcepted 
items and services furnished by nonexcepted off-campus PBDs, which can 
be used to refine PFS payment rates for these services in future years.
    There were several OPPS payment adjustments that we did not adopt 
in the CY 2017 interim final rule, including, but not limited to, 
outlier payments, the rural sole community hospital (SCH) adjustment, 
the cancer hospital adjustments, transitional outpatient payments, the 
hospital outpatient quality reporting payment adjustment, and the 
inpatient hospital deductible cap to the cost-sharing liability for a 
single hospital outpatient service. We believed these payment 
adjustments were expressly authorized for, and should be limited to, 
hospitals that are paid under the OPPS for covered OPD services in 
accordance with section 1833(t) of the Act. We believed that these 
policies should not apply to nonexcepted items and services furnished 
by nonexcepted off-campus PBDs, and did not propose that they apply for 
CY 2018.
5. Partial Hospitalization Services
    For partial hospitalization programs (PHP), which are intensive 
outpatient psychiatric day treatment programs furnished to patients as 
an alternative to inpatient psychiatric hospitalization or as a 
stepdown to shorten an inpatient stay and transition a patient to a 
less intensive level of care, section 1861(ff)(3)(A) of the Act 
specifies that a PHP is a program furnished by a hospital, to its 
outpatients, or by a Community Mental Health Center (CMHC). In the CY 
2017 OPPS/ASC proposed rule (81 FR 45690), in the discussion of the 
proposed implementation of section 603 of Bipartisan Budget Act of 
2015, we noted that because CMHCs also furnish PHP services and are 
ineligible to be provider-based to a hospital, a nonexcepted off-campus 
PBD would be eligible for PHP payment if the entity enrolls and bills 
as a CMHC for payment under the OPPS. We further noted that a hospital 
may choose to enroll a nonexcepted off-campus PBD as a CMHC, provided 
it meets all Medicare requirements and conditions of participation.
    Commenters expressed concern that without a clear payment mechanism 
for PHP services furnished by nonexcepted off-campus PBDs, access to 
partial hospitalization services would be limited, and pointed out the 
critical role PHPs play in the continuum of mental health care. Many 
commenters believed that Congress did not intend for partial 
hospitalization services to no longer be paid for by Medicare when such 
services are furnished by nonexcepted off-campus PBDs. Several 
commenters disagreed with the notion of enrolling as a CMHC in order to 
receive payment for PHP services. These commenters stated that 
hospital-based PHPs and CMHCs are inherently different in structure, 
operation, and payment, and noted that the conditions of participation 
for hospital departments and CMHCs are different. Several commenters 
requested that CMS find a mechanism to pay hospital-based PHPs in 
nonexcepted off-campus PBDs.
    Because we shared the commenters' concerns, in the CY 2017 OPPS/ASC 
final rule with comment period and interim final rule with comment 
period (81 FR 79715, 79717, and 79727), we adopted payment for partial 
hospitalization items and services furnished by nonexcepted off-campus 
PBDs under the PFS. When billed in accordance with the CY 2017 interim 
final rule, these partial hospitalization services are paid at the CMHC 
per diem rate for APC 5853, for providing three or more partial 
hospitalization services per day (81 FR 79727).
    In the CY 2017 OPPS/ASC proposed rule (81 FR 45681), the CY 2017 
OPPS/ASC final rule with comment period, and interim final rule with 
comment period (81 FR 79717 and 79727), we noted that when a 
beneficiary receives outpatient services in an off-campus department of 
a hospital, the total Medicare payment for those services is generally 
higher than when those same services are provided in a physician's 
office. Similarly, when partial hospitalization services are provided 
in a hospital-based PHP, Medicare pays more than when those same 
services are provided by a CMHC. Our rationale for adopting the CMHC 
per diem rate for APC 5853 as the PFS payment amount for nonexcepted 
off-campus PBDs providing PHP services is because CMHCs are 
freestanding entities that are not part of a hospital, but they provide 
the same PHP services as hospital-based PHPs (81 FR 79727). This is 
similar to the differences between freestanding entities paid under the 
PFS that furnish other services also provided by hospital-based 
entities. Similar to other entities currently paid for their technical 
component services under the PFS, we believe CMHCs would typically have 
lower cost structures than hospital-based PHPs, largely due to lower 
overhead costs and other indirect costs such as administration, 
personnel, and security. We believe that paying for nonexcepted 
hospital-based partial hospitalization services at the lower CMHC per 
diem rate aligns with section 603 of Bipartisan Budget Act of 2015, 
while also preserving access to PHP services. In addition, nonexcepted 
off-campus PBDs will not be required to enroll as CMHCs in order to 
bill and be paid for providing partial hospitalization services. 
However, a nonexcepted off-campus PBD that wishes to provide PHP 
services may still enroll as a CMHC if it chooses to do so and meets 
the relevant requirements. Finally, we recognize that because hospital-
based PHPs are providing partial hospitalization services in the 
hospital outpatient setting, they can offer benefits that CMHCs do not 
have, such as an easier patient transition to and from inpatient care, 
and easier sharing of health information between the PHP and the 
inpatient staff.
    In the CY 2018 PFS proposed rule, we did not propose to require 
these PHPs to enroll as CMHCs but instead we proposed to continue to 
pay nonexcepted off-campus PBDs providing PHP items and services under 
the PFS. Further, in that CY 2018 PFS proposed rule, we proposed to 
continue to adopt the CMHC per diem rate for APC 5853 as the PFS 
payment amount for nonexcepted off-campus PBDs providing three or more 
PHP services per day in CY 2018.
    The following is a summary of the public comments received on 
potential changes to our methodology and our responses:
    Comment: We received several comments in response to the CY 2018 
PFS proposals pertaining to nonexcepted off-campus PBDs providing PHP 
services. Many of the commenters believed that paying nonexcepted off-
campus PBDs providing PHP services at the CMHC per diem rate does not 
compensate enough for financial viability and would jeopardize access 
to critically needed mental health services. Other

[[Page 53026]]

commenters were concerned that the payment rate under section 603 of 
the Bipartisan Budget Act of 2015 or the lower CMHC payment rate would 
affect access by hindering needed expansion of PHPs or limiting the 
ability of PHPs to address the growing substance abuse/opioid crisis. 
One commenter stated that now is not the time to reduce resources and 
treatments for behavioral health, and expressed concern that payment 
reductions could push some behavioral health care providers beyond the 
point of financial viability. One commenter suggested that the proposed 
cuts could force outpatients requiring intensive services, like 
beneficiaries in PHPs, back into the inpatient setting.
    One commenter had concerns about the accuracy and stability of the 
CMHC claims data or CMHC rates, and asked for fair and equitable 
payments. A few commenters suggested alternatives, such as exempting 
PHP APC codes from section 603 of the Bipartisan Budget Act of 2015 
entirely, researching other payment methods, or paying at the hospital-
based PHP rate.
    Response: We believe that the CMHC per diem rate provides 
appropriate payment for partial hospitalization services. In the CY 
2017 OPPS/ASC proposed rule (81 FR 45681) and earlier in this section 
of this CY 2018 MPFS final rule, we noted that when a beneficiary 
receives services in an excepted off-campus PBD, the Medicare payment 
for those services is generally higher than when those same services 
are provided in a physician's office. Similarly, when partial 
hospitalization services are provided in a hospital-based PHP, Medicare 
pays more than when those same services are provided by a CMHC. CMHCs 
are freestanding providers that are not part of a hospital, and that 
have lower cost structures than hospital-based PHPs. This is similar to 
the differences between freestanding entities paid under the MPFS that 
furnish other services also provided by hospital-based entities. We 
believe that the cost structure for nonexcepted off-campus PBDs 
providing PHP items and services is similar to CMHCs. We continue to 
believe that paying for nonexcepted hospital-based partial 
hospitalization services at the lower CMHC per diem rate is in 
alignment with section 603 of Bipartisan Budget Act of 2015 and results 
in fair and equitable payments, while also preserving access to the PHP 
benefit. As such, we do not believe that the lower CMHC payments made 
to nonexcepted off-campus PBDs providing PHP services would result in 
these PHP patients being shifted into inpatient care.
    Regarding the comment about the accuracy of CMHC claims and rates, 
we refer readers to the CY 2016 OPPS/ASC final rule with comment period 
(80 FR 70462 through 70466) and the CY 2017 OPPS/ASC final rule with 
comment period (81 FR 79680 through 79686) for details on the 
ratesetting methodology, including policies that we believe result in 
stable and accurate PHP payment rates. Furthermore, we note that the 
final CY 2018 CMHC per diem rate is higher than that proposed in the CY 
2018 OPPS/ASC proposed rule (82 FR 33639). The final CY 2018 CMHC per 
diem rate is 68.8 percent of the final CY 2018 hospital-based PHP per 
diem rate under the OPPS (see the CY 2018 OPPS/ASC final rule with 
comment period for details). This is a significantly higher percentage 
of payment than was proposed for most other items or services provided 
in nonexcepted off-campus PBDs that derive their payment amount from CY 
2018 OPPS APC rates, and we believe it will help to address commenters' 
concerns about ensuring access to valuable PHP services.
    In response to the alternatives that commenters suggested, we are 
unable to pay nonexcepted off-campus PBDs that are PHPs at the same 
rate that hospital-based PHPs are paid under the OPPS or to exempt PHP 
APC codes from the requirements of section 603 of the Bipartisan Budget 
Act of 2015 because doing so would not meet the requirements of the 
amendments made by section 603 of the Bipartisan Budget Act of 2015. 
Regarding the comment about considering other payment methodologies for 
PHP services, we will take these comments under advisement in 
considering whether to propose a different methodology for PHP services 
in future rulemaking.
    In summary, after considering the public comments, we are 
finalizing our proposals as proposed. Therefore, in CY 2018, we are 
identifying the PFS as the applicable payment system for PHP services 
furnished by a nonexcepted off campus PBDs, and we are setting the PFS 
payment rate for these PHP services as the per diem rate that would be 
paid to a CMHC in CY 2018.
6. Supervision Rules
    The supervision rules that apply for hospitals continue to apply 
for nonexcepted off-campus PBDs that furnish nonexcepted items and 
services. The amendments made by section 603 of the Bipartisan Budget 
Act of 2015 did not change the status of these PBDs, only the status 
of, and payment mechanism for, the services they furnish. These 
supervision requirements are specified in Sec.  410.27.
7. Beneficiary Cost-Sharing
    Under the PFS, the beneficiary copayment is generally 20 percent of 
the fee schedule amount, unless there is an applicable exception in 
accordance with the statute. All cost-sharing rules that apply under 
the PFS in accordance with section 1848(g) of the Act and section 
1866(a)(2)(A) of the Act continue to apply for all nonexcepted items 
and services furnished by nonexcepted off-campus PBDs, regardless of 
the cost-sharing obligation under the OPPS.
8. CY 2019 and Future Years
    We continue to believe the amendments made to the statute by 
section 603 of the Bipartisan Budget Act of 2015 intended to eliminate 
the Medicare payment incentive for hospitals to purchase physician 
offices, convert them to off-campus PBDs, and bill under the OPPS for 
items and services they furnish there. Therefore, we continue to 
believe the payment policy under this provision should ultimately 
equalize payment rates between nonexcepted off-campus PBDs and 
physician offices to the greatest extent possible, while allowing 
nonexcepted off-campus PBDs to bill in a straight-forward way for 
services they furnish.
    We note that a full year of claims data regarding the mix of 
services reported using the ``PN'' modifier (from CY 2017) will first 
be available for use in PFS ratesetting for CY 2019. Under the current 
methodology, we would expect to use that data in order to ensure that 
Medicare payment to hospitals billing for nonexcepted items and 
services furnished by nonexcepted off-campus PBDs under the PFS would 
reflect the relative resources involved in furnishing the items and 
services relative to other PFS services. We recognize that under our 
current approach, payment rates would not be equal on a procedure-by-
procedure basis. However, the application of the PFS Relativity 
Adjuster would move toward equalizing payment rates in the aggregate 
between physician offices and nonexcepted off-campus PBDs to the extent 
appropriate. Therefore, for certain specialties, service lines, and 
nonexcepted off-campus PBD types, total Medicare payments for the same 
services might be either higher or lower when furnished by a 
nonexcepted off-campus PBD rather than in a physician office.
    Depending on the mix of services for particular off-campus PBDs, we 
remain concerned that such specialty-specific patterns in payment 
differentials could result in continued incentives for hospitals to buy 
certain types of

[[Page 53027]]

physician offices and convert them to excepted off-campus PBDs; these 
are the incentives we believe Congress intended to avoid. However, 
continuing a policy similar to the one we proposed in the proposed rule 
would allow hospitals to continue billing through a facility claim form 
and would allow for continuation of the packaging rules and cost 
report-based relative payment rate determinations under OPPS, which we 
believe are preferable to using the current valuation methodologies 
under the PFS that are not well-suited for nonexcepted items and 
services furnished by nonexcepted off-campus PBDs. Therefore, for CY 
2019 and for future years, we intend to examine the claims data in 
order to determine not only the appropriate PFS Relativity Adjuster(s), 
but also to determine whether additional adjustments to the methodology 
are appropriate--especially with the goal of attaining site neutral 
payments to promote a level playing field under Medicare between 
physician office settings and nonexcepted off-campus PBD settings, 
without regard to the kinds of services furnished by particular off-
campus PBDs. We solicited comments on potential changes to our 
methodology that would better account for these specialty-specific 
patterns.
    The following is a summary of the public comments received on the 
potential changes to our methodology and the PFS Relativity Adjuster.
    Comment: We received many comments from stakeholders opposing our 
proposal to reduce the PFS Relativity Adjuster to 25 percent. The 
majority of commenters questioned why CMS would propose a different PFS 
Relativity Adjuster for CY 2018 than is currently in place for CY 2017 
given the absence of any additional data to inform a more precise 
estimate. A number of commenters, including MedPAC, also mentioned the 
large variation in the rate differential between the PFS and the OPPS 
across the top 22 services, and stated that a PFS Relativity Adjuster 
calculated from a single outpatient clinic visit does not represent the 
mix of services provided by PBDs.
    In addition, several commenters stated their concern that CMS's 
approach in developing the PFS Relativity Adjuster fails to account for 
the extensive packaging that occurs for outpatient clinic visits 
(billed using HCPCS code G0463 under the OPPS) and other common 
services. They stated that additional services are often provided with 
a single code, and that the PFS Relativity Adjuster does not account 
for the resources required to furnish these additional services. They 
note that CMS does not account for packaging that occurs under the 
OPPS, despite recognizing the importance of such differences between 
the payment systems. Some commenters offered their own estimates of the 
value of packaging that occurs under the OPPS for the top 22 HCPCS 
codes and provided suggestions for incorporating those estimates into 
our analysis.
    Response: We agree with the commenters' concerns about the proposed 
change to the PFS Relativity Adjuster for CY 2018, specifically that 
the single code level comparison of the service most commonly billed in 
the off-campus setting under the OPPS doesn't adequately reflect the 
large variation in services furnished in off-campus PBDs. Furthermore, 
we recognize the possibility that our proposed PFS Relativity Adjuster 
of 25 percent may overcorrect for the possibility that the CY 2017 PFS 
Relativity Adjuster of 50 percent was an overestimate of the relativity 
between the OPPS and PFS. We also agree with commenters who stressed 
the need to account for packaging rules that apply under the OPPS. 
However, we have clearly outlined the challenges we face in calibrating 
the PFS Relativity Rate to account for the effect of packaging.
    After consideration of the public comments, we believe that an 
approach in which we integrate the code-level comparison for the 
service most commonly billed in the off-campus PBD setting under the 
OPPS (a clinic visit reported using HCPCS code G0463), which was the 
basis of our proposed PFS Relativity Adjuster for CY 2018 of 25 
percent, with the comparison of relative PFS to OPPS rates for the top 
25 (most frequently billed) major codes, which was the basis of our PFS 
Relativity Adjuster for CY 2017 of 50 percent, addresses many of the 
concerns and comments we received.
    For this approach, we updated the list of the 25 major codes billed 
by off-campus hospital departments using the ``PO'' modifier to reflect 
a full year of claims data for CY 2016 (see Table 10). We did not 
exclude HCPCS code G0463 from the analysis, but we retained all other 
parameters that we described in the CY 2017 interim final rule, 
including the exclusion of separately payable drugs and biologics, 
services assigned an OPPS status indicator ``A''. We removed HCPCS code 
36591 (Collection of blood specimen from a completely implantable 
venous access device) because, under PFS policies, the code is used 
only to pay separately under the PFS when no other service was on the 
claim. We also removed HCPCS code G0009 (Administration of Pneumococcal 
Vaccine) and HCPCS code G0008 (Administration of influenza vaccine) 
because there is no payment for these codes under the PFS. Two of these 
codes, CPT 36591 and HCPCS G0009, were also removed from our 
calculation of the top major codes when we calculated the PFS 
Relativity Adjuster in the CY 2017 interim final rule. HCPCS code G0008 
was not on the list of the top major codes when we initially analyzed 
claims data for CY 2016 available through August 26, 2016, but it 
appears on the list of the top codes that contained a ``PO'' modifier 
when we analyzed the same data through the end of CY 2016.
    We determined the analogous payment for each of the top major HCPCS 
codes, including HCPCS code G0463, using the same logic that we applied 
in our calculation of the top 22 codes for the CY 2017 interim final 
rule. Table 10 shows data for the OPPS rates, the analogous PFS rates, 
and the full year utilization for these codes. The resulting 
utilization-weighted average comparison between the PFS and the OPPS 
for the top 22 codes, following the approach described above, is 35 
percent. In other words, on average, the applicable payment amount 
under the PFS is 35 percent of the amount that would have been paid 
under the OPPS.
    In the CY 2018 PFS proposed rule, we sought comment on whether a 
different PFS Relativity Adjuster, such as 40 percent, would reflect a 
middle ground between the CY 2017 PFS Relativity Adjuster of 50 
percent, selected to ensure adequate payment to hospitals, and our 
proposed CY 2018 PFS Relativity Adjuster of 25 percent, selected to 
ensure that hospitals are not paid more than others would be paid 
through the PFS nonfacility rate. Since, as we acknowledged in response 
to public comments, we are unable at this time to fully calculate the 
effects of packaging under the OPPS, we believe that a 40 percent PFS 
Relativity Adjuster, which is an upward adjustment to the 35 percent 
calculation described above, is appropriate. We are, therefore, 
finalizing a PFS Relativity Adjuster of 40 percent for CY 2018.
    Comment: Several commenters requested clarification with regard to 
payment for drugs that are packaged under the OPPS. One commenter 
stated its belief that many drugs and biological therapies are not paid 
separately under the OPPS and therefore would be subject to the 
adjuster in the PBD setting. The commenter suggested that the new Level 
I and II drug administration codes conditionally packaged under the 
OPPS, as finalized in the OPPS CY 2018, would be subject

[[Page 53028]]

to the PFS Relativity Adjuster. Other commenters requested 
clarification regarding how CMS will handle 340B drug payment for 
nonexcepted off-campus PBDs under section 603 of the Bipartisan Budget 
Act of 2015. One commenter wrote that CMS did not specify whether it 
will reduce the payment for 340B drugs furnished in nonexcepted off-
campus PBDs, and that there could be a large payment differential for 
these drugs furnished in nonexcepted vs. excepted off-campus PBDs.
    Response: We appreciate the commenters' request for clarification. 
In prior rulemaking, we established the policy that drugs and 
biologicals that are separately payable under the OPPS (identified by 
status indicator ``G'' or ``K'' under the OPPS) are paid in accordance 
with section 1847A of the Act, consistent with payment rules in the 
physician office setting. Drugs and biologicals that are 
unconditionally packaged under the OPPS will continue to be packaged 
when furnished in a nonexcepted off-campus PBD. Drug administration 
services subject to conditional packaging (identified by status 
indicator ``Q1'' under the OPPS) will be packaged under the OPPS if the 
relevant criteria are met; otherwise they are separately paid. We refer 
commenters to the file ``Nonexcepted Items and Services Payment by OPPS 
Status Indicator'', available on the CMS Web site under downloads for 
the CY 2018 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html, for information about the services, by OPPS status 
indicator, which are subject to the PFS Relativity Adjuster. Drugs that 
are acquired under the 340B program and furnished by nonexcepted off-
campus PBDs are paid under the PFS and are not subject to the OPPS drug 
payment policies. We did not propose to adjust payment for 340B-
acquired drugs in nonexcepted off-campus PBDs in CY 2018 but will be 
monitor drug utilization in these PBDs. Please refer to section V.B.7 
of the CY 2018 OPPS/ASC final rule with comment for a detailed 
discussion of the 340B payment policy.
    Comment: Several commenters stated their belief that the 
appropriate comparison between the PFS and OPPS for purpose of 
determining the PFS Relativity Adjuster is the full PFS nonfacility 
rate rather than the difference between the facility and the 
nonfacility rate.
    Response: We disagree with commenters that the total PFS 
nonfacility rate should be used to assess relativity between the PFS 
and OPPS. As we have stated previously, the practice expense portion of 
the nonfacility rate reflects both direct and indirect costs that would 
be incurred by the physician in furnishing the service. The facility 
rate reflects the relative resources involved in furnishing the service 
in a facility setting, where the billing professional does not incur 
practice expense costs because they are incurred by the facility. We 
believe the most appropriate code-level comparison between the PFS and 
the OPPS would reflect the technical component (TC) of each HCPCS code 
under the PFS. However, we do not currently calculate a separate 
technical component rate for all HCPCS codes under the PFS--only for 
those for which the professional and technical components of the 
service are distinct and can be separately billed by two different 
practitioners or other suppliers under the PFS. We continue to believe 
that, for HCPCS codes for which there is a different payment for 
facility and nonfacility settings, it is appropriate to compare the 
difference under the PFS between the nonfacility and the facility rate 
with the OPPS rate.
    Comment: We received a few comments suggesting that the PFS rate 
for services should be established as a payment floor for nonexcepted 
items and services furnished by nonexcepted off-campus PBDs or, 
alternatively, that some items and services should be excluded from the 
PFS Relativity Adjuster. A few commenters noted that the reduced rate 
from applying the PFS Relativity Adjuster would be lower, for certain 
services, than what is paid for the technical component for these 
services under the PFS. A few commenters specifically cited CPT codes 
for PET imaging procedures (CPT codes 78459, 79491, 78492, 78608, and 
78811-78816), which are subject to payment policies under the Deficit 
Reduction Act (DRA) of 2005.
    Response: We appreciate the commenters' concerns. We recognize that 
the PFS payment for some services will be lower or higher, on a code by 
code basis, than the PFS payment for nonexcepted items and services 
furnished by nonexcepted PBDs calculated using the PFS Relativity 
Adjuster. We also recognize that there are certain CPT codes that are 
subject to payment rules limiting the payment amount for services. We 
will consider whether it would be appropriate to set a floor using the 
PFS, or otherwise address codes subject to statutory payment 
restrictions, in future rulemaking.
    Comment: We received support from several commenters about our 
proposal to reduce the PFS Relativity Adjuster to 25 percent. 
Generally, the commenters indicated that the proposed rate more 
accurately represents the intent of the statute, which is to reduce 
financial incentives for hospitals to purchase freestanding physician 
practices. Several commenters, including a major national health 
insurer, were supportive of efforts in general to establish more 
equitable payment across sites of service.
    Response: We thank commenters for their support. We are encouraged 
by the amount of interest generated in response to the implementation 
of section 603 of the Bipartisan Budget Act of 2015. As we stated 
above, we were persuaded by commenters that the establishment of the 
proposed PFS Relativity Adjuster of 25 percent derived from a single 
HCPCS code for outpatient clinic visits may overcorrect for the risk 
that the CY 2017 PFS adjuster overstated relativity between the OPPS 
and the PFS. We believe that our revised approach, which builds the 
relative payment for clinic visits between the PFS and the OPPS into 
our prior analysis of the top 22 HCPCS codes, is a more appropriate 
approach for payment in CY 2018, in response to these concerns. 
Therefore, using such an approach, we are finalizing a PFS Relativity 
Adjuster of 40 percent for CY 2018.
    Comment: Several commenters pointed out that nonexcepted off-campus 
PBDs face higher operational and regulatory costs than freestanding 
physician offices, and that intent of the statute could not have been 
to equalize payments between nonexcepted off-campus PBDs and 
freestanding physician offices.
    Response: We do not disagree that there may be additional 
regulatory and operational costs faced by off-campus PBDs. However, we 
continue to believe that the amendments made to the statute by section 
603 of the Bipartisan Budget Act of 2015 are intended to eliminate the 
Medicare payment incentive for hospitals to purchase physician offices 
and bill under the OPPS for items and services furnished there. We 
believe that, by removing the financial incentive for hospitals to 
purchase freestanding facilities, we allow market forces to determine 
the appropriate number and distribution of hospital PBDs and physician 
offices based on regional costs, practice patterns, patient needs.
    Comment: We received comments expressing general frustration with 
the longstanding differences in payment policies between the PFS and 
the OPPS. The commenters stated their belief that the PFS underpays for 
the value of services furnished in nonfacility

[[Page 53029]]

settings, thereby driving physicians into hospital employment 
agreements. They stated that this general pattern detracts from 
developing and implementing more cost efficient models of care. 
Moreover, disparate payments between OPPS and PFS drive the creation of 
health system monopolies, which generally increase the overall cost of 
care for the population and reduce the feasibility of operating 
independent physician practices.
    Response: We appreciate the perspectives of the commenters. We note 
that payments made under the PFS and the OPPS are established under 
different statutory authorities using wholly different bases and 
methodologies, and therefore often result in differential payment 
amounts for similar services. We do not have the legal authority, with 
limited exceptions such as section 603 of the Bipartisan Budget Act of 
2015, to develop or implement modified payment rates that would broadly 
reduce the differences in payment between physician offices and 
hospital outpatient departments.
    Comment: Many commenters described the importance of hospital off-
campus PBDs in meeting the needs of rural and high risk patients. They 
maintained that payments made using the PFS Relativity Adjuster, 
particularly at the proposed rate of 25 percent, would be so low as to 
prohibit hospitals from providing needed services to high risk 
populations and may even require some hospital locations to close. A 
commenter specifically requested that CMS conduct an impact assessment 
before continuing with implementation of the statute.
    Response: We appreciate the comment and understand the 
stakeholders' concerns about access to care for rural populations. As 
you know, section 603 amended the statute at section 1833(t) of the Act 
to carve out certain items and services furnished by certain off-campus 
outpatient departments of a provider from the definition of covered 
outpatient services, and from payment under the OPPS beginning on 
January 1, 2017. We do not believe that section 603 of the Bipartisan 
Budget Act of 2015 restricts options for patients in rural and 
underserved areas, and moreover, we do not believe the statutory 
amendments have been implemented in a manner that restricts access to 
care for rural populations.
    We have previously stated that we consider the PFS Relativity 
Adjuster to be an interim policy until a complete year of claims data 
from CY 2017 are available for analysis. Once such data are available, 
we expect to calculate and propose a more precise payment rate. 
Additionally, we continue to consider options for nonexcepted off-
campus PBDs to bill for nonexcepted items and services using a PFS 
claim, effectively allowing us to develop and pay a code-specific 
amount representing the technical component of furnishing a service.
    Comment: A couple of commenters indicated their belief that CMS is 
making drastic changes to payment policies for nonexcepted items and 
services furnished by nonexcepted off-campus PBDs and that this 
adversely impacts the ability of hospitals and physician offices to 
conduct long term planning. One commenter stated that our proposal to 
change the PFS Relativity Adjuster for CY 2018 contradicts CMS's 
statement in the CY 2017 interim final rule (81 FR 79720 through 79729) 
in which we articulated that, unless there are significant changes to 
the policies set forth in the interim final rule, we anticipate 
continuing to use the same method to determine PFS payment amounts for 
nonexcepted items and services furnished by nonexcepted off-campus PBDs 
in the near term. Several commenters indicated that they had 
interpreted CMS's statements as a promise that the PFS Relativity 
Adjuster would remain at 50 percent until such time that we had 
required data available to more precise calculation. The commenters, 
representing hospital stakeholders, suggested that they may not have 
moved forward with planned expansions of new off-campus PBDs if they 
had known we would change the PFS Relativity Adjuster.
    Response: We thank commenters for their concerns. We do not agree 
that our statements in the CY 2017 interim final rule reflected a 
promise not to change the PFS Relativity Adjuster over the next two to 
three years. Rather, we stated that the general approach, in which we 
calculate an overall reduction--the PFS Relativity Adjuster--to 
nonexcepted items and services furnished by nonexcepted off-campus PBDs 
when billed with a ``PN'' modifier, would remain in place until we were 
able to establish code-specific reductions that represent the technical 
component of services furnished under the PFS or until we were able to 
implement system changes needed to enable nonexcepted off-campus PBDs 
to bill for the technical component of nonexcepted items and services 
using a professional claim. We are required by law to implement payment 
changes for nonexcepted PBDs. Through notice and comment rulemaking in 
the CY 2017 interim final rule and the CY 2018 PFS proposed rule, we 
have been as transparent as possible in our methodology for determining 
the PFS Relativity Adjuster, including limitations related to data 
availability. We believe we have given sufficient information about our 
underlying concerns and objectives, including the transitory nature of 
this payment policy until we have the opportunity to analyze CY 2017 
claims data. In addition, while we currently lack both the data and the 
infrastructure to require hospitals to bill for nonexcepted items and 
services furnished by nonexcepted off-campus PBDs using a professional 
claim, we are continuing to explore the changes that would be needed to 
do so for future years. This change would allow nonexcepted off-campus 
PBDs to report services using the same coding as would be used by 
practitioners and suppliers under the PFS and to bill specifically for 
nonexcepted items and services at rates that represent the technical 
component of services furnished under the PFS.
    Comment: Several stakeholders commented on topics related to 
policies we addressed in prior rulemaking or policies that are outside 
the scope of this final rule. Commenters urged CMS to expand excepted 
status of an off-campus PBD that is changing location or ownership. 
Other commenters, however, suggested that we remove the excepted status 
for off-campus PBDs entirely, even for those billing as a PBD prior to 
November 2, 2015.
    Response: We appreciate commenters' concerns regarding these 
topics. However, we note that the implementation of section 603 of the 
Bipartisan Budget Act of 2015 was finalized in the CY 2017 CY OPPS/ASC 
final rule with comment period (81 FR 79699 through 79719), and we did 
not make any proposals in the CY 2018 PFS proposed rule related to 
defining the applicable items and services furnished by certain off-
campus outpatient departments of a provider, which will not be 
considered covered OPD services on or after January 1, 2017 (that is, 
how we defined nonexcepted items and services furnished by nonexcepted 
off-campus PBDs). Thus, comments addressing such issues are outside the 
scope of this rulemaking. Comments submitted with technical billing 
questions are addressed through applicable program instructions. For 
policies related to patient cost sharing under the OPPS and for 
guidance related to cost reporting for nonexcepted items and services 
furnished by nonexcepted PBDs, we direct commenters to the OPPS CY 2018 
final rule.

[[Page 53030]]

    Comment: We received several comments questioning why we have not 
responded to comments on the CY 2017 OPPS interim final rule in which 
we implemented the CY 2017 PFS Relativity Adjuster of 50 percent. The 
same commenters also questioned whether our proposal to reduce the PFS 
Relativity Adjuster to 25 percent might be a violation of our 
rulemaking obligations under the Administrative Procedure Act (APA) (5 
U.S.C. 553) insofar as we indicated our intention to develop a revised 
PFS relativity adjuster based on claims data when they became 
available, and there are not yet claims data available to develop a 
more appropriate payment adjustment. Some commenters further suggested 
that our policies regarding the PFS relativity adjuster, made in the 
absence of specific data to support them as explained in the CY 2017 
interim final rule, are arbitrary and capricious.
    Response: We appreciate the commenters' concerns about adhering to 
the rulemaking requirements of the APA. To meet our rulemaking 
obligations, we generally respond to comments on an interim final rule 
at the time that we adopt final policies relating to that interim final 
rule. On the whole, commenterson the CY 2017 interim final rule who 
disagreed with setting the CY 2017 PFS Relativity Adjuster at 50 
percent articulated concerns about the approach we used to arrive at 
that rate. In particular, commenters highlighted the differences in 
packaging rules under the PFS and the OPPS, and suggested that CMS 
should use the total nonfacility rate (rather than the nonfacility 
minus facility rate) to compare relative payments between PFS and OPPS. 
We are currently addressing, through notice and rulemaking for CY 2018, 
the concerns raised by commenters and stakeholders related to the 
policies that we proposed and are finalizing for CY 2018. However, we 
note that the public comments on the CY 2017 interim final rule and on 
the CY 2018 PFS proposed rule express many of the same views and 
concerns about how we should set the PFS relativity adjuster.
    We presented the analysis and reasons that led us to the proposed 
PFS Relativity Adjuster of 25 percent for CY 2018; and we responded to 
public comments on that proposal with a revised analysis and the final 
PFS Relativity Adjuster of 40 percent for CY 2018. We have provided the 
data required to replicate our analysis, consistently based upon CY 
2016 payment rates under the PFS and OPPS, for the CY 2017 interim 
final, and for the proposed and final CY 2018 PFS relativity adjusters. 
Furthermore, we have been as transparent as possible in our approach, 
including the limitations related to data availability, and our 
inability to develop a precise adjustment to the relative payment rates 
that would account for differences between the two payment systems, 
including packaging. We believe we are moving as judiciously as 
possible, given these limitations, to meet the requirements of the 
statute, providing public transparency into our policy considerations, 
and in full accordance with our notice and comment rulemaking 
obligations. We are finalizing a PFS Relativity Adjuster of 40 percent 
for CY 2018 as discussed earlier in this section.
    Comment: Several commenters requested that CMS move all of the 
rulemaking, including requests for comments, comment summaries and our 
responses, for policies relating to the implementation of section 603 
of the Bipartisan Budget Act of 2015 from the PFS rule to the OPPS 
rule. They cited the additional burden of responding to such 
interrelated policies in different rules.
    Response: We appreciate the commenters' concern about the 
challenges presented by addressing policies that implicate two payment 
systems that are issued in two separate rulemaking processes. However, 
because the policies included in this final rule relate to payments 
that are made under the PFS to nonexcepted off-campus PBDs furnishing 
nonexcepted items and services, we believe it is appropriate that these 
issues be addressed in rulemaking for the PFS. We note that policies 
related to interpretation of the OPPS statute will continue to be 
addressed in OPPS rulemaking.

   Table 10--Comparison of CY 2016 OPPS Payment Rate to CY 2016 PFS Payment Rate for Top Hospital Codes Billed
                                            Using the ``PO'' Modifier
----------------------------------------------------------------------------------------------------------------
                                                                     CY 2016
                                                                    applicable
                                           CY 2016      CY 2016        PFS       Col (5) as
    HCPCS code        Code description   total claim      OPPS      technical        a           PFS estimate
                                             lines      payment      payment     percentage
                                                          rate        amount      of OPPS
                                                                     estimate
(1)                 (2)................          (3)          (4)          (5)               (6)
----------------------------------------------------------------------------------------------------------------
G0463.............  Hospital outpt        13,835,921      $102.12       $26.71        26.16  Nonfacility rate--
                     clinic visit.                                                            Facility rate
                                                                                              based on the
                                                                                              average of ten PFS
                                                                                              CPT codes: 99201--
                                                                                              99205 and 99211 0
                                                                                              99215.
96372.............  Ther/proph/diag inj      725,665        42.31        25.42         60.1  Single rate paid
                     sc/im.                                                                   exclusively to
                                                                                              either
                                                                                              practitioner or
                                                                                              facility; full
                                                                                              nonfacility rate.
71020.............  Chest x-ray 2vw          719,451        60.80        16.83         27.7  Technical
                     frontal&latl.                                                            component: Full
                                                                                              nonfacility rate.
93005.............  Electrocardiogram        662,763        55.94         8.59         15.4  Single rate paid
                     tracing.                                                                 exclusively to
                                                                                              either
                                                                                              practitioner or
                                                                                              facility; full
                                                                                              nonfacility rate.
96413.............  Chemo iv infusion 1      563,245       280.27       136.41         48.7  Single rate paid
                     hr.                                                                      exclusively to
                                                                                              either
                                                                                              practitioner or
                                                                                              facility: Full
                                                                                              nonfacility rate.
93798.............  Cardiac rehab/           448,130       103.92        11.10         10.7  Nonfacility rate--
                     monitor.                                                                 Facility rate.
96375.............  Tx/pro/dx inj new        408,751        42.31        22.56         53.3  Single rate paid
                     drug addon.                                                              exclusively to
                                                                                              either
                                                                                              practitioner or
                                                                                              facility; full
                                                                                              nonfacility rate.
93306.............  Tte w/doppler            369,856       416.80       165.77         39.8  Technical
                     complete.                                                                component: full
                                                                                              nonfacility rate.
77080.............  Dxa bone density         344,118       100.69        31.15         30.9  Technical
                     axial.                                                                   component: full
                                                                                              nonfacility rate.
90853.............  Group psychotherapy      299,446        69.65         0.36          0.5  Nonfacility rate--
                                                                                              Facility rate.
77412.............  Radiation treatment      296,601       194.35       266.86        137.3  Technical component
                     delivery.                                                                (Full nonfacility
                                                                                              rate) based on
                                                                                              weighted averages
                                                                                              for the following
                                                                                              PFS codes: G6011;
                                                                                              G6012; G6013; and
                                                                                              G6014.
96365.............  Ther/proph/diag iv       269,899       173.18        69.82         40.3  Single rate paid
                     inf init.                                                                exclusively to
                                                                                              either
                                                                                              practitioner or
                                                                                              facility: Full
                                                                                              nonfacility rate.
20610.............  Drain/inj joint/         221,922       223.76        13.96          6.2  Nonfacility rate--
                     bursa w/o us.                                                            Facility rate.

[[Page 53031]]

 
96367.............  Tx/proph/dg addl         217,098        42.31        30.79         72.8  Single rate paid
                     seq iv inf.                                                              exclusively to
                                                                                              either pracitioner
                                                                                              or facility: Full
                                                                                              nonfacility rate.
11042.............  Deb subq tissue 20       215,734       225.55        54.78         24.3  Nonfacility rate--
                     sq cm/<.                                                                 Facility rate.
93017.............  Cardiovascular           196,183       220.35        39.74         18.0  Single rate paid
                     stress test.                                                             exclusively to
                                                                                              either
                                                                                              practitioner or
                                                                                              facility; full
                                                                                              nonfacility rate.
77386.............  Ntsty modul rad tx       182,989       505.51       347.30         68.7  Technical
                     dlvr cplx.                                                               component:
                                                                                              Nonfacility rate
                                                                                              for CPT code G6015
                                                                                              (analogous code
                                                                                              used under the
                                                                                              PFS).
74177.............  Ct abd & pelv w/         167,549       347.72       220.20         63.3  Technical
                     contrast.                                                                component: Full
                                                                                              nonfacility rate.
71260.............  Ct thorax w/dye....      163,756       236.86       167.21         70.6  Technical
                                                                                              component: Full
                                                                                              nonfacility rate.
71250.............  Ct thorax w/o dye..      160,956       112.49       129.61        115.2  Technical
                                                                                              component: Full
                                                                                              nonfacility rate.
78452.............  Ht muscle image          159,219     1,108.46       412.82         37.2  Technical
                     spect mult.                                                              component: Full
                                                                                              nonfacility rate.
96415.............  Chemo iv infusion        151,700        42.31        28.64         67.7  Single rate paid
                     addl hr.                                                                 exclusively to
                                                                                              either
                                                                                              practitioner or
                                                                                              facility; full
                                                                                              nonfacility rate.
----------------------------------------------------------------------------------------------------------------
Weighted Average (claim line volume * rate) of the PFS payment compared to OPPS payment for  35%
 the 22 major codes:
----------------------------------------------------------------------------------------------------------------

H. 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 the 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.E.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 PFS proposed rule, the new process was applicable to all codes, 
except for new codes that describe truly new services. For CY 2017, we 
proposed new values in the CY 2017 PFS 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 for which 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 values for those codes in the CY 2017 PFS 
proposed rule.
    We considered public comments received during the 60-day public 
comment period for the proposed rule before establishing final values 
in the CY 2017 PFS 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 
did not identify any new codes that described such wholly new services. 
Therefore, we did not establish any code values on an interim final 
basis.
2. Methodology for Establishing Work RVUs
    For each code identified in this section, we conducted a review 
that included 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 reviews of recommended work RVUs and time 
inputs have generally included, but have not been limited to, a review 
of information provided by the RUC, the Health Care Professionals 
Advisory Committee (HCPAC), 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 have also assessed the methodology and 
data used to develop the recommendations submitted to us by the RUC and 
other public commenters and the rationale for the recommendations. In 
the CY 2011 PFS final rule with comment period (75 FR 73328 through 
73329), we discussed a variety of methodologies and approaches used to 
develop work RVUs,

[[Page 53032]]

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 (75 FR 73328 through 73329) 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. We 
have used the building block methodology to construct, or deconstruct, 
the work RVU for a CPT code based on component pieces of the code.
    Components that we have used in the building block approach may 
have included preservice, intraservice, or postservice time and post-
procedure visits. When referring to a bundled CPT code, the building 
block components could include 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 and 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 have refined 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 preservice time packages for 
services typically furnished in the facility setting (for example: 
Preservice time packages reflecting the different combinations of 
straightforward or difficult procedure, and straightforward or 
difficult patient). Currently, there are three preservice time packages 
for services typically furnished in the nonfacility setting.
    We developed several standard building block methodologies to value 
services appropriately when they have common billing patterns. In cases 
where a service is typically furnished to a beneficiary on the same day 
as an evaluation and management (E/M) service, we believe that there is 
overlap between the two services in some of the activities furnished 
during the preservice evaluation and postservice time. 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 have believed that the RUC has not 
adequately accounted for the overlapping activities in the recommended 
work RVU and/or times, we have adjusted 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 have removed 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 have also 
removed a work RVU of 0.09 (4 minutes x 0.0224 IWPUT) if we have not 
believed the overlap in time had 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 over time with our ongoing adjustment of work RVUs based on 
changes in the best information we have had regarding the time 
resources involved in furnishing individual services. We have been 
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. We are statutorily obligated to consider both 
time and intensity in establishing work RVUs for PFS services. 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 have applied various 
methodologies to identify several potential work values for individual 
codes.
    We have observed that for many codes reviewed by the RUC, 
recommended work RVUs have appeared to be incongruous with recommended 
assumptions regarding the resource costs in time. This has been the 
case for a significant portion of codes for which we have recently 
established or proposed work RVUs that are based on refinements to the 
RUC-recommended values. When we have adjusted work RVUs to account for 
significant changes in time, we have begun by looking at the change in 
the time in the context of the RUC-recommended work RVU. When the 
recommended work RVUs have not appeared to account for significant 
changes in time, we have employed 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 block, 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 have sometimes used 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 
have used the recommended values as a starting reference and then 
applied one of these several methodologies to account for the 
reductions in time that we believe had not otherwise been reflected in 
the RUC-recommended value. When we have believed that such changes in 
time have already been accounted for in the RUC recommendation, then we 
have not made such adjustments. Likewise, we have not arbitrarily 
applied time ratios to current work RVUs to calculate proposed work 
RVUs. We have used the ratios to identify potential work RVUs and 
considered these work RVUs as potential options relative to the values 
developed through other options.
    We do not imply 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 have believed 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 had appeared to 
disregard or dismiss the

[[Page 53033]]

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 
have generally used one of the aforementioned methodologies to identify 
potential work RVUs, including the methodologies intended to account 
for the changes in the resources involved in furnishing the procedure.
    Several stakeholders, 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; other stakeholders have 
also expressed concerns with CMS refinements to RUC recommended values 
in general. In the CY 2017 PFS final rule (81 FR 80272 through 80277) 
we responded in detail to several comments that we received regarding 
this issue. In the CY 2017 PFS proposed rule, we requested comments 
regarding potential alternatives to making adjustments that would 
recognize overall estimates of work in the context of changes in the 
resource of time for particular services; however, we did not receive 
any specific potential alternatives as requested.
    In developing proposed values for new, revised, and potentially 
misvalued codes for CY 2018, we considered the lack of alternative 
approaches to making the adjustments, especially since many 
stakeholders have routinely urged us to propose and finalize the RUC-
recommended values. We also considered the RUC's consistent reassurance 
that these kinds of concerns (regarding changes in time, for example) 
had already been considered, and either incorporated or dismissed, as 
part of the development of their recommended values. These have led us 
to shift our approach to reviewing RUC recommendations, especially as 
we believe that the majority of practitioners paid under the PFS, 
though not necessarily those in any particular specialty, would prefer 
CMS rely more heavily on RUC recommended values in establishing payment 
rates under the PFS.
    For CY 2018, we generally proposed the RUC-recommended work RVUs 
for new, revised, and potentially misvalued codes. We proposed these 
values based on our understanding that the RUC generally considers the 
kinds of concerns we have historically raised regarding appropriate 
valuation of work RVUs. However, during our review of these recommended 
values, we identified some concerns similar to those we have recognized 
in prior years. Given the relative nature of the PFS and our obligation 
to ensure that the RVUs reflect relative resource use, we included 
descriptions of potential approaches we might have taken in developing 
work RVUs that differ from the RUC-recommended values. We sought 
comment on both the RUC-recommended values as well as the alternatives 
considered.
    The following is a summary of the public comments received on both 
the RUC-recommended values as well as the alternatives we considered in 
developing work RVUs and our responses:
    Comment: Several commenters generally support the proposed use of 
the RUC-recommended work RVUs, without refinement. One commenter 
encouraged further collaboration between the RUC and CMS to improve the 
relativity within the payment system.
    Response: We thank the commenters for their input and support of 
the proposals. We also agree that collaboration is a critical element 
in our establishment of work RVUs. In our review of work RVUs and time 
inputs, we have and will continue to consider information from various 
public commenters, medical literature, the HCPAC, information provided 
by the RUC, Medicare claims data, and other relevant sources.
    Comment: One commenter stated that the RUC thoroughly vets the 
times and values of the procedures it reviews, applies the right 
valuation methodology to appropriately value the procedures that are 
being reviewed, and usually adjusts the times identified by the survey 
if the times seem unreasonable. Another commenter stated that 
recommendations by the RUC remain the most robust mechanism for 
collecting data and establishing relative values. A few commenters 
stated that CMS should depend on RUC-recommended values instead of 
trying to create an arbitrary, new methodology that lacks reliability 
or reflects significantly flawed rationales. A few commenters stated 
that CMS work value reductions are done with complete disregard for the 
rigorous process conducted by the RUC with input from medical specialty 
societies to develop data driven recommendations for physician work 
values and without presenting data to support these reductions.
    Response: We agree that the RUC provides critically important 
information for our review process. However, our review of recommended 
work RVUs and time inputs also generally includes review of various 
sources, in addition to the RUC, such as information provided by other 
public commenters, comparative databases, and medical literature which 
are also vital sources of information. We disagree with the commenters 
that CMS has created arbitrary, unreliable work value reductions that 
have disregarded the RUC process. We have historically used the RUC-
recommended values or existing values as a starting point in our 
review, and then applied adjustments as necessary, particularly when we 
find that the RUC recommendation does not appropriately account for 
recommended changes in time, and provides no explanation as to why this 
would be appropriate.
    Comment: One commenter expressed disappointment with situations 
where CMS rejects recommended work valuations and direct PE inputs that 
would have resulted in expenditure decreases, and was concerned that 
all professionals are impacted. The commenter stated that CMS should 
accept RUC-recommended values and inputs that would result in 
expenditure decreases or hold all other healthcare professionals 
harmless for the decision to reject them.
    Response: We appreciate the commenter's views, but note that we are 
required to establish appropriate valuations and ensure that RVUs are 
reflective of relative resources involved in furnishing a service. In 
reviewing specific codes, we make these decisions the same way 
regardless of whether the decisions would result in increases or 
decreases to overall expenditures under the PFS. Additionally, we do 
not have authority to exempt the rates for particular services from 
budget neutrality adjustments, relativity adjustments, or the effects 
of the misvalued code target recapture adjustments based on differences 
between what the RUC recommends and what CMS finalizes through notice 
and comment rulemaking.
    Comment: Some commenters expressed concern about the effect of the 
misvalued code reviews on particular specialties and settings. The 
commenters recommended insulating particular settings or specialties 
from the impact of the code reviews.
    Response: We are required to periodically review the accuracy of 
RVUs for all services furnished under the PFS. We do not believe it 
would be appropriate, nor do we have any specific authority, to 
insulate particular settings or specialties from the impact of this 
review. We also note that most misvalued code reviews and revaluations 
are triggered by the identification of codes under the potentially 
misvalued code categories that are enumerated in the statute.

[[Page 53034]]

    Comment: One commenter stated that it is open to supporting our 
alternative methods of valuation if the methods are disclosed and there 
is ample time to review, comment, and iterate on suggestions. The 
commenter stated that the RUC process currently allows for this. 
Another commenter stated that it appreciates CMS providing stakeholders 
with discussion of alternative approaches that the agency might have 
used to reach a different value, rather than proposing those values. 
The commenter stated that this gives specialties an opportunity to 
consider the alternative values, while also providing a pathway for us 
to finalize an alternative value based on information provided by 
stakeholders. The commenter also stated that it believes many of these 
alternative methods could be raised during deliberations at RUC 
meetings when specialties and their expert physician advisors are 
available to engage in a dialogue with CMS representatives. In 
addition, the commenter stated that CMS representatives who attend the 
RUC meetings should engage more actively in discussion with society 
representatives about the agency's issues and concerns with work and 
direct PE inputs, rather than first sharing concerns in the proposed 
rule when dialogue is restricted due to the rulemaking process.
    Response: While the comment period does not provide for an 
iterative process as suggested by one of the commenters, it does 
provide an opportunity for all interested parties to review and have an 
opportunity to comment on the proposals and alternative valuations 
considered. While we acknowledge that discussion and consideration of 
different valuations occurs during the RUC process, we also note that 
not all interested parties have the opportunity to participate in the 
RUC process, and not all relevant stakeholders are members of the RUC. 
Additionally, we would like to reiterate that, while we appreciate that 
some commenters believe that CMS staff could offer useful perspectives 
by regularly attending and participating more fully in the RUC 
meetings, we do not believe that would be appropriate for many reasons, 
not least of which is that CMS staff participation in the RUC process 
cannot supplant our obligation to establish through notice and comment 
rulemaking what we determine to be appropriate RVUs for each reviewed 
code. Accordingly, we disagree with the commenter's suggestion that CMS 
staff should preemptively address the concerns of work and PE values 
during the RUC meeting, instead of through notice and comment 
rulemaking. Formal notice and comment rulemaking allows all interested 
parties the opportunity to review our proposals and provide feedback, 
as well as to submit supplemental information about our proposals, and 
address any concerns or alternatives we have expressed in making our 
proposals.
    Comment: Several commenters expressed concern and disappointment 
with our proposed approach for valuing codes for CY 2018. MedPAC stated 
that it believes CMS is moving in the wrong direction by proposing to 
accept all of the RUC recommendations for work RVUs for CY 2018 without 
modification, and that this approach is inconsistent with MedPAC's 
longstanding view that CMS relies too heavily on input from the RUC, 
which is made up of practitioners who have a financial stake in the 
payment rates for services paid under the PFS. MedPAC stated that the 
Secretary is responsible for establishing RVUs for services, and this 
authority should not be delegated to a private entity; therefore, CMS 
should independently evaluate the RUC-recommended RVUs based on 
objective data and revise them when they are inaccurate. MedPAC also 
stated that CMS should collect data from a set of efficient practices 
to validate the time estimates and establish more accurate RVUs. Other 
commenters stated that from their perspective, CMS is abandoning its 
responsibility to set work RVUs under the PFS. One commenter stated 
that CMS should actively supervise and take responsibility for setting 
physician payments based on reliable, objective evidence. Another 
commenter stated that while it appreciates the work of the RUC, they 
had concerns that primary care is undervalued by the RUC, and stated 
that the RUC tends to favor more procedural and specialty-based 
services. The commenter stated that if CMS steps away from taking an 
active role in determining RVUs under its own PFS, the agency would be 
inflating the role of the RUC and thus underemphasizing primary care in 
the process. The commenter also stated that the RUC's final 
recommendations do not necessarily strike the balance across different 
provider types and services, and that it is the responsibility of CMS, 
not the RUC, to set RVUs under the PFS; and therefore, CMS should 
retain an active role in evaluating information and data and setting 
reimbursement rates for services across the PFS.
    Response: We would like to clarify that we are not relinquishing 
our obligation to independently establish appropriate RVUs for services 
paid under the PFS. We will continue to thoroughly review and consider 
information we receive from the RUC, the HCPAC, public commenters, 
medical literature, Medicare claims data, comparative databases, 
comparison with other codes within the PFS, as well as consultation 
with other physicians and healthcare professionals within CMS and the 
federal government as part of our process for establishing valuations. 
We also note that given the critical role of the resource of time in 
establishing work RVUs and the concerns that have been raised about 
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. We 
refer readers to the CY 2017 PFS final rule for discussion of the Urban 
Institute report (81 FR 80203). While generally proposing the RUC-
recommended work RVUs for new, revised, and potentially misvalued codes 
was our approach for CY 2018, we note that we also included alternative 
values where we believed there was a possible opportunity for increased 
precision.
    We also want to clarify that as part of our obligation to establish 
RVUs for the PFS, we annually make an independent assessment of the 
available recommendations, supporting documentation, and other 
available information from the RUC and other commenters to determine 
the appropriate valuations. Where we concur that the RUC 
recommendations, or recommendations from other commenters, are 
reasonable and appropriate and are consistent with the time and 
intensity paradigm of physician work, we propose those values as 
recommended. Additionally, we will continue to engage with 
stakeholders, including the RUC, with regard to our approach for 
accurately valuing codes.
    CMS appreciates the efforts of the RUC to deliberate on highly 
technical matters involving clinical care. The RUC is comprised of 31 
physicians, the majority of whom are appointed by major medical 
specialty societies. Commenters have noted concerns with the range of 
expertise represented in the RUC membership and have advocated for more 
balanced representation from across the medical community. Commenters 
have also suggested that the RUC should consider how to further engage 
the public in its deliberative processes. CMS encourages the RUC to 
consider acting on these comments and suggestions in its ongoing 
deliberations.

[[Page 53035]]

This action could involve improving the ability of stakeholders or the 
public to meaningfully participate in or learn about the deliberations, 
considering the balance of primary care and specialty expertise on the 
committee, and examining how payers are included in this process. 
Stakeholder input could include surveying retired physicians and nurses 
in addition to physicians, and receiving additional information about 
how payers view relative resource use for services. CMS may also 
consider updating its internal review of RUC recommendations in the 
future.
    Comment: One commenter stated that data obtained through the RUC 
survey process, based on subjective physician perceptions of work and 
time, may not always be the most accurate data available. The commenter 
stated that CMS should be open to reviewing additional sources of 
objective and validated work time data furnished by stakeholders. Such 
sources might include peer reviewed and published studies of 
comparative surgery times among different procedures in the same 
institution using standardized metrics.
    Response. We continue to be open to reviewing additional and 
supplemental sources of data furnished by stakeholders. We encourage 
stakeholders to continue to provide such information for CMS 
consideration in establishing work RVUs.
    Comment: One commenter stated that nurse practitioners have had 
little opportunity to participate in RUC activities, and since the fee 
schedule recommendations from the RUC impact all clinicians, it is 
important that all clinicians, including nurse practitioners, have 
input in that process. Another commenter stated that the process for 
setting the fee schedule should be accurate and robust, include input 
from multiple stakeholders, and be an open process that should have 
oversight from, and be transparent to, the many stakeholders who are 
affected by the PFS.
    Response: We concur that the process of valuing codes should be 
accurate and robust, and, as previously stated, we consider input from 
various sources when determining the appropriate valuation. Notice and 
comment rulemaking provides for an open process whereby we welcome 
input from all interested parties, and encourage the commenters to 
provide feedback regarding our annual proposed valuations.
    We look forward to continuing to engage with stakeholders and 
commenters, including the RUC, as we prioritize our obligation to value 
new, revised, and potentially misvalued codes, and will continue to 
welcome feedback from all interested parties regarding valuation of 
services for consideration through our rulemaking process. We refer 
readers to section II.H.4 of this final rule for detailed discussion of 
the proposed valuation, and alternative valuation considered for 
specific codes. Table 12 contains a list of codes for which we proposed 
work RVUs; this includes all codes for which we received RUC 
recommendations by February 10, 2017. The proposed work RVUs, work time 
and other payment information for all proposed CY 2018 payable codes 
are available on the CMS Web site under downloads for the CY 2018 PFS 
final rule. Table 12 also contains the CPT code descriptors for all 
proposed, new, revised, and potentially misvalued codes discussed in 
this section.
3. Methodology for 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, and 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 13 details 
our 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 
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 $0.30 or less, the refinement has no impact on the PE 
RVUs. This calculation considers both the impact on the direct portion 
of the PE RVU, as well as the impact on the indirect allocator for the 
average service. We also note that nearly half of the refinements 
listed in Table 13 result in changes under the $0.30 threshold and are 
unlikely to result in a change to the RVUs.
    We also note that the direct PE inputs for CY 2018 are displayed in 
the CY 2018 direct PE input database, available on the CMS Web site 
under the downloads for the CY 2018 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. The inputs 
displayed there have also been used in developing the proposed CY 2018 
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

[[Page 53036]]

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 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.
    We refer readers to section II. B. of this final rule for more 
information regarding the collaborative work of CMS and the RUC in 
improvements in standardizing 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 2018, we received invoices for several new supply and 
equipment items. Tables 13 and 14 detail the invoices received for new 
and existing items in the direct PE database. As discussed in section 
II.B. 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 13 and 14 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.

[[Page 53037]]

(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 2018 are 
available on the CMS Web site under downloads for the CY 2018 PFS final 
rule at For more information regarding the history of the MPPR policy, 
we refer readers to the CY 2014 PFS final rule (78 FR 74261-74263). For 
more information regarding the history of the OPPS cap, we refer 
readers to the CY 2007 PFS final rule (71 FR 69659-69662).
4. Proposed Valuation of Specific Codes for CY 2018
(1) Anesthesia Services for Gastrointestinal (GI) Procedures (CPT Codes 
00731, 00732, 00811, 00812, and 00813)
    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 relative frequency with which anesthesia codes 
are reported with colonoscopy services, we believed the relative values 
of the anesthesia services should be reexamined and proposed to 
identify CPT codes 00740 (Anesthesia for upper gastrointestinal 
endoscopic procedures, endoscope introduced proximal to duodenum) and 
00810 (Anesthesia for lower intestinal endoscopic procedures, endoscopy 
introduced distal to duodenum) as potentially misvalued.
    For CY 2018, the CPT Editorial Panel is deleting CPT codes 00740 
and 00810 and creating new codes for anesthesia services furnished in 
conjunction with and in support of gastrointestinal endoscopic 
procedures: Two codes for upper GI procedures, CPT code 00731 
(Anesthesia for upper gastrointestinal endoscopic procedures, endoscope 
introduced proximal to duodenum; not otherwise specified) and CPT code 
00732 (Anesthesia for upper gastrointestinal endoscopic procedures, 
endoscopy introduced proximal to duodenum; endoscopic retrograde 
cholangiopancreatography (ERCP)); and two codes for lower GI 
procedures, CPT code 00811 (Anesthesia for lower intestinal endoscopic 
procedures, endoscope introduced distal to duodenum; not otherwise 
specified) and CPT code 00812 (Anesthesia for lower intestinal 
endoscopic procedures, endoscope introduced distal to duodenum; 
screening colonoscopy); and one code for upper and lower GI procedures, 
CPT code 00813 (Anesthesia for combined upper and lower 
gastrointestinal endoscopic procedures, endoscope introduced both 
proximal to and distal to the duodenum).
    In the CY 2018 PFS proposed rule, we proposed the RUC-recommended 
base units without refinement for CPT codes 00731 (5.00 base units), 
00732 (6.00 base units), 00811 (4.00 base units), 00812 (4.00 base 
units) and 00813 (5.00 base units). We considered 3.00 base units for 
CPT code 00812 based on our comparison of the surveyed post-induction 
anesthesia-intensity allocation for CPT code 00812 to codes with 
similar allocations, such as CPT code 01382 (Anesthesia for diagnostic 
arthroscopic procedures of knee joint). We found that CPT code 01382, 
which was also valued with 3 base units, had similar allocations 
compared to the survey results for CPT code 00812. We received comments 
from anesthesia providers and professional specialty societies, 
including the RUC that specifically addressed the codes in this family.
    Comment: Regarding CPT code 00812, the RUC stated that its 
recommendation of 4.00 base units was made on an interim basis since 
the initial survey response rate did not meet the RUC's required 
minimum threshold based on the high utilization of predecessor CPT code 
00810. Subsequently, the RUC included as part of its public comments a 
revised final recommendation of 3.00 base units for CPT code 00812 
based on its review of new survey data, with the majority of survey 
respondents choosing CPT code 00910 (3.00 base units) as the key 
reference code more closely related to the work of CPT code 00812. Some 
commenters suggested that CMS should finalize its proposed values for 
each code in this family, including the proposed 4.00 base units for 
CPT code 00812, and suggested that CPT codes 00812 and 00811 represent 
similar work. A few commenters indicated that CPT code 00410 (4.00 base 
units) was a better comparator and crosswalk than the alternative 
crosswalk to CPT code 01382 that CMS considered for CPT code 00812.
    Response: We reviewed additional information submitted by the RUC 
as part of its public comment, which included an analysis of new survey 
data. We find this additional data persuasive and believe that 3.00 
base units better reflects the work of CPT code 00812.
    Comment: Several commenters expressed concerns about the process 
used for identifying CPT codes 00740 and 00810 as potentially 
misvalued. Commenters requested that we maintain the CY 2017 payment 
levels for CY 2018, suggesting that if we were to finalize the proposed 
base units for each code in this family, it would discourage use of 
anesthesia during GI procedures.
    Response: We continue to believe that the physician performing the 
GI procedure is in the best position to consider the beneficiary's 
needs when determining whether to utilize moderate sedation or 
anesthesia services. Additionally, while we understand the commenters' 
concerns, 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 that have 
experienced the fastest growth, along with codes as determined 
appropriate by the Secretary. Therefore, as discussed in the CY 2016 
PFS proposed rule (80 FR 41686), we indicated that given the 
significant change in relative frequency with which anesthesia codes 
are reported with colonoscopy services, we believed the relative values 
of the anesthesia services should be reexamined as potentially 
misvalued.
    Comment: Commenters raised concerns about how a change in valuation 
for anesthesia services would affect payments made by private insurers.
    Response: While we appreciate commenters' concerns, this final rule

[[Page 53038]]

addresses valuation of services for purposes of Medicare payments made 
under the PFS. Valuation and payment determinations made by private 
insurers are outside the scope of this final rule.
    After consideration of comments received that specifically 
addressed the codes in this family, for CY 2018, we are finalizing 5.00 
base units for CPT codes 00731, 6.00 base units for CPT code 00732, 
4.00 base units for CPT code 00811, 3.00 base units for CPT code 00812, 
and 5.00 base units for CPT code 00813.
(2) Acne Surgery (CPT Code 10040)
    CPT code 10040 (Acne surgery (e.g., marsupialization, opening or 
removal of multiple milia, comedones, cysts, pustules) was identified 
as potentially misvalued on a screen of Harvard-valued codes with 
utilization over 30,000 in CY 2014. In the CY 2018 PFS proposed rule, 
we proposed the RUC-recommended work RVU of 0.91 for CPT code 10040 and 
the RUC-recommended work time values. We considered using the current 
number of 0.5 post-procedure office visits of CPT code 99212 (Office/
outpatient visit est) rather than the RUC-recommended number of 1.0 
post-procedure office visits. For CPT code 10040, the RUC stated that 
it is a low intensity service that can be performed by a nurse under a 
physician's supervision, and that the average number of office visits 
in the follow-up period of acne surgery is 0.4. We sought public 
comments regarding the typical number of postoperative visits for this 
code, considering there have been no changes made to the code 
descriptor and we have not found evidence of changes to the typical 
patient population.
    We proposed the RUC-recommended direct PE inputs for CPT code 10040 
without refinement. We considered refinements to the clinical labor for 
``Assist physician in performing procedure'' from 10 minutes to 3 
minutes. CPT code 10040 previously used about one third of the 
intraservice work time for this clinical labor activity (5 minutes out 
of 14 minutes), and the RUC-recommended value of 10 minutes would have 
increased this to 100 percent of the intraservice work time without 
rationale for the change. We considered 3 minutes for this clinical 
labor activity, which is about one third of the intraservice work time 
(3 minutes out of 10 minutes) and would have maintained the current 
ratio between clinical labor time and work time. For CY 2018, we 
proposed the RUC-recommended work RVUs and direct PE inputs for CPT 
code 10040 and sought comment on our proposed and alternative values.
    Comment: Commenters supported the proposed values for CPT code 
10040 but disagreed with the alternative values.
    Response: We continue to welcome information from all interested 
parties regarding valuation of services for consideration through our 
rulemaking process. We will continue to consider alternative work RVUs 
as we propose the valuation of services for future notice and comment 
rulemaking.
    After consideration of comments received, for CY 2018, we are 
finalizing the work RVUs and direct PE inputs for CPT code 10040 as 
proposed.
(3) Muscle Flaps (CPT Codes 15734, 15736, 15738, 15730, and 15733)
    CPT codes 15732 and 15736 were identified via a screen of high 
level E/M visits included in their global periods. This screen 
identified that a CPT code 99214 office visit was included for CPT 
codes 15732 and 15736 but not included in the other codes in this 
family. During the CPT Editorial Panel's review process for this family 
of codes, CPT code 15732 was deleted and replaced with two new codes, 
CPT codes 15730 and 15733, to better differentiate and describe the 
work of large muscle flaps performed on patients with head and neck 
cancer depending on the site where the service was performed.
    For CY 2018, we proposed the RUC-recommended work RVUs of 23.00 for 
CPT code 15734, 17.04 for CPT code 15736, 19.04 for CPT code 15738, 
13.50 for CPT code 15730, and 15.68 for CPT code 15733. For CPT code 
15730, we considered a work RVU of 12.03, crosswalking to CPT code 
36830 (Creation of arteriovenous fistula by other than direct 
arteriovenous anastomosis (separate procedure); nonautogenous graft 
(e.g., biological collagen, thermoplastic graft)). We had concerns 
because the RUC-recommended work RVU of 13.50 would represent nearly 
double the intensity of CPT codes 15734 through 15738, as well as 
nearly double the intensity of deleted CPT code 15732. The RUC-
recommended work RVU for CPT code 15730 is also based on a direct 
crosswalk to CPT code 36832 (Revision, open, arteriovenous fistula; 
without thrombectomy, autogenous or nonautogenous dialysis graft 
(separate procedure)), which has the same intraservice time, but with 
20 additional minutes of total time. We considered a potential 
crosswalk to another code in the same family, CPT code 36830, which 
also shares the same intraservice time with CPT code 15730 but differs 
by only 8 minutes of total time. However, we sought comment on whether 
the RUC recommendation was appropriate given the significant variation 
in intensity among these services.
    We considered a work RVU of 14.63 for CPT code 15733 (survey 25th 
percentile), crosswalking to CPT code 36833 (Revision, open, 
arteriovenous fistula; with thrombectomy, autogenous or nonautogenous 
dialysis graft (separate procedure)), which has the same intraservice 
time, 1 minute of additional total time, and a work RVU of 14.50. We 
sought comment on the effect that an alternative work RVU of 14.50 
would have on relativity among the codes in this family.
    We considered refining the clinical labor time for ``Check 
dressings & wound/home care instructions'' for CPT code 15730 from 10 
minutes to 5 minutes. We sought comment on the typical time input for 
checking dressings, and whether removing and replacing dressings would 
typically take place during the intraservice or postservice period.
    We also sought comments regarding the use of the new ``plate, 
surgical, mini-compression, 4 hole'' (SD189) supply included in CPT 
code 15730, including whether use of this supply would be typical, and 
if so, whether it should be included in the work description. We noted 
that SD189 is mentioned in the direct PE recommendations, but the 
supply does not appear in the work description. In the work 
description, the fixation screws are applied to the orbital rim and 
lateral nasal wall, not the surgical plate.
    Comment: Several commenters supported the proposed values for all 
five of the codes but disagreed with the alternative values.
    Response: We continue to welcome information from all interested 
parties regarding valuation of services for consideration through our 
rulemaking process. We will continue to consider alternative work RVUs 
as we propose the valuation of services for future notice and comment 
rulemaking.
    Comment: Several commenters stated that the use of the ``plate, 
surgical, mini-compression, 4 hole'' (SD189) supply was typical in CPT 
code 15730. Commenters mentioned that this supply had a number of 
clinical benefits, such as greater stability, less risk of infection, 
fewer screws, and a wide area of support. Commenters stated that the 
recommendation forms that accompany the work descriptor do not normally 
list all supplies or materials used before, during, or after the 
surgery in great detail.

[[Page 53039]]

    Response: We appreciate the additional information supplied by the 
commenters regarding the use of the SD189 supply. While we agree that 
the work descriptor for a procedure would not necessarily list all of 
the supplies used before, during, or after a surgery, we remain puzzled 
at the lack of any mention of the surgical plate in the description of 
work for this service. The surgical plate is an expensive ($226) supply 
that appears to be integral to the work being performed in this 
service. The deleted predecessor code for this service, CPT code 15732, 
did not include a surgical plate among its direct PE inputs, and if the 
use of the surgical plate is now typical for the new CPT code 15730, we 
believe that the description of work for this service would more 
accurately explain the work taking place by detailing the use of the 
supply. We agree with the commenters regarding the clinical benefits of 
the surgical plate, and believe that this should be reflected in the 
description of work for this service.
    After consideration of comments received, for CY 2018, we are 
finalizing the work RVUs and direct PE inputs for the codes in the 
muscle flaps family as proposed.
(4) Application of Rigid Leg Cast (CPT Code 29445)
    CPT code 29445 (Application of rigid total contact leg cast) 
appeared on a high growth screen of all services with total Medicare 
utilization of 10,000 or more services that increased by at least 100 
percent from 2008 through 2013. This screen also indicated that the 
code was last surveyed more than 10 years previously, and that the 
dominant specialty had changed during that time.
    For CY 2018, we proposed the RUC-recommended work RVU of 1.78 for 
CPT code 29445. For the direct PE inputs, we proposed to refine the 
clinical labor time for ``Check dressings & wound/home care 
instructions'' from 5 minutes to 3 minutes. We believed that the 
additional 2 minutes of clinical labor time that we proposed to remove 
would take place during the monitoring time following the procedure and 
be accounted for in that clinical labor time.
    We also considered refining the clinical labor time for ``Remove 
cast'' from 22 minutes to 11 minutes: 1 minute for room prep, 10 
minutes for assisting the physician, and 0 minutes for the additional 
activities described in the RUC recommendations, which would have only 
taken place during the initial casting. We had concerns that the RUC-
recommended clinical labor regarding the ``remove cast'' task is based 
only on an initial visit where a new cast would be applied and 22 
minutes may be an appropriate length of time. However, the RUC 
recommendations suggested that four to twelve cast changes are common 
for patients, and we sought comment on whether the initial application 
of a new cast would be typical for CPT code 29445. We reviewed the 
Medicare claims data for CPT code 29445 and found that three or more 
castings took place for 52 percent of beneficiaries, which suggests 
that three or more castings may be the typical case. A single casting 
only took place for 30 percent of services reported with CPT code 
29445.
    Comment: Several commenters supported the proposed values for CPT 
code 29445 but disagreed with the alternative values.
    Response: We continue to welcome information from all interested 
parties regarding valuation of services for consideration through our 
rulemaking process. We will continue to consider alternative work RVUs 
as we propose the valuation of services for future notice and comment 
rulemaking.
    Comment: One commenter stated that they disagreed with our proposal 
to refine the clinical labor time for ``Check dressings & wound/home 
care instructions'' from 5 minutes to 3 minutes. The commenter did not 
supply any rationale for its disagreement.
    Response: We continue to believe that the additional 2 minutes of 
clinical labor time that we proposed to remove would take place during 
the monitoring time following the procedure and be accounted for in 
that clinical labor time, since we did not receive any information to 
suggest otherwise for CPT code 29445.
    After consideration of comments received, for CY 2018, we are 
finalizing the work RVUs and direct PE inputs for CPT code 29445 as 
proposed.
(5) Strapping Multi-Layer Compression (CPT Codes 29580 and 29581)
    The RUC reviewed CPT code 29580 since it appeared on the screen for 
high expenditure services and reviewed CPT code 29581 as part of this 
family of codes. For CY 2018, the CPT Editorial Panel is deleting two 
additional codes in the family: CPT codes 29582 (Application of multi-
layer compression system; thigh and leg, including ankle and foot, when 
performed) and 29583 (Application of multi-layer compression system; 
upper arm and forearm).
    For CY 2018, we proposed the RUC-recommended work RVUs for CPT code 
29580 (a work RVU of 0.55) and CPT code 29581 (a work RVU of 0.60).
    However, we were concerned about the changes in preservice time 
reflected in the specialty surveys compared to the RUC-recommended work 
RVUs. For instance, for CPT code 29580, we considered a work RVU of 
0.46, crosswalking to CPT code 98925 (Osteopathic manipulative 
treatment (OMT); 1-2 body regions involved)), which has a work RVU of 
0.46 and shares a similar intraservice time. Compared to the specialty 
survey times, the RUC recommended a slight decrease (9 minutes) in 
preservice time for CPT code 29580, with the intraservice and immediate 
postservice times remaining unchanged.
    For CPT code 29581, we considered a work RVU of 0.51 [we note that 
in the CY 2018 PFS proposed rule (82 FR 33991), this was cited as 0.50] 
by using the RUC-recommended work RVU increment between CPT codes 29580 
and 29581 (+0.05), added to the work RVU we considered for CPT code 
29580 (0.46), and crosswalking to CPT code 97597 (Debridement (e.g., 
high pressure waterjet with/without suction, sharp selective 
debridement with scissors, scalpel and forceps), open wound, (e.g., 
fibrin, devitalized epidermis and/or dermis, exudate, debris, biofilm), 
including topical application(s), wound assessment, use of a whirlpool, 
when performed and instruction(s) for ongoing care, per session, total 
wound(s) surface area; first 20 sq cm or less)), which has similar 
intraservice and total times to the RUC-recommended services times for 
CPT code 29581. We sought comment on whether a work RVU of 0.51 would 
improve relativity among the codes in this family.
    For CY 2018, we proposed the RUC-recommended work RVUs for CPT 
codes 29580 and 29581 and sought comment on whether the alternative 
values we considered would be more appropriate.
    Comment: In general, commenters were supportive of our proposal of 
the RUC-recommended work RVUs. Some expressed opposition to the 
alternative work RVUs.
    Response: We will continue to consider alternative work RVUs as we 
propose the valuation of services for future notice and comment 
rulemaking.
    Comment: Several commenters were supportive of the RUC-recommended 
PE inputs for these services.
    Response: We disagree with the RUC-recommended PE inputs for these 
services. We proposed to refine the L037D clinical labor time for 
``Provide pre-service education/obtain consent'' from 3 minutes to 2 
minutes to conform to the standard for this clinical labor

[[Page 53040]]

activity. The RUC recommendation did not include a written 
justification for additional clinical labor time beyond the standard 2 
minutes for this activity. As a result, we also proposed to refine the 
recommended equipment times for the exam table (EF023) and exam light 
(EQ168) to conform to changes in clinical labor time. Thus, we proposed 
to refine the equipment times for EF023 and EQ168 to 34 minutes for CPT 
code 29580 and to 36 minutes for CPT code 29581, to reflect the service 
period time associated with these codes. 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.
    After consideration of comments received, we are finalizing the 
work RVUs and direct PE inputs for these services as proposed.
(6) Resection Inferior Turbinate (CPT Code 30140)
    CPT code 30140 (Submucous resection inferior turbinate, partial or 
complete, any method) was identified as potentially misvalued on a 
screen of Harvard-valued codes with utilization over 30,000 in CY 2014. 
During the review process, the RUC re-surveyed the code as a 0-day 
global period, based on the presence of a negative intensity value in 
the initial survey and highly variable postoperative office visits.
    For CY 2018, we proposed the RUC-recommended work RVU of 3.00 for 
CPT code 30140 as a 0-day global code. We also considered a work RVU of 
2.68 for CPT code 30140 and sought comment on changes in practice 
patterns since the code was previously reviewed, service times of 
comparable services, and whether a work RVU of 2.68 would better 
maintain relativity among similar codes. We noted that the RUC-
recommended work RVU of 3.00 nearly doubles the derived intensity of 
the code as currently valued. We noted that the RUC recommendations 
referenced services that had similar service times to CPT code 30140 
(CPT code 31240 (Nasal/sinus endoscopy, surgical; with concha bullosa 
resection), with a work RVU of 2.61; and CPT code 31295 (Nasal/sinus 
endoscopy, surgical; with dilation of maxillary sinus ostium (e.g., 
balloon dilation), transnasal or via canine fossa), with a work RVU of 
2.70.
    We noted that the initial survey for CPT code 30140 as a 90-day 
global resulted in a RUC-recommended work RVU of 3.57, while the second 
survey for the code as a 0-day global resulted in a RUC-recommended 
work RVU of 3.00, despite the removal of two postoperative office 
visits of CPT code 99212 and a half discharge visit of CPT code 99238. 
These removed postoperative visits have a total work RVU of 2.58, which 
is notably higher than the difference in the RUC-recommended work RVUs 
between the two surveys.
    We also proposed to create equipment codes for three new equipment 
items based on invoices submitted with the RUC recommendations for CPT 
code 30140. We proposed to create three new equipment codes based on 
the invoices submitted for this code family: The 2mm reusable shaver 
blade (EQ383) at a price of $790, the microdebrider handpiece (EQ384) 
at a price of $4,760, and the microdebrider console (EQ385) at a price 
of $9,034.
    Comment: Several commenters supported the proposed values for CPT 
code 30140 but disagreed with the alternative values.
    Response: We continue to welcome information from all interested 
parties regarding valuation of services for consideration through our 
rulemaking process. We will continue to consider alternative work RVUs 
as we propose the valuation of services for future notice and comment 
rulemaking.
    Comment: One commenter requested that CMS add a new supply named 
the ``turbinate reduction wand'' to the supply inputs associated with 
this procedure when performed in the physician office setting. The 
commenter stated that this device is designed to ablate, coagulate, and 
remove a core of tissue that provides the desired volumetric reduction 
of the anatomy, and supplied several invoices for use in pricing the 
new supply.
    Response: We note that the suggested turbinate reduction wand has a 
price of nearly $200, which would add substantially to the costs of CPT 
code 30140. Before including such significant resource costs in the 
code, we believe that we should see input from the physician community 
such as the RUC. At present, we do not have any information to suggest 
that the use of this new supply is typical for CPT code 30140, and the 
RUC did not recommend the inclusion of this supply on either of the two 
occasions when this code was reviewed in CY 2017. For these reasons, we 
do not believe that it would be appropriate to add the turbinate 
reduction wand to CPT code 30140 at this time. We welcome the 
submission of additional information regarding this use of this supply 
from stakeholders.
    After consideration of comments received, for CY 2018, we are 
finalizing the work RVUs and direct PE inputs for CPT code 30140 as 
proposed.
(7) Control Nasal Hemorrhage (CPT Codes 30901, 30903, 30905, and 30906)
    In the CY 2018 PFS proposed rule, we proposed the RUC-recommended 
work RVU of 1.10 for CPT code 30901, 1.54 for CPT code 30903, 1.97 for 
CPT code 30905, and 2.45 for CPT code 30906. We also proposed the RUC-
recommended direct PE inputs for CPT codes 30901, 30903, 30905, and 
30906, with standard refinements to the equipment times to account for 
patient monitoring times. We noted that as part of its recommendation, 
the RUC informed us that the specialty societies presented evidence 
stating that the 1995 valuations for these services factored in 
excessive times, specifically to account for infection control 
procedures that were necessary at that time due to the prevalence of 
HIV/AIDS. The specialty societies also noted that increased 
availability and use of blood thinner medications compared to those 
available in 1995, has increased the difficulty and intensity of these 
procedures. We sought additional information regarding the presumption 
that the relative resource intensity of these services specifically 
would be affected by the commercial availability of additional blood 
thinner medications. We stated in the CY 2018 PFS proposed rule that we 
believe blood thinner medications were widely available before 1995 
when these codes were last valued. We also sought comments on the 
prevalence of HIV/AIDS and whether the work related to infection 
control procedures would be relative across many PFS services or 
specifically related to nasal hemorrhage control procedures.
    For CPT code 30901 (Control nasal hemorrhage, anterior, simple 
(limited cautery and/or packing) any method), we considered a work RVU 
of 1.00 (the 25th percentile survey result), crosswalking to CPT code 
20606 (Arthrocentesis, aspiration and/or injection, intermediate joint 
or bursa (e.g., temporomandibular, acromioclavicular, wrist, elbow or 
ankle, olecranon bursa); with ultrasound guidance, with permanent 
recording and reporting), which has similar service times. The median 
survey total time (24 minutes) dropped by 2 minutes (from preservice 
time), to 24 minutes compared to the existing total time. The 
difference in total time reflected a small decrease in preservice time, 
with no change in intraservice time (10 minutes). Among codes with 
similar service times, we found only three codes that had a higher work 
RVU than the RUC-recommended value.

[[Page 53041]]

    For CPT code 30903 (Control nasal hemorrhage, anterior, complex 
(extensive cautery and/or packing) any method), we considered a work 
RVU of 1.30 (the 25th percentile survey result), which would have been 
further supported by CPT codes 36584 and 51710, which have similar 
service times to the median survey results. The RUC recommended a 
decreased total time of 39 minutes compared to the existing total time 
(70 minutes), with intraservice time dropping from 30 to 15 minutes.
    For CPT code 30905 (Control nasal hemorrhage, posterior, with 
posterior nasal packs and/or cautery, any method; initial), we 
considered a work RVU of 1.73, using the RUC-recommended work RVU 
increment between CPT codes 30903 and 30905 (0.43), added to the work 
RVU we considered for CPT code 30903 (1.30), and crosswalking to CPT 
code 45321 (Proctosigmoidoscopy, rigid; with decompression of 
volvulus), which has similar service times. The surveyed intraservice 
time dropped from 48 minutes to 20 minutes. The RUC recommendations 
indicated that surveyed service times for CPT code 30905 are longer 
than for CPT code 30903 since the service is performed to control an 
arterial posterior bleed. According to the specialty society, arterial 
posterior bleeds are more difficult to treat and require a more 
extensive procedure in comparison to services reported with CPT code 
30903. We considered using the RUC-recommended work RVU increment 
between CPT codes 30903 and 30905 (0.43), added to the work RVU we 
considered for CPT code 30903 (1.30), resulting in a work RVU of 1.73. 
We sought comment on whether a work RVU of 1.73 would potentially 
affect relativity among the codes in this family.
    For CPT code 30906 (Control nasal hemorrhage, posterior, with 
posterior nasal packs and/or cautery, any method; subsequent), we 
considered a work RVU of 2.21, using the RUC-recommended work RVU 
increment between CPT codes 30905 and 30906 (0.48), added to the work 
RVU we considered for CPT code 30905 (1.73), and crosswalking to 
services with similar service times (CPT codes 19281 (Placement of 
breast localization device(s) (e.g., clip, metallic pellet, wire/
needle, radioactive seeds), percutaneous; first lesion, including 
mammographic guidance), 51727 (Simple Cystometrogram (CMG) (e.g., 
spinal manometer); with urethral pressure profile studies (i.e., 
urethral closure pressure profile), any technique), 49185 
(Sclerotherapy of a fluid collection (e.g., lymphocele, cyst, or 
seroma), percutaneous, including contrast injection(s), sclerosant 
injection(s), diagnostic study, imaging guidance (e.g., ultrasound, 
fluoroscopy) and radiological supervision and interpretation when 
performed), and 62305 (Myelography via lumbar injection, including 
radiological supervision and interpretation; 2 or more regions (e.g., 
lumbar/thoracic, cervical/thoracic, lumbar/cervical, lumbar thoracic/
cervical)). The surveyed median intraservice time dropped from 60 
minutes to 30 minutes. We sought comment on whether a work RVU of 2.21 
would potentially improve relativity among the codes in this family.
    Given the RUC's consensus, for CY 2018, we proposed the RUC-
recommended work RVUs for each code in this family and sought comment 
on whether our alternative values would be more appropriate.
    Comment: We received a few comments that specifically addressed our 
proposed values for this code family from professional specialty 
societies, including the RUC. Commenters expressed support for CMS' 
proposed values including the proposed direct PE inputs with standard 
refinements to equipment times.
    Response: We appreciate the commenters' support and, after 
consideration of the comments received that specifically address the 
codes in this family, we are finalizing a work RVU of 1.10 for CPT code 
30901, a work RVU of 1.54 for CPT code 30903, a work RVU of 1.97 for 
CPT code 30905, and a work RVU of 2.45 for CPT code 30906. We are also 
finalizing the direct PE inputs as proposed, with standard refinements 
to equipment times to account for patient monitoring times.
(8) Nasal Sinus Endoscopy (CPT Codes 31254, 31255, 31256, 31267, 31276, 
31287, 31288, 31295, 31296, 31297, 31241, 31241, 31253, 31257, 31259, 
and 31298)
    In October 2016, the CPT Editorial Panel created five new codes 
(CPT codes 31241, 31241, 31253, 31257, 31259 and 31298) and revised CPT 
codes 31238, 31254, 31255, 31276, 31287, 31288, 31296, and 31297. CPT 
codes 31253--31298 are newly bundled services representing services 
that are frequently reported together. CPT code 31241 represents a new 
service. The RUC reviewed this family of codes at its January 2017 
meeting. For CY 2018, we proposed the RUC-recommended work RVUs for all 
15 CPT codes in this family as follows: 4.27 for CPT code 31254, 5.75 
for CPT code 31255, 3.11 for CPT code 31256, 4.68 for CPT code 31267, 
6.75 for CPT code 31276, 3.50 for CPT code 31287, 4.10 for CPT code 
31288, 2.70 for CPT code 31295, 3.10 for CPT code 31296, 2.44 for CPT 
code 31297, 8.00 for CPT code 31241, 9.00 for CPT code 31253, 8.00 for 
CPT code 31257, 8.48 for CPT code 31259, and 4.50 for CPT code 31298.
    For CPT code 31296, we considered a work RVU of 2.82, supported by 
a crosswalk to CPT code 36901 (Intro cath dialysis circuit) with an 
intraservice time of 25 minutes and total time of 66 minutes, similar 
to the service times for CPT code 31296. We were concerned about the 
decrease in service time compared to the work RVU and sought comment on 
whether or not a work RVU of 2.82 might improve relativity with other 
PFS services.
    For CPT code 31256, we considered a work RVU of 2.80, supported by 
a crosswalk to CPT code 43231 (Esophagoscopy, flexible, transoral; with 
endoscopic ultrasound examination), which has 30 minutes of 
intraservice time and 81 minutes of total time, similar to the RUC-
recommended service times. We were concerned about the difference in 
total time between CPT code 31256 and the RUC-recommended crosswalk to 
CPT code 43247. CPT code 43247 has 30 minutes intraservice time and 58 
minutes total time), and CPT code 31256 (30 minutes intraservice time 
and 83 minutes total time).
    For CPT code 31254, we noted the RUC's explanation that this 
service is more intense than the functional endoscopic sinus surgery on 
the maxillary or sphenoid sinuses due to the risk of major 
complications such as injury to the eye muscles, bleeding into the eye 
or brain fluid leak and, consequently, that the RUC concluded that it 
should be valued higher than either CPT code 31256 or CPT code 31287. 
Since CPT code 31256 has the same total time (30 minutes) and 
intraservice time (30 minutes) as CPT code 31254, we considered whether 
the incremental difference recommended by the RUC between these two 
codes (work RVU of 1.16) would reflect the intensity of the service. We 
considered a work RVU of 2.80 for CPT code 31256, and also considered 
an alternative work RVU of 3.97 for CPT code 31254.
    For CPT code 31287, we considered a work RVU of 3.19 based on the 
difference between the RUC-recommended work RVU for the maxillary sinus 
surgery (CPT code 31256) and the sphenoid sinus surgery (CPT code 
31287) (difference = 0.28) added to the work RVU that we considered for 
the base code (CPT code 31256, a work RVU of 2.80). We noted that the 
magnitude of decreases in

[[Page 53042]]

service times is greater than those for the work RVU, which potentially 
could affect relativity among PFS services.
    For CPT code 31255, we considered a work RVU of 5.30, based on a 
crosswalk to CPT codes 36475 (Endovenous rf 1st vein) and 36478 
(Endovenous laser 1st vein) since both of these services have the same 
intraservice times, total times, and work RVUs. We noted that there are 
several CPT codes with similar total and intraservice times as CPT code 
31255 that have lower work RVUs than the RUC's recommended work RVU of 
5.75, such as CPT code 36246 (Ins cath abd/l-ext art 2nd), which has 45 
minutes intraservice time, 96 minutes total time and a work RVU of 5.02
    For CPT code 31276 (Nasal/sinus endoscopy, surgical; with frontal 
sinus exploration, including removal of tissue from frontal sinus, when 
performed), we considered a work RVU of 6.30, which is similar to other 
functional endoscopic surgeries. We noted that the services reported 
with CPT code 31276 are the most intense and complex of the functional 
endoscopic surgeries due to the risks of working in the narrow confines 
in the frontal recess. However, we had concerns regarding the RUC-
recommended crosswalk to CPT code 52352 (Cystourethroscopy, with 
ureteroscopy and/or pyeloscopy; with removal or manipulation of 
calculus (ureteral catheterization is included)), and sought comment on 
whether the RUC-recommended decrease in service times was appropriate 
since CPT code 52352 has 20 minutes more total time than CPT code 
31276.
    For CPT code 31241 (nasal/sinus endoscopy, surgical; with ligation 
of Sphenopalatine artery), we had concerns and sought comment regarding 
the accuracy and applicability of the surveys as the RUC indicated that 
the specialty society did not use the survey instrument that contained 
questions about the number and types of visits and that this service 
requires including a half day discharge day management as the patients 
typically stay overnight to be monitored for further bleeding. We 
sought comment on whether inclusion of a half day discharge day visit 
was typical for this service since services assigned 0-day global 
periods do not typically include discharge visits. We considered 
reducing the total time from 142 minutes to 123 minutes by removing the 
half day discharge. Using the alternative total time of 123 minutes, we 
found services with similar total and intraservice time (60 minutes) 
and total time (123 minutes).
    We considered a work RVU of 7.30 for CPT code 31241, supported by a 
direct crosswalk to CPT code 36253 (Superselective catheter placement 
(one or more second order or higher renal artery branches) renal artery 
and any accessory renal artery(s) for renal angiography, including 
arterial puncture, catheterization, fluoroscopy, contrast injection(s), 
image postprocessing, permanent recording of images, and radiological 
supervision and interpretation, including pressure gradient 
measurements when performed, and flush aortogram when performed; 
unilateral), since CPT code 36253 has a similar total time compared to 
our alternative total time.
    For CPT code 31257, we considered a work RVU of 7.30, based on a 
crosswalk to CPT code 36253 (Superselective catheter placement (one or 
more second order or higher renal artery branches) renal artery and any 
accessory renal artery(s) for renal angiography, including arterial 
puncture, catheterization, fluoroscopy, contrast injection(s), image 
postprocessing, permanent recording of images, and radiological 
supervision and interpretation, including pressure gradient 
measurements when performed, and flush aortogram when performed; 
unilateral). We had similar concerns regarding the service times for 
this service, including the cited reference codes, compared to the RUC-
recommended work RVU. We sought comment on whether a work RVU of 7.30 
for CPT code 31257 would improve consistency among the combined CPT 
codes in this family.
    CPT code 31259 is a new code representing a combination of the 
services previously described by CPT codes 31255 and 31288. We noted 
the changes in overall service times compared to other codes in this 
family and other PFS services. We considered a work RVU of 7.85 for CPT 
code 31259, crosswalking to CPT code 93461 (R&l hrt art/ventricle 
angio), which has identical intraservice times. We sought comment on 
the effect that this alternative work RVU might have on consistency and 
rank order compared to the other bundled codes in this family.
    CPT code 31298 represents a combination of CPT codes 31296 and 
31297. We had concerns about the use of the RUC-recommended comparison 
codes, CPT codes 47532 and 58558, due to differences in both 
intraservice and total time compared to the service times for CPT code 
31298. We considered a work RVU of 4.10 for CPT code 31298, 
crosswalking to CPT code 44406 (Colonoscopy w/ultrasound), which has 
similar service times.
    In the CY 2018 PFS proposed rule, we proposed the RUC-recommended 
work RVUs for each code in this family and sought comment on our 
alternative values.
    Comment: In general, commenters supported the work RVUs for 
existing CPT codes in this family as proposed. One commenter expressed 
concern about the proposed work RVUs for the newly bundled CPT codes: 
CPT code 31253, 31257, 31259, and 31298. The commenter encouraged CMS 
to adopt a payment rate for the newly bundled codes that more closely 
aligns with the payment if the individual codes are reported separately 
on the same claim. Valuing the newly bundled codes as the sum of the 
component codes would yield a work RVU of 12.50 for CPT 31253 instead 
of the proposed 9.00; a work RVU of 9.25 for CPT 31257 instead of the 
proposed 8.00; a work RVU of 9.85 for 31259 instead of the proposed 
8.48; and a work RVU of 5.44 for CPT 31298 instead of the proposed 
4.50.
    Response: We believe that certain efficiencies occur when certain 
services are furnished together. From a payment perspective, those 
efficiencies are reflected in the multiple procedure payment reduction. 
Similarly, when services that used to be described by two separate 
codes are combined, those efficiencies are reflected in the work RVU 
for the combined code. Therefore, we are finalizing all work RVUs for 
the CPT codes in this family, including the newly combined services, as 
proposed.
    Comment: One commenter noted that a few of the CPT codes have work 
RVUs that are decreasing by more than 20 percent and requested that CMS 
phase-in these rate reductions.
    Response: Section 1848(c)(7) of the Act requires that, 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. We note that the phase-in 
requirement does not apply to codes that are new or revised. Therefore, 
the CPT codes in this code family with work RVU reductions of greater 
than 20 percent are not subject to the phase-in requirement. Please see 
section II.F of the CY 2016 PFS final rule with comment period (80 FR 
70930) for more information regarding the phase-in of significant RVU 
reductions. The document is available on the CMS Web site under 
downloads for the CY 2016 PFS final rule with comment period at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    Regarding the recommended direct PE inputs, we expressed concern 
about one of the supply items used in furnishing

[[Page 53043]]

services for several CPT codes in this family: ``sinus surgery balloon 
(maxillary, frontal, or sphenoid) kit'' (SA106). In the current 
recommendations, half of one kit (each kit has sufficient supply for 
two sinuses) is included in the PE inputs for CPT codes 31295, 31296, 
and 31297. The new CPT code 31298 has one full kit, reflecting a 
service consisting of two sinuses, according to the RUC's explanation. 
The price of the full kit (two sinuses) of this disposable supply is 
$2,599.06. Our analysis of 2016 Medicare claims data indicated that 48 
percent of the time one of the three CPT codes (31295, 31296, and 
31297) is billed, it is reported on a claim with either one or both of 
the other codes. Ten percent of the time one of the three CPT codes is 
billed, it is reported on a claim with both of the other two codes. 
Effectively, 10 percent of claims reporting these CPT codes are being 
paid for three sinuses. We sought comments on the number of units of 
this supply item that are used for each service. We welcomed 
suggestions about improved methodologies for identifying the quantity 
of this disposable supply used during these procedures and will 
continue to monitor utilization and reporting of these services.
    Comment: We received several comments in response to our request 
for input about the number of units of supply item ``sinus surgery 
balloon (maxillary, frontal, or sphenoid) kit'' (SA106) that are 
appropriate for CPT codes 31295, 31296, 31297, and 31298. Commenters, 
including the RUC, noted that each kit includes one balloon, and each 
sinus requires 0.5 of a balloon, and that the current PE input of 0.5 
of SA106 is appropriate for CPT 31295, 31296, and 31297. Commenters 
also noted that, since CPT code 31298 bundles CPT codes 31296 and 
31297, an entire balloon kit is appropriate. The RUC also reiterated 
support for CMS to develop a standalone HCPCS supply code for the 
balloon kit.
    Response: We are finalizing the PE input for supply item SA106 as 
proposed, which includes 0.5 kit for CPT codes 31295, 31296, and 31297, 
and one kit for CPT code 31298.
    Comment: One commenter suggested that several PE inputs for CPT 
code 31254 are either missing, insufficient, or have an incorrect 
price. The commenter also requested that CMS develop nonfacility PE 
inputs for CPT code 31255.
    Response: After reviewing the commenter's suggestions regarding 
supply items for CPT code 31254, we believe that the current supplies 
and prices, as developed by the RUC in concert with the specialty 
societies, account for the items that are typically involved in 
furnishing this service. We refer the commenter to the process by which 
additional information for consideration of prices for supply items can 
be provided to CMS through the annual rulemaking cycle, in particular 
through invoices. Regarding the request to establish nonfacility values 
for this code, we have historically proposed payment rates for specific 
settings that have been vetted through the RUC process. We also 
consider information on Medicare utilization that may indicate trends 
on where the service is being furnished to identify when it might be 
appropriate to value a code in the nonfacility setting. If stakeholders 
are interested in submitting information about PE inputs that reflect 
resource costs typical for a particular setting, we encourage 
collaboration with the RUC in addressing such inputs. We note that the 
valuation of a service under the PFS in particular settings does not 
address whether those services are medically reasonable and necessary 
in the case of individual patients, including being furnished in a 
setting appropriate to the patient's medical needs and condition. We 
are finalizing the PE inputs for CPT codes in this family as proposed.
    In reviewing the RUC recommendations for this family of CPT codes, 
we noted that the CPT codes in this family are subject to the standard 
payment adjustment for multiple surgeries. In our analysis of the 
claims data, we noted that the average number of HCPCS codes in this 
family reported together on a claim line is approximately 2.89. In 
addition, about 15 percent of claims have two of the newly bundled CPT 
codes reported together on a claim line. We expressed concern about the 
frequency with which the nasal sinus endoscopy CPT codes in this family 
are billed together. We sought comments on whether we should consider 
the endobase code adjustments as a better approach to adjusting payment 
for these services instead of the current multiple procedure payment 
reduction. For additional information about the payment adjustment 
under the special rule for multiple endoscopic services, we refer 
readers to the Medicare Claims Processing Manual, Chapter 23 (available 
on the CMS Web site at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Internet-Only-Manuals-IOMs-Items/CMS018912.html.
    Comment: There was no consensus among commenters about whether we 
should consider the endobase code adjustments as a better approach to 
adjusting payment for these services instead of the multiple procedure 
payment reduction. A few commenters stated their opposition, noting 
that in cases where multiple endoscopies are provided on the same date 
of service, this would result in the base procedure not being 
reimbursed, and that this would be grossly inappropriate because these 
are therapeutic procedures and each sinus represents very different 
work and risks. Other commenters supported the application of the 
payment reduction for multiple endoscopic procedures.
    Response: We will consider these comments. We welcome feedback from 
stakeholders regarding these and other services for which a change in 
the indicator status designating the applicable type of multiple 
procedure payment reduction might be appropriate. We are finalizing our 
proposal to maintain the standard multiple procedure payment reduction 
for this group of nasal sinus endoscopy services.
    To estimate utilization for new or newly bundled services in this 
group of complex codes, we used a different crosswalk to current 
services than was recommended by the RUC. We believe that the RUC did 
not sufficiently account for utilization changes that occur when 
several newly bundled CPT codes describe formerly separate services. We 
direct readers to the file called ``CY 2017 Analytic Crosswalk to CY 
2018'' on the CMS Web site under downloads for the CY 2018 PFS final 
rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
(9) Tracheostomy (CPT Codes 31600, 31601, 31603, 31605, and 31610)
    CPT code 31600 was identified as part of a screen of high 
expenditure services with Medicare allowed charges of $10 million or 
more that had not been recently reviewed. CPT codes 31601, 31603, 
31605, and 31610 were added and reviewed as part of the code family.
    We proposed the RUC-recommended work RVUs for all five codes in 
this family. We proposed work RVUs of 5.56 for CPT code 31600, 8.00 for 
CPT code 31601, 6.00 for CPT code 31603, 6.45 for CPT code 31605, and 
12.00 for CPT code 31610.
    We considered a work RVU of 6.50 for CPT code 31601. We sought 
comment on the effect that this alternative value would have on 
relativity compared to other PFS services, especially since the survey 
data do not suggest an increase in the time required to perform the 
procedure.

[[Page 53044]]

    We considered a work RVU of 4.77 for CPT code 31605, based on the 
survey 25th percentile from the combined survey total. We also 
considered an intraservice work time of 15 minutes, based on the median 
intraservice work time from the combined survey total for CPT code 
31605. We sought comments on the methodology used to determine the RUC-
recommended work RVU and intraservice work time. We were concerned that 
the number of respondents (20) was below the threshold typically 
required for submission of a survey, and the effect of using survey 
results only from physicians who had personal experience performing the 
procedure. CPT code 31605 has a lower intraservice and total time, but 
a higher work RVU than comparable codes under the PFS. We noted that 
the next highest 0-day global code with 20 minutes of intraservice time 
is CPT code 16035 (Escharotomy; initial incision) at a work RVU of 
3.74. All other 0-day global codes with a work RVU of 6.45 or greater 
have at least 40 minutes of intraservice time.
    We sought comment on the effect that an alternative work RVU of 
4.77 would have on the relativity of this service compared to other 
services in this family of codes and compared to other PFS services, 
taking into account that CPT code 31605 describes a difficult and 
dangerous life-threatening emergency procedure.
    We considered a work RVU of 6.50 for CPT code 31610 based on a 
direct crosswalk to CPT code 31601 (Incision of windpipe). We 
understand that the RUC considered the possibility of recommending this 
code be assigned a 0-day global period based on concerns about negative 
derived intensity. We shared the RUC's concerns with the current 
construction of CPT code 31610, particularly with the 242 minutes of 
work time included in the postoperative visits, which is an unusually 
large amount for a procedure with only 45 minutes of intraservice time. 
We did not identify any other comparable codes under the PFS with 45 
minutes of intraservice time and more than 300 minutes of total time. 
We sought comment on whether the unusually high volume of physician 
work time included in the postoperative visits for CPT code 31610 
contributed to the negative derived intensity reported by the survey 
data. Considering that the other codes in this family have 0-day global 
periods, we considered and sought comment on whether a 0-day global 
period should be assigned to CPT code 31610. Removal of the 
postoperative E/M visits from CPT code 31610 would result in an 
intraservice time of 45 minutes and a total time of 125 minutes, 
similar to CPT code 31601 with 45 minutes of intraservice time and 135 
minutes of total time.
    We proposed the RUC-recommended direct PE inputs for all five CPT 
codes in this family without refinements. As discussed earlier, we 
considered a 0-day global period for CPT code 31610, which would also 
have resulted in removal of the clinical labor associated with the 
postoperative E/M visits, along with the supplies and equipment 
utilized during those visits. While we remained concerned about the 
global period assigned to CPT code 31610 and the changes in service 
times reflected in the specialty surveys compared to the RUC-
recommended work RVUs, for CY 2018, we proposed the RUC-recommended 
work RVUs and direct PE inputs for each code in this family and sought 
comment on our proposed and alternative values.
    Comment: The commenters supported the proposed values for all five 
of the codes but disagreed with the alternative values.
    Response: We appreciate the feedback from the commenters. We 
continue to welcome information from all interested parties regarding 
valuation of services for consideration through our rulemaking process.
    After consideration of comments received, for CY 2018, we are 
finalizing the work RVUs, direct PE inputs, and global periods for the 
codes in the tracheostomy family as proposed.
(10) Bronchial Aspiration of Tracheobronchial Tree (CPT Codes 31645 and 
31646)
    CPT code 31645 (Bronchoscopy, rigid or flexible, including 
fluoroscopic guidance, when performed with therapeutic aspiration of 
tracheobronchial tree, initial) was identified as potentially misvalued 
on a screen of Harvard-valued codes with utilization over 30,000 in CY 
2014. CPT code 31646 (Bronchoscopy, rigid or flexible, including 
fluoroscopic guidance, when performed with therapeutic aspiration of 
tracheobronchial tree, subsequent, same hospital stay) was added for 
review as part of the family of codes, and both were revised to reflect 
recent changes in how the services are typically performed. For CY 
2018, we proposed the RUC-recommended work RVUs of 2.88 for CPT code 
31645 and 2.78 for CPT code 31646.
    We considered a work RVU of 2.72 for CPT code 31645, crosswalking 
to CPT code 45347 (Sigmoidoscopy, flexible; with placement of 
endoscopic stent). We had concerns regarding the decrease in 
intraservice and total time compared to the current values; we also 
believe that it is important to note how these related codes have been 
affected by the creation of separately billable codes for moderate 
sedation (see the CY 2017 PFS final rule (81 FR 80339)). The RUC 
recommended a work RVU for CPT code 31645 that is higher than the work 
RVU for CPT code 31622 (Bronchoscopy, rigid or flexible, including 
fluoroscopic guidance, when performed; diagnostic, with cell washing, 
when performed), which is the base procedure for this broader group of 
codes. We agreed that CPT code 31645 should be valued at a higher work 
RVU than CPT code 31622; however, we sought comment on whether the work 
of moderate sedation was inadvertently included in the development of 
the recommended work RVU. We noted that as part of the CY 2017 PFS 
final rule (81 FR 80339), we finalized separate payment for moderate 
sedation. Following the creation of separately billable codes for 
moderate sedation, CPT code 31622 is currently valued at a work RVU of 
2.53, not 2.78 as it was previously valued, and we did not believe it 
would be appropriate to continue to value CPT code 31645 as though 
moderate sedation was still an inherent part of the work of this 
service. As a result, we considered a direct crosswalk to CPT code 
45347, which has the same intraservice time and 8 additional minutes of 
total time, at a work RVU of 2.72.
    We considered a work RVU of 2.53 for CPT code 31646, crosswalking 
to CPT code 31622 (Dx bronchoscope/wash). The RUC recommendation for 
CPT code 31646 indicated that the code was comparable to CPT code 
31622, since they share the same intraservice time and similar total 
time, and that the recommended work RVU of 2.78 for CPT code 31646 was 
equal to the work RVU of CPT code 31622 before the CY 2017 changes to 
reporting of moderate sedation. We agreed with the survey participants 
that these two codes are comparable to one another, but had concerns 
about valuation of CPT code 31646 using a cross reference to a code 
that included moderate sedation. We considered crosswalking CPT code 
31646 using the current CY 2017 valuation for CPT code 31622 (a work 
RVU of 2.53).
    For the direct PE inputs, we proposed to remove the oxygen gas 
(SD084) from CPT code 31645. This supply is included in the separately 
billable moderate sedation codes, and we proposed to remove the oxygen 
gas as recommended by the RUC's PE Subcommittee as part of the removal 
of

[[Page 53045]]

oxygen from non-moderate sedation post-procedure monitoring codes. We 
also proposed to remove the equipment time for the IV infusion pump 
(EQ032) from CPT code 31645. We did not agree that there would 
typically be a need for a separate infusion pump in CPT code 31645, as 
the infusion pump is contained in the separately reportable moderate 
sedation codes. We also proposed to remove the equipment time for the 
CO2 respiratory profile monitor (EQ004) and the mobile instrument table 
(EF027) from CPT code 31645. These equipment items are not contained in 
the current composition of the code, and there was no rationale 
provided in the RUC recommendations for their inclusion. As a result, 
we did not believe that their use would be typical for CPT code 31645.
    We proposed to increase the equipment time for the flexible 
bronchoscopy fiberscope (ES017) for CPT code 31645 consistent with 
standard equipment times for scopes. We also proposed to increase the 
equipment time for the Gomco suction machine (EQ235) and the power 
table (EF031) consistent with standard equipment times for non-highly 
technical equipment. For CY 2018, we proposed the RUC-recommended work 
RVUs for both codes in this family and sought comment on whether we 
should finalize refined values consistent with the implementation of 
separately billable codes for moderate sedation.
    Comment: Several commenters supported the proposed values for both 
of the codes but disagreed with the alternative values.
    Response: We continue to welcome information from all interested 
parties regarding valuation of services for consideration through our 
rulemaking process. We will continue to consider alternative work RVUs 
as we propose the valuation of services for future notice and comment 
rulemaking.
    Comment: One commenter disagreed with our proposal to remove the 
oxygen gas (SD084) and the equipment time for the CO2 respiratory 
profile monitor (EQ004) from CPT code 31645. The commenter stated that 
although the separately reported moderate sedation codes do include 
some oxygen, the new codes fail to include enough oxygen for the entire 
procedure, and there would be an unacceptable risk to the patient 
population if insufficient quantities of oxygen were allotted for this 
service. The commenter indicated that the use of these direct PE inputs 
was the standard of care for bronchoscopies.
    Response: After reviewing the information supplied by the 
commenter, we agree that the removal of these two direct PE inputs from 
CPT code 31645 could create a risk for the patient population. 
Therefore, we are finalizing the inclusion of 175 liters of oxygen gas 
and 58 minutes of equipment time for the CO2 respiratory profile 
monitor for CPT code 31645.
    After consideration of comments received, for CY 2018, we are 
finalizing the work RVUs and direct PE inputs for the codes in the 
bronchial aspiration of tracheobronchial tree family as proposed, with 
the exception of the proposed removal of the oxygen gas and CO2 
respiratory profile monitor as detailed above.
(11) Cryoablation of Pulmonary Tumor (CPT Codes 32998 and 32994)
    For CY 2018, the CPT Editorial Panel modified the descriptor for 
CPT code 32998 (Ablation therapy for reduction or eradication of 1 or 
more pulmonary tumor(s) including pleura or chest wall when involved by 
tumor extension, percutaneous, including imaging guidance when 
performed, unilateral; radiofrequency) to include imaging guidance. In 
addition, the panel deleted Category III CPT Code 0304T and replaced it 
with a new CPT code 32994, to describe ablation therapy for reduction 
of pulmonary tumor using cryoablation with imaging guidance. In the CY 
2018 PFS proposed rule, we proposed the RUC-recommended work RVUs for 
CPT codes 32998 (a work RVU of 9.03) and 32994 (a work RVU of 9.03).
    However, we expressed concerns about the descriptions of the codes 
and the recommended valuations assuming that imaging guidance is 
inherent to the procedure. Based on our analysis of claims data from 
2014, existing CPT code 32998 is currently reported with one of the 
three imaging guidance codes (CPT codes 76940, 77013, or 77022) less 
than 50 percent of the time. We sought comment on whether there is 
additional information that would help explain why the codes are being 
bundled despite what is reflected in the Medicare claims data. We 
considered a work RVU of 7.69 for CPT code 32998, that included 
approximately one half the value of the imaging guidance in the new 
codes that describe the work of both the procedure and the image 
guidance (that is, the sum of the current work RVU for CPT code 32998 
and one-half of the work RVU for CPT code 77013 (the imaging guidance 
code most frequently billed with CPT code 32998 according to 2014 
claims data)). We applied the same general rationale regarding the use 
of imaging guidance for new CPT code 32994. Since the RUC recommended 
identical work RVUs for these codes, we also considered a work RVU of 
7.69 for CPT code 32994.
    For CPT codes 32998 and 32994, we proposed to use the RUC-
recommended direct PE inputs with standard refinements and sought 
comment on our proposed values.
    Comment: Commenters generally supported the work RVUs for these 
codes, as proposed. Some commenters expressed concerns about our 
analysis of utilization data related to the bundling of imaging 
guidance services with ablation therapy. In addition, commenters 
disagreed with our refinement to times for several equipment items.
    Response: We continue to remain interested in ensuring that, when 
two services are combined into a single CPT code, that they are 
furnished together so frequently that the resulting resource valuation 
is not inadvertently overestimating resource costs.
    After consideration of the public comments, we are finalizing the 
work RVUs as proposed. With regard to the PE inputs, we note that we 
applied the standard formulas for equipment times, and we continue to 
believe that these refinements are reasonable for these codes. An 
explanation of the standards and formulas for equipment related to 
direct PE inputs is in the CY 2014 PFS final rule with comment period 
(79 FR 67557). We are also finalizing the direct PE inputs with 
standard refinements for these services, as proposed.
(12) Artificial Heart System Procedures (CPT Codes 33927, 33929, and 
33928)
    For CY 2018, the CPT Editorial Panel deleted Category III CPT Codes 
0051T through 0053T and created CPT codes 33927 (Implantation of a 
total replacement heart system (artificial heart) with recipient 
cardiectomy), 33929 (Removal of a total replacement heart system 
(artificial heart) for heart transplantation), and 33928 (Removal and 
replacement of total replacement heart system (artificial heart)) to 
report artificial heart system procedures. We proposed the RUC-
recommended work RVU of 49.00 for CPT code 33927, and proposed to 
assign contractor-priced status to CPT codes 33929 and 33928, as 
recommended by the RUC. We considered assigning contractor-priced 
status for CPT code 33927. We had concerns regarding the accuracy of 
the RUC-recommended work valuation for CPT code 33927, due to its low 
utilization and the resulting difficulties in finding enough 
practitioners with direct experience of the procedure for the specialty 
societies to survey. We sought comment on the sufficiency of the survey 
data, especially since new

[[Page 53046]]

technologies and those with lower utilization are typically contractor-
priced. For CY 2018, we proposed the RUC-recommended work RVUs for CPT 
code 33927. We sought comment on this alternative pricing for this CPT 
code 33927. We did not propose any direct PE inputs, as we did not 
receive RUC-recommended PE information for CPT codes 33927, 33929, and 
33928. These three codes will be placed on the RUC's new technology 
list and will be re-reviewed by the RUC in 3 years.
    Comment: Several commenters supported the proposed values for CPT 
code 33927 but disagreed with the alternative values.
    Response: We continue to welcome information from all interested 
parties regarding valuation of services for consideration through our 
rulemaking process. We will continue to consider alternative work RVUs 
as we propose the valuation of services for future notice and comment 
rulemaking.
    After consideration of comments received for CY 2018, we are 
finalizing the work RVU of 49.00 for CPT code 33927 and finalizing 
contractor-priced status for CPT codes 33929 and 33928 as proposed.
(13) Endovascular Repair Procedures (CPT Codes 34701, 34702, 34703, 
34704, 34705, 34706, 34707, 34708, 34709, 34710, 34711, 34712, 34713, 
34812, 34714, 34820, 34833, 34834, 34715, and 34716)
    The CPT/RUC joint workgroup on codes recommended in October 2015 to 
bundle endovascular abdominal aortic aneurysm repair (EVAR) codes 
together with radiologic supervision and interpretation codes, since 
these codes were typically reported together at least 50 percent of the 
time. The CPT Editorial Panel bundled these services together in 
September 2016, creating 16 new codes, revising four existing codes, 
and deleting 14 other codes related to endovascular repair procedures.
    We proposed the RUC-recommended work RVUs for all 20 codes in this 
family. We proposed work RVUs of 23.71 for CPT code 34701, 36.00 for 
CPT code 34702, 26.52 for CPT code 34703, 45.00 for CPT code 34704, 
29.58 for CPT code 34705, 45.00 for CPT code 34706, 22.28 for CPT code 
34707, 36.50 for CPT code 34708, 6.50 for CPT code 34709, 15.00 for CPT 
code 34710, 6.00 for CPT code 34711, 12.00 for CPT code 34712, 2.50 for 
CPT code 34713, 4.13 for CPT code 34812, 5.25 for CPT code 34714, 7.00 
for CPT code 34820, 8.16 for CPT code 34833, 2.65 for CPT code 34834, 
6.00 for CPT code 34715, and 7.19 for CPT code 34716. We also proposed 
the RUC-recommended direct PE inputs without refinement for all 20 
codes in the family.
    We considered a work RVU of 32.00 for CPT code 34702 based on the 
survey 25th percentile, and further supported with a crosswalk to CPT 
code 48000 (Placement of drains, peripancreatic, for acute 
pancreatitis), which has the same intraservice time of 120 minutes and 
a work RVU of 31.95. When we compared the RUC-recommended work RVU to 
similar codes valued under the PFS, we were unable to find any 90-day 
global services with 120 minutes of intraservice time and approximately 
677 minutes of total time that had a work RVU greater than 36.00.
    We considered a work RVU of 40.00 for CPT code 34704 based on the 
survey 25th percentile, crosswalking to CPT code 33534 (Coronary artery 
bypass, using arterial graft(s); 2 coronary arterial grafts) which has 
a work RVU of 39.88. CPT code 33534 has 193 minutes of intraservice 
time, but a lower total time of 717 minutes. When we compared the RUC-
recommended work RVU for CPT code 34704 to similar codes paid under the 
PFS, we were unable to find any 90-day global services with 180 minutes 
of intraservice time and approximately 737 minutes of total time that 
had a work RVU greater than 45.00.
    We considered a work RVU of 40.00 for CPT code 34706 based on the 
survey 25th percentile. CPT code 34706 has nearly identical time values 
to CPT code 34704, with 2 fewer minutes of intraservice time and total 
time, and the RUC-recommended work RVU was the same for both of these 
codes. The survey respondents also believed that these two codes had a 
comparable amount of work, as the survey 25th percentile work RVU was 
40.00 for both codes.
    We considered a work RVU of 30.00 for CPT code 34708 based on the 
survey 25th percentile and sought comment on whether a work RVU of 
30.00 would improve relativity among the codes in this family. CPT code 
34708 has identical intraservice and total times as CPT code 34702. 
However, we noted that the RUC-recommended work RVU of 36.50 for CPT 
code 34708 is higher than the RUC-recommended work RVU of 36.00 for CPT 
code 34702. This is the inverse of the relationship between CPT codes 
34707 and 34701, which describe the same procedures in a non-emergent 
state when a rupture does not take place. CPT code 34707 has a RUC-
recommended work RVU of 22.28, while CPT code 34701 has a RUC-
recommended work RVU of 23.71. We sought comment on whether the RUC-
recommended work RVUs would create a rank order anomaly within the 
family by reversing the relationship between these paired codes when 
performed in an emergent state. We noted that if CPT codes 34708 and 
34702 were valued at the survey 25th percentile, this potential rank 
order anomaly disappears; in this scenario, we considered valuing CPT 
code 34708 at a work RVU of 30.00 and CPT code 34702 at a work RVU of 
32.00. We sought comment on whether these alternative work values would 
improve relativity with the RUC-recommended work RVUs for CPT code 
34707 (22.28) and CPT code 34701 (23.71), with an increment of 
approximately 1.50 to 2.00 RVUs between the two code pairs.
    For the eight remaining codes that describe endovascular access 
procedures, we considered assignment of a 0-day global period, instead 
of the RUC-recommended add-on (ZZZ) global period and subsequently 
adding back the preservice and immediate postservice work time, and 
increasing the work RVU of each code accordingly using a building block 
methodology. We noted that as add-on procedures, these eight codes 
would not be subject to the multiple procedure payment discount. We 
were concerned that the total payment for these services will be 
increasing in the aggregate based on changes in coding that alter MPPR 
adjustments, despite the information in the surveys that reflects a 
decrease in the intraservice time required to perform the procedures, 
and a decrease in their overall intensity as compared to the current 
values.
    We considered a work RVU of 3.95 for CPT code 34713, based on the 
RUC-recommended work RVU of 2.50 plus an additional 1.45 work RVUs. 
This additional work results from the addition of 38 total minutes of 
preservice work time and 30 minutes of postservice work time based on a 
crosswalk to CPT code 37224 (Revascularization, endovascular, open or 
percutaneous, femoral, popliteal artery(s), unilateral; with 
transluminal angioplasty) as valued by using the building block 
methodology. Using the same method, we considered a work RVU of:
     6.48 for CPT code 34812 based on maintaining the current 
75 minutes of preservice work time and the current 30 minutes of 
postservice work time, with a total work RVU of 2.35, added to the RUC-
recommended work RVU of 4.13;
     7.53 for CPT code 34714 with the addition of 75 minutes of 
preservice work time and 27 minutes of postservice work time to match 
CPT code 34833;
     9.46 for CPT code 34820 based on maintaining the current 
80 minutes of preservice work time and the current 30 minutes of 
postservice work time;

[[Page 53047]]

     10.44 for CPT code 34833 based on maintaining the current 
75 minutes of preservice work time and the current 27 minutes of 
postservice work time;
     5.00 for CPT code 34834 based on maintaining the current 
70 minutes of preservice work time and the current 35 minutes of 
postservice work time;
     8.35 for CPT code 34715 with the addition of 70 minutes of 
preservice work time and 35 minutes of postservice work time to match 
CPT code 34834; and
     9.47 for CPT code 34716 with the addition of 75 minutes of 
preservice work time and 27 minutes of postservice work time to match 
CPT code 34833.
    We proposed the RUC-recommended work RVUs and direct PE inputs for 
each code in this family and sought comment on whether our alternative 
values would be more appropriate.
    Comment: Several commenters supported the proposed values for all 
20 of the codes but disagreed with the alternative values.
    Response: We continue to welcome information from all interested 
parties regarding valuation of services for consideration through our 
rulemaking process. We will continue to consider alternative work RVUs 
as we propose the valuation of services for future notice and comment 
rulemaking.
    After consideration of comments received, for CY 2018, we are 
finalizing the work RVUs and direct PE inputs for the codes in the 
endovascular repair procedures family as proposed.
(14) Selective Catheter Placement (CPT Codes 36215, 36216, 36217, and 
36218)
    CPT code 36215 was identified as potentially misvalued on a screen 
of Harvard-valued codes with utilization over 30,000 in CY 2014, as 
well as on a screen of high expenditure services across specialties 
with Medicare allowed charges of over $10 million. CPT codes 36216, 
36217, and 36218 were added to the family to be reviewed together with 
CPT code 36215.
    We proposed the RUC-recommended work RVUs for each code in this 
family. We proposed work RVUs of 4.17 for CPT code 36215, 5.27 for CPT 
code 36216, 6.29 for CPT code 36217, and 1.01 for CPT code 36218.
    We also considered refinements to the intraservice work time for 
CPT code 36217 from 60 minutes to 50 minutes, consistent with the RUC's 
usual use of the survey median intraservice work time. We had concerns 
that the use of the recommended survey 75th percentile intraservice 
work time will not be clinically appropriate for this code, as the 75th 
percentile time was identical for CPT codes 36216 and 36217, and 
therefore, the use of this value would not preserve the incremental, 
linear consistency between the work RVU and the intraservice time 
within the family.
    For the direct PE inputs, we proposed to refine the clinical labor 
time for the ``Post-procedure doppler evaluation (extremity)'' activity 
from 3 minutes to 1 minute for CPT codes 36215, 36216, and 36217. We 
believed that 1 minute would be more typical for this task, as the 
practitioner would be able to quickly evaluate if there was an issue 
with the extremity because there would be visual signs of arterial 
insufficiency resulting from the procedure.
    We proposed to remove the equipment time for the mobile instrument 
table (EF027) from CPT codes 36215, 36216, and 36217. We believed that 
the mobile instrument table would be used for moderate sedation, which 
was removed from these procedures in CY 2017 (see the CY 2017 PFS final 
rule (81 FR 80339). While we recognized that 180 minutes of post-
procedure monitoring time remains in these codes during which the 
stretcher (EF018), IV infusion pump (EQ032), and 3-channel ECG (EQ011) 
would remain in use, we did not agree that the mobile instrument table 
would typically be in use during this period of monitoring. As a 
result, we proposed to remove this equipment time from these three 
codes.
    While we remained concerned about the use of the survey 75th 
percentile intraservice work time for CPT code 36217, for CY 2018, we 
proposed the RUC-recommended work RVUs for each code in this family and 
sought comment on whether our alternative values would be more 
appropriate.
    Comment: Commenters supported the proposed values for all four of 
the codes but disagreed with the alternative values. We did not receive 
any comments specifically requesting the use of the alternative values 
for this family of codes.
    Response: We appreciate the feedback from the commenters. We 
continue to welcome information from all interested parties regarding 
valuation of services for consideration through our rulemaking process. 
We will continue to consider alternative work RVUs as we propose the 
valuation of services for future notice and comment rulemaking.
    Comment: Several commenters disagreed with the CMS proposal to 
refine the clinical labor time for the ``Post-procedure doppler 
evaluation (extremity)'' activity from 3 minutes to 1 minute for CPT 
codes 36215, 36216, and 36217. Commenters stated that CMS picked 
another time under the impression that clinical staff should be able to 
perform this task more quickly and that this was not a reason to change 
the recommended clinical labor time.
    Response: The response from the commenters did not provide any 
rationale as to why a clinical labor time of 3 minutes would be typical 
for this activity. We continue to believe that 1 minute would be more 
typical for this task, as the practitioner would be able to quickly 
evaluate if there was an issue with the extremity via visual signs of 
arterial insufficiency.
    Comment: Several commenters disagreed with the proposal to remove 
equipment time for the mobile instrument table (EF027) from CPT codes 
36215, 36216, and 36217. Commenters stated that the office still needed 
the instrument table during the postoperative period, outside of 
moderate sedation, to house all of the monitoring items.
    Response: While we appreciate the concerns raised by the 
commenters, we disagree. Storage equipment is a form of indirect PE 
that is not individually allocable to services and therefore is not 
separately payable. Our methodology incorporates the costs of non-
medical infrastructure, such as cabinets and counter space, as part of 
the office rent expenses contained as part of indirect PE. Because the 
mobile instrument table is analogous to storage equipment in this 
particular circumstance, we continue to believe that it would be 
classified as a form of indirect PE and would not typically be in use 
during this period of monitoring.
    After consideration of comments received, for CY 2018, we are 
finalizing the work RVUs and direct PE inputs for the codes in the 
selective catheter placement family as proposed.
(15) Treatment of Incompetent Veins (CPT Codes 36470, 36471, 36482, 
36483, 36465, and 36466)
    In September 2016, the CPT Editorial Panel created four new codes 
to describe the treatment of incompetent veins, and revised existing 
CPT codes 36470 and 36471. These six codes were reviewed together as 
part of the same family of procedures. For CY 2018, we proposed the 
RUC-recommended work RVU for all six codes. We proposed work RVUs of 
0.75 for CPT code 36470, 1.50 for CPT code 36471, 3.50 for CPT code 
36482, 1.75 for CPT code 36483, 2.35 for CPT code 36465, and 3.00 for 
CPT code 36466.
    We considered a work RVU of 4.38 for CPT code 36482, which would 
have been based on the RUC-recommended work RVU of 3.50 plus half of 
the RUC-recommended work RVU of CPT code

[[Page 53048]]

36483. We also considered assigning CPT code 36483 a status indicator 
of ``bundled.'' The services that would be reported using CPT codes 
36482 and 36483 in CY 2018 are currently reported with unlisted CPT 
code 37799 (Unlisted procedure, vascular surgery). We had concerns 
about how frequently the current services include treatment of an 
initial vein (CPT code 36482) as compared to the treatment of initial 
and subsequent veins (CPT codes 36482 and 36483 together). We believed 
it may be more accurate to describe these services through the use of a 
single code, as in the rest of this code family, instead of a base code 
and add-on code pair. Under this potential scenario, we looked at the 
RUC-recommended crosswalk and noted that the add-on CPT code 36483 was 
estimated to be billed 50 percent of the time together with CPT code 
36482. We therefore considered adding half of the RUC-recommended work 
RVU of CPT code 36483 (0.88) to the RUC-recommended work RVU of CPT 
code 36482 (3.50), which would result in a work RVU of 4.38.
    We proposed to remove the 2 minutes of clinical labor for the 
``Setup scope'' (CA015) activity and add the same 2 minutes of clinical 
labor for the ``Prepare room, equipment and supplies'' (CA013) activity 
for CPT codes 36482, 36465, and 36466. The RUC-recommended materials 
stated that these 2 minutes were a proxy for setting up the ultrasound 
machine, and we believe that this 2 minutes was more accurately 
described by the ``Prepare room, equipment and supplies'' (CA013) 
activity code, since there is no scope equipment utilized in these 
procedures. We proposed to maintain the Vascular Tech (L054A) clinical 
labor type for these 2 minutes. We also proposed to refine the clinical 
labor for the ``Check dressings, catheters, wounds'' (CA029) activity 
for CPT codes 36470, 36471, 36482, 36465, and 36466, consistent with 
the standard times for this clinical labor activity.
    We proposed to remove the six individual 4x4 sterile gauze (SG055) 
supplies and replace them with a 4x4 sterile gauze pack of 10 (SG056) 
for CPT codes 36470, 36471, 36482, 36465, and 36466. The pack of 10 
sterile gauze is cheaper than six individual pieces of sterile gauze, 
and we did not agree that it would be typical to pay a higher cost for 
fewer supplies. We also proposed to create three new supply codes in 
response to the invoices submitted for this family of codes. We 
proposed to establish a price of $1,495 for the Venaseal glue (SD323) 
supply, a price of $3,195 for the Varithena foam (SD324) supply, and a 
price of $40 for the Varithena admin pack (SA125) supply.
    We proposed to adjust the equipment times for the surgical light 
(EF014), the power table (EF031), and the portable ultrasound unit 
(EQ250) for CPT codes 36482, 36465, and 36466, consistent with the 
standards for non-highly technical equipment and to reflect the changes 
in the clinical labor described in this section of the final rule.
    While we remained concerned about the creation of a base code and 
add-on code pairing (CPT codes 36482 and 36483) out of services that 
are currently reported using an unlisted code, for CY 2018, we proposed 
the RUC-recommended work RVUs for each code in this family and sought 
comment on whether our alternative values would be more appropriate.
    Comment: Several commenters supported the proposed values for all 
six of the codes but disagreed with the alternative values.
    Response: We appreciate the feedback from the commenters.
    Comment: One commenter stated that they agreed with the direct PE 
refinements as proposed.
    Response: We appreciate the support from the commenter.
    After consideration of comments received, for CY 2018, we are 
finalizing the work RVUs and direct PE inputs for the codes in the 
treatment of incompetent veins family as proposed.
(16) Therapeutic Apheresis (CPT Codes 36511, 36512, 36513, 36514, 
36516, and 36522)
    CPT code 36516 was nominated as potentially misvalued in the CY 
2016 PFS proposed rule. The CPT Editorial Panel deleted CPT code 36515 
and made revisions to CPT code 36516 to include immunoabsorption. CPT 
codes 36511, 36512, 36513, 36514, and 36522 were added to CPT code 
36516 to be reviewed together as part of the therapeutic apheresis 
family.
    For CY 2018, we proposed the RUC-recommended work RVUs for all six 
codes in the family. We proposed work RVUs of 2.00 for CPT code 36511, 
2.00 for CPT 36512, 2.00 for CPT code 36513, 1.81 for CPT code 36514, 
1.56 for CPT code 36516, and 1.75 for CPT code 36522.
    We proposed to use the RUC-recommended direct PE inputs for these 
codes without refinement. We considered refining the clinical labor 
time for the ``Prepare room, equipment, supplies'' activity from 20 
minutes to 10 minutes for CPT codes 36514 and 36522, and from 30 
minutes to 10 minutes for CPT code 36516. We also considered refining 
the clinical labor for the ``Prepare and position patient/monitor 
patient/set up IV'' activity from 15 minutes to 10 minutes for these 
same three codes. In both cases, we considered maintaining the current 
clinical labor time for CPT codes 36514 and 36516, and adjusting the 
clinical labor time for CPT code 36522 to match the other two codes in 
the family. We had concerns about the lack of a rationale provided for 
these changes in clinical labor time, and whether these clinical labor 
tasks would typically require this additional time.
    We proposed the RUC-recommended work RVUs and to use the RUC-
recommended direct PE inputs for each code in this family and sought 
comment on whether our alternative values would be more appropriate. We 
also sought comment on whether these procedures were creating a new 
point of venous access or utilizing a previously placed access.
    Comment: Several commenters supported the proposed values for all 
six of the codes but disagreed with the alternative values.
    Response: We continue to welcome information from all interested 
parties regarding valuation of services for consideration through our 
rulemaking process. We will continue to consider alternative work RVUs 
as we propose the valuation of services for future notice and comment 
rulemaking.
    Comment: Several commenters stated that a cell separator system 
(EQ084) was mistakenly left out of the RUC's recommendation for CPT 
code 36516. The commenters stated that this particular equipment item 
is critical for all of the therapeutic apheresis services and that CPT 
code 36516 uses a piece of equipment (the Liposorber system) that 
attaches to this missing equipment item. The commenters recommended 
adding this piece of equipment (EQ084) to CPT code 36516 with 324 
minutes of use.
    Response: We disagree with the commenters. Based on the information 
that we currently have available, we do not believe that the cell 
separator system (EQ084) was mistakenly left out of the RUC 
recommendation for CPT code 36516. We note that the RUC did not include 
the cell separator system in its recommendations for this procedure, 
and also made no mention of an error in the recommended direct PE 
inputs for CPT code 36516 in its comments on the CY 2018 PFS proposed 
rule. We are also confused by the statement from one commenter that the 
cell separator system is critical for all of the therapeutic apheresis 
services, since this equipment item is not included in the current 
direct PE inputs for CPT

[[Page 53049]]

code 36516, nor was it recommended for CPT code 36522 in the same 
family. We welcome additional feedback from stakeholders regarding 
whether the use of the cell separator system is typical in CPT code 
36516.
    Comment: Many commenters responded to the request for additional 
information regarding whether these procedures were creating a new 
point of venous access or utilizing a previously placed access point. 
Commenters agreed that both of the vignettes for these services, as 
well as the descriptions of work, stated that the typical patient has a 
previously placed venous access that is then utilized. While in some 
cases, a revision to the access site may need to be made, or initial 
access achieved, these cases were not representative of the typical 
patient scenario. There was widespread agreement from the commenters on 
the utilization of a previously placed access point in these services.
    Response: We appreciate the feedback from the commenters in 
clarifying the clinical details surrounding the point of venous access.
    After consideration of comments received, for CY 2018, we are 
finalizing the work RVUs and direct PE inputs for the codes in the 
therapeutic apheresis family as proposed.
(17) Insertion of Catheter (CPT Codes 36555, 36556, 36620, and 93503)
    CPT code 36556 was identified as part of a screen of high 
expenditure services with Medicare allowed charges of $10 million or 
more that had not been recently reviewed. CPT codes 36555, 36620, and 
93503 were added for review by the RUC as part of the code family. We 
proposed the RUC-recommended work RVUs for each code in this family. We 
proposed work RVUs of 1.93 for CPT code 36555, 1.75 for CPT code 36556, 
1.00 for CPT code 36620, and 2.00 for CPT code 93503.
    We proposed to remove the clinical labor time for the ``Monitor pt. 
following procedure'' activity and the equipment time for the 3-channel 
ECG (EQ011) for CPT code 36555. CPT code 36555 no longer includes 
moderate sedation as part of the procedure (see the CY 2017 PFS final 
rule (81 FR 80339). We proposed to remove the direct PE inputs related 
to moderate sedation from CPT code 36555 as they would now be included 
in the separately reported moderate sedation services. We also proposed 
to refine the equipment times for the exam table (EF023) and the exam 
light (EQ168) to reflect changes in the clinical labor time.
    Comment: Several commenters requested that CMS not finalize its 
proposal to accept the RUC's recommendations for CPT codes 36555, 
36556, 36620 and 93503 and instead finalize higher work RVUs that the 
specialty had provided to the RUC. The commenters stated that these 
work RVUs maintained relativity within the resource-based relative 
value scale (RBRVS) range of services and represented a more accurate 
valuation of these procedures. One commenter stated that the RUC-
recommended work RVUs create a rank order anomaly in the intensity of 
the services in this family of codes.
    Response: As we stated in the background of this code valuation 
section, we generally proposed RUC-recommended work RVUs for new, 
revised, and potentially misvalued codes for CY 2018. We believe that 
in the absence of other data regarding the appropriate valuation of 
these codes, the RUC-recommended work RVUs represent the most accurate 
valuation of the procedures. We continue to be open to reviewing 
additional and supplemental sources of data furnished by stakeholders. 
We encourage stakeholders to continue to provide such information for 
consideration in establishing work RVUs.
    Comment: Several commenters disagreed with the proposal to remove 
the direct PE inputs related to moderate sedation from CPT code 36555. 
The commenters stated that any PE refinement necessary to address 
separate reporting of moderate sedation would have already taken place, 
so no further refinement to PE as it relates to this change should be 
necessary. Another commenter indicated agreement with the proposed 
direct PE refinements.
    Response: We appreciate the support from the commenter for our 
proposed direct PE refinements. Regarding the other comments, we 
continue to believe that further refinements are needed to address the 
separate reporting of moderate sedation. CPT code 36555 does not 
currently contain any clinical labor for post procedure clinical labor 
monitoring related to moderate sedation; however, 7.5 minutes of 
monitoring time was added back into the procedure as part of the RUC-
recommended direct PE inputs for CY 2018. Since this clinical labor for 
the monitoring time would be included in the separately reported 
moderate sedation code, we believe that it would be duplicative to 
include the same monitoring clinical labor time, or the equipment time 
for the 3-channel ECG, in CPT code 36555.
    After consideration of comments received, for CY 2018, we are 
finalizing the work RVUs and direct PE inputs for the codes in the 
insertion of catheter family as proposed.
(18) Insertion of PICC Catheter (CPT Code 36569)
    CPT code 36569 was identified as part of a screen of high 
expenditure services with Medicare allowed charges of $10 million or 
more that had not been recently reviewed. For CY 2018, we proposed the 
RUC-recommended work RVU of 1.70 for CPT code 36569.
    We proposed to remove the equipment time for the exam table 
(EF023), as this equipment item is a component part of the 
radiographic-fluoroscopic room (EL014) included in CPT code 77001 
(Fluoroscopic guidance for central venous access device placement, 
replacement (catheter only or complete), or removal). Because CPT code 
36569 is typically billed together with CPT code 77001, we believed 
that including the additional equipment time for the exam table in CPT 
code 36569 would be duplicative.
    Comment: Several commenters disagreed with the proposal to remove 
the equipment time for the exam table (EF023). Commenters stated that 
CMS' rationale for removing the exam table, that it is a component part 
of the radiographic-fluoroscopic room (EL014), was incorrect. 
Commenters pointed out that the radiographic-fluoroscopic room only 
includes a radiographic machine and camera, and requested that the exam 
table should be reinstated consistent with the RUC's recommendation.
    Response: We appreciate the clarification regarding the contents of 
the radiographic-fluoroscopic room from the commenters. After reviewing 
the room's contents, we agree with the commenters that the 
radiographic-fluoroscopic room only includes a radiographic machine and 
camera. While we believe that the radiographic machine likely 
incorporates an exam table on which to place the patient, we concede 
that this is not specifically stated in the documentation for the 
radiographic-fluoroscopic room from the commenters. As a result, we are 
not finalizing our proposal to remove the equipment time for the exam 
table. We are restoring the exam table to CPT code 36569 at an 
equipment time of 32 minutes in accordance with our standard formula 
for non-highly technical equipment time.
    After consideration of comments received, for CY 2018, we are 
finalizing the work RVUs and direct PE inputs for the codes for CPT 
code 36569 as proposed, with the exception of the

[[Page 53050]]

change for the exam table as detailed above.
(19) Bone Marrow Aspiration (CPT Codes 38220, 38221, 38222, and 20939)
    CPT code 38221 was identified as part of a screen of high 
expenditure services with Medicare allowed charges of $10 million or 
more that had not been recently reviewed. The descriptors for CPT codes 
38220 and 38221 were revised to reflect changes in practice patterns, 
and two new CPT codes (38222 and 20939) were created to more accurately 
describe new services that are now available. For CY 2018, we proposed 
the RUC-recommended work RVUs for each code in this family. We proposed 
a work RVU of 1.20 for CPT code 38220, 1.28 for CPT code 38221, 1.44 
for CPT code 38222, and 1.16 for CPT code 20939.
    We also received a recommendation from the RUC to change the global 
periods for CPT codes 38220, 38221, and 38222 from XXX global periods 
to 0-day global periods, even though these codes were surveyed under 
the XXX global period. We agreed with the recommendation that for these 
three particular codes, their services were more accurately described 
when assigned 0-day global periods as opposed to the XXX global status. 
Therefore, we proposed to assign a 0-day global period to all three 
codes in this family. We noted, however, that we believed that global 
period changes must be addressed on an individual basis, especially 
when the routine survey methodologies rely on assumptions regarding 
global periods for particular codes. Subsequently, we proposed to 
refine the preservice work time from 15 minutes of evaluation time to 9 
minutes of evaluation time, 1 minute of positioning time, and 5 minutes 
of scrub, dress, and wait time. We proposed these refinements to the 
work times for these three codes to more closely align with the 
preservice times of other recently reviewed 0-day global procedures, 
such as CPT code 30903 (Control nasal hemorrhage, anterior, complex 
(extensive cautery and/or packing) any method). We also noted that 
given our proposal to value CPT code 38222, we proposed to eliminate 
payment using HCPCS code G0364 for CY 2018 since the changes to the set 
of CPT codes will now accurately describe the services currently 
reported by HCPCS code G0364. For CPT code 20939, we considered a work 
RVU of 1.00 based on a direct crosswalk to CPT codes 64494 
(Injection(s), diagnostic or therapeutic agent, paravertebral facet 
(zygapophyseal) joint (or nerves innervating that joint) with image 
guidance (fluoroscopy or CT), lumbar or sacral; second level) and 64495 
(Injection(s), diagnostic or therapeutic agent, paravertebral facet 
(zygapophyseal) joint (or nerves innervating that joint) with image 
guidance (fluoroscopy or CT), lumbar or sacral; third and any 
additional level(s)). CPT code 20939 is a global ZZZ add-on code for 
CPT code 38220, and we were concerned with maintaining relativity among 
PFS services, considering that an add-on code typically has 
significantly less intraservice time and total time compared to the 
base code. We considered an alternative crosswalk to CPT codes 64494 
and 64495, which share the same intraservice and total time with CPT 
code 20939 and have work RVUs of 1.00.
    We also proposed to refine the clinical labor for ``Lab Tech 
activities'' from 12 minutes to 9 minutes for CPT code 38220, from 7.5 
minutes to 7 minutes for CPT code 38221, and from 12.5 minutes to 10 
minutes for CPT code 38222. We maintained the current time value for 
the two existing codes, as we had no reason to believe that the typical 
duration has increased for these lab activities. We assigned 10 minutes 
for CPT code 38222 based on the statement in the RUC-recommended 
materials for the direct PE inputs that this activity takes 0.5 minutes 
longer than it does in the current version of CPT code 38220. We also 
proposed to remove the breakout lines for the lab activities. We 
believe that the breakout of activities into numerous subactivities 
generally tends to inflate the total time assigned to clinical labor 
activities and results in values that are not consistent with the 
analogous times for other PFS services.
    We considered refining the clinical labor time for ``Provide 
preservice education/obtain consent'' for CPT codes 38220, 38221, and 
38222 from 12 minutes to 6 minutes. We had concerns regarding whether 
12 minutes would be typical for education and consent prior to these 
procedures, as much of the patient education takes place following the 
procedure, in the clinical labor activity described under the ``Check 
dressings & wound/home care instructions'' heading. We proposed the 
RUC-recommended work RVUs for each code in this family and sought 
comment on whether our alternative values would be more appropriate.
    Comment: Several commenters agreed with the proposal to change the 
global period for CPT codes 38220, 38221, and 38222 from XXX global 
periods to 0-day global periods. These commenters also supported the 
proposed change to the preservice work times to more closely align with 
the preservice times of other recently reviewed 0-day global 
procedures.
    Response: We appreciate the support for our proposal from the 
commenters.
    Comment: Other commenters disagreed with the proposed change in 
global period. Commenters stated that maintaining these codes as XXX 
globals was consistent with the survey methodology used to generate the 
RUC-recommended work RVUs, as these codes were surveyed under the XXX 
global period. The commenters stated that these codes are billed less 
than 25 percent of the time with an E/M service, and that since an E/M 
service being performed on the same day is not typical, there was not a 
compelling reason to change the global period.
    Response: We appreciate the additional responses from commenters 
requesting that the XXX global period should be retained for these 
three CPT codes. As these codes were surveyed and valued under XXX 
global status and the RUC has maintained that there is a need to 
resurvey when the global period changes, we will not finalize our 
proposal to change CPT codes 38220, 38221, and 38222 from XXX global 
periods to 0-day global periods. In the absence of compelling evidence 
that the 0-day global status would be more typical for these services, 
we believe that the current XXX global period should be maintained. We 
will also not finalize our related proposal to refine the preservice 
work time from 15 minutes of evaluation time to 9 minutes of evaluation 
time, 1 minute of positioning time, and 5 minutes of scrub, dress, and 
wait time. We welcome additional feedback from stakeholders regarding 
the global period that should be assigned to these codes.
    Comment: Several commenters supported the proposed values for all 
four of the codes but disagreed with the alternative values.
    Response: We continue to welcome information from all interested 
parties regarding valuation of services for consideration through our 
rulemaking process. We will continue to consider alternative work RVUs 
as we propose the valuation of services for future notice and comment 
rulemaking.
    Comment: Several commenters disagreed with the proposal to refine 
the clinical labor for ``Lab Tech activities'' in CPT codes 38220, 
38221, and 38222. Commenters stated that each CPT code is unique and 
the recommended clinical labor reflects the typical time of those 
activities associated with each service. Commenters also disagreed with 
the proposal to remove the breakout lines for the lab activities, 
stating that the

[[Page 53051]]

methodology at the time of review was to provide as much detail as 
possible and that just because these subactivities were fully displayed 
did not mean that they had been double counted. Several of the 
commenters supplied clinical information describing the activities that 
took place in additional detail.
    Response: We appreciate the additional information supplied by the 
commenters. We agree with the commenters that each service is unique 
and must be valued on an individual basis. We also agree that the lab 
activities taking place in these services are important and that they 
must be performed. Our concern is that the individual accounting of 
clinical labor activities can lead to PE proliferation, and that this 
breakout of activities into numerous subactivities generally tends to 
inflate the total time assigned to clinical labor activities and 
results in values that are not consistent with the analogous times for 
other PFS services. In the case of these codes, we believe that 
maintaining the current clinical labor times as proposed will better 
serve the purposes of ensuring relativity. We will continue to look for 
additional information related to the clinical labor assigned to lab 
activities, and we welcome additional feedback from stakeholders.
    After consideration of comments received, for CY 2018, we are 
finalizing the work RVUs and direct PE inputs for the codes in the bone 
marrow aspiration family as proposed. We are not finalizing the 
proposal to change CPT codes 38220, 38221, and 38222 from XXX global 
periods to 0-day global periods, and we are not finalizing the related 
proposal to refine the preservice work time from 15 minutes of 
evaluation time to 9 minutes of evaluation time, 1 minute of 
positioning time, and 5 minutes of scrub, dress, and wait time for 
these three codes.
(20) Esophagectomy (CPT Codes 43107, 43112, 43117, 43286, 43287, and 
43288)
    CPT codes 43286, 43287, and 43288 were created by the CPT Editorial 
Panel to report esophagectomy via laparoscopic and thoracoscopic 
approaches. CPT codes 43107, 43112, and 43117 were also reviewed as 
part of the family with the three new codes. CPT code 43112 was revised 
to clarify the nature of the service being performed. We proposed the 
RUC-recommended work RVUs for all six codes in the family. We proposed 
work RVUs of 52.05 for CPT code 43107, 62.00 for CPT code 43112, 57.50 
for CPT code 43117, 55.00 for CPT code 43286, 63.00 for CPT code 43287, 
and 66.42 for CPT code 43288.
    We also proposed the RUC-recommended work times for all six codes 
in this family. We considered removing 20 minutes from the preservice 
evaluation work time from all six of the codes in this family. We had 
concerns as to whether this additional evaluation time should be 
included for surgical procedures, due to the lack of evidence 
indicating that it takes longer to review outside imaging and lab 
reports for surgical services than for non-surgical services. We also 
considered refining the preservice positioning work time and the 
immediate postservice work time for all six of the codes in this family 
consistent with standard preservice and postservice work times 
allocated to other PFS services.
    We had concerns about the presence of two separate surveys 
conducted for the three new CPT codes. We noted that CPT codes 43286, 
43287, and 43288 were surveyed initially in January 2016, and then were 
surveyed again in October 2016 together with CPT codes 43107, 43112, 
and 43117 due to concerns about the description of the typical patient 
in the original vignette and a change in the codes on the reference 
service list (RSL). We noted that CPT codes 43286 and 43287 had the 
same median intraservice time on both surveys, while CPT code 43288 had 
a median intraservice time that was an hour longer on its second survey 
(420 minutes) as compared to its first survey (360 minutes). We also 
noted that the total survey time for CPT code 43286 decreased from 
1,058 minutes in the first survey to 972 minutes in the second survey, 
while the median work RVU increased from 50.00 to 65.00. We did not 
understand how the survey median intraservice time could increase so 
significantly from the first survey to the second survey for CPT code 
43288, or how the surveyed times for CPT code 43286 could be decreasing 
while the work RVU was simultaneously increasing by 15.00 work RVUs.
    Based on our analysis, it appeared that the accompanying RSL was 
the main difference between the two surveys; the codes on the initial 
RSL had a median work RVU of 44.18, while the codes on the second RSL 
had a median work RVU of 59.64. This increase of 15.00 work RVUs 
between the two RSLs that accompanied the surveys appeared to account 
for the increase in the work RVUs for the three new codes. We were 
concerned that the second survey may have overestimated the work 
required to perform these procedures, as the 25th percentile work RVU 
of the second survey was higher than the median work RVU of the initial 
survey for all three codes, despite no change in the median 
intraservice work time for CPT codes 43286 and 43287.
    Given these concerns, we considered a work RVU of 50.00 for CPT 
code 43286, a work RVU of 60.00 for CPT code 43287, and a work RVU of 
61.00 for CPT code 43288, by using the survey median work RVU from the 
first survey for the three new codes. For CPT codes 43107 and 43117, we 
considered employing the intraservice time ratio between the 
laparoscopic version of the procedure represented by the new code and 
the open version of the same procedure represented by the existing 
code.
    We considered a work RVU of 45.00 for CPT code 43107 based on the 
intraservice time ratio with CPT code 43286 and a work RVU of 55.00 for 
CPT code 43117 based on the intraservice time ratio with CPT code 
43287. CPT code 43107 has 270 minutes of intraservice time as compared 
with 300 minutes of intraservice time for CPT code 43286, which 
produces a ratio of 0.9, and when multiplied by a work RVU of 50.00 
(CPT code 43286), results in the proposed work RVU of 45.00. We 
considered using the same methodology for CPT codes 43117 and 43287.
    Finally, we considered a work RVU of 58.94 for CPT code 43112 based 
on a direct crosswalk to CPT code 46744 (Repair of cloacal anomaly by 
anorectovaginoplasty and urethroplasty, sacroperineal approach). We 
noted that the intraservice time ratio when applied to CPT codes 43112 
and 43288, the paired McKeown esophagectomy procedures, would have 
produced a potential work RVU of 52.29, creating a rank order anomaly 
within the family by establishing a higher work RVU for CPT code 43117 
than CPT code 43112, and we were concerned with whether this was an 
appropriate valuation for the code.
    We sought comment on whether the alternative work RVUs that we 
considered might reflect the relative difference in work more 
accurately between the six codes in the family. We noted, for example, 
that these valuations corrected the rank order anomaly between CPT 
codes 43112 and 43121 as noted in the RUC recommendations.
    We proposed the RUC-recommended direct PE inputs for all six codes 
in the family without refinement. We considered changing the preservice 
clinical labor type for all six codes from an RN (L051) to an RN/LPN/
MTA blend (L037D). We had concerns about whether the use of RN clinical 
labor would be typical for filling out referral forms or for scheduling 
space and equipment in the facility. We also

[[Page 53052]]

considered removing the additional clinical labor time for the 
``Additional coordination between multiple specialties for complex 
procedures (e.g., tests, meds, scheduling)'' activity, consistent with 
preservice standards for codes with 90-day global periods. We were 
concerned that this time would not typically be included in non-
surgical procedures performed by other specialties even when additional 
coordination is required. We sought comment regarding the changes in 
the valuation between the two surveys, the preservice and immediate 
postservice work times, and the RN staffing type employed for routine 
preservice clinical labor.
    Comment: Several commenters supported the proposed values for all 
six of the codes but disagreed with the alternative values.
    Response: We continue to welcome information from all interested 
parties regarding valuation of services for consideration through our 
rulemaking process. We will continue to consider alternative work RVUs 
as we propose the valuation of services for future notice and comment 
rulemaking.
    After consideration of comments received, for CY 2018, we are 
finalizing the work RVUs and direct PE inputs for the codes in the 
esophagectomy family as proposed.
(21) Transurethral Electrosurgical Resection of Prostate (CPT Code 
52601)
    CPT code 52601 appeared on a screen of potentially misvalued codes, 
which indicated that it was performed less than 50 percent of the time 
in the inpatient setting, yet included inpatient hospital E/M services 
within the global period. For CY 2018, we proposed the RUC-recommended 
work RVU of 13.16 for CPT code 52601 and proposed to use the RUC-
recommended direct PE inputs without refinements.
    We considered a work RVU of 12.29 for CPT code 52601 based on a 
direct crosswalk to CPT code 58541 (Laparoscopy, surgical, 
supracervical hysterectomy, for uterus 250 g or less), which is one of 
the reference codes. CPT code 58541 may potentially be a more accurate 
crosswalk for CPT code 52601 than the RUC-recommended direct crosswalk 
to CPT code 29828 (Arthroscopy, shoulder, surgical; biceps tenodesis). 
Although all three of these codes share the same intraservice time of 
75 minutes, CPT code 58541 is a closer match in terms of the total time 
at only 10 minutes difference. CPT code 58541 also shares the same 
postoperative office visits as CPT code 52601, a pair of CPT code 99213 
office visits, while CPT code 29828 also contains two CPT code 99212 
office visits that are not present in the reviewed code.
    We noted that if we were to use a reverse building block 
methodology for CPT code 52601 and subtract out the value of the E/M 
visits being removed, the proposed work RVU would be 11.21. We did not 
propose this work RVU; however, because as we noted in the CY 2017 PFS 
final rule (81 FR 80274), 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 and building 
block methodologies 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. For CPT code 52601, we were concerned about how the RUC-
recommended derived intensity of the procedure could be increasing by 
30 percent over the current derived intensity, while at the same time 
the typical site of service was changing from inpatient to outpatient 
status. In other words, if it was now typical for CPT code 52601 to be 
performed on an outpatient basis, then we would generally expect the 
intensity of the procedure to be decreasing, not increasing. We 
considered a work RVU of 12.29 for CPT code 52601 based on a direct 
crosswalk to CPT code 58541 (Lsh uterus 250 g or less), and sought 
comment on whether this alternative value might better reflect 
relativity.
    Comment: Several commenters supported the proposed values for CPT 
code 52601 but disagreed with the alternative values.
    Response: We appreciate the feedback from the commenters. We 
continue to welcome information from all interested parties regarding 
valuation of services for consideration through our rulemaking process.
    After consideration of comments received, for CY 2018, we are 
finalizing the work RVUs and direct PE inputs for CPT code 52601 as 
proposed.
(22) Peri-Prostatic Implantation of Biodegradable Material (CPT Code 
55874)
    In October 2016, the CPT Editorial Panel deleted CPT Category III 
code 0438T and created a new CPT code 55874 (Transperineal placement of 
biodegradable material, peri-prostatic, single or multiple 
injection(s), including image guidance, when performed). For CY 2018, 
we proposed the RUC-recommended work RVU of 3.03 for CPT code 55874.
    In reviewing the RUC recommendations, we noted a decrease in 
preservice time (30 minutes) compared to the current value. In order to 
account for this change in time, we considered calculating the 
intraservice time ratio between the key reference code (CPT code 
49411), which has an intraservice time of 40 minutes, and the RUC-
recommended intraservice time (30 minutes) and multiplying that by the 
work RVU for CPT code 49411 (3.57), which would have resulted in a work 
RVU of 2.68. A work RVU of 2.68 would have been further supported by a 
bracket of two crosswalk codes, CPT code 65779 (Placement of amniotic 
membrane on the ocular surface; single layer, sutured), which has a 
work RVU of 2.50 and CPT code 43252 (Esophagogastroduodenoscopy, 
flexible, transoral; with optical endomicroscopy), which has a work RVU 
of 2.96. Compared with CPT code 55874, these codes have identical 
intraservice and similar total times. We sought comment on whether 
these alternative values should be considered, especially given the 
changes in time reflected in the survey data.
    We received invoices with pricing information regarding two new 
supply items: ``endocavity balloon'' and ``biodegradeable material 
kit--periprostatic.'' The invoice for the endocavity balloon was 
$399.00 and the input price on the PE spreadsheet for this supply item 
was noted as such. We believed that the input price noted on the PE 
spreadsheet was an error, given that the invoice noted that the price 
of $399.00 was for a box of ten and the specialty society requested a 
single unit of this supply item. Therefore, we proposed to use this 
information to propose for supply item ``endocavity balloon'' a price 
of $39.90. The invoice for the ``biodegradeable material kit--
periprostatic'' totaled $2,850.00. We proposed to use this information 
to propose for the supply item ``biodegradeable material kit--
periprostatic'' a price of $2850.00. We also received an invoice with 
pricing information regarding the new equipment item ``endocavitary US 
probe'' which totaled $16,146.00. We proposed to use this information 
to propose for equipment item ``endocavitary US probe'', a per-minute 
price of $0.0639. We questioned, given an invoice price of $29,999.00 
for this existing equipment item EQ250 (portable ultrasound unit), 
whether this equipment item includes probes. We sought public comments 
related to

[[Page 53053]]

whether equipment item EQ250 (portable ultrasound) includes probes.
    Comment: In general, commenters were supportive of our proposal of 
the RUC-recommended work RVUs. Some commenters expressed opposition to 
the alternative work RVUs we considered.
    Response: We are appreciative of the commenters' feedback. We 
continue to welcome information from all interested parties regarding 
valuation of services for consideration through our rulemaking process. 
We will continue to consider alternative work RVUs as we propose the 
valuation of services for future notice and comment rulemaking.
    Comment: The RUC stated that CMS acknowledges that physician work 
intensity per minute is not typically linear and also that making 
reductions to RVUs in strict proportion to changes in time is 
inappropriate. The RUC further noted that for several comment periods 
they have laid out a compelling case to justify this position on work 
intensity per minute. They noted that they appreciate CMS's 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 the work time 
coincides with a change in the work intensity per minute.
    Response: We do not agree with the commenter's characterization of 
our statements. We stated in the CY 2017 PFS final rule (81 FR 80273) 
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, 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, 
significant decreases in time should generally be reflected in 
decreases to work RVUs.
    Comment: The RUC noted that they wanted to remind CMS of its 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 commenter stated that when physician 
times are updated in the fee schedule, the ratio of intraservice 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. The RUC highlighted that their 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 stated in the CY 2017 PFS final rule (81 FR 80275) 
that we understand that not all components of physician time have 
identical intensity and are mindful of this point when determining what 
the appropriate work RVU values should be. We 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: The RUC noted that its support of the proposed refinements 
for EF031, EQ250, EQ386, ER061, ER062, and L037D, was contingent on the 
assumption that the proposed PE refinements were because of the change 
in time for the clinical labor task, ``Obtain vital signs''.
    Response: The proposed PE refinements for EF031, EQ250, EQ386, 
ER061, ER062, L037D, are a result of our proposal to refine the L037D 
clinical labor time for ``Obtain vital signs'' from 3 minutes to 5 
minutes, to conform to the proposed standard for this clinical labor 
activity. As a result, we proposed to refine the equipment times for 
the power table (EF031) from 63 minute to 65 minutes and from 48 
minutes to 50 minutes for the following: Portable ultrasound unit 
(EQ250), endocavitary US probe (EQ386), stepper stabilizer, template 
(for brachytherapy treatment) (ER061), and stirrups (for brachytherapy 
table) (ER062) to reflect the service period time associated with this 
code.
    Comment: Several commenters, including the RUC, were supportive of 
our proposed price updates for the ``endocavity balloon'' (SD325), 
biodegradeable material kit--periprostatic'' (SA126), and 
``endocavitary US probe'' (EQ386) and urged CMS to finalize the 
proposal.
    Response: We appreciate the support from commenters.
    After consideration of comments received, we are finalizing the 
following supply and equipment prices: SD325, at a price of $39.90; 
SA126, at a price of $2850.00; and EQ386, at a price of $16,146.00 (a 
per-minute price of $0.0639).
    Comment: Several commenters, including the RUC, noted that 
``portable ultrasound unit'' (EQ250), which has a cost of $29,999.00, 
does not include an intracavitary probe. These commenters further noted 
that the probe is necessary to perform this procedure and recommended 
that both the portable unit and the intracavitary probe be recognized 
as direct PE inputs for this service. One commenter included pricing 
information in its comment letter, noting that the probe should be 
added as an additional direct PE input at a cost of $20,700.
    Response: While we appreciate the submission of this pricing 
information from the commenter, we are unable to consider this pricing 
information for the CY 2018 final rule without documentation of 
invoices. We request that commenters submit invoices for pricing 
updates and that the invoices 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. To be 
considered for a given year's proposed rule, we generally need to 
receive invoices by February. 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 the supply and equipment pricing for the 
final rule for that calendar year. We note that both the ``endocavitary 
US probe'' (EQ386) and ``portable ultrasound unit'' (EQ250) are 
included in the PE inputs for this service, which are displayed in the 
CY 2018 PFS final rule direct PE input database, available on the CMS 
Web site under the downloads for the CY 2018 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    After consideration of comments received, we are finalizing the 
work RVUs and direct PE inputs for CPT code 55874 as proposed.

[[Page 53054]]

(23) Colporrhaphy With Cystourethroscopy (CPT Codes 57240, 57250, 57260 
and 57265)
    In October 2015, CPT code 57240 was identified by analysis of the 
Medicare data from 2011-2013 that indicated that services reported with 
CPT code 57240 were performed less than 50 percent of the time in the 
inpatient setting, yet include inpatient hospital E/M services within 
the global period. The RUC recommended that CPT codes 57240 (Anterior 
colporrhaphy, repair of cystocele with or without repair of 
urethrocele), 57250 (Posterior colporrhaphy, repair of rectocele with 
or without perineorrhaphy), 57260 (Combined anteroposterior 
colporrhaphy), and 57265 (Combined anteroposterior colporrhaphy; with 
enterocele repair) be referred to the CPT Editorial Panel. In September 
2016, the CPT Editorial Panel revised CPT codes 57240, 57260 and 57265 
to preclude separate reporting of follow up cystourethroscopy after 
colporrhaphy (CPT code 52000).
    For CY 2018, we proposed the RUC-recommended work RVUs for CPT code 
57240 (a work RVU of 10.08), CPT code 57250 (a work RVU of 10.08), CPT 
code 57260 (a work RVU of 13.25), and CPT code 57265 (a work RVU of 
15.00).
    We note that there were changes in service times reflected in the 
specialty surveys compared to the RUC-recommended work RVUs for CPT 
code 57240. Specifically, we note that the RUC recommended a 48 minute 
decrease in total time, compared to the specialty survey total time of 
259 minutes. The difference in total time reflected a decrease in 
preservice time (29 minutes) and inpatient visits (0.5 visits = 19 
minutes). We considered a work RVU of 9.77 for CPT code 57240, 
crosswalking to CPT code 50590 (Lithotripsy, extracorporeal shock 
wave), which has similar service times. We sought comment on whether 
CPT code 57250 would be a relevant comparator for CPT code 57240, based 
on the described elements of each service and existing or surveyed 
service times, compared to CPT code 57240. We considered a work RVU of 
11.47 for CPT code 57260 [we note that in the CY 2018 PFS proposed rule 
(82 FR 34000), this was cited as CPT code 57265], crosswalking to CPT 
code 47563 (Laparoscopy, surgical; cholecystectomy with 
cholangiography) with similar service times. We sought comment on how 
an alternative work RVU of 11.47 for CPT code 57260 [we note that in 
the CY 2018 PFS proposed rule (82 FR 34000), this was cited as CPT code 
57260] would affect relativity among PFS services, and on whether CPT 
code 57265 [we note that in the CY 2018 PFS proposed rule (82 FR 
34000), this was cited as CPT code 57260] is a relevant comparator for 
CPT code 57260 [we note that in the CY 2018 PFS proposed rule (82 FR 
34000), this was cited as CPT code 57265], considering differences in 
the described procedures and service times.
    We proposed the RUC-recommended direct PE inputs for CPT codes 
57240, 57250, 57260 and 57265 without refinements.
    Comment: In general, commenters were supportive of our proposal of 
the RUC-recommended work RVUs. We continue to welcome information from 
all interested parties regarding valuation of services for 
consideration through our rulemaking process. Some expressed opposition 
to the alternative work RVUs we considered.
    Response: We will continue to consider alternative work RVUs as we 
propose the valuation of services for future notice and comment 
rulemaking.
    After consideration of comments received, we are finalizing the 
work RVUs as proposed. We are finalizing the proposed direct PE inputs 
for CPT codes 57240, 57250, 57260 and 57265, without refinement.
(24) Injection of Anesthetic Agent (CPT Code 64418)
    CPT code 64418 (Injection, anesthetic agent; suprascapular nerve) 
was identified by the AMA through their screen of Harvard-valued codes 
with utilization over 30,000. We proposed the RUC-recommended work RVU 
of 1.10 and RUC-recommended direct PE inputs without refinement.
    Comment: We received one comment that expressed support for CMS' 
proposed value.
    Response: We appreciate the commenter's support.
    After consideration of the comment received that specifically 
addressed this code, for CY 2018, we are finalizing a work RVU of 1.10 
and the proposed direct PE inputs without refinement for CPT code 
64418.
(25) Nerve Repair With Nerve Allograft (CPT Codes 64910, 64911, 64912, 
and 64913)
    The CPT Editorial Panel created two new Category I CPT codes (64912 
and 64913) to report the repair of a nerve using a nerve allograft. CPT 
codes 64910 and 64911 were also reviewed as part of this code family. 
CPT codes 64912 and 64913 will be placed on the new technology list to 
be re-reviewed by the RUC in 3 years to ensure correct valuation and 
utilization assumptions.
    For CY 2018, we proposed the RUC-recommended work RVUs for the 
following codes: A work RVU of 10.52 for CPT code 64910, a work RVU of 
14.00 for CPT code 64911, a work RVU of 12.00 for CPT code 64912, and a 
work RVU of 3.00 for CPT code 64913.
    We noted a decrease in preservice time (7 minutes) for CPT code 
64910 and considered an alternate work RVU of 10.15, crosswalking to 
CPT code 15120 (Split-thickness autograft, face, scalp, eyelids, mouth, 
neck, ears, orbits, genitalia, hands, feet, and/or multiple digits; 
first 100 sq cm or less, or 1 percent of body area of infants and 
children (except 15050)), which has similar service times. We sought 
comments on whether an alternative work RVU of 10.15 for CPT code 64910 
would better reflect relativity among PFS services with similar service 
times.
    For CPT code 64911 (Nerve repair; with autogenous vein graft 
(includes harvest of vein graft), each nerve)), we considered a work 
RVU of 13.50, by crosswalking to CPT code 31591 (Laryngoplasty, 
medicalization, unilateral), which has similar service times and a work 
RVU of 13.56. We sought comments on whether a work RVU of 13.50 for CPT 
code 64911 would better reflect relativity among other PFS services 
with similar service times.
    The new coding structure for these services increases granularity 
by including add-on codes that describe each strand of nerve repair. 
While we recognize that additional granularity may be important and 
useful for purposes of data collection, the advantages to Medicare for 
such granularity for purposes of payment are unclear, especially since 
we are unaware of a payment-related reason for such coding complexity. 
We considered proposing a bundled status to the new add-on codes and 
incorporating the relative resources in furnishing the add-on code (CPT 
code 64913) into the base code (CPT code 64912) based on the 
utilization assumptions that accompanied the RUC's recommendations. The 
RUC estimated that CPT code 64912 would have 750 Medicare allowed 
services in CY 2018, and that the corresponding add-on CPT code 64913 
would have 150 Medicare allowed services in CY 2018. Therefore, the RUC 
estimated that CPT code 64912 will be billed without add-on CPT code 
64913 for 80 percent (750/900) of the Medicare allowed services, and 
that CPT code 64912 will be billed with add-on CPT code time 64913 for 
20 percent (150/900) of the Medicare allowed services in CY 2018. To 
account for the additional work involved in 20 percent of the allowed 
services, we added a

[[Page 53055]]

work RVU of 0.60 (20 percent of the work RVU of 3.00 for CPT code 
64913) to the work RVU of 12.00 for CPT code 64912, to derive an 
alternative work RVU of 12.60 for CPT code 64912 and increased the 
intraservice time by 6 minutes to account for the bundling of services 
from CPT code 64913. The alternative work RVU of 12.60 would have been 
further supported by a crosswalk to CPT code 14301 (Adjacent tissue 
transfer or rearrangement, any area; defect 30.1 sq cm to 60.0 sq cm), 
which has similar intraservice and total times.
    We proposed the RUC-recommended direct PE inputs for CPT codes 
64910, 64911, 64912 and 64913 without refinements.
    Comment: In general commenters were supportive of our proposal of 
the RUC-recommended work RVUs. Some expressed opposition to the 
alternative work RVUs.
    Response: We will continue to consider alternative work RVUs as we 
propose the valuation of services for future notice and comment 
rulemaking.
    Comment: Some commenters disagreed with our proposal to bundle CPT 
codes 64912 and 64913. Several commenters, including the RUC, noted 
that bundling the service would place a financial burden on the 
patients who do not require multiple strands because they would be 
charged 120 percent of what they should be charged. One commenter cited 
this as the payment-related reason to not bundle the services, and 
further noted that bundling would undermine the premise of coding and 
relative reimbursement. The RUC noted that CPT code 64913 is an add-on 
code for the additional work related to insertion of an additional 
nerve allograft for the same nerve. They stated that the additional 
work is not typically performed with the base code and therefore would 
not be appropriate to bundle into the work of the base code.
    Response: We note that 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. We will 
continue to consider these options as we propose the valuation of 
services for future notice and comment rulemaking.
    Comment: The RUC stated that it is atypical for CMS to question the 
coding structure of newly proposed services via rulemaking. In the 
future, they requested that CMS voice concerns regarding coding 
structure as part of the agency's participation in the CPT Editorial 
Panel review process.
    Response: While we acknowledge that the discussion and 
consideration of different coding structures occurs during the CPT 
Editorial Panel review process, we also note that not all interested 
parties have the opportunity to participate in the CPT Editorial Panel 
review process, and not all relevant stakeholders are members of the 
CPT Editorial Panel. Additionally, we would like to reiterate that, 
while we appreciate that some commenters believe that CMS staff could 
offer useful perspectives by regularly attending and participating more 
fully in the CPT Editorial Panel review process, we do not believe that 
would be appropriate for many reasons, not least of which is that CMS 
staff participation in the CPT Editorial Panel review process cannot 
supplant our obligation to establish through notice and comment 
rulemaking what we determine to be appropriate coding structures for 
each reviewed code. Accordingly, we disagree with the commenter's 
suggestion that CMS staff should preemptively address the concerns of 
coding structures during the CPT Editorial Panel review process, 
instead of through notice and comment rulemaking. Formal notice and 
comment rulemaking allows all interested parties the opportunity to 
review our proposals and provide feedback, as well as to submit 
supplemental information about our proposals, and address any concerns 
or alternatives we have expressed in making our proposal.
    Comment: A commenter questioned why CMS would be concerned with a 
code pair that is not typically reported for Medicare-aged patients, 
but instead is a service for younger patients that have better nerve 
healing capacity.
    Response: As discussed in the CY 2017 PFS final rule (82 FR 80172), 
the statute requires us to establish, by regulation, each year's 
payment amounts for all physicians' services paid under the PFS. 
Although we prioritize high volume services when we routinely examine 
the valuation and coding for existing services under the misvalued code 
initiative, we also value low-volume services in accordance with the 
statute.
    After consideration of comments received, we are finalizing the 
work RVUs for CPT codes 64910, 64911, 64912, and 64913 as proposed. We 
are also finalizing the proposed direct PE inputs for these codes, 
without refinement.
(26) Correction of Trichiasis (CPT Code 67820)
    In CY 2016, CPT code 67820 was identified by the screen for high 
expenditure services across specialties with Medicare allowed charges 
of $10 million or more. The screen identified the top 20 codes by 
specialty in terms of allowed charges, excluding 10- and 90-day global 
services, anesthesia and E/M services and services reviewed since CY 
2010. During the review process, the RUC re-surveyed the code and 
recommended a work RVU of 0.32, which we proposed in the CY 2018 PFS 
proposed rule.
    The RUC also recommended 15 minutes of preservice time in the 
facility setting to complete preservice diagnostic and referral forms, 
coordinate pre-surgery services, schedule space and equipment in the 
facility, provide preservice education/obtain consent, and follow-up 
phone calls and prescriptions. We believed it to be atypical for a 
physician's staff to be performing these activities in a facility-
setting with a procedure that has a 0-day global period. Therefore, we 
proposed removing the time associated with these activities.
    We also note that in the course of refining the times associated 
with the clinical activities referenced above, we inadvertently reduced 
the time associated with the screening lane (EL006) from 11 minutes to 
5 minutes.
    Comment: Commenters stated that a default policy of allowing zero 
minutes of preservice time in the facility setting was inappropriate as 
ambulatory practices often expend staff time to coordinate with the 
facility in order to bring their patients in to perform procedures. 
Commenters also acknowledged that it may be atypical for epilation of 
eyelashes to require pre-surgery coordination, follow-up phone calls or 
prescriptions and that by removing these two activities, the total 
clinical staff preservice time would be more appropriate for the 
service.
    Response: We appreciate the information provided by commenters 
regarding the preservice clinical activities and agree that certain 
activities are typical for this service. Therefore, for CY 2018, we 
will finalize a total of 9 minutes of preservice time which corresponds 
with coordinating pre-surgery services, scheduling space and equipment 
in the facility, and providing preservice education/obtain consent.
    Comment: Commenters stated their disagreement with the reduction of 
time from 11 to 5 minutes for the screening lane (EL006), as the 
physician would be

[[Page 53056]]

treating the patient in the screening lane for all aspects of the 
procedure and therefore, it would be unavailable for any other use 
during the procedure.
    Response: As we stated above, we inadvertently reduced the time of 
the screening lane and did not intend to make a proposal regarding this 
equipment item. Therefore, for CY 2018, we will finalize the RUC-
recommended 11 minutes for the screening lane.
    Comment: Another commenter expressed their support for the RUC 
process, but opposed the RUC-recommended work RVU of 0.32 for CPT code 
67820. The commenter recommended CMS increase the work RVU to the 0.40 
to align with 25th percentile of the survey.
    Response: We believe the RUC's recommend valuation of 0.32 for CPT 
code 67820 is appropriate due to the overall reduction in total time 
and it having less intensity than its key reference code, CPT code 
11900, Injection, intralesional; up to and including 7 lesions (work 
RVU = 0.52, intra time = 8 minutes). Therefore, after consideration of 
the comments, we will finalize the RUC-recommended work RVU of 0.32 for 
CPT code 67820 for CY 2018.
(27) CT Soft Tissue Neck (CPT Codes 70490, 70491, and 70492)
    CPT codes 70490 and 70492 were identified through the high 
expenditure services across specialties with Medicare allowed charges 
of $10 million or more screen. CPT code 70491 was also included for 
review as part of this code family. For CY 2018, we proposed the RUC-
recommended work RVUs of 1.28 for CPT code 70490, 1.38 for CPT code 
70491, and 1.62 for CPT code 70492. For CPT code 70490, we considered a 
work RVU of 1.07 based on a crosswalk to CPT code 72125 (Computed 
tomography, cervical spine; without contrast material). CPT code 72125 
is a non-contrast CT service on a similar anatomical area and has 
identical intraservice and total times to those recommended by the RUC 
for CPT code 70490. We also considered work RVUs of 1.17 for CPT code 
70491 and 1.41 for CPT code 70492. We sought comment on how relativity 
among other CT services paid under the PFS would be affected by 
applying the alternative work RVUs described above for CPT codes in 
this family.
    Comment: Commenters disagreed with our alternative values and 
supported our proposal to implement the RUC-recommended values.
    Response: We appreciate the comments regarding our proposals.
    After consideration of the public comments, we are finalizing the 
RUC-recommended work RVUs as proposed.
(28) Magnetic Resonance Angiography (MRA) Head (CPT Codes 70544, 70545, 
and 70546)
    CPT code 70544 was identified by a screen of services across 
specialties with Medicare allowed charges of $10 million or more. 
Subsequently, CPT codes 70545 and 70546 were also reviewed as part of 
this code family. We proposed the RUC-recommended work RVUs of 1.20 for 
CPT code 70544, 1.20 for CPT code 70545, and 1.48 for CPT code 70546. 
We also proposed the following refinements to the RUC-recommended 
direct PE inputs. For the service period clinical labor activity 
``Provide preservice education/obtain consent,'' we proposed 5 minutes 
for CPT code 70544, 7 minutes for CPT code 70545, and 7 minutes for CPT 
code 70546 so that the times for this activity are consistent with 
other magnetic resonance (MR) services performed without-contrast 
materials, with-contrast materials, and without-and-with contrast 
materials, respectively. For the clinical labor task ``Acquire 
images,'' we proposed using the RUC-recommended clinical time of 26 
minutes for CPT code 70544. We considered proposing 20 minutes of 
clinical time to maintain the relativity among the three codes in this 
family and for consistency with other MRA and magnetic resonance 
imaging (MRI) codes, which do not typically assign more clinical labor 
time to this task for services without contrast material than for 
services with contrast material. We sought comment as to the 
appropriate time value for this clinical labor task. For the clinical 
labor task ``Technologist QCs images in PACS, checking all images, 
reformats, and dose page,'' we proposed to refine the clinical labor 
time from the RUC recommended 4 minutes to 3 minutes to comply with the 
standards.
    Comment: A commenter disagreed with our proposed clinical labor 
time for the task ``Technologist QCs images in PACS, checking all 
images, reformats, and dose page,'' and stated that CMS had previously 
determined that the amount of clinical labor needed to check images in 
a PACS workstation may vary depending on the service, and that CMS 
would agree to times above the standard if a compelling rationale is 
presented.
    Response: We believe that MRA services are analogous to MRI 
services in that they are most accurately considered procedures of 
intermediate complexity.
    Comment: One commenter did not agree with our alternative value for 
the clinical labor task ``acquire images.''
    Response: We appreciate the comment, and we are finalizing as 
proposed the RUC-recommended clinical labor time value for this task.
    After consideration of the comments, we are finalizing these PE 
refinements as well as the RUC-recommended work RVUs, as proposed.
(29) Magnetic Resonance Angiography (MRA) Neck (CPT Codes 70547, 70548, 
and 70549)
    CPT code 70549 was identified through a high expenditure screen. 
CPT codes 70547 and 70748 were also reviewed as part of this family of 
codes. We proposed the RUC-recommended work RVUs of 1.20 for CPT code 
70547, 1.50 for CPT code 70548, and 1.80 for CPT code 70549. We also 
proposed several refinements to the RUC-recommended direct PE inputs 
for these services. For the service period clinical labor activity 
``Provide preservice education/obtain consent,'' we proposed 5 minutes 
for CPT code 70547, 7 minutes for CPT code 70548, and 7 minutes for CPT 
code 70549 so that the times for this activity are consistent with 
other MR services performed without contrast material, with contrast 
material, and without-and with contrast material, respectively. For the 
intraservice clinical labor task acquire images, for CPT code 70547, we 
proposed to use the RUC-recommended 26 minutes. We considered applying 
20 minutes to this clinical labor task, which would have maintained 
consistency with the 20 minutes recommended by the RUC for CPT code 
70548 (the service that includes with-contrast material). We stated 
concern about the lack of evidence that a non-contrast MRA would 
require more clinical labor time than the with-contrast MRA service. We 
sought comment as to the appropriate time value for this clinical labor 
task. For the clinical labor task ``Technologist QCs images in PACS, 
checking all images, reformats, and dose page,'' we proposed to refine 
the clinical labor time from the RUC recommended 4 minutes to 3 minutes 
to comply with the standards.
    Comment: A commenter did not agree with our alternative time value 
for the task ``acquire images.''
    Response: We appreciate the comment, and we are finalizing the RUC-
recommended time value for this clinical labor task as proposed.
    Comment: A commenter disagreed with our proposed clinical labor 
time for the task ``Technologist QCs images in PACS, checking all 
images, reformats,

[[Page 53057]]

and dose page,'' stating that CMS had previously determined that the 
amount of clinical labor needed to check images in a PACS workstation 
may vary depending on the service, and that we will agree to times 
above the standard if a compelling rationale is presented.
    Response: We believe that MRA services are analogous to MRI 
services in that they are most accurately considered procedures of 
intermediate complexity. Therefore, for CPT codes 70547, 70548, and 
70549, we are finalizing these PE refinements as well as the RUC-
recommended work RVUs, as proposed.
(30) CT Chest (CPT Codes 71250, 71260, and 71270)
    CMS identified this code family through the high expenditures 
screen. We proposed the RUC-recommended work RVUs of 1.16 for CPT code 
71250, 1.24 for CPT code 71260, and 1.38 for CPT code 71270. For CPT 
code 71250, we considered maintaining the CY 2017 work RVU of 1.02. We 
stated that we are concerned with the lack of evidence that the 
physician time or intensity of furnishing this service has changed 
since it was last valued. In addition, we noted that a comparison to 
other CT codes indicated that the RUC-recommended work values could be 
overvalued relative to other CT services and compared to similar, non-
contrast CT studies such as CPT codes 72131 (Computed tomography, 
lumbar spine; without contrast material) and 73700 (Computed 
tomography, lower extremity; without contrast material), both of which 
have work RVUs of 1.00. For CPT code 71260, we considered proposing a 
work RVU of 1.10 by applying the RUC-recommended increment between CPT 
code 71250 and 71260 (0.08) to CPT code 71260. For CPT code 71270, we 
considered a work RVU of 1.24 by applying the RUC-recommended increment 
between CPT codes 71260 and 71270 (0.22) to CPT code 71270. In addition 
to maintaining relatively among the codes in this family, we considered 
further supporting these alternative values based on a comparison to 
other CT studies, such as with-contrast material CT studies, and 
without-and-with contrast CT studies. While noting our concerns, we 
proposed the RUC recommended work RVUs for CPT code 71250, 71260, and 
71270 and sought comment on whether our alternative values would 
improve relativity.
    Comment: Commenters supported the proposed values for these codes 
but disagreed with the alternative values.
    Response: We appreciate the comments in support of our proposals.
    After consideration of the public comments, we are finalizing the 
RUC-recommended values as proposed.
(31) MRI of Abdomen and Pelvis (CPT Codes 72195, 72196, 72197, 74181, 
74182, and 74183)
    CPT codes 74182 and 72196 were identified as part of the screen of 
high expenditure services across specialties with Medicare allowed 
charges of $10 million or more. CPT codes 74181, 74183, 72195, and 
72197 were also reviewed as part of this code family. We proposed the 
RUC-recommended work RVUs of 1.46 for CPT code 72195, 1.73 for CPT code 
72196, 2.20 for CPT code 72197, 1.46 for CPT code 74181, 1.73 for CPT 
code 74182, and 2.20 for CPT code 74183. While we proposed the RUC-
recommended direct PE inputs, we considered 30 minutes for clinical 
labor task ``Acquire images'' for CPT codes 74181 and 74182, which we 
stated appeared to be more consistent with the codes in this family and 
more consistent with other MR codes. We also noted that for CPT codes 
74181 and 74182, the clinical labor time for acquired images appears to 
have been developed through a consensus panel from the specialty 
society over 15 years ago. Given that these times are estimates based 
on expert panel consensus rather than survey data, we sought comment on 
whether using a structure that matches other MR code families would be 
more appropriate to value these clinical labor times.
    Comment: A commenter stated that all clinical labor time inputs are 
based on an expert panel, and our expression of concern for this code 
family is thus inconsistent with our review of other services in 
current and past rulemaking.
    Response: We appreciate the comment and we are finalizing the RUC-
recommended work RVUs, as proposed.
(32) MRI Lower Extremity (CPT Codes 73718, 73719, and 73720)
    CPT codes 73718 and 73720 were identified as part of the screen of 
high expenditure services, and CPT code 73719 was included for review 
as part of the code family. We proposed the RUC-recommended work RVUs 
of 1.35 for CPT code 73718, 1.62 for CPT code 73719, and 2.15 for CPT 
code 73720. We are also proposing the following refinements to the RUC-
recommended direct PE inputs. For the service period clinical labor 
activity ``Provide preservice education/obtain consent,'' we proposed 5 
minutes for CPT code 73718, 7 minutes for CPT code 73719, and 7 minutes 
for CPT code 73720. Likewise, for the service period task ``Prepare 
room, equipment, supplies,'' we proposed 3 minutes for CPT code 73718, 
5 minutes for CPT code 73719, and 5 minutes for CPT code 73720. We 
proposed these changes to maintain consistency with other MR services 
without contrast materials, with contrast materials, and without-and-
with contrast materials, respectively.
    Comment: A commenter disagreed with our proposed PE refinements to 
the clinical labor activity ``Prepare room, equipment, supplies,'' 
stating that the RUC-recommended clinical labor time paralleled other 
recent MRI codes, including MRI brain and MRI face, and that MR 
involves strong magnetic fields and ensuring patient safety is 
important. More specifically, all objects in the room must be MRI 
compatible. MR exams involve the use of MR coils which vary based on 
the body part studied and are specifically selected to fit the patient. 
These coils must be prepared for the intended exam, positioned, and 
attached to the MR unit. In addition, the examinations involving the 
use of contrast require setup of the injector apparatus and preparation 
of the contrast material.
    Response: We agree that the RUC-recommended clinical labor times 
for this activity appear consistent with those for the code family 
mentioned by the commenter. Therefore, we are not finalizing our 
proposed time values for this activity, and are instead finalizing the 
RUC-recommended values of 5 minutes, 7 minutes, and 7 minutes for CPT 
codes 73718, 73719, and 73720, respectively, to maintain consistency 
among similar services.
(33) Abdominal X-Ray (CPT Codes 74022, 74018, 74019, and 74021)
    CPT codes 74000 (Radiologic examination, abdomen; single 
anteroposterior view) and 74022 (Radiologic examination, abdomen; 
complete acute abdomen series, including supine, erect, and/or 
decubitus views, single view chest) were identified via a high 
expenditure screen. The CPT Editorial Panel created CPT codes 
7401874018, 7401974019, and 7402174021to replace CPT codes 74000, 
74010, and 74020. The RUC suggested a utilization scenario that assumes 
that 25 percent of services currently reported with CPT code 74010 will 
be reported with CPT code 74019 and 75 percent will be reported with 
CPT code 74021; and 75 percent of services currently reported with CPT 
code 74020 will be reported with CPT code 74019 and 25 percent will be 
reported with CPT code 74021. In the CY 2018 PFS proposed rule, we 
stated that we did not identify evidence or a rationale for these 
assumptions. For

[[Page 53058]]

purposes of calculating the proposed RVUs, we used an even distribution 
of services previously reported as CPT codes 74010 and 74020 to CPT 
codes 740X2 and 740X3 instead of the RUC-recommended distribution 
because we thought that the services previously reported with codes 
74010 and 74020 will be reported in equal volume between the code 
representing two views and the code representing three views, and we 
sought comment on information that would help us improve on this 
distribution for purposes of developing final RVUs, including rationale 
for the distribution reflected in the RUC's utilization crosswalk.
    Comment: The RUC commented that its utilization assumptions are 
based on expert panel consensus, and said that its utilization 
assumptions will result in savings that would be reapplied to the 
Medicare conversion factor. The RUC also requested clarity regarding 
our utilization assumptions and their relationship to the work RVUs we 
proposed for this code family.
    Response: We appreciate the RUC's input regarding utilization 
assumptions. We note that we are finalizing the RUC-recommended work 
RVUs as proposed, and our utilization assumptions do not determine the 
valuation of work RVUs, which will be incorporated into overall budget 
neutrality calculations.
(34) Angiography of Extremities (CPT Codes 75710 and 75716)
    This code family was identified through the $10 million or more 
screen of high expenditure services. We proposed the RUC-recommended 
work RVUs of 1.75 for CPT code 75710 and 1.97 for CPT code 75716. We 
also proposed to use the RUC-recommended direct PE inputs for CPT codes 
75710 and 75716, with the following refinements. For the clinical labor 
task ``Technologist QC's images in PACS, checking for all images, 
reformats, and dose page,'' we proposed refinements consistent with the 
standard clinical labor times for tasks associated with the PACS 
Workstation. We also proposed to refine the clinical labor by removing 
the 2 minutes associated with the task ``prepare room, equipment, and 
supplies.'' CPT codes 75710 and 75716, which represent radiological 
supervision and interpretation, are billed with codes that include 
activities such as needle placement and imaging, and the ``prepare 
room, equipment, supplies,'' activity will be accounted for with the 
codes that are billed with these interpretation codes.
    Comment: A commenter disagreed with our proposed clinical labor 
time for the task ``Technologist QCs images in PACS, checking all 
images, reformats, and dose page,'' stating that CMS had previously 
determined that the amount of clinical labor needed to check images in 
a PACS workstation may vary depending on the service, and that we would 
agree to times above the standard if a compelling rationale is 
presented.
    Response: We believe that MRA services are analogous to MRI 
services in that they are most accurately considered procedures of 
intermediate complexity.
    After consideration of the comment we received, we are finalizing 
these PE refinements as well as the RUC-recommended work RVUs, as 
proposed.
(35) Ophthalmic Biometry (CPT Codes 76516, 76519, and 92136)
    In the CY 2016 PFS final rule with comment period, CMS identified 
CPT codes 76519 and 92136 as potentially misvalued on the high 
expenditure screen. For CY 2018, we proposed the RUC-recommended work 
RVUs for each code in this family as follows: 0.40 for CPT code 76516, 
0.54 for CPT code 76519, and 0.54 for CPT code 92136.
    For CPT codes 76519 and 92136, the RUC recommended adding an 
additional 8 minutes of immediate postservice time for dictating the 
report of the procedure for the medical record, review and sign report, 
communicate results to the patient, discussing lens implant options for 
desired postoperative refractive result, and entering an order for the 
intraocular lens implant. We considered time and work values that would 
not include the additional 8 minutes of immediate postservice time in 
either of these codes, due to the concern that the additional time may 
not reflect the typical case. Were we to not include those 8 minutes, 
each of these procedures would have a total time of 14 minutes. We 
considered applying the total time ratio (decrease from 17 minutes to 
14 minutes; ratio of 0.824) to the RUC-recommended work RVU of 0.54, 
which would have resulted in a work RVU of 0.44 for CPT codes 76519 and 
92136. We sought comment on whether these alternative values would 
improve relativity.
    Comment: Several commenters, including the RUC, stated the 
additional immediate postservice time for CPT codes 76519 and 92136 was 
appropriate due to the need for the provider to discuss the multiple 
lens options and refractive outcomes with the patient; as many of these 
medical options were not available when the code was last surveyed.
    Response: We appreciate the feedback from the commenters regarding 
the relativity of our alternative value. After considering these 
comments, we are finalizing the RUC-recommended values of 0.54 RVUs for 
CPT codes 76519 and 92136, for CY 2018.
(36) Ultrasound of Extremity (CPT Codes 76881 and 76882)
    The RUC identified CPT codes 76881 and 76882 for review only of PE 
inputs. For CPT code 76881, we proposed the RUC-recommended inputs with 
refinements. We proposed to remove 1 minute from the clinical labor 
task ``Exam documents scanned into PACS. Exam completed in RIS system 
to generate billing process and to populate images into Radiologist 
work queue,'' because this code does not include any equipment time for 
the PACS workstation proxy or professional PACS workstation. We noted 
that the RUC-recommended inputs shift the general ultrasound room from 
the PE inputs for CPT code 76881 to the PE inputs for CPT code 76882. 
We proposed to make this change, consistent with the RUC 
recommendations; however, we sought comment on whether a portable 
ultrasound unit would be a more accurate PE input for both codes, given 
that the dominant specialty for both of these services is podiatry, 
based on available 2016 Medicare claims data. As noted in the CY 2018 
PFS proposed rule, we proposed that these codes would not be subject to 
the phase-in of significant RVU reductions given the significance of 
this shift of resource costs between codes in the same family and 
sought comment on this proposed application of the phase-in policy.
    Comment: Many commenters disagreed with the RUC recommendations for 
the direct PE inputs, stating that the shift of PE from CPT code 76881 
to CPT code 76882 is based on inaccurate assumptions regarding the 
typical equipment used in furnishing these services. These commenters 
noted that the equipment used to furnish the two procedures is 
identical. These commenters stated that the RUC-recommended direct PE 
inputs for CPT code 76881, which were developed based on the assumption 
that the dominant specialty furnishing the service is podiatry, do not 
reflect the equipment inputs utilized by rheumatologists such as an 
ultrasound room and PACS workstation.
    Furthermore, these commenters stated that valuing CPT code 76882, 
which is the limited ultrasound procedure, at a higher price than CPT 
code 76881, which is the complete ultrasound procedure, represents a 
rank order anomaly. The RUC disagreed with our statement that podiatry 
is the dominant

[[Page 53059]]

specialty for both codes and re-affirmed its recommendation.
    Response: Examination of 2016 claims indicates that the dominant 
specialty for both codes, when considering the volume of global and TC 
services in aggregate, is podiatry. Therefore, we are finalizing the 
RUC-recommended direct PE inputs with refinements for CPT code 76881 as 
proposed. For CPT code 76882, we are not finalizing our proposal to 
include an ultrasound room, and we are instead finalizing the RUC-
recommended equipment, with the exception of the ultrasound room, which 
we are replacing with a portable ultrasound unit. This is based on the 
RUC's determination, as expressed through its recommendations for CY 
2018, that a portable unit is the equipment type that is typical for 
podiatry, which is the dominant specialty furnishing CPT code 76882. We 
are thus applying the PE inputs that the RUC has determined are typical 
for the dominant specialty for both codes in order to maintain 
consistency and rank order.
    Comment: A commenter requested that CMS reconsider our proposal not 
to subject these codes to the phase-in of significant RVU reductions.
    Response: The significant RVU reductions that will result from the 
PE inputs that we are finalizing comprise a change in resource costs 
overall for the code family. This is in contrast to our proposal, which 
would have shifted costs within codes of the same family. Therefore, we 
are not finalizing our proposal to exempt these codes from the phase-
in, and the reduction in the PE for CPT code 76881 will thus be limited 
to 19 percent for the first year. This transition period will allow us 
to obtain more stakeholder input on the appropriate PE inputs and 
specialty assumptions for these services, and we expect to consider 
this input for future rulemaking.
    Comment: A commenter disagreed with our decision to remove from CPT 
code 76881 the one minute of clinical labor assigned to the task ``Exam 
document scanned into PACS. Exam completed in RIS system to generate 
billing process and to populate images into Radiologist work queue,'' 
stating that regardless of whether the service includes a PACS 
workstation, there is still documentation to be entered.
    Response: The task of entering documentation, when not applied to a 
code that includes a PACS workstation as an equipment item, is most 
appropriately considered indirect PE; therefore, we are finalizing this 
refinement as proposed.
(37) Flow Cytometry Codes (CPT Codes 88184 and 88185)
    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 PE 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. These codes were reviewed again at the 
January 2016 RUC meeting, and new recommendations were submitted to CMS 
as part of the CY 2017 PFS rulemaking cycle. In the CY 2017 PFS final 
rule (81 FR 80325), we finalized all of the direct PE inputs for CPT 
codes 88184 and 88185, as proposed, except for the proposed refinement 
to the dye sublimation printer.
    As discussed in the potentially misvalued services section of this 
final rule (section II.E), we have received conflicting information 
about the direct PE inputs for CPT codes 88184 (Flow cytometry, cell 
surface, cytoplasmic, or nuclear marker, technical component only; 
first marker) and 88185 (Flow cytometry, cell surface, cytoplasmic, or 
nuclear marker, technical component only; each additional marker). 
Therefore, in the CY 2018 PFS proposed rule, we proposed these codes as 
potentially misvalued so that they can be reviewed again because some 
stakeholders have suggested the clinical labor and supplies that were 
previously finalized are no longer accurate. In response to the CY 2018 
PFS proposed rule, several commenters urged CMS to use the RUC's 
recommendations for CY 2017 in developing final PE RVUs for these 
services instead of recommending additional review under the misvalued 
code initiative. Based on this suggestion from the commenters, which 
appears to reflect a broad consensus, we have re-examined the CY 2017 
RUC-recommended direct PE inputs for these services, in light of the 
specific comments. In the paragraphs below, we summarize the direct PE 
inputs that we are changing based on these comments.
    Comment: Several commenters urged CMS to use the RUC-recommended 15 
minutes for the clinical labor activity ``Instrument start-up, quality 
control functions, calibration, centrifugation, maintaining specimen 
tracking, logs and labeling.'' from CY 2017 for this clinical labor 
activity. Commenters stated that the CMS comparison to CPT code 88182 
was not appropriate, as that code uses older/simpler technology, and 
that the more robust testing described in these codes requires a higher 
level of skill, experience, and continuing education in the laboratory 
staff than in CPT code 88182.
    Response: After reviewing this additional information, we agree 
with the commenters that 15 minutes would be typical for this task. We 
are finalizing a clinical labor time of 15 minutes for the ``Instrument 
start-up, quality control functions . . .'' clinical labor activity for 
CPT code 88184.
    Comment: Several commenters stated that the RUC-recommended time of 
10 minutes for ``Load specimen into flow cytometer, run specimen, 
monitor data acquisition, and data modeling, and unload flow 
cytometer'' activity for CPT code 88184 reflects the typical case. 
Commenters stated that the time it takes for data capture, data 
modeling, data acquisition, and computational analysis is significantly 
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.
    Response: After reviewing this additional information, we agree 
with the commenters that 10 minutes would be typical for this task. We 
were persuaded by the additional information that the commenters 
supplied regarding the need for extra clinical labor time in CPT code 
88184 as compared to CPT code 88182 due to the additional colors used 
in flow cytometry. Therefore, we are finalizing a clinical labor time 
of 10 minutes for the ``Load specimen into flow cytometer . . .'' 
clinical labor activity for CPT code 88184.
    Comment: Several commenters objected to the finalized 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 uses 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. 
A commenter stated that for a typical immunophenotyping panel, it takes 
38 units of different antibody reagents to identify 24 distinct cell 
surface markers across 10-12 separately analyzed tubes, and therefore a 
ratio of 1.6 units of antibody reagent for each reportable and billable 
surface marker is required, not

[[Page 53060]]

the 1:1 ratio in the finalized CY 2017 values. All of the commenters 
requested using the CY 2017 RUC recommendation of 1.6 supply quantity 
for this input.
    Response: We appreciate the additional information supplied by the 
commenters regarding the flow cytometry antibody (SL186) in CPT codes 
88184 and 88185, and in particular the extensive data provided to 
explain why the supply quantity of 1.6 would be typical for these 
procedures. After reviewing this additional information, we agree with 
the commenters and we are finalizing a supply quantity of 1.6 for the 
flow cytometry antibody in these two CPT codes.
    Comment: Several commenters disagreed with the finalized equipment 
time for the dye sublimation printer (ED031). One commenter 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. One commenter 
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, and 
urged CMS to adopt the RUC-recommended 5 minutes of equipment time. 
Another commenter stated that this process takes usually 10 minutes for 
their most technically advanced personnel.
    Response: We note that in the CY 2017 PFS final rule, due to the 
presentation of new information detailing how the equipment time for 
the printer was disassociated from any clinical labor tasks, we 
increased the finalized equipment time to the RUC-recommended 5 minutes 
for CPT code 88184 and 2 minutes for CPT code 88185. Regarding the 
request to increase the equipment time for the dye sublimation printer 
to 10 minutes, we have no data to indicate that this amount of 
equipment time would be typical. The information that we received from 
commenters during the CY 2017 rule cycle, which was again echoed by 
additional commenters in this rule cycle, indicated that 5 minutes was 
the typical length of time required to print the 25-30 pages of 
materials used in this service. The commenter who disagreed and 
suggested 10 minutes of equipment time included time for the 
pathologist to review the printed materials, and we do not agree that 
the printer would typically need to remain in use while the pathologist 
conducted this review. We continue to believe that the RUC-recommended 
equipment times for the dye sublimation printer would be typical for 
these services.
    After consideration of the comments received as part of the CY 2018 
rule cycle, we are updating the direct PE inputs finalized in CY 2017 
for CPT codes 88184 and 88185 with the changes detailed above.
(38) Pathology Consultation During Surgery (CPT Codes 88333 and 88334)
    CPT codes 88333 and 88334 were surveyed for both work and PE for 
the CY 2018 rule cycle. We proposed the RUC-recommended work RVU of 
1.20 for CPT code 88333 and the RUC-recommended work RVU of 0.73 for 
CPT code 88334. For the direct PE inputs, we proposed to remove the 
clinical labor for the ``Prepare room. Filter and replenish stains and 
supplies (including setting up grossing station with colored stains)'' 
activity from CPT code 88333. This clinical labor is not currently 
included in the direct PE inputs for CPT code 88333, and we believed 
that this is a form of indirect PE that is not individually allocable 
to a particular patient for a particular service. While we agreed that 
replenishing stains and supplies is a necessary task, under the 
established methodology, we believed that it is more appropriately 
classified as indirect PE.
    We proposed to refine the clinical labor time for ``Clean room/
equipment following procedure'' activity for CPT code 88333, consistent 
with the standard clinical labor time assigned for room cleaning when 
used by laboratory services. We sought comments related to the 
equipment time assigned to the ``grossing station w-heavy duty 
disposal'' (EP015) for CPT codes 88333 and 88334. Although the 
recommended equipment time of 10 minutes maintains the current 
equipment time assigned to the grossing station, and we had no reason 
to believe that this time is incorrect, it was unclear to us how this 
equipment time was derived.
    Comment: Several commenters stated that the RUC recommended that 
CPT code 88334 should have a ZZZ global period rather than a XXX global 
period because it is an add-on code and does not include any preservice 
or postservice work time. These commenters requested the assignment of 
a ZZZ global period for CPT code 88334.
    Response: We appreciate the identification of this issue with the 
global period for CPT code 88334 from the commenters. Due to a 
technical error, a global period of XXX was incorrectly assigned to 
this code in the proposed rule. We are finalizing a global period of 
ZZZ for CPT code 88334 as the RUC recommended.
    Comment: Several commenters disagreed with the proposal to remove 
the clinical labor for the ``Prepare room. Filter and replenish stains 
and supplies (including setting up grossing station with colored 
stains)'' activity from CPT code 88333. One commenter stated that this 
was not a form of indirect PE as the clinical labor task was 
attributable to a specific patient and constituted a necessary function 
of directly providing patients with important lab services. Another 
commenter stated that this was not a form of indirect PE because it was 
akin to a number of recognized direct PE activity codes such as Prepare 
room, equipment and supplies (CA013) and Provide education/obtain 
consent (CA011). The commenter stated that to classify these PE 
activities as indirect expenses would be unintentionally biased against 
pathology and laboratory services, due to their unique status as a 
medical specialty in which many procedures can be performed in batches, 
serving multiple patients simultaneously.
    Response: We continue to believe that many of the activities 
described by the clinical labor task ``Prepare room. Filter and 
replenish stains and supplies (including setting up grossing station 
with colored stains)'' constitute forms of indirect PE. The fact that 
many clinical labor tasks associated with pathology and laboratory 
services cannot be allocated to individual patients is the reason why 
they are classified as indirect PE under our methodology. While some of 
these issues may be unique to pathology and laboratory services, in 
many other non-lab cases there are also supplies or clinical labor 
tasks that are not allocable to individual services that we have 
assigned to indirect PE. However, we agree with the commenters that 
some of the clinical labor described in this task is analogous to the 
clinical labor described in non-laboratory direct PE activity codes 
such as Prepare room, equipment and supplies (CA013). Since 2 minutes 
is the standard time allocated for the CA013 clinical labor activity 
code in non-laboratory services, we will assign 2 minutes for room 
preparation and equipment setup for CPT code 88333. We continue to 
believe that the replenishing of stains and supplies constitutes a form 
of indirect PE, and we do not agree that clinical labor time should be 
allocated for this task.
    Comment: Several commenters disagreed with the proposal to refine 
the clinical labor time for ``Clean room/equipment following 
procedure'' activity for CPT code 88333 from 5

[[Page 53061]]

minutes to 1 minute, consistent with the standard clinical labor time 
assigned for room cleaning when used by laboratory services. Commenters 
stated that they were aware of the existence of this specific standard, 
but indicated that they looked to the typical patient scenario as well 
as similar services to arrive at a time estimate. The recommended time 
of 5 minutes included tasks performed when the add-on CPT code 88334 
was also provided.
    Response: We continue to believe that the standard clinical labor 
time of 1 minute for room and equipment cleaning in laboratory services 
should be applied to CPT code 88333, as the commenters did not supply a 
rationale as to why this time would not be typical. The RUC's 
recommendations for this clinical labor task stated that cleaning the 
grossing area was attributable to the first code only (CPT code 88333), 
and if there is additional clinical labor required when CPT code 88334 
is performed, we believe that it should be included in the direct PE 
inputs for that service.
    Comment: Several commenters responded to CMS' request for 
information regarding the derivation of the recommended equipment time 
for the ``grossing station w-heavy duty disposal'' (EP015). Commenters 
stated that the time assigned to the EP015 grossing station w-heavy 
duty disposal is derived from a combination of the total clinical labor 
time for the service and the physician time of reviewing the patient 
case at the same grossing station.
    Response: We appreciate the additional information from the 
commenters regarding the equipment time. As we stated in the proposed 
rule, we have no reason to believe that the recommended equipment time 
is incorrect, it was simply unclear to us how this equipment time was 
derived.
    After consideration of comments received, for CY 2018, we are 
finalizing the work RVUs and direct PE inputs for the codes in the 
pathology consultation during surgery family as proposed, with the 
exception of the refinement to the ``Prepare room. Filter and replenish 
stains and supplies (including setting up grossing station with colored 
stains)'' clinical labor time as detailed above. We are also finalizing 
an add-on global period (ZZZ) for CPT code 88334 as the RUC 
recommended.
(39) Radiation Therapy Planning (CPT Codes 77261, 77262, and 77263)
    CPT code 77263 was identified through a screen of high expenditure 
services across specialties. CPT codes 77261 and 77262 were included 
for review. For CY 2018, we proposed the RUC-recommended work RVUs of 
1.30 for CPT code 77261, 2.00 for CPT code 77262, and 3.14 for CPT code 
77263. However, we stated that we had concerns regarding the RUC-
recommended work RVUs given the decreases in service times as 
recommended by the RUC and reflected in the survey data compared to the 
current values. For CPT code 77263, we considered a work RVU of 2.60 
based on a crosswalk to CPT code 96111 (Developmental testing, 
(includes assessment of motor, language, social, adaptive, and/or 
cognitive functioning by standardized developmental instruments) with 
interpretation and report), which has an identical intraservice time, 
and similar total time to the RUC-recommended time values for CPT code 
77263. We expressed concern that despite a 15 minute decrease in 
intraservice time, the RUC did not recommend a work RVU decrease. We 
noted that the majority of the utilization among the codes in this 
family would be reported with CPT code 77263. Therefore, we considered 
using a work RVU of 2.60 for CPT code 77263 as a base for alternative 
valuations for CPT codes 77261 and 77262 by applying the ratio of the 
crosswalk work RVU of CPT code 96111 (Developmental test extend) to the 
RUC-recommended work RVU of CPT code 77263 (that is, 2.60/3.14 = 0.83) 
to the RUC-recommended work RVU for CPT code 77261 (that is, 0.83 x 
1.30 = 1.08) and CPT code 77262 (that is, 0.83 x 2.0 = 1.66), which 
would have resulted in work RVUs of 1.08 for CPT code 77261 and 1.66 
for CPT code 77262. We sought comments on whether the alternative 
valuation would be more appropriate for these codes.
    Comment: Some commenters disagreed with our considered alternative 
values, and urged us to adopt the RUC-recommendations as proposed.
    Response: We appreciate the feedback from commenters on our 
proposal and our alternative values.
    After consideration of the comments, we are finalizing the RUC-
recommended work RVUs as proposed.
(40) Tumor Immunohistochemistry (CPT Codes 88360 and 88361)
    CPT codes 88360 and 88361 appeared on a high expenditure services 
screen across specialties with Medicare allowed charges of over $10 
million. We proposed the RUC-recommended work RVU of 0.85 for CPT code 
88360 and the RUC-recommended work RVU of 0.95 for CPT code 88361.
    We proposed to refine the clinical labor time for the ``Enter 
patient data, computational prep for antibody testing, generate and 
apply bar codes to slides, and enter data for automated slide stainer'' 
activity for both codes, consistent with the standard time for this 
clinical labor activity across different pathology services. For CPT 
code 88361, we also proposed to remove the 1 minute of clinical labor 
time from the ``Performing instrument calibration, instrument qc and 
start up and shutdown'' and the ``Gate areas to be counted by the 
machine'' activities. These clinical labor activities do not appear in 
other recently reviewed computer-assisted pathology codes. We believe 
that these clinical labor activities would not be typical for CPT code 
88361 and are already included in the allocation of indirect PE, 
consistent with our established methodology.
    We proposed to remove the clinical labor time for ``Clean room/
equipment following procedure'' for CPT codes 88360 and 88361, as we 
believed that this clinical labor is duplicative of the 4 minutes of 
clinical labor assigned to ``Clean equipment and work station in 
histology lab''. We also proposed to remove the clinical labor time for 
the ``Verify results and complete work load recording logs'' and the 
``Recycle xylene from tissue processor and stainer'' activities for CPT 
codes 88360 and 88361. As we stated in previous rules, such as in the 
CY 2017 PFS final rule (81 FR 80319), we believed these clinical labor 
activities were already included in the allocation of indirect PE, 
consistent with our established methodology.
    We proposed to refine the equipment time for the ``Benchmark ULTRA 
auto slide prep & E-Bar Label system'' (EP112) from 18 minutes to 16 
minutes for both codes. The RUC-recommended equipment time of 18 
minutes was an increase of 3 minutes from the current EP112 equipment 
time to incorporate the equipment time of the ``E-Bar II Barcode Slide 
Label System'' (EP113), which the recommended materials have clarified 
is part of the EP112 equipment item. We proposed to add 1 minute over 
the current value of 15 minutes to the EP112 equipment time to reach 
the aforementioned 16 minutes, as we believed that this would be more 
typical for the slide labeling taking place.
    For CPT code 88361, we proposed to maintain the current price of 
$195,000.00 for the DNA image analyzer (EP001) equipment, as the 
submitted invoice contained a series of unrelated items that have been 
crossed out, making it difficult to determine the cost of the 
equipment. We considered refining the equipment time for the DNA image 
analyzer from 30 minutes to 5 minutes. The equipment literature for

[[Page 53062]]

the DNA image analyzer states that the machine can run 50 slides per 
hour, and CPT code 88361 only requires 3 slides per procedure. This 
works out to 3.6 minutes of equipment usage (3 slides divided by 50 
slides per hour multiplied by 60 minutes in an hour), to which we 
considered adding 1 minute for preparing the slides. The resulting 
figure of 4.6 minutes would then round up to 5 minutes, which we 
considered as the potential equipment time for EP001 assigned to CPT 
code 88361. We sought comments on additional pricing information for 
the EP001 DNA image analyzer equipment, specifically, invoices solely 
for this equipment containing a rationale for each component part, as 
well as the appropriate equipment time typically required for use in 
CPT code 88361.
    Comment: Several commenters disagreed with our proposal to refine 
the clinical labor time for the ``Enter patient data, computational 
prep for antibody testing, generate and apply bar codes to slides, and 
enter data for automated slide stainer'' activity for both codes from 5 
minutes to 1 minute. One commenter stated that this clinical labor task 
was unique to immunohistochemistry services and was significantly more 
complicated than performance of a hematoxylin and eosin stained section 
in the traditional histology laboratory. Another commenter stated that 
CMS did not finalize a standardized time for this particular clinical 
labor activity in the CY 2017 PFS final rule, and expressed concern 
with the reliance on standardized pathology clinical labor tasks and 
times. The commenter stated that it would be inappropriate to finalize 
this particular refinement since there had not been an opportunity for 
stakeholders to comment on the establishment of this standard.
    Response: As we stated in the CY 2017 PFS final rule (81 FR 80324), 
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, we continue to believe 
that this is correctly categorized as indirect PE, and therefore, we do 
not recognize the entry of patient data as a direct PE input, and we do 
not consider this task as typically performed by clinical labor on a 
per-service basis.
    We also agree with the commenter that we did not finalize a 
standard clinical labor time for this particular clinical labor task. 
However, we believe that the clinical labor described here under 
``generate and apply bar codes to slides'' is broadly analogous to the 
clinical labor task ``Complete workload recording logs. Collate slides 
and paperwork. Deliver to pathologist'' in CPT codes 88321, 88323, and 
88325, which were addressed in the CY 2017 PFS final rule (81 FR 80325-
80326) and were finalized with 1 minute of clinical labor time. 
Although we agree that the unique nature of pathology and laboratory 
services can make comparisons across codes more difficult than in other 
services, we believe the comparison of similar clinical labor 
activities across different services is important to maintaining the 
relativity of the direct PE inputs. Since we have typically allocated 1 
minute to the labeling of slides in other recently reviewed laboratory 
services, and we have no reason to believe that CPT codes 88360 and 
88361 would not be typical, we are finalizing a clinical labor time of 
1 minute for this activity.
    Comment: Several commenters disagreed with the proposal to remove 
the 1 minute of clinical labor time from the ``Performing instrument 
calibration, instrument qc and start up and shutdown'' and the ``Gate 
areas to be counted by the machine'' activities from CPT code 88361. 
Commenters stated that the fact that these activities do not appear in 
other recently reviewed pathology CPT codes should have no bearing on 
CPT code 88361, as not all pathology services are identical in terms of 
the individual components involved in their execution and many are 
unique. Commenters stated that accurate calibration and quality control 
are key to accurately measuring the cells and this clinical labor 
should be recognized.
    Response: We agree with the commenter that there are distinctions 
between individual services, and that no two services are identical. We 
also believe that comparisons across similar services have an important 
role in allowing for greater transparency and consistency, as well as 
maintaining the relativity of the direct PE inputs. We are concerned 
that too much individual accounting of clinical labor activities, such 
as with these two tasks, can lead to PE proliferation, and that this 
breakout of activities into numerous subactivities generally tends to 
inflate the total time assigned to clinical labor activities and 
results in values that are not consistent with the analogous times for 
other PFS services. The fact that these clinical labor activities do 
not appear in other recently reviewed computer-assisted pathology codes 
is noteworthy since it suggests that these tasks were previously 
subsumed under other clinical labor activities, rather than being 
broken out into individual clinical labor tasks. Instead of listing 
``Performing instrument calibration, instrument qc and start up and 
shutdown'' and ``Load slides on automatic image analyzer'' as separate 
clinical labor tasks, we believe that these activities have 
historically been grouped together under more general headings related 
to preparation. In other words, we believe that the additional 
recommended clinical labor time in this case derives from the separate 
listing of these activities as individual tasks rather than 
representing a change in practice patterns. We also continue to believe 
that these clinical labor activities would not be typical for CPT code 
88361 and are already included in the allocation of indirect PE, 
consistent with our established methodology.
    Comment: Several commenters disagreed with our proposal to remove 
the clinical labor time for ``Clean room/equipment following 
procedure'' for CPT codes 88360 and 88361. Commenters stated that the 
histology laboratory prepares the tissue for sectioning by embedding 
the tissue into blocks while the immunohistochemistry laboratory is 
typically in a separate and distinct work area. Since these procedures 
require both of these work areas to be cleaned, the commenters 
requested the restoration of this clinical labor time.
    Response: After reviewing this new information, we agree with the 
commenters that this clinical labor is not duplicative of the 4 minutes 
of clinical labor assigned to ``Clean equipment and work station in 
histology lab''. We are finalizing the restoration of this 1 minute of 
clinical labor time, as recommended.
    Comment: Several commenters disagreed with the proposal to remove 
the clinical labor time for the ``Verify results and complete work load 
recording logs'' and the ``Recycle xylene from tissue processor and 
stainer'' activities for CPT codes 88360 and 88361. Commenters stated 
that the time associated with these tasks was a direct expense, not an 
indirect cost input, and was allocable to a specific patient. One 
commenter indicated that 1 minute was necessary for these tasks in 
these services. Another commenter stated that while completion of the 
work load reporting logs might be an indirect expense, the quality 
control of results is performed for each and every case, and it should 
be reported separately as a direct expense.
    Response: We appreciate the support from the commenter who agreed 
that completion of work load recording logs was a form of indirect PE. 
We continue to believe that both of these clinical labor activities are 
already included in the allocation of indirect PE consistent

[[Page 53063]]

with our established methodology. Other non-laboratory services conduct 
similar administrative activities, such as filling out electronic 
health records and recycling supplies, without receiving clinical labor 
time for individual services.
    Comment: Several commenters disagreed with the proposal to refine 
the equipment time for the ``Benchmark ULTRA auto slide prep & E-Bar 
Label system'' (EP112) from 18 minutes to 16 minutes for both codes. 
Commenters stated that this appeared to be an arithmetic error made 
when equipment items EP112 and EP113 were combined, and that there was 
a need to add back minutes that had been removed when EP113 was 
deleted. The commenters urged CMS to adopt the RUC-recommended EP112 
for CPT codes 88360 and 88361, along with CPT codes 88341, 88342, and 
88344.
    Response: Our proposed value of 16 minutes was not based on an 
arithmetic error, as we proposed to add 1 minute over the current value 
of 15 minutes to the EP112 equipment time because we believed that 1 
minute would be more typical than 3 minutes for the slide labeling 
taking place in CPT codes 88360 and 88361. However, after consideration 
of the additional evidence supplied by the commenters, we agree that 
there should be 3 additional minutes of EP112 equipment time in these 
codes as recommended. We were persuaded by the commenters that slide 
labeling would indeed take the full 3 minutes of additional time 
previously assigned to EP113, rather than the 1 minute that we proposed 
to assign for this task. We are finalizing this change to the equipment 
time for CPT codes 88360 and 88361, along with a correction to the 
total equipment time reclassified as EP112 for the other three codes 
mentioned by commenters, as described in Table 11.

              Table 11--Benchmark ULTRA Auto Slide Prep & E-Bar Label System (EP112) Equipment Time
----------------------------------------------------------------------------------------------------------------
                                                                                                Total equipment
                        CPT code                           Current EP112      Current EP113    time reclassified
                                                              minutes            minutes            as EP112
----------------------------------------------------------------------------------------------------------------
88341..................................................                 15                  1                 16
88342..................................................                 15                  3                 18
88344..................................................                 30                  3                 33
88360..................................................                 15                  3                 18
88361..................................................                 15                  3                 18
----------------------------------------------------------------------------------------------------------------

    Comment: Several commenters disagreed with the alternative proposal 
to refine the equipment time for the DNA image analyzer (EP001) from 30 
minutes to 5 minutes. Commenters stated that although the product 
literature provides information for 20x and 40x (50 slides/hr.) 
however, this is just the initial step in the analytical process of 
obtaining an image of the tissue stained for the appropriate antigen. 
The commenters stated that it was the additional steps of analysis that 
resulted in the RUC recommending 30 minutes of equipment time, and 
listed a series of tasks performed by the histotechnologist involving 
the EP001 equipment. Commenters stated that 30 minutes of equipment 
time is appropriate for the DNA image analyzer. Commenters also 
supplied new invoices to address CMS' concerns with the pricing of the 
EP001 equipment, and requested a name change from ``DNA image 
analyzer'' to ``DNA/digital image analyzer.''
    Response: We appreciate the additional information supplied by the 
commenters regarding the use of the EP001 equipment.
    After consideration of the comments, we are finalizing our proposed 
equipment time of 30 minutes instead of the alternative equipment time. 
We are finalizing a price of $248,946.30 for this equipment, based on 
the submitted price of $258,042.30 minus the price of the user training 
($6,800.00), the instructor-led online training ($646.00) and the 
shipping and handling costs ($1,650.00). These costs are allocated 
through the indirect allocation under the established PE methodology. 
We are also finalizing the name change to the EP001 equipment, as 
requested by the commenters.
    Comment: One commenter recommended a series of clinical labor times 
that were higher than the RUC's recommendations. The commenter stated 
that these were the average times required to perform the clinical 
labor tasks based on their internal time studies.
    Response: 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. However, because we did not 
receive data on these specific time studies from the commenter to 
support these increases above the RUC recommendations, we are not 
incorporating these changes to clinical labor into the tumor 
immunohistochemistry codes at this time. We urge interested 
stakeholders to consider submitting robust data for these and other 
services.
    After consideration of comments received, for CY 2018, we are 
finalizing the work RVUs for the codes in the tumor 
immunohistochemistry family as proposed. We are finalizing the direct 
PE inputs for these codes, as proposed, along with the refinements 
detailed above in response to the comments.
(41) Cardiac Electrophysiology Device Monitoring Services (CPT Codes 
93279, 93281, 93282, 93283, 93284, 93285, 93286, 93287, 93288, 93289, 
93290, 93291, 93292, 93293, 93294, 93295, 93296, 93297, 93298, and 
93299)
    As part of the CY 2016 PFS final rule with comment period (80 FR 
70914), several services in this family (reported with CPT codes 93288, 
93293, 93294, 93295, and 93296) were identified as potentially 
misvalued through the high expenditure by specialty screen. Seven of 
the 21 services in this family involve remote monitoring of 
cardiovascular devices, and two of these services (reported with CPT 
codes 93296 and 93299) are valued for PE only. In the CY 2018 PFS 
proposed rule, we proposed the RUC-recommended work RVUs for the 19 CPT 
codes in this family that are valued with physician work as follows: 
0.65 for CPT code 93279, 0.77 for CPT code 93280, 0.85 for CPT code 
93281, 0.85 for CPT code 93282, 1.15 for CPT code 93283, 1.25 for CPT 
code 93284, 0.52 for CPT code 93285, 0.30 for CPT code 93286, 0.45 for 
CPT code 93287, 0.43 for CPT code 93288, 0.75 for CPT code 93289, 0.43 
for CPT code 93290, 0.37 for CPT code 93291, 0.43 for CPT code 93292, 
0.31 for CPT code 93293, 0.60 for CPT code 93294, 0.74 for CPT code 
93295, 0.52 for CPT code 93297, and 0.52 for CPT code 93298.
    For CPT code 93293, we considered a work RVU of 0.91 (25th 
percentile survey result) and sought comment on

[[Page 53064]]

whether this alternative work RVU would better maintain relativity 
between single and dual lead pacemaker systems and cardioverter 
defibrillator services. We considered reducing the work RVU for CPT 
code 93282 by 0.11 work RVUs and sought comments on whether this 
alternative value would better reflect relativity between the single 
and dual lead systems that exist within pacemaker services and within 
cardioverter defibrillator services. We also noted that there is a 
difference of 0.10 work RVUs between the RUC-recommended values for CPT 
codes 93289 and 93282. Therefore, we considered a proportionate 
reduction for CPT code 93289 to a work RVU of 0.69. For CPT code 93283, 
we considered a work RVU of 0.91, consistent with the 25th percentile 
from the survey results, and sought comment on whether this value would 
improve relativity.
    As noted in this section of the final rule, several of the CPT 
codes (99392, 99294, 99295, 99297, and 99298) reviewed by the RUC in 
January 2017 involve remote monitoring services for cardiac devices. We 
agreed with the RUC that these services are difficult to value 
considering that the monitoring duration (number of days between 30 and 
90) and the average number of transmissions vary. We also noted that 
these codes were surveyed twice, and in both cases the intraservice and 
total times were considered by the specialty societies to be 
inconsistent with existing times. The RUC explained that it 
extrapolated total and intraservice time data for these codes and 
warned against making comparisons. Without additional information about 
the methods and sources used for extrapolation, however, we had no 
basis for assuming the imputed values are of higher quality and/or 
accuracy than those from the survey. We did not agree, therefore, that 
survey results should not be used as a point of comparison in the 
context of other factors, particularly when they are used to support 
other considerations.
    Although we proposed the RUC-recommended work RVUs for each of 
these CPT codes, we considered alternative values. The RUC recommended 
a work RVU of 0.31 for CPT code 93293, which is 0.01 work RVUs lower 
than the existing work RVU for this code. We have concerns that the 
amount of the reduction in the work RVU recommended by the RUC may not 
be consistent with the decrease in total time of 7 minutes. We 
considered an alternative crosswalk for CPT code 93293 (Pm phone r-
strip device eval) (5 minutes intraservice time and 13 minutes total 
time) to CPT code 94726 (Pulm funct tst plethysmograp), which has 5 
minutes intraservice time and 15 minutes total time and a work RVU of 
0.26. We sought comments on our proposed and alternative valuations for 
this code.
    For CPT code 93294, we considered a work RVU of 0.55, crosswalking 
from CPT code 76706 (Us abdl aorta screen aaa), and sought comments on 
whether it would better align with the RUC-recommended service times. 
We were concerned that a work RVU of 0.60 may not account for the 
difference between existing service times and the RUC-recommended 
service times. Similarly, the RUC recommended a work RVU for CPT code 
93294 of 0.60, which is 0.05 work RVUs less than the existing work RVU. 
The total time for furnishing services reported with CPT code 93294 
decreased by 10 minutes, however, and we believe this reduction in time 
may not be appropriately reflected by a decrease of 0.05 work RVUs. 
Compared to services with similar total and intraservice times, we 
identified CPT code 76706 (Us abdl aorta screen aaa) as a potentially 
more appropriate crosswalk. CPT code 76706 has identical intraservice 
and total service times as CPT code 93294, with a work RVU of 0.55. We 
sought comments on whether our alternative value would better reflect 
the time and intensity involved in furnishing this service.
    For CPT code 93295, we considered a work RVU of 0.69, crosswalking 
to CPT code 76586, which has identical intraservice and total times 
compared to CPT code 93295. We considered using a work RVU of 0.69 to 
maintain the differential between CPT code 93295 and the work RVU we 
considered for the previous code in this family (a work RVU of 0.11 for 
CPT code 93295). We were concerned about the decrease in service time 
compared to the work RVU. We noted that the existing intraservice time 
is 22.5 minutes, compared to the RUC-recommended intraservice time of 
10 minutes. We sought comments on whether our alternative value would 
better reflect the time and intensity involved in furnishing this 
service.
    For CPT code 93298, the RUC recommended a work RVU of 0.52, which 
is unchanged from the current work RVU for this code. We were concerned 
about that recommendation given the reduction in both intraservice and 
total time for this service. The intraservice time decreased from 24 to 
7 minutes, while total time decreased from 44 to 17 minutes. We 
acknowledged that the current times for this CPT code and others in 
this family are extrapolations. However, without additional information 
about the extrapolation of data from survey results, we question 
whether the survey results should be excluded from consideration 
altogether. We considered a work RVU of 0.37 for CPT code 93297, 
crosswalking to CPT code 96446 (Chemotx admn prtl cavity). We also 
considered a work RVU of 0.37 for CPT code 93298 based on a crosswalk 
to CPT code 96446, since the RUC indicated that the work RVUs for CPT 
codes 93297 and 93298 should be the same. We sought comment on our 
proposed valuation and whether our alternative valuation would be more 
appropriate for this code.
    We proposed the RUC-recommended direct PE inputs with the following 
refinements. We proposed to remove 2 minutes for ``review charts'' from 
CPT codes 93279, 93281, 93282, 93283, 93284, 93285, 93286, 93287, 
93288, 93289, 93290, 93291, and 93292 to maintain relativity since it 
is not typically incorporated for similar PFS codes. We also proposed 
removing 2 minutes for ``complete diagnostic forms, lab & X-ray 
requisitions'' for the labor category ``med tech/asst'' (L026A) for 
these services because we believe the same activity is being performed 
by labor category RN/LPN/MTA (L037D). We sought comments regarding 
whether this row was included in error. For the same group of CPT 
codes, we also proposed standard refinements for the time for equipment 
items EF023 and EQ198.
    We proposed to use the RUC-recommended direct PE inputs and times 
for all other CPT codes in this family (CPT codes 93293, 93294, 93295, 
93296, 93297, 93298, and 93299) without refinement.
    Comment: We received several comments requesting that CMS retain 
the contractor priced status of the PE-only CPT code 93299. In general, 
commenters opposed to the change were concerned that the amount of 
payment proposed for this code was too low to adequately reimburse 
practitioners.
    Response: After reviewing the range of current prices established 
by MACs, we agree with concerns that the proposed rate of 0.77 RVUs 
corresponds to a low reimbursement relative to the range of payments 
across localities and states. We concur that there is no need, at this 
time, to establish a national rate, and we defer to individual MACs to 
set a reimbursement rate for this CPT code that reflects local 
populations, supply costs, and practice patterns. For these reasons, we 
are not finalizing our proposal with respect to CPT code 93299, and 
this code will remain contractor-priced.

[[Page 53065]]

    Comment: We received a comment specifically regarding the proposed 
decrease in work RVUs for CPT code 93295 from 1.29 to 0.74. The 
commenter maintained that the decrease in work RVUs is inconsistent 
with the time requirements and focus on patient care required for 
ongoing review of monitoring reports over a 90-day period. The 
commenter further noted that the reduction in work RVUs for this code 
is inconsistent with a shift in paradigm from an office-based patient 
care model to comprehensive care.
    Response: We appreciate the commenters' concerns about the RUC-
recommended decrease in work RVUs for this code. However, we note that 
the survey conducted by the specialty societies as part of the RUC 
process describes a time period of up to 90 days for this code. For 
this code, as with many others, these surveys are the best data we have 
about the time and intensity of work for a particular CPT code, as well 
as the labor time, supplies, and equipment required in furnishing the 
service. After consideration of the public comments, we are finalizing 
a work RVU of 0.74 for CPT code 93295, as proposed. We are also 
finalizing work RVUs for the remainder of the CPT codes in this family 
as proposed.
(42) Transthoracic Echocardiography (TTE) (CPT Codes 93306, 93307, and 
93308)
    In the CY 2016 PFS final rule with comment period (80 FR 70914), 
CMS identified CPT code 93306 through the high expenditures screen. 
Subsequently, the RUC reviewed CPT codes 93307 and 93308, in addition 
to CPT code 93306, as part of this family of codes that describe 
transthoracic echocardiograms. In the CY 2018 PFS proposed rule, we 
proposed the RUC-recommended work RVUs for CPT codes 93306 (a work RVU 
of 1.50), 93307 (a work RVU of 0.92), and 93308 (a work RVU of 0.53), 
and proposed the RUC-recommended direct PE inputs for CPT codes 93306, 
93307, and 93308 without refinement.
    For CPT code 93306 (Echocardiography, transthoracic, real-time with 
image documentation (2D), includes M-mode recording, when performed, 
complete, with spectral Doppler echocardiography, and with color flow 
Doppler echocardiography), we considered maintaining the CY 2017 work 
RVU of 1.30. The surveyed total time for this code dropped slightly due 
to changes in the immediate postservice time. The median preservice and 
intraservice time remained unchanged.
    For CPT code 93307 (Echocardiography, transthoracic, real-time with 
image documentation (2D), includes M-mode recording, when performed, 
complete, without spectral or color Doppler echocardiography), we 
considered a work RVU of 0.80, crosswalking to services with similar 
service times (CPT codes 93880 (Duplex scan of Extracranial arteries; 
complete bilateral study), 93925 (Duplex scan of lower extremity 
arteries or arterial bypass grafts; complete bilateral study), 93930 
(Duplex scan of upper extremity arteries or arterial bypass grafts; 
complete bilateral study), 93976 (Duplex scan of arterial inflow and 
venous outflow of abdominal, pelvic, scrotal contents and/or 
retroperitoneal organs; limited study), and 93978 (Duplex scan of 
aorta, inferior vena cava, iliac vasculature or bypass grafts; complete 
study)). The surveyed total time dropped 3 minutes (from the 
intraservice time) compared to the existing service times for this 
code.
    For CPT code 93308 (Echocardiography, transthoracic, real-time with 
image documentation (2D), includes M-mode recording, when performed, 
follow-up or limited study), we considered a work RVU of 0.43, 
crosswalking to CPT code 93292 (Interrogation device evaluation (in 
person) with analysis, review and report by a physician or other 
qualified health care professional, includes connection, recording and 
disconnection per patient encounter; wearable defibrillator system) 
based on similar service times. The surveyed total time dropped by 5 
minutes (from the intraservice time) compared to the existing service 
times for this code.
    For CY 2018, we proposed the RUC-recommended work RVUs for CPT 
codes 93306, 93307, and 93308 and sought comments on whether our 
alternative values would have better reflected the time and intensity 
of these services.
    Comment: A few commenters addressed the codes in this family 
including the RUC. Commenters expressed support for CMS' proposed 
values.
    Response: We appreciate the commenter's support.
    After consideration of the comments received that specifically 
addressed this code family, for CY 2018, we are finalizing a work RVU 
of 1.50 for CPT code 93306, a work RVU of 0.92 for CPT code 93307, and 
a work RVU of 0.53 for CPT code 93308, as proposed. We are also 
finalizing the proposed direct PE inputs without refinement for all 
codes in this family.
(43) Stress Transthoracic Echocardiography (TTE) Complete (CPT Codes 
93350 and 93351)
    CPT code 93351 was identified as potentially misvalued and the RUC 
reviewed CPT code 93350 as part of the same code family. In the CY 2018 
PFS proposed rule, we proposed the RUC-recommended work RVUs for CPT 
codes 93350 (a work RVU of 1.46) and 93351 (a work RVU of 1.75).
    We proposed the following refinements to the RUC-recommended direct 
PE inputs for CPT codes 93350 and 93351. For both codes, we applied the 
standard formula in developing the minutes for equipment item ED053 
(professional PACS workstation), which results in 18 minutes for CPT 
code 93350 and 25 minutes for CPT code 93351. We also proposed standard 
clinical labor times for providing preservice education/obtaining 
consent. We did not propose to include clinical labor time for the task 
setup scope since there is no scope used in the procedure and we did 
not agree with the RUC's statement that this replicates 5 minutes in 
CPT code 93015 when the RN prepares patients for 10-lead ECG. We found 
that there was no corresponding time of 5 minutes for setup scope in 
the PE inputs for CPT code 93015. We proposed refinements to the 
equipment time for ED050 (PACS workstation proxy) for CPT code 93351, 
consistent with our standard equipment times for PACS Workstation 
Proxy.
    Comment: Commenters generally supported our proposed work RVUs for 
CPT codes 93350 and 93351, which are remaining unchanged from CY 2017.
    Response: We appreciate the feedback from stakeholders and we are 
finalizing work RVUs for these two codes, as proposed.
    Comment: Several commenters, including the RUC, disagreed with our 
proposed refinements to PE inputs, particularly with regard to changes 
in the equipment time to conform to established policies for non-highly 
technical equipment and PACS workstations.
    Response: We note that these refinements are in accordance with the 
standards and formulas for equipment related to direct PE inputs as 
described in the CY 2015 PFS final rule with comment period (79 FR 
67557). Therefore, we are finalizing the PE inputs and refinements for 
CPT 93350 and 93351 as proposed.
(44) Peripheral Artery Disease (PAD) Rehabilitation (CPT Code 93668)
    We have issued a national coverage determination (NCD) for Medicare

[[Page 53066]]

coverage of supervised exercise therapy (SET) for the treatment of 
peripheral artery disease (PAD). Information regarding the NCD can be 
found on the CMS Web site at https://www.cms.gov/medicare-coverage-database/details/nca-decision-memo.aspx?NCAId=287. CPT code 93668, 
currently assigned PROCSTAT N (noncovered service by Medicare), will be 
payable before the end of CY 2017, retroactive to the effective date of 
the NCD to implement payment under the NCD.
    For CY 2018, we proposed to make payment for Medicare-covered SET 
for the treatment of PAD, consistent with the NCD, reported with CPT 
code 93668. For CPT code 93668, we proposed to use the most recent RUC-
recommended work and direct PE inputs. We are also sought comment on 
the coding structure and valuation assumptions. Since the RUC has not 
reviewed CPT code 93668 since 2001, we sought comments on the direct PE 
inputs assigned to the code, which appear in the direct PE input 
database. We also noted that CPT code 93668 is a PE-only code and does 
not include physician work.
    CPT prefatory language states that CPT code 93668 may be separately 
reported with appropriate E/M services, including office and/or 
outpatient services (CPT codes 99201 through 99215), initial hospital 
care (CPT codes 99221 through 99223), subsequent hospital care (CPT 
codes 99231 through 99233), and critical care services (CPT codes 99291 
through 99292). Our understanding of CPT's prefatory language is that 
these E/M codes may only be billed when review or exam of the patient 
is medically indicated and must conform to all existing E/M 
documentation requirements. E/M visit codes should not be billed to 
account for supervision of SET for the treatment of PAD by a physician 
or other qualified healthcare practitioner. We sought comments on 
whether to develop professional coding to reflect the supervision of 
clinical staff, and on the potential overlap with CPT code 99211 
(Office or other outpatient visit for the evaluation and management of 
an established patient, that may not require the presence of a 
physician or other qualified health care professional. Usually, the 
presenting problem(s) are minimal. Typically, 5 minutes are spent 
performing or supervising these services.) and any distinctions between 
time spent by clinical staff for CPT code 99211 and time spent by 
clinical staff for CPT code 93668.
    Comment: Commenters were supportive of CMS' proposal to make CPT 
code 93668 active for CY 2018 and payable before the end of CY 2017, 
retroactive to the effective date of the NCD, to facilitate separate 
payment for SET. The RUC responded to CMS' request for comment on the 
coding structure and the valuation assumptions by stating that it 
intends to work with the specialty societies through the CPT Editorial 
Panel and the RUC process to evaluate both. The RUC recommended 
maintaining current PE inputs until they provide recommendations for CY 
2019.
    Response: We will be maintaining the current PE inputs until we 
receive a new recommendation from the RUC.
    Comment: One commenter stated that advanced practice providers, 
such as nurse practitioners, clinical nurse specialists, or physician 
assistants, should be able to refer patients for SET. This commenter 
noted that these practitioners are often relied up to provide referrals 
and education for patients.
    Response: Under the conditions of the NCD, beneficiaries must have 
a face-to-face visit with the physician responsible for the overall PAD 
treatment to obtain a referral for SET.
    After consideration of these public comments, we are finalizing the 
RUC-recommended values for CPT code 93668, as proposed.
(45) INR Monitoring (CPT Codes 93792 and 93793)
    In October 2015, AMA staff assembled a list of all services with 
total Medicare utilization of 10,000 or more that have increased by at 
least 100 percent from 2008 through 2013, and these services were 
identified on that list. The RUC recommended that HCPCS codes G0248, 
G0249 and G0250, which describe related INR monitoring services, be 
referred to the CPT Editorial Panel to create Category I codes to 
describe these services.
    For CY 2018, the CPT Editorial Panel is deleting CPT codes 99363 
and 99364 and creating new CPT codes 93792 (Patient/caregiver training 
for initiation of home INR monitoring under the direction of a 
physician or other qualified health care professional, including face-
to-face, use and care of the INR monitor, obtaining blood sample, 
instructions for reporting home INR test results, and documentation of 
patient's/caregiver's ability to perform testing and report results) 
and 93793 (Anticoagulant management for a patient taking warfarin, must 
include review and interpretation of a new home, office, or lab 
International Normalized Ratio (INR) test result, patient instructions, 
dosage adjustment (as needed), and-scheduling of additional test(s) 
when performed). CPT code 93792 is a technical component-only code. 
With the creation of CPT codes 93792 and 93793, the RUC recommended 
that CMS delete HCPCS codes G0248, G0249 and G0250.
    For CPT code 93793, we proposed the RUC-recommended work RVU of 
0.18. Because HCPCS codes G0248, G0249 and G0250 are used to report 
related services under a Medicare National Coverage Determination, we 
did not propose to delete the G-codes.
    In reviewing the recommended PE inputs for these services, we 
obtained updated invoices for prices for particular items. We proposed 
to use the invoices to update the price of the supply ``INR test 
strip'' (SJ055). We obtained publically available pricing information 
from two vendors. The pricing from one vendor indicated the price for a 
box of 24 of supply item SJ055 item (INR test strip) is $150.00, which 
equated to a unit price of $6.25. Pricing from a second vendor 
indicated the price of a box of 48 of the supply item SJ055 to be 
$233.00, which equated to a unit price of $5.06. The average price of 
these two unit prices is $5.66.
    Therefore, we proposed to re-price SJ055 from $21.86 to $5.66 for 
CPT code 93792. We sought public comments on current pricing for the 
INR test strip supply.
    Comment: In general, commenters were supportive of our proposal of 
the RUC-recommended work RVUs.
    Response: We appreciate the commenters' feedback. We continue to 
welcome information from all interested parties regarding valuation of 
services for consideration through our rulemaking process.
    Comment: The RUC noted that it agreed with CMS' proposal to update 
the price of the thirteen supplies and one equipment item listed on 
Table 14: CY 2018 Proposed Rule Invoices Received for Existing Direct 
PE Inputs of the CY 2018 proposed rule (82 FR 34078).
    Response: We thank the RUC for its support and note that the re-
price of supply item SJ055 was included in Table 14: CY 2018 Proposed 
Invoices Received for Existing Direct PE Inputs of the CY 2018 proposed 
rule (82 FR 34078).
    Comment: A commenter disagreed with our proposed re-pricing of 
SJ055, noting that it would result in an RVU reduction of almost 50 
percent for HCPCS codes G0248 and G0249, which would adversely impact 
access to these services.
    This commenter discussed ``home-use'' vs ``professional-use only'' 
INR test strips, noting that the method CMS used to re-price SJ055 was 
incorrect because

[[Page 53067]]

the pricing information was based on two vendors who were selling 
``professional-use only'' strips in units of 24 and 48. The commenter 
provided publicly available pricing information and recommended that we 
re-price the INR test strip to $20.31 per unit, inclusive of $1.85 per 
unit for shipping.
    Response: In reviewing the publicly available pricing information 
provided by the commenter, the price for a box of 6 INR test strips was 
noted at $110.79, which equated to $18.46 per test strip. We note that 
the product did not make a distinction of ``home-use'' or 
``professional-use only''. Furthermore, this was the same product we 
used to propose to re-price the INR test strip, but in a smaller 
quantity. Because we believe it is reasonable to assume that an 
efficient practice would be more likely to purchase the same supply in 
a larger quantity in order to take advantage of a significantly lower 
unit price for that supply, we are not including this price in our 
valuation of the INR test strip.
    Furthermore, given that beneficiaries are generally responsible for 
paying cost-sharing, the re-price of $20.31 recommended by the 
commenter would increase beneficiary cost-sharing. Also, as discussed 
in the CY 2017 PFS final rule (81 FR 80525), after reviewing the public 
comments in response to the CY 1998 PFS 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).
    Comment: Several commenters noted that the RVUs used to support the 
ongoing provision of INR Test Materials/Equipment (that is, G0249) are 
based on the patient producing 4 test results and not the IDTF simply 
providing 4 test strips. These commenters recommended the inclusion of 
6 to 7 or more test strips for this service. One commenter noted that 
in order to produce 4 test results, IDTFs must provide a sealed vial of 
6 test strips and that two additional strips are used to allow patients 
to re-confirm critical out of range (or aberrant) test results before 
their physician alters therapy.
    Response: The commenter did not provide, nor were we able to find, 
documentation to support the requirement for a sealed vial of 6 test 
strips.
    After consideration of the comments received, we will finalize the 
re-price of SJ055 as proposed, and increase the number of INR test 
strips by two as recommended by commenters.
    Comment: One commenter noted that the supply ``INR test strip'' 
(SJ055) is categorized as ``Pharmacy, Non-Rx'' but should be more 
accurately categorized as ``Pharmacy, Rx''.
    Response: Historically, this supply item has been categorized as 
``Pharmacy, Non-Rx''. We note that the internal use of this 
categorization does not have an impact on how this supply is priced 
under the PFS.
    After consideration of the comments received, we will finalize the 
re-price of SJ055 as proposed, but will increase the number of INR test 
strips by two, as recommended by commenters. We will also increase the 
number of lancets and alcohol swab-pads by two each, which we believe 
are typically used to furnish this service. For CPT code 93793, we are 
finalizing the RUC-recommended work RVU of 0.18 for CY 2018, as 
proposed.
(46) Pulmonary Diagnostic Tests (CPT Codes 94621, 94617, and 94618)
    CPT code 94620 was identified as part of a screen of high 
expenditure services with Medicare allowed charges of $10 million or 
more that had not been recently reviewed. CPT code 94621 was added to 
the family for review. The CPT Editorial Panel deleted CPT code 94620 
and split it into two new codes, CPT codes 94617 and 94618, to describe 
two different tests commonly performed for evaluation of dyspnea. We 
proposed the RUC-recommended work RVUs of 1.42 for CPT code 94621, 0.70 
for CPT code 94617, and 0.48 for CPT code 94618.
    We proposed to refine the clinical labor time for the ``Provide 
preservice education/obtain consent'' activity from 10 minutes to 5 
minutes for CPT code 94621, which is the current time assigned for this 
task. While we agree that CPT code 94621 requires additional time above 
the standard for this clinical labor activity, we do not believe that 
double the current time would be typical for this procedure. We also 
proposed to refine the clinical labor time for the ``Prepare and 
position patient/monitor patient/set up IV'' activity from 5 minutes to 
3 minutes for the same code. The standard time for this activity is 2 
minutes, and we proposed a value of 3 minutes to reflect 1 minute of 
additional preparation time above the standard. We believed that 
additional clinical labor time used for preparation would be included 
under the 10 minutes assigned to the ``Prepare room, equipment, 
supplies'' activity for this code.
    We proposed to refine the clinical labor time for the ``Complete 
diagnostic forms, lab & X-ray requisitions'' activity, consistent with 
the standard clinical labor time for this activity. We also proposed to 
refine the equipment times for CPT codes 94621 and 94617 to account for 
1:4 patient monitoring time, and to refine the equipment times for CPT 
code 94618 consistent with standards for non-highly technical 
equipment.
    We considered refining the clinical labor time for the ``pre 
exercise ECG, VC, Min Vent. Calculation'' activity from 27 minutes to 
15 minutes for CPT code 94621. We considered proposing this value of 15 
minutes based on assigning 5 minutes apiece for the ECG, the MVV, and 
the spirometry. We believed that each of these three components of this 
clinical labor activity would typically take no longer than 5 minutes 
based on a comparison to the use of these tasks in other CPT codes. We 
also considered refining the clinical labor time for the ``Clinical 
staff performs procedure'' activity from 55 minutes to 35 minutes for 
CPT code 94617 and from 14 minutes to 12 minutes for CPT code 94621. 
The RUC-recommended materials for the PE inputs state that this 
clinical labor task consists of performing 5 spirometries at 9 minutes 
each plus 10 minutes of exercise time for CPT code 94617; we believed 
that the spirometries typically take 5 minutes each, which would reduce 
this activity from 55 minutes to 35 minutes. For CPT code 94621, we 
considered maintaining the current value of 12 minutes due to a lack of 
justification for increasing the time to 14 minutes.
    While we remained concerned about the intraservice period clinical 
labor times, for CY 2018, we proposed the RUC-recommended work RVUs for 
each code in this family and sought comment on whether our alternative 
clinical labor times would better reflect the work and times for these 
services.
    Comment: The commenters supported the proposed values for all three 
of the codes but disagreed with the alternative values.
    Response: We continue to welcome information from all interested 
parties regarding valuation of services for consideration through our 
rulemaking process. We will continue to consider alternative work RVUs 
as we propose the valuation of services for future notice and comment 
rulemaking.
    Comment: Several commenters disagreed with the proposal to refine 
the clinical labor time for the ``Provide preservice education/obtain 
consent'' activity from 10 minutes to 5 minutes

[[Page 53068]]

for CPT code 94621. Commenters stated that the explanation to the 
patient involves a back and forth discussion that is important for 
obtaining an accurate test for the patient, and this education cannot 
be rushed. The commenters indicated that sufficient time for informed 
consent is also important since exercising to maximal capacity does 
have risks, including death, and testing may include additional 
invasive procedures which require additional and adequate explanation 
to the patient.
    Response: We agree that there is an important need for preservice 
education and that this service requires additional clinical labor time 
beyond the standard. However, the standard time for this clinical labor 
activity is 3 minutes, and CPT code 94621 is currently receiving 
additional time beyond the standard with 5 minutes of allocated 
clinical labor time. We continue to believe that increasing the 
clinical labor time for preservice education above the current 
valuation would not be typical for this procedure.
    Comment: Several commenters disagreed with the proposal to refine 
the clinical labor time for the ``Prepare and position patient/monitor 
patient/set up IV'' activity from 5 minutes to 3 minutes for the same 
code. Commenters stated that any breakdown in monitoring or IV access 
during the test itself adversely impacted the ability to interpret the 
test due to a lack of full and continuous data, and could also impact 
the validity of the test if the patient exercise were interrupted for 
any reason. Commenters explained that it takes more than the standard 
time to set up patient with 10 ECG leads and a blood pressure cuff, fit 
the patient with a face mask ensuring tight seal, and position on the 
bicycle ergometer.
    Response: After reviewing this additional information, we agree 
with the commenters that 5 minutes would be typical to conduct the 
positioning as described. We are finalizing a clinical labor time of 5 
minutes for the ``Prepare and position patient/monitor patient/set up 
IV'' clinical labor activity for CPT code 94621.
    Comment: Several commenters disagreed with the proposal to refine 
the clinical labor time for the ``Complete diagnostic forms, lab & X-
ray requisitions'' activity to 3 minutes, consistent with the standard 
clinical labor time for this activity. Commenters stated that the 
technician had to summarize over 40 pages of data and compile reports 
for physician to interpret, including ECG and spirometries.
    Response: We continue to believe that 3 minutes would be typical 
for three codes, consistent with the standard clinical labor time for 
this activity. We did not receive any information from the commenters 
to suggest that the standard clinical labor time would not be typical 
for these services.
    Comment: Several commenters disagreed with the proposed refinements 
to the equipment time for these three codes. Commenters stated that CMS 
proposed the use of a 1:4 patient monitoring time rather than the RUC 
recommended 1:1 time. Commenters explained that patients recover in the 
testing room, not a separate room, while technologists are cleaning 
equipment, and therefore the equipment time could not be a 1:4 ratio 
because the typical procedure environment allowed only one patient in 
one room.
    Response: We believe that the specific refinement comment used for 
the equipment time in CPT codes 94621 and 94617 (Refined equipment time 
to conform to established policies for equipment with 4x monitoring 
time) may have been misinterpreted by the commenters. This specific 
comment was intended to convey only that the equipment times were 
adjusted in accordance with our standard equipment time formulas. In 
the specific context of CPT codes 94621 and 94617, this refinement 
comment indicated that we did not include the clinical labor time for 
``Complete diagnostic forms, lab & X-ray requisitions'' into the 
equipment times for these two codes, as this clinical labor activity is 
not part of our standard equipment formula and we do not believe that 
equipment such as the pulse oximeter would typically be in use while 
completing forms. Aside from the removal of this single clinical labor 
activity's time, the proposed equipment time formula for these two 
codes was the same as the RUC-recommended equipment time formula. We 
were not conveying a clinical judgment about the use of 1:4 patient 
monitoring time as opposed to 1:1 patient monitoring time for these 
services. However, we do note that the RUC's recommendations for CPT 
codes 94621 and 94617 include the clinical labor activity ``Monitor pt. 
following procedure/check tubes, monitors, drains, multitasking 1:4'', 
which led us to believe that 1:4 patient monitoring time was in use for 
these services. If we were to adopt 1:1 patient monitoring time for 
these services, we note that this would reduce the equipment times for 
CPT code 94621 by 22 minutes and for CPT code 94617 by 6 minutes. After 
consideration of the comments, we are finalizing the 1:4 patient 
monitoring time.
    After consideration of comments received, for CY 2018, we are 
finalizing the work RVUs for the codes in the pulmonary diagnostic 
tests family as proposed. We are finalizing the direct PE inputs for 
these codes as proposed along with the refinements detailed above in 
response to the comments.
(47) Percutaneous Allergy Skin Tests (CPT Code 95004)
    In the CY 2016 PFS proposed rule (80 FR 41706), CPT code 95004 was 
identified through the high expenditures screen as potentially 
misvalued. The RUC suggested in its comments on the CY 2016 PFS 
proposed rule (80 FR 41706), that CPT code 95004 should be removed from 
the list of potentially misvalued codes because it has a work RVU of 
0.01 and that it would serve little purpose to survey physician work 
for this code. The RUC and CMS previously determined that there is 
physician work involved in providing this service since the physician 
must interpret the test and prepare a report. In the CY 2016 PFS final 
rule with comment period (80 FR 70913), CMS reiterated an interest in 
the review of work and PE for this service.
    We note that our interest in stakeholder review of a particular 
code should not be considered a directive for survey under the RUC 
process. We intend to more clearly state our interests in the future, 
so that under similar circumstances, such effort need not be undertaken 
based on a mistaken impression. To reiterate, we believed that whether 
or not a code should be surveyed in response to our interest in 
receiving recommendations regarding the work RVUs should be at the 
discretion of the RUC and the specialty societies. In many cases, we 
have used recommendations developed through means other than surveys in 
developing RVUs. For example, for many PFS services, the direct PE 
inputs are the primary drivers of overall RVUs and Medicare payment. In 
most of these cases, the recommended inputs are not derived from survey 
data. In some cases, especially for resource-intensive and highly 
technical services, we have expressed some concern about the lack of 
survey or other broad-based data that we have relied on in developing 
rates across the PFS for many years.
    For CY 2018, we proposed the RUC-recommended work RVU of 0.01 for 
CPT code 95004.
    Regarding direct PE inputs, we proposed to refine the equipment 
times for the ``exam table'' (EF023) and the ``mayo stand'' (EF015) to 
79 minutes

[[Page 53069]]

each to account for clinical 1:4 patient monitoring time. We received 
invoices with new pricing information for two supplies: SH101 
``negative control, allergy test'' ($5.17) and SH102 ``positive 
control, allergy test'' ($26.12). Using this information, we proposed a 
price of $0.03 per test for supply item SH101 and a price of $0.13 per 
test for supply item SH102.
    Comment: In general, commenters were supportive of our proposal of 
the RUC-recommended work RVUs.
    Response: We will continue to consider alternative work RVUs as we 
propose the valuation of services for future notice and comment 
rulemaking. We appreciate the commenter's feedback.
    Comment: Several commenters noted that they would expect that CMS 
will phase in reductions for this service.
    Response: The payment reductions for CPT code 95004 are subject to 
the phase-in. We note that the CY 2018 PFS Final Rule List of Codes 
Subject to Phase-in is available on the CMS Web site under the 
downloads section of the CY 2018 PFS final rule at https://www.cms.gov/Medicare/Medicare-Fee-for-;Service-Payment/PhysicianFeeSched/PFS-
Federal-Regulation-Notices.html. For a more detailed description of the 
methodology for the phase-in of significant RVU changes, we refer 
readers to the CY 2016 PFS final rule with comment period (80 FR 
70927).
    After consideration of the comments received, we are finalizing the 
work RVUs and PE inputs for CPT code 95004, as proposed.
(48) Continuous Glucose Monitoring (CPT Codes 95250, 95251, and 95249)
    CPT codes 95250 (Ambulatory continuous glucose monitoring of 
interstitial tissue fluid via a subcutaneous sensor for a minimum of 72 
hours; sensor placement, hook-up, calibration of monitor, patient 
training, removal of sensor, and printout of recording) and 95251 
(Ambulatory continuous glucose monitoring of interstitial tissue fluid 
via a subcutaneous sensor for a minimum of 72 hours; interpretation and 
report) are used to report the technical and professional component for 
continuous glucose monitoring. In April 2013, CPT code 95251 was 
identified through the high volume growth services screen and 
subsequently this code family was reviewed at the RUC's October 2016 
meeting.
    For CY 2018, we proposed the RUC-recommended work RVU of 0.70 for 
CPT code 95251. However, we were concerned and sought comments on 
whether the 2 minutes of physician preservice time was necessary. Since 
CPT code 95251 is typically billed with an E/M service on the same day, 
we believed the 2 minutes of preservice time may be duplicative. 
Furthermore, we sought comment on whether it would be typical for the 
physician to spend 2 minutes to obtain the CGM reports for review since 
we believed the report would typically be obtained by clinical staff on 
behalf of the physician.
    For the direct PE inputs, the RUC submitted 19 invoices to update 
the price of the medical supply item ``glucose monitoring 
(interstitial) sensor'' (SD114) for CPT code 95250. We proposed to use 
these invoice prices for the glucose monitoring (interstitial) sensor 
(SD114), with an average cost of $53.08. Therefore, we proposed to use 
the average price of $53.08 for this supply item.
    As part of our review of this service, we obtained publicly 
available pricing information for the CGM system (EQ125). We reviewed 
the information provided in a study titled, ``The cost-effectiveness of 
continuous glucose monitoring in type 1 diabetes,'' (Huang, SE., 
O'Grady, M., Basu, A. et al., Diabetes Care. June 2010), which 
indicated the price of CGM technology (without sensors) from 3 
different vendors, reflective of full retail prices with no insurer 
discounts, to be $600.00, $1119.00, and $1250.00, which equated to an 
average cost of $1016.00 for the CGM system. In addition, we obtained 
publicly available pricing information for two vendors. This 
information indicated the price of a CGM system to be $1061.90 and 
$1279.17, which equated to an average cost of $1170.54. For CY 2018, we 
proposed to price supply items SD114 at $53.08 and EQ125 at $1170.54. 
We sought comments on current pricing for equipment item ``continuous 
glucose monitoring system'' (EQ125).
    Comment: In general, commenters were supportive of our proposal of 
the RUC-recommended work RVUs. Some expressed opposition to the 
alternative work RVUs.
    Response: We will continue to consider alternative work RVUs as we 
propose the valuation of services for future notice and comment 
rulemaking.
    Comment: The RUC noted that the CPT Editorial Panel indicated that 
the new PE-only CPT code 95249 (Ambulatory continuous glucose 
monitoring of interstitial tissue fluid via a subcutaneous sensor for a 
minimum of 72 hours; patient-provided equipment, sensor placement, 
hook-up, calibration of monitor, patient training, and printout of 
recording), along with CPT codes 95250 and 95251 (with editorial 
revisions), will appear in the 2018 CPT coding manual. The RUC 
requested an exemption to CMS's policy to propose values in the 
proposed rule for all RUC recommendations that we receive by the 
February 10th deadline each year, and asked that we include CPT code 
95249 in the CY 2018 PFS final rule. The RUC recommendations for CPT 
codes 95250 and 95251 were affirmed without change at the April 2017 
RUC meeting. At this same meeting, the RUC developed recommendations 
for the direct PE inputs for the newly approved CPT code 95249, a PE-
only code that is a part of the code family that includes CPT codes 
95250 and 95251. The RUC used the direct PE inputs from CPT code 95250 
to derive the PE inputs for CPT code 95249 by removing PE inputs that 
were not applicable to CPT code 95249. Several other commenters also 
recommended inclusion of CPT code 95249 in the CY 2018 final rule.
    Response: We recognize that the CPT Editorial Panel created CPT 
code 95249, which is part of the family of services described by CPT 
codes 95250 and 95251, in order to accommodate the different ways in 
which this service can be furnished and billed. While we continue to 
believe that the process we established through rulemaking where we 
propose values in the PFS proposed rule and finalize values in the PFS 
final rule is suitable for the vast majority of services that we price 
on the PFS, we believe there is merit to the RUC's request so that we 
can ensure relativity within this code family.
    Comment: The RUC noted that it agreed with CMS' proposal to update 
the price of the 13 supplies and one equipment item listed on Table 14: 
CY 2018 Proposed Rule Invoices Received for Existing Direct PE Inputs 
of the CY 2018 proposed rule (82 FR 34078).
    Response: We appreciate the commenter's feedback.
    After consideration of the comments received, we are finalizing the 
work RVUs and PE inputs for CPT codes 95250 and 95251, as proposed. We 
are also finalizing the PE inputs for CPT code 95249 and will include 
this code in the CY2018 Medicare Physician Fee Schedule.
(49) Parent, Caregiver-Focused Health Risk Assessment (CPT Codes 96160 
and 96161)
    In the CY 2017 PFS final rule (81 FR 80330), we discussed that in 
October 2015, the CPT Editorial Panel created two new PE-only codes, 
CPT code 96160 (Administration of patient focused health risk 
assessment instrument (e.g., health hazard

[[Page 53070]]

appraisal) with scoring and documentation, per standardized instrument) 
and CPT code 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). We assigned an active payment status to both codes for CY 
2017 and finalized use of the RUC recommended values for these codes. 
We also assigned 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. The RUC submitted 
updated recommendations for the direct PE inputs for CPT codes 96160 
and 96161 after reviewing new specialty society surveys. The RUC 
recommended 7 total minutes of clinical staff time, and we proposed to 
adopt this number of minutes in valuing the services. The PE worksheet 
included several distinct tasks with minutes for each; however, in 
keeping with the standardization of clinical labor tasks, we proposed 
to designate all 7 minutes under ``administration, scoring, and 
documenting results of completed standardized instrument'' rather than 
dividing the minutes into the four categories as shown in the RUC 
recommendations.
    Comment: One commenter noted that they appreciate CMS' review of 
these services and agreed with the refinement to aggregate the four 
clinical activities into one direct PE input.
    Response: We appreciate the comment.
    After consideration of the public comment, we are finalizing the 
direct PE inputs for CPT codes 96160 and 96161, as proposed.
(50) Chemotherapy Administration (CPT Codes 96401, 96402, 96409, and 
96411)
    In the CY 2016 PFS proposed rule, CPT codes 96401 (Chemotherapy 
administration, subcutaneous or intramuscular; non-hormonal anti-
neoplastic), 96402 (Chemotherapy administration, subcutaneous or 
intramuscular; hormonal anti-neoplastic), 96409 (Chemotherapy 
administration; intravenous, push technique, single or initial 
substance/drug), and 96411 (Chemotherapy administration; intravenous, 
push technique, each additional substance/drug (List separately in 
addition to code for primary procedure)) were identified through the 
high expenditure services screen across specialties with Medicare 
allowed charges of over $10 million.
    For CY 2018, we proposed the RUC-recommended work RVUs of 0.21 for 
CPT code 96401, 0.19 for CPT code 96402, 0.24 for CPT code 96409, and 
0.20 for CPT code 96411.
    For CPT code 96402, we proposed the RUC-recommended equipment times 
with refinements for the biohazard hood (EP016) and exam table (EF023) 
from 31 minutes to 34 minutes to reflect the service period time 
associated with this code. We proposed the RUC-recommended direct PE 
inputs for CPT codes 96401, 96409, and 96411 without refinements.
    Comment: In general, commenters were supportive of our proposal of 
the RUC-recommended work RVUs and RUC-recommended PE inputs for these 
services. One commenter noted that maintaining the recommended 
physician work RVUs will promote fair and adequate reimbursement and 
protect patient access.
    Response: We appreciate the commenter's feedback.
    Comment: One commenter noted that there are no acuity adjustments 
for chemotherapy or infusion services. The commenter further noted that 
CMS could enact site-of-service neutrality for payment of these codes 
in addition to adding acuity adjustment modifiers to reflect more 
intensive care given to some patients.
    Response: We refer readers to section II.G. of this final rule for 
more information on site neutrality regarding payment rates under the 
Medicare physician fee schedule for nonexcepted items and services 
furnished by nonexcepted off-campus provider-based departments of a 
hospital. With regard to acuity adjustments for chemotherapy or 
infusion services, we will consider whether to propose such adjustments 
in future notice and comment rulemaking.
    Comment: Several commenters supported our proposed equipment times 
for the biohazard hood and the exam table to reflect the service period 
time associated with CPT code 96402. One commenter noted support for 
our proposal of the RUC-recommended PE inputs for the other three 
services in this code family.
    Response: We appreciate the comments. We note that the PE inputs 
for these services are displayed in the CY 2018 PFS final rule direct 
PE input database, available on the CMS Web site under the downloads 
for the CY 2018 PFS final rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    Comment: Several commenters expressed concern with our proposed 
reductions in payment for many drug administration codes. Commenters 
stated that the payment for CPT code 96402 would be reduced by almost 
12 percent and that these reductions could harm access to care, 
especially in rural settings, and they urged CMS not to implement them. 
Furthermore, they noted that if CMS implemented the proposed payment 
reductions, that it would be essential to monitor patient access to 
care.
    Response: We share the concern of the commenters in maintaining 
access to care for Medicare beneficiaries. We continue to carefully 
consider the impact that our valuation of these services will have on 
beneficiary access to care. We note that we believe that improved 
payment accuracy under the PFS generally facilitates access to 
reasonable and necessary physicians' services. The statute requires us 
to establish payments under the PFS based on national uniform RVUs that 
account for the relative resources used in furnishing a service. We 
proposed the RUC-recommended PE inputs for this family of services, 
which were based on the expertise of the RUC. We believe that the RUC 
recommendations appropriately reflect the resource costs of furnishing 
the services and thus would result in appropriate valuation of these 
services.
    Comment: One commenter noted the importance of ensuring that 
chemotherapy treatments are funded and allowed to continue in order to 
sustain life.
    Response: We are appreciative of the commenter's perspective and 
share the commenter's concern in maintaining access to care for 
Medicare beneficiaries. We did not make any proposals and are not 
finalizing any policies to limit Medicare coverage of these services. 
These services will be payable under the PFS for CY 2018.
    Comment: One commenter noted that it was aware that CMS is 
researching how to minimize payment differentials between hospital-
based infusion centers and practice infusion centers. The commenter 
also noted that the coding nomenclature used for both chemotherapy and 
infusion services do not have acuity adjustments. Another commenter 
noted that the RVU supervision credit is only given for practice-based 
infusion centers and not when the service is provided in the facility, 
where many of these complicated infusions take place. They noted that 
RVU supervision of these chemotherapy and infusion services

[[Page 53071]]

should be usable by both providers and facility providers.
    Response: For more information on how CMS is researching how to 
minimize payment differentials between hospital-based infusion centers 
and practice infusion centers, we refer readers to section II.G of this 
final rule for more information on payment rates under the Medicare 
physician fee schedule for nonexcepted items and services furnished by 
nonexcepted off-campus provider-based departments of a hospital.
    After consideration of comments received, we are finalizing the 
work RVUs and PE inputs for CPT codes 96401, 96402, 96409, and 96411, 
as proposed.
(51) Photochemotherapy (CPT Code 96910)
    CPT code 96910 appeared on a high expenditure services screen 
across specialties with Medicare allowed charges of over $10 million. 
It is a PE-only code that does not have a work RVU.
    We proposed to refine the clinical labor time for the ``Provide 
preservice education/obtain consent'' activity from 3 minutes to 1 
minute for CPT code 96910. We believed that 1 minute would be typical 
for patient education, as CPT code 96910 is a repeat procedure where 
there would not be a need to obtain consent again. We also proposed to 
remove the 2 minutes of clinical labor for the ``Complete diagnostic 
forms, lab & X-ray requisitions'' activity, as this item is considered 
indirect PE under our established methodology. We proposed to create a 
new supply code (SB054) for the sauna suit, and proposed to price at 
$9.99 based on the submitted invoice. Finally, we also proposed to 
adjust the equipment times to reflect changes in the clinical labor for 
CPT code 96910.
    We proposed the RUC-recommended clinical labor time of 15 minutes 
for the ``Prepare and position patient/monitor patient/set up IV'' 
activity, the RUC-recommended clinical labor time of 16 minutes for the 
``Monitor patient during procedure'' activity, and the RUC-recommended 
clinical labor time of 15 minutes for the ``Clean room/equipment by 
physician staff'' activity, but we sought additional information 
regarding the rationale for these values. Given the lack of 
explanation, we considered using the current clinical labor time of 7 
minutes for the ``Prepare and position patient/monitor patient/set up 
IV'' activity, the current clinical labor time of 4 minutes for the 
``Monitor patient during procedure'' activity, and the current clinical 
labor time of 10 minutes for the ``Clean room/equipment by physician 
staff'' activity. We sought comment on whether maintaining the current 
values would improve relativity.
    We considered removing the ``Single Patient Discard Bag, 400 ml'' 
(SD236) supply and replacing it with the ``biohazard specimen transport 
bag'' (SM008). We were concerned about whether the single patient 
discard bag is the appropriate size for storing the sauna suit used in 
this procedure, and whether use of a biohazard specimen transport bag 
would be typical. We sought comments on our proposed and alternative 
values for these direct PE inputs.
    Comment: Several commenters supported the proposed values for CPT 
code 96910 but disagreed with the alternative values.
    Response: We continue to welcome information from all interested 
parties regarding valuation of services for consideration through our 
rulemaking process.
    Comment: One commenter disagreed with the proposal to refine the 
clinical labor time for the ``Provide preservice education/obtain 
consent'' activity from 3 minutes to 1 minute. The commenter stated 
that the preservice education needed for this procedure takes longer 
due to the nature of the procedure, as the staff needs to provide very 
specific instructions to insure the safety and comfort of the patients 
while they are in the ultraviolet treatment unit receiving treatment.
    Response: After reviewing this additional information, we agree 
with the commenter that 3 minutes would be typical to conduct the 
preservice education as described. Therefore, we are finalizing a 
clinical labor time of 3 minutes for the ``Provide preservice 
education/obtain consent'' clinical labor activity for CPT code 96910.
    Comment: One commenter disagreed with the proposal to remove the 2 
minutes of clinical labor time for the ``Complete diagnostic forms, lab 
& X-ray requisitions'' activity. The commenter stated that the 
subjective, objective, assessment, and plan notes needs to be completed 
for each patient.
    Response: We agree with the commenter that these diagnostic forms 
need to be filled out for each patient. However, this activity is 
considered indirect PE under our established methodology and is 
included in the administrative costs of the service. Filling out forms 
or restocking shelves are necessary tasks, but they are not 
individually allocable to a service and therefore fall under the 
category of indirect PE.
    Comment: One commenter disagreed with the proposal to adjust the 
equipment times to reflect changes in the clinical labor. The commenter 
did not provide a rationale for this disagreement, other than restating 
its opposition to the removal of the clinical labor time and the other 
proposed refinements.
    Response: Over the past decade, the increasing standardization of 
clinical labor tasks has resulted in greater transparency and 
consistency in the assignment of equipment minutes based on clinical 
labor times. We currently utilize a series of standard formulas for 
equipment time, which are calculated based on the clinical labor 
activities in which the equipment would typically be in use. When the 
clinical labor for a procedure is altered in response to a proposal, we 
will typically alter the equipment time for that procedure as well to 
reflect the changes in clinical labor time, assuming of course that the 
equipment in question would typically be utilized during that clinical 
labor activity. We proposed to decrease the equipment time for CPT code 
96910 in accordance with the changes in the proposed clinical labor 
time, and we have no reason to believe that the standard equipment time 
formulas would be inapplicable for this service. We also note that as a 
result of the increase in the clinical labor time for the ``Obtain 
vital signs'' activity from 3 minutes to 5 minutes, the final equipment 
time for everything other than the phototherapy UVB measuring device 
(EQ203) is 67 minutes, the same equipment time contained in the RUC's 
recommendations.
    After consideration of comments received, we are finalizing the 
direct PE inputs for CPT code 96910 as proposed, with the exception of 
the change to the ``Provide preservice education/obtain consent'' 
clinical labor activity, as detailed above.
(52) Photodynamic Therapy (CPT Codes 96567, 96573, and 96574)
    CPT code 96567 was identified as potentially misvalued through a 
CMS screen for codes with high expenditures. This code describes a 
service furnished by clinical staff and does not include physician 
work. For CY 2018, the CPT Editorial Panel created two new codes, CPT 
codes 96573 and 96574, to describe photodynamic therapy by external 
application of light to destroy premalignant skin lesions, including 
the physician work involved in furnishing the service. CPT codes 96567, 
96573, and 96574 were reviewed during the RUC's January 2017 meeting.
    For CY 2018, we proposed the RUC-recommended work RVUs for CPT

[[Page 53072]]

codes 96573 (a work RVU of 0.48) and 96574 (a work RVU of 1.01).
    We proposed the RUC-recommended PE inputs with refinements due to 
inconsistencies between the stated description of clinical activities 
and the submitted spreadsheets. First, we proposed to add assist 
physician clinical staff time to CPT codes 96573 (10 minutes) and 96574 
(16 minutes), which is equivalent to the physician intraservice times 
for these services. For both CPT codes 96573 and 96574, we proposed a 
reduction from 35 minutes to 17 minutes for clinical activity in the 
postservice time, consistent with the description of clinical work in 
the summary of recommendations, which states that the patient receives 
activation of the affected area with the BLU-U Photodynamic Therapy 
Illuminator for approximately 17 minutes. For CPT codes 96573 and 
96574, we proposed to refine equipment formulas for two items: Power 
table (EF031) and LumaCare external light with probe set (EQ169), 
consistent with standards for nonhighly technical equipment. An 
explanation of the standards and formulas for equipment related to 
direct PE inputs is in the CY 2014 PFS final rule with comment period 
(79 FR 67557).
    Comment: Several commenters, including the RUC, disagreed with our 
proposal to change the RUC-recommended clinical labor times for CPT 
96573 and 96574 due to inconsistencies between the stated description 
of clinical activities and the submitted spreadsheets. Commenters also 
noted that Table 11 in the CY 2018 PFS proposed rule did not reflect 
these changes.
    Response: We appreciate commenters' attention to this discrepancy. 
In the proposed rule, we wrote that we proposed this change, but as 
commenters pointed out, the proposed refinements were reflected in the 
data presented in Table 11. We are finalizing the RUC recommended PE 
clinical labor times for these two CPT codes. We are finalizing our 
proposal to refine equipment formulas for EF031 and EQ169 for these two 
CPT codes, in accordance with formula standards.
    We identified several vendors with publically available prices for 
supply item LMX 4 percent cream (SH092) for significantly less than the 
existing $1.60 per gram. Based on our research of vendors, we proposed 
to set the price of supply item SH092 to $0.78 per gram. Other CPT 
codes affected by the proposed change in the price of supply item LMX 4 
percent cream (SH092) would be: CPT code 46607 (Anoscopy; with high-
resolution magnification (HRA) (e.g., colposcope, operating microscope) 
and chemical agent enhancement, with biopsy, single or multiple), CPT 
code 17000 (Destruction (e.g., laser surgery, electrosurgery, 
cryosurgery, chemosurgery, surgical curettement), premalignant lesions 
(e.g., actinic keratoses); first lesion), CPT code 17003 (Destruction 
(e.g., laser surgery, electrosurgery, cryosurgery, chemosurgery, 
surgical curettement), premalignant lesions (e.g., actinic keratoses); 
second through 14 lesions, each (List separately in addition to code 
for first lesion)), and CPT code 17004 (Destruction (e.g., laser 
surgery, electrosurgery, cryosurgery, chemosurgery, surgical 
curettement), premalignant lesions (e.g., actinic keratoses), 15 or 
more lesions)).
    In addition, the RUC forwarded an invoice for a new supply item, 
safety goggles, at $6.00 and requested three goggles each for CPT codes 
96573 and 96574. Because we did not have a basis for distinguishing the 
requested new goggles from the existing UV-blocking goggles, we 
considered this invoice to be an additional price point for SJ027 
rather than an entirely new item. We proposed a price of $4.10 for 
supply item SJ027 (the average of the two prices for this supply item 
($2.30 + $6.00)/2 = $4.10)). Other CPT codes affected by the proposed 
change in the price of supply item UV-blocking goggles (SJ027) are: CPT 
code 36522 (Photopheresis, extracorporeal), CPT code 96910 
(Photochemotherapy; tar and ultraviolet B (Goeckerman treatment) or 
petrolatum and ultraviolet B), CPT code 96912 (Photochemotherapy; 
psoralens and ultraviolet A (PUVA)), and CPT code 96913 
(Photochemotherapy (Goeckerman and/or PUVA) for severe photoresponsive 
dermatoses requiring at least 4-8 hours of care under direct 
supervision of the physician (includes application of medication and 
dressings)), CPT code 96920 (Laser treatment for inflammatory skin 
disease (psoriasis); total area less than 250 sq cm), CPT code 96921 
(Laser treatment for inflammatory skin disease (psoriasis); 250 sq cm 
to 500 sq cm), and CPT code 96922 (Laser treatment for inflammatory 
skin disease (psoriasis); over 500 sq cm). We sought comments on our 
proposed PE refinements, including our proposed supply item prices.
    Comment: Commenters generally supported our proposed work RVUs for 
CPT codes 96573 and 96574. Two commenters disagreed with our proposal 
to accept the RUC's recommended PE inputs for the existing CPT code 
96567. They stated that the staff and equipment times for CPT codes 
96567 should mirror the times in CPT code 96573, with the addition of 
10 minutes for staff to apply the photosensitizing agent. As currently 
proposed, the commenters noted that staff times for CPT code 96567 are 
inadequate to perform the service.
    Response: Based on support from commenters on our proposed work 
RVUs for CPT codes 96573 and 96574, we are finalizing those values as 
proposed. We thank commenters for their comments regarding clinical 
labor inputs for CPT code 96567. The RUC provides recommendations 
regarding clinical labor that are developed through a collaborative 
process with specialty societies. The RUC did not, in its comment 
letter, modify recommendations for this CPT code. The RUC has a process 
for identifying potentially missing clinical labor time, and we 
encourage commenters to work in concert with the RUC to resolve those 
concerns.
    Comment: One commenter questioned whether the CPT Editorial Panel 
should have used the same code number as an existing service, rather 
than a new one, to describe the revised service for CPT code 96567.
    Response: In certain circumstances, we may find it necessary to 
deviate from the CPT Editorial Panel's decisions. However, we note that 
CMS does not direct the CPT Editorial Panel and we encourage the 
commenter to follow the panel's established process for reviewing CPT 
codes and descriptors.
    Comment: A few commenters questioned our proposal to refine 
equipment times to confirm to standard formulas. In particular, they 
maintained that the equipment time for the power table should not be 
refined because the patient has to stay on the table during the 
illumination period and the room is not available for other patients' 
use.
    Response: We agree that the power table may be required throughout 
the illumination period, and we would consider the recommendation if 
there were additional information explaining why equipment time for the 
power table included the entire service time plus 3 additional hours. 
However, the total time for the power table formula of 230 minutes and 
232 minutes for CPT codes 96573 and 96574, respectively, was not 
consistent with the narrative accompanying the recommendation. In the 
narrative for both CPT codes, illumination of the affected area is 
approximately 17 minutes with no specific amount of time for incubation 
provided. In the absence of additional information explaining why the 
times are needed, we are finalizing our

[[Page 53073]]

proposed refinement for this and two other equipment items.
    Comment: We received several comments about our proposal to reduce 
the price for supply item LMX 4 percent cream (SH092) from $1.60 to 
$0.78. We also received comments about our proposal to blend the prices 
of two types of goggles, SJ027 and SD326.
    Response: We discuss these supply items and prices in detail in 
section II.B of this final rule.
(53) Physical Medicine and Rehabilitation (PM&R) (CPT Codes 97012, 
97016, 97018, 97022, 97032, 97033, 97034, 97035, 97110, 97112, 97113, 
97116, 97140, 97530, 97533, 97535, 97537, 97542, and HCPCS Code G0283)
    In our CY 2015 PFS final rule with comment period (79 FR 67576) and 
CY 2016 PFS final rule with comment period (80 FR 70917), we identified 
a total of ten codes through the high expenditure by specialty screen 
for services primarily furnished by physical and occupational 
therapists: CPT codes 97032, 97035, 97110, 97112, 97113, 97116, 97140, 
97530, 97535, and HCPCS code G0283. An additional nine codes in this 
PM&R family were identified for review by the physical therapy (PT) and 
occupational therapy (OT) specialty societies: CPT codes 97012, 97016, 
97018, 97022, 97033, 97034, 97533, 97537, and 97542. Many of these code 
values had not been reviewed since they were established in 1994, 1995 
or 1998.
    After review during its January 2017 meeting, the HCPAC submitted 
recommendations to CMS for all 19 codes. While the HCPAC included 
recommendations for CPT code 97014, we note that this is a code we have 
not recognized for PFS payment since 2002 when we implemented our wound 
care electrical stimulation policies. For payment under the PFS, 
instead of CPT code 97014, we recognize HCPCS code G0281 for wound care 
electrical stimulation and HCPCS code G0283 for all other electrical 
stimulation scenarios, when covered. For CY 2018, we proposed the HCPAC 
recommendations for CPT code 97014, HCPCS code G0283, and HCPCS code 
G0281.
    CMS considers all 19 codes as ``always therapy'' which means they 
are always considered to be furnished under a physical therapy (PT), 
occupational therapy (OT), or speech-language pathology (SLP) plan of 
care regardless of who furnishes them and the payment amounts are 
counted towards the appropriate statutory therapy cap--either the 
therapy cap for PT and SLP services combined, or the single therapy cap 
for OT services. These ``always therapy'' codes are also subject to the 
therapy MPPR.
    For CY 2018, we proposed the HCPAC's recommended work RVUs for CPT 
codes 97012, 97016, 97018, 97022, 97032, 97033, 97034, 97035, 97110, 
97112, 97113, 97116, 97140, 97530, 97533, 97535, 97537, 97542, and 
G0283 (97014).
    For supervised modality services reported with CPT codes 97012, 
97016, 97018, and 97022, and HCPCS code G0283 (97014), we considered 
maintaining the current values for these codes rather than the HCPAC 
recommendations. We note that the work times recommended by the HCPAC 
reflect use of the survey data even though the HCPAC explained in its 
recommendations that the survey results were not deemed credible 
because of a lack of evidence to support higher work RVUs of each 
survey's 25th percentile or median values. We note total time decreases 
among these codes ranging from 1 to 8 minutes.
    While we proposed the HCPAC-recommended work RVUs and work times 
for each code in this family, we sought comments on whether maintaining 
the current times, given the HCPAC's lack of confidence in the survey 
data, would better reflect the work times for these services.
    We proposed to maintain the existing CY 2017 PE inputs for all 19 
codes. We noted that section 1848(b)(7) of the Act requires a 50 
percent therapy MPPR instead of the 25 percent therapy MPPR established 
during CY 2011 PFS rulemaking. One of the primary rationales for the 
MPPR policy developed through the rulemaking process was that the 
direct PE inputs for these services did not fully recognize the 
redundant inputs when these services were furnished together, or in 
multiple units. After reviewing the recommended direct PE inputs, it 
was evident that they were developed based on an acknowledgement of the 
efficiencies of services typically furnished together as well as codes 
billed in multiple units. Given this assessment, we believed that were 
we to use the recommended inputs to develop the PE RVUs, the 50 percent 
MPPR on the PE for these services, as required by current law, would 
functionally duplicate the payment adjustments to account for 
efficiencies that had already been addressed through code-level 
valuation. Therefore, for CY 2018, we proposed to retain the existing 
CY 2017 PE inputs for these services and sought comments on whether 
there is an alternative approach that would avoid duplicative downward 
payment adjustments while still allowing for the direct PE inputs to be 
updated to better reflect current practice.
    We noted that we believed that the always therapy codes subject to 
the therapy MPPR on PE are unique from other therapeutic and diagnostic 
procedure codes paid under the PFS and subject to MPPRs. For example, 
unlike most surgical services, these ``always therapy'' codes are 
typically billed either with other therapy codes or in multiple units, 
or both. Generally, MPPRs are used when codes are often, but not 
typically, furnished with other particular codes. When full sets of 
related codes are almost all typically billed with other codes, or 
billed in multiple units, coding and valuation have changed to reflect 
these practices. For example, new codes have been introduced to 
describe combined services or some related services are described by 
add-on codes. In other cases, the MPPR is considered in the valuation 
for individual services.
    The following is a summary of public comments received on our 
proposal to accept the HCPAC-recommended work RVUs for all 19 PM&R 
codes and the request for comment for the supervised modality codes--
CPT codes 97012, 97016, 97018, and 97022, and HCPCS code G0283 
(97014)--to alternatively not accept the work times:
    Comment: We received many comments all of which were in support of 
our proposal to accept the HCPAC-recommended work RVUs for the 19 PM&R 
codes that includes an increase in work RVUs for six of the codes. The 
majority of commenters disagreed with the alternative we considered to 
retain the current work times associated with the five supervised 
modality services, while one commenter agreed. The HCPAC and other 
commenters disagreed and asked us to maintain the proposed 
recommendations in this final rule because they noted that the survey's 
25th percentile time for each of these codes more accurately reflects 
the time necessary to perform the service and takes into account 
efficiencies based on the typical number of services reported per 
session. One commenter asked us to keep the current time values for the 
supervised modality services reported with CPT codes 97012, 97016, 
97018, and 97022, and HCPCS code G0283 (97014) and not accept the 
HCPAC's proposed time values and offered several clinical scenarios for 
some of the supervised modality services they believe demonstrate the 
need for maintaining the current time values for these services.
    Response: We appreciate the many commenters who supported our

[[Page 53074]]

proposal to accept the work RVU recommendations we received from the 
HCPAC for the 19 PM&R codes. While we appreciate the various comments 
we received on our alternative consideration to retain the times 
associated with the work RVUs for the supervised modality codes, we are 
finalizing our proposal to accept the work RVUs, including the times, 
for all 19 PM&R codes.
    The following is a summary of the public comments received as to 
whether there is an alternative approach to our proposal to retain the 
CY 2017 direct PE inputs for always therapy codes that would avoid 
duplicative downward payment adjustments while still allowing for the 
direct PE inputs to be updated to better reflect current practice and 
our responses:
    Comment: Many commenters agreed with our proposal to maintain the 
existing 2017 PE inputs for all 19 PM&R codes. A number of these 
commenters noted the importance of the PE values that reflect the costs 
of maintaining a therapy practice (such as renting office space, buying 
supplies and equipment, and staff salary/benefits). Some of these 
commenters thanked CMS for recognizing that if the recommended inputs 
to develop the PE RVUs were adopted, the 50 percent MPPR on the PE for 
these services would duplicate the payment adjustments to account for 
efficiencies that had already been addressed through the code-level 
valuation process.
    Several other commenters, including the HCPAC, urged us to 
implement the recommended direct PE inputs. In its comment, the HCPAC 
assured CMS that the RUC PE Subcommittee understood the 50 percent MPPR 
and took it into account, in addition to the efficiencies of services 
billed together, when reviewing the direct PE inputs for these 
services. The HCPAC noted in its comment letter that the PE inputs were 
reviewed with the understanding that as a result of the MPPR, a 50 
percent reduction is in place for the second and subsequent reporting 
of a physical medicine and rehabilitation service on the same date of 
service. The HCPAC comment letter clarified that the PE Subcommittee's 
recommendations apply to the 22 codes that are subject to the therapy 
MPPR--the 19 codes in this PM&R section and the three codes for 
orthotic and prosthetic management services (discussed in the below 
section).
    Response: We are persuaded by the HCPAC's reassurance that the PE 
Subcommittee took the 50 percent MPPR into consideration during its 
deliberative process and that the forwarded recommendations reflect the 
therapy MPPR policy, in addition to the efficiencies of services billed 
together. Therefore, we will not finalize our proposal to maintain the 
existing direct PE inputs for therapy codes; instead, we will accept 
the HCPAC recommendations for the direct PE inputs for the 19 PM&R 
codes in this section and the three codes discussed in a subsequent 
section for services related to orthotics and prosthetics management 
and/or training.
    After consideration of comments received, we are finalizing the 
HCPAC-recommended work RVUs, including the times, for all 19 PM&R codes 
as proposed. We are also finalizing to accept the HCPAC recommendations 
for the direct PE inputs for all 19 codes.
(54) Cognitive Function Intervention (CPT Code 97127)
    We received HCPAC recommendations for new CPT code 97127 that 
describes services currently reported under CPT code 97532 (Development 
of cognitive skills to improve attention, memory, problem solving 
(includes compensatory training), direct (one-on-one) patient contact, 
each 15 minutes). CPT code 97532 is scheduled to be deleted for CY 2018 
and replaced by CPT code 97127.
    The existing code is reported per 15 minutes and the new code is 
reported once. Under current coding, Medicare utilization for these 
services is heterogeneous and indicates that practitioners of different 
disciplines incur significantly different resource costs (especially in 
time) when furnishing these services to Medicare beneficiaries. As 
described by both the existing and new code, the service might be 
appropriately furnished both by therapists under the outpatient therapy 
(OPT) services benefit (includes physical therapy (PT), occupational 
therapy (OT) or speech-language pathology (SLP)); and outside the 
therapy benefit by physicians, certain NPPs, and psychologists. As an 
OPT service, it can (1) be billed by physicians, certain NPPs, or 
private practice therapists including physical therapists (PT-PPs), 
occupational therapists (OT-PPs) and speech-language pathologists (SLP-
PPs) in private practice, or (2) be billed by institutional providers 
(for example, skilled nursing facilities, rehabilitation agencies, 
outpatient hospitals, etc.) when furnished by therapists working for 
the institutional providers.
    According to the HCPAC, professional claims data indicate that CPT 
code 97532 was most often billed in 4 units. The HCPAC recommended a 
work RVU of 1.50 for CPT code 97127, which is only 3.4 times greater 
than the work RVU for the predecessor code (0.44). Assuming 
professional billing patterns remain the same, the recommended coding 
and valuation could result in a significant reduction in overall 
Medicare payment under the PFS.
    However, our analysis of the claims data indicates that the number 
of units typically reported for the current code suggests a significant 
difference in the amount of time spent with the patient, depending on 
which discipline (and implicitly under which benefit) bills Medicare 
for services described by this single code.
    Based on our review of claims data by specialty, SLP-PPs, OT-PPs 
and PT-PPs furnishing the same services under the OPT benefit would 
receive overall payment increases due simply to the change in coding 
because they typically bill for fewer than 4 units, while overall 
payment for clinical psychologists furnishing therapeutic interventions 
for cognitive function would decrease because they typically bill in 
units of four or more.
    We sought additional information regarding the potential impact of 
this coding and payment change prior to proposing its use under the 
PFS. For CY 2018, we proposed to maintain the current coding and 
valuation for these cognitive function services. If the CPT Editorial 
Panel deletes the existing CPT code for CY 2018, we would effectuate 
this proposal through use of a new a HCPCS code G-code, G0515, which 
would maintain the descriptor and values from existing CPT code 97532. 
Under this proposal, new CPT code 97127 would be given a procedure 
status of ``I'' (Invalid for Medicare).
    We also noted that this change in coding and payment could have 
significant impact for payment to Medicare institutions for OPT 
services. Under section 1834(k) of the Act, when reported by Medicare 
institutional providers, OPT services are paid at PFS non-facility 
payment rates. Institutional claims data for CPT code 97532 when 
furnished by the three therapist disciplines show a much higher 
utilization overall than that for professional claims, but 
significantly fewer 15 minute units reported. This suggests that 
outpatient therapy professionals generally spend significantly less 
time with patients in the institutional setting. Use of the new CPT 
code could, therefore, result in significant additional expenditure to 
the Medicare program, as well as other payers, including Medicaid 
programs, based on the change in coding alone.

[[Page 53075]]

    The following is a summary of the public comments received on 
additional information regarding the potential impact of this coding 
and payment change prior to its use under the PFS and our responses:
    Comment: The HCPAC and other commenters--after considering CMS 
concerns and an independent review and analysis conducted by the 
speech-language pathology specialty of Medicare Part B facility-based 
claims (using the Medicare 5% Limited Data Set (LDS)) that confirmed 
the same variable billing patterns and higher utilization of CPT code 
97532--generally agreed with our proposal to create HCPCS code G0515 
instead of recognizing CPT code 97127 in the short term and encouraged 
us to work with stakeholders, including the AMA, on a more permanent 
coding solution. These same commenters had expressed concern that CMS 
did not use the data in the same way as the HCPAC and RUC to determine 
the typical units billed, and that moving forward, they would be 
interested to work with CMS to identify exceptional procedure codes 
such as this one where the more commonly used database may be 
misleading.
    Response: We agree that the untimed CPT code 97127 designed to 
replace the 15-minute timed CPT code 97532 represents an 
``exceptional'' procedure code, primarily because it would be covered 
and paid by Medicare under two separate benefits--one for medical 
services and the other for OPT services. It is this uniqueness that 
prompted us to examine the differing billing patterns of the various 
practitioners furnishing these cognitive therapy services as well as 
the overall utilization in all the settings it is reported. Because CPT 
code 97127 would have been reported by institutional providers of OPT 
services and typical units in a same-day billing file is not available, 
our review required us to look at the average units reported by each 
therapy discipline. We appreciate the work of the SLP and psychology 
specialties in completing the HCPAC survey process for CPT code 97127, 
and we thank the HCPAC and the specialty societies for recognizing our 
necessity to develop HCPCS code G0515 to report these cognitive therapy 
services.
    Comment: One commenter expressed concern that our proposal to 
create HCPCS code G0515 instead of adopting CPT code 97127 would result 
in confusion for providers that would have two different codes to 
report for cognitive therapy services: One for Medicare and another for 
private payers. The commenter requested that we use CPT code 97127, 
perhaps with modifiers to account for billing pattern differences, 
unless CMS commits to extensive outreach services to the provider 
community.
    Response: If we were to adopt the new coding and higher payment for 
CPT code 97127, instead of creating HCPCS code G0515 to maintain 
current coding and valuation for these services as we proposed, we 
acknowledge that the institutional providers of OPT services such as 
those represented by this commenter would benefit the most from the 
untimed nature of CPT code 97127, assuming current billing patterns and 
resource use, since therapists in these settings typically furnish 
these services in fewer units. We note that private payers have the 
option to adopt our G-codes for reporting purposes. In addition, the 
coding we proposed for HCPCS code G0515 is identical to that which 
Medicare providers have used in the past for these cognitive therapy 
services. As with all new therapy codes, we will address changes to the 
2018 therapy code list made in this CY 2018 PFS final rule in an 
upcoming Change Request (CR) for the 2018 Annual Update to the Therapy 
Code List, CR 10303, which will be available on the 2017 Transmittals 
Web page at https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017-Transmittals.html.
    Comment: The HCPAC and other commenters pointed out that the 
description of HCPCS code GXXX1 listed in Table 10: Proposed CY 2018 
Work RVUs for New, Revised and Potentially Misvalued Codes of the 
proposed rule, (82 FR 34021) does not reflect CMS' intent to maintain 
the descriptor for CPT code 97532.
    Response: We thank the commenters for notifying us about the 
incorrect descriptor for GXXX1 that we inadvertently included in Table 
10 of the CY 2018 PFS proposed rule (82 FR 34021). The correct 
descriptor for GXXX1/G0515 in that table should have been the same as 
that for the prior CPT code 97532 that we defined and included in our 
discussion as: Development of cognitive skills to improve attention, 
memory, problem solving (includes compensatory training), direct (one-
on-one) patient contact, each 15 minutes.
    Comment: The HCPAC and other commenters expressed concern about 
CMS' refinement of PE inputs for CPT code 97127, contending that the 
agency lacked a rationale for the refinements shown in Table 11--CY 
2018 Proposed Codes with Direct PE Input Recommendations with 
Refinements. These commenters encouraged CMS to either use the existing 
PE inputs in CPT code 97532 for HCPCS code G0515 or more closely mirror 
the PE refinements that were forwarded by the HCPAC for CPT code 97127 
to those for CPT code 97532. The commenters noted that any changes that 
result in significant deviations from current PE inputs should not be 
implemented absent another review of cognitive therapy services through 
the HCPAC valuation process.
    Response: We thank the commenters for informing us that Table 11 
contained PE input refinements for CPT code 97127. Their inclusion in 
Table 11 was inadvertent given that we proposed to retain the same 
valuation of CPT code 97532 for HCPCS code G0515 and not to recognize 
CPT code 97127 for Medicare purposes.
    Comment: One commenter asked us to provide greater insight as to 
what we believe would comprise an effective permanent coding solution 
that permits sufficient coverage of and fair payment for these 
cognitive therapy services when furnished to outpatients in both the 
professional office and facility-based settings.
    Response: CMS' typical role is to review the codes forwarded to us 
from the RUC and HCPAC and to agree or disagree with those valuations. 
Through the review and analysis necessary for valuation purposes, we 
have at times found it necessary due to Medicare programmatic concerns 
to create our own G-code instead of recognizing the code sent to us, as 
we did in the case of the untimed code, CPT code 97127. This code, 
which represents services that are utilized and reported under two 
separate benefits--medical services and outpatient therapy services--
the latter of which can be billed by facility-based providers on 
institutional claims when furnished by qualified therapists, or on 
professional claims by therapists in private practice, physicians, or 
certain NPPs (NPs, PAs, CNSs)--presents an unusual coding challenge. 
Other than what has been already discussed in this rulemaking process, 
we do not believe we are in a position to provide additional insight to 
a permanent code that the HCPAC has not yet forwarded to us.
    After consideration of the public comments, we are finalizing our 
proposal to create HCPCS code G0515 to mirror the coding and valuation 
of existing CPT code 97532, instead of adopting CPT code 97127. We will 
assign CPT code 97127 a status indicator of ``I'' to indicate that it 
is ``Invalid'' for Medicare policy and payment purposes.
    We have designated HCPCS code G0515 a as ``sometimes therapy'' 
code,

[[Page 53076]]

which means that an appropriate therapy modifier--GN, GO or GP, to 
reflect that it is under an SLP, OT, or PT plan of care--is always 
required when this service is furnished by therapists; and, when it is 
furnished by or incident to physicians and NPP when the services are 
integral to an SLP, OT, or PT plan of care. Accordingly, HCPCS code 
G0515 is sometimes appropriately reported by physicians, NPPs, and 
psychologists without a therapy modifier when it is appropriately 
furnished outside an SLP, OT, or PT plan of care. When furnished by 
psychologists, the services of HCPCS code G0515 are never considered 
therapy services and may not be reported with a GN, GO, or GP therapy 
modifier.
(55) Management and/or Training: Orthotics and Prosthetics (CPT Codes 
97760, 97761, and 977X1)
    For CY 2018, the CPT Editorial Panel revised the set of codes that 
comprise the CPT manual's PM&R subsection for orthotic management and 
prosthetic management at its September 2016 meeting. According to the 
CPT Editorial Panel, these revisions were made at the request of the 
specialty societies representing physical and occupational therapists 
to differentiate between the initial and subsequent encounters and to 
describe the ongoing management and/or training that is involved in 
subsequent encounters. These changes include:
     Revising the code descriptors by adding the term ``initial 
encounter'' to CPT code 97760 (Orthotic(s) management and training 
(including assessment and fitting when not otherwise reported), upper 
extremity(ies), lower extremity(ies) and/or trunk, initial orthotic(s) 
encounter, each 15 minutes), and CPT code 97761 (Prosthetic(s) 
training, upper and/or lower extremity(ies), initial prosthetic(s) 
encounter, each 15 minutes);
     Creating a new CPT code 977X1 (Orthotic(s)/prosthetic(s) 
management and/or training, upper extremity(ies), lower extremity(ies), 
and/or trunk, subsequent orthotic(s)/prosthetic(s) encounter, each 15 
minutes); and
     Deleting CPT code 97762 (checkout for orthotic/prosthetic 
use, established patient, each 15 minutes).
    Intended for the management and/or training of patients with 
orthotics and/or prosthetics, CPT codes 97760 and 97761 were previously 
used to report both the initial and subsequent encounters, that, when 
furnished under the Medicare outpatient therapy services benefit, 
included services occurring during the same PT or OT episode of care. 
CPT code 97762 was used to separately report the assessment and fitting 
(including any adjustments) of an orthotic or prosthetic for an 
established patient when these services were not bundled into another 
code or service. For CY 2018, CPT codes 97760 and 97761 are intended to 
be reported only for the initial encounter, and CPT code 977X1 is 
intended to be reported for all other orthotic and/or prosthetic 
services for an established patient that occur on a ``subsequent 
encounter'' or a different date of service from that of the initial 
encounter service.
    The HCPAC submitted work and PE recommendations for CPT codes 
97760, 97761, and 977X1 from their January 2017 meeting. For CY 2018, 
we proposed the HCPAC-recommended work RVU of 0.50 for CPT code 97760, 
a work RVU of 0.50 for CPT code 97761, and a work RVU of 0.48 for CPT 
code 977X1. We noted that for budget neutrality purposes, the HCPAC 
recommendations also included utilization crosswalks for each of the 
three codes that were each assigned a one-to-one crosswalk to the 
utilization of the prior codes: All the prior services of CPT codes 
97760 and 97761 were each crosswalked to the same newly revised codes; 
and, all the utilization from CPT code 97762 was crosswalked to the new 
CPT code 977X1.
    For CPT code 977X1, we considered a work RVU of 0.33, crosswalking 
to CPT code 92508 (Speech/hearing therapy), which has a similar total 
therapist time (22 minutes). We were concerned and sought comments on 
the HCPAC one-to-one utilization crosswalk recommendations for all 
three codes in this family since the utilization assumptions are 
potentially flawed when viewed in the context of the new CPT code 
descriptors. For instance, for CPT code 977X1, the new descriptor 
indicates that the services inherent to CPT code 97762 (over 14,000 in 
2015), as well as the new services for subsequent encounters previously 
reported via CPT codes 97760 and 97761 will also be encompassed, 
although it is difficult to estimate the number of additional services 
the latter represents. We were concerned that the HCPAC's valuation is 
inconsistent with the submitted information regarding how services will 
be reported under the new coding. We sought comments on our proposed 
and alternative values for CPT code 977X1. We were also interested in 
receiving comments from stakeholders and clinicians with expertise in 
furnishing these orthotic management and/or prosthetics training 
services about the utilization and types of services that would be 
furnished under the new CPT coding structure, particularly those of the 
newly created CPT code 977X1 and how these services differ from the 
services reported with the predecessor CPT code 97762.
    We proposed to maintain the current PE inputs for CPT codes 97760, 
97761, and 977X1, as we discussed in our proposals for the PM&R codes 
discussed above; the same therapy MPPR applies. We proposed the current 
direct PE inputs for CPT code 97762 and for new CPT code 977X1, though 
we sought comment as to whether or not a different crosswalk or other 
adjustment would be appropriate given the change in code descriptor.
    The following is a summary of the public comments received as to 
whether or not a different crosswalk or other adjustment would be 
appropriate for CPT code 97763 given the change in code descriptor and 
our responses:
    Comment: Many commenters supported of our proposal to adopt the 
HCPAC recommendations for revised work RVUs for CPT codes 97760 and 
97761, and the proposed work RVU of newly created CPT code 977X1/97763. 
A few commenters also expressed support for the revised CPT descriptors 
of codes 97760 and 97761 to include the term ``initial encounter'', 
which they believe will eliminate billing confusion; and, also that the 
addition of the term ``subsequent encounter'' to the descriptor of CPT 
code 97763, because, the commenters stated it clarifies when this code 
is used--that, for the same patient, the provider would only report CPT 
code 97763 on the second or other subsequent visit after previously 
reporting an initial encounter for orthotic and/or prosthetic training 
and management using either CPT code 97760 or 97761. Other commenters 
informed us that they support the revised descriptors because they 
better align with the descriptions used within the ICD-10 system. One 
commenter noted that the new descriptors designation of subsequent or 
initial services will contribute confusion to the coding process for 
these services.
    Response: We appreciate the support of the many commenters for our 
proposal to accept the work RVU values for these orthotic and/or 
prosthetic management and training services.
    Comment: In response to our alternative work valuation of 0.33 RVUs 
for CPT code 97763, several commenters disagreed, stating that the 
suggested crosswalk to CPT code 92508 is inappropriate, that the work 
involved in delivering the orthotic/prosthetic subsequent encounter 
service is very similar to that furnished in the initial encounter, as 
substantiated through the

[[Page 53077]]

HCPAC survey process. One commenter that does not support the 0.33 work 
RVU, told us they agree with our crosswalk of CPT code 92508 for 
purposes of therapist time (17 minutes), given that we were limited for 
comparable crosswalks since the 97000 series of codes was under review. 
Another commenter noted that our alternative value was too low and that 
we should adopt the higher value based on their belief that many 
``orthotics and prosthetics require increasingly complex and critical 
subsequent encounter adjustments based on changes in the status of a 
patient. These services often require a great deal of time and 
expertise on the part of the therapist.'' In addition, the commenter 
noted that some orthotic devices are dynamic in nature and need regular 
adjustments to ensure that the fit is correct and that orthotics and 
prosthetics management and training technology has evolved since the 
last valuation of these codes, meaning more specialized expertise is 
needed by a therapist.
    Response: We thank the commenters for their input. We continue to 
believe that the proposed value most accurately captures the work 
involved in this service. As a result, we are finalizing our proposed 
value for CY 2018.
    Comment. One commenter supported ``CMS' proposal to eliminate code 
97762'' but did not support the adoption of CPT code 97763 in its place 
because in their view it eliminates the evaluation component of CPT 
code 97760 that was previously used to report subsequent encounters for 
orthotic management services. This commenter believes that the new CPT 
codes descriptors complicate coding through the unnecessary designation 
of subsequent or initial services. This commenter also noted this to 
mean that all other encounters are subsequent encounters to this 
initial fabrication--which they believe is typically billed using a 
HCPCS L-code; that the new CPT code 97763 is redundant because it is 
used at a subsequent encounter from the one during which the orthosis 
was fabricated, and that CPT code 97760 is the only code needed to bill 
correctly for both the evaluation of fit and use, subsequent 
modifications and additional training or repairs revealed during 
reassessment of the orthosis. Regardless of the specific encounter 
during which these orthotic management services are billed, the 
commenter noted that the level of work is the same--supporting the 
increased work RVUs of code 97760.
    Response: We thank the commenter for the information provided on 
their coding concerns and their support for the work RVU of CPT code 
97760. We note that while CMS proposes and finalizes the valuation of 
these services, it is the CPT Editorial Panel that revises CPT 
descriptors as well as adds and deletes CPT codes.
    Comment. Several commenters expressed concern that the HCPAC one-
to-one utilization crosswalk recommendations for all three codes in 
this family are potentially flawed when viewed in the context of the 
new CPT code descriptors. One commenter stated that they anticipate 
there will be a redistribution in coding between CPT codes 97760 and 
97761 to 977X1/97763 based on the assumption that the majority of 
patients have more than 1 billing session for an orthosis or 
prosthesis; therefore, the commenter estimated some volume of services 
previously billed under CPT codes 97760 and 97761 will be billed under 
CPT code 977X1. Another commenter noted the code descriptor revisions, 
particularly the addition of ``initial encounter'' to CPT code 97760, 
could be interpreted to include that encounter in which the therapist 
billed for the fabrication of the orthotic using an HCPCS L-code, and 
could result in a shift to CPT code 97763.
    Response: We appreciate the feedback that these commenters provided 
on the utilization crosswalk recommendations from the HCPAC, and note 
that these concerns echo some of the concerns that we raised in the CY 
2018 PFS proposed rule. After consideration of the public comments, we 
are finalizing our proposal to accept the HCPAC recommended work RVUs 
for CPT codes 97760, 97761, and 97763. Because these codes are subject 
to the same MPPR policy as the 19 PM&R codes discussed in the above 
section, we are not finalizing our proposal to retain the existing PE 
inputs for these three codes. Instead, we are not finalizing our 
proposal to retain the existing PE inputs for these three codes 
because, as we discussed in an above section on PM&R codes, we were 
persuaded by the HCPAC that the PE Subcommittee took into account the 
50 percent MPPR policy when developing the PE inputs for these codes.
    We also note that these codes are designated as ``always therapy,'' 
meaning that they always represent therapy services regardless of who 
furnishes them; and that a GO or GP therapy modifier is always required 
to indicate that the services are furnished under an OT or PT plan of 
care, respectively. As ``always therapy,'' these codes are subject to 
the therapy MPPR and the statutory therapy caps.
(56) Assessment of and Care Planning for Patients With Cognitive 
Impairment (CPT Code 99483)
    For CY 2017, CMS began making separate payment for HCPCS code G0505 
(Assessment and care planning for patients with cognitive impairment) 
as an interim means of facilitating payment for a CPT code that was 
forthcoming for CY 2018, eventual CPT code 99483. As part of public 
comment on the CY 2017 PFS proposed rule, the RUC submitted recommended 
values for this code, which we adopted in the CY 2017 PFS final rule. 
For CY 2018, CMS is adopting CPT code 99483, and deleting the interim 
HCPCS code G0505. As is our longstanding practice, when we propose to 
accept the RUC-recommended values for a code and did not have any 
significant concerns, we did not write about this proposal in the 
preamble to the CY 2018 PFS proposed rule.
    Comment: Several commenters supported the adoption of CPT code 
99483. Commenters stated that by making separate payment for this code, 
we were helping patients with dementia gain access to valuable medical 
care. One commenter also included questions that it had gathered from 
practitioners about billing HCPCS code G0505. We did not receive any 
comments that opposed adoption of CPT code 99483.
    Response: We thank commenters for their support, and will consider 
the practitioners' questions for forthcoming guidance, as appropriate.
    Comment: A few commenters noted that there were slight variations 
in scope of service elements between the HCPCS code G0505 and CPT code 
99483.
    Response: We believe that despite the differences, the policies of 
CPT code 99483 conform to those of the HCPCS G-code and intend to 
monitor this service and seek input from stakeholders as to whether we 
should issue additional regulatory or sub-regulatory guidance.
    For CY 2018, CMS is deleting the interim HCPCS code G0505 and 
replacing it with CPT code 99483. After consideration of these 
comments, we are finalizing the new descriptor for CPT code 99483, as 
proposed. We note that we previously adopted the RUC-recommended values 
for this service in the CY 2017 PFS final rule and will continue to use 
the RUC-recommended values with our adoption of CPT code 99483.
(57) Psychiatric Collaborative Care Management Services (CPT Codes 
99492, 99493, 99494, and 99484).
    In the CY 2017 PFS final rule (81 FR 80230), we established 
separate

[[Page 53078]]

payment for three services (HCPCS codes G0502, G0503, and G0504) under 
the psychiatric collaborative care model that paralleled CPT codes that 
were being created to report these services as well as a G-code for 
general behavioral health integration (BHI) services (HCPCS code 
G0507).
    For CY 2018, the CPT Editorial Panel is creating CPT codes 99492, 
99493, 99494, and 99484 to describe these services. For CY 2018, we are 
adopting these CPT codes and deleting HCPCS codes G0502, G0503, G0504, 
and G0507. We proposed the RUC-recommended work RVUs for each of these 
CPT codes, which are identical to the current values for HCPCS codes 
G0502, G0503, G0504, and G0507.
    We proposed the RUC-recommended PE inputs, with one refinement. The 
RUC-recommended values included clinical labor inputs in the facility 
setting, but we did not propose to include these minutes in developing 
the facility PE RVUs.
    Were we to develop facility PE RVUs for these services that 
included clinical staff time, when a practitioner working in a 
provider-based department of a hospital was furnishing these services, 
both the professional and the hospital would be paid for the same 
clinical labor costs. We presumed that this aspect of the RUC's 
recommendation reflects the circumstance where the patient receiving 
the services spends a significant period of time in a facility setting, 
but the billing practitioner is nonetheless incurring the cost 
associated with the non-face-to-face clinical staff time over the 
course of a month. We recognized that the binary site of service 
differential may not recognize the different models of this kind of 
care and may not be appropriate in some cases. We sought comments on 
how to best address this valuation issue for these and other monthly 
care management services. We noted that we could consider a range of 
options for future rulemaking, including allowing separate billing for 
the professional, technical, and global components of these services to 
allow practitioners to bill the component of the service they furnish.
    We stated in the CY 2017 PFS final rule (81 FR 80236) that the 
general BHI code (CPT code 99484) may be used to report a range of 
models of BHI services and that we expected this code to be refined 
over time as we receive more information about other BHI models in use. 
We remain interested in how this code is being used and look forward to 
hearing from stakeholders regarding its use in reporting different 
models of BHI services. Additionally, we have received inquiries from 
stakeholders about whether or not professionals who cannot report E/M 
services to Medicare might nonetheless serve as a primary hub for BHI 
services. For example, stakeholders have suggested that a clinical 
psychologist might serve as the primary practitioner that integrates 
medical care and psychiatric expertise. For purposes of future 
rulemaking, we sought comment on the circumstances under which this 
model of care is happening and whether additional coding would be 
needed to accurately describe and value other models of care.
    Comment: A few commenters noted that the logic that would dictate a 
lower PE RVU in a facility does not fit with the care management model 
and one commenter also noted that patients in facility settings are 
more medically and behaviorally complex. Some commenters stated that 
they would be open to separate billing for the professional, technical, 
and global components of these services in order to allow practitioners 
to appropriately bill the component of the service they furnish and 
preferred that option over not including clinical staff time in the 
facility setting. One commenter suggested that CMS instruct 
practitioners billing for these services to report the place of service 
where they practice rather than the location of the patient.
    Response: We will consider the commenters' input on solutions to 
the site of service differential for care management services for 
future notice and comment rulemaking. We also note that because these 
codes describe services that take place over the course of a calendar 
month, we have issued additional guidance, which can be found on the 
CMS Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Downloads/Behavioral-Health-Integration-FAQs.pdf.
    Comment: A few commenters suggested that CMS create separate codes 
to describe behavioral health care management services that could be 
billed by psychologists and other non-physician practitioners who are 
not authorized to bill Medicare for E/M services. One commenter 
suggested that CMS include psychiatric diagnostic evaluation services 
that can be furnished and billed by psychologists as eligible 
initiating visits. Another commenter urged CMS to expand coverage to 
make separate reimbursement to the psychiatric consultant in the 
collaborative care model. Alternatively, another commenter noted that 
integration of medical and psychiatric care requires the ability to 
advise and make medical recommendations as needed for all relevant 
medical care, including treatment for physical health conditions, which 
may include psychiatric and other medical differential diagnosis, 
treatment strategies regarding appropriate therapies, medication 
management, and medical management of complications associated with 
treatment of psychiatric disorders. Commenters also described other 
models of care that are in use, including the STAR-VA model and a model 
used in outpatient health care settings where a clinical social worker 
not only provides psychiatric care but also assists with psychosocial 
aspects of medical care.
    Response: We thank commenters for their input and note that there 
were several issues for which there was not stakeholder consensus. We 
will consider all of the comments for future notice and comment 
rulemaking.
    For CY 2018, CMS is deleting the interim HCPCS codes G0502, G0503, 
G0504, and G0507 and replacing them with CPT codes 99492, 99493, 99494, 
and 99484, respectively. After consideration of these comments, for CY 
2018, we are finalizing the coding and valuation for CPT codes 99492, 
99493, 99494, and 99484, as proposed.
(58) Hyperbaric Oxygen Therapy (HCPCS Code G0277)
    In the CY 2016 PFS final rule with comment period (80 FR 71005), we 
discussed the CY 2015 valuation of hyperbaric oxygen therapy services 
(79 FR 67677). Prior to CY 2015, CPT code 99183 was used to report both 
the professional attendance and supervision, and the costs associated 
with treatment delivery were included in the nonfacility direct PE 
inputs for the code. We created HCPCS code G0277 to be used to report 
the treatment delivery separately, consistent with the OPPS coding 
mechanism, to allow the use of the same coding structure across 
multiple settings. In establishing interim final direct PE inputs for 
HCPCS code G0277, we used the RUC-recommended direct PE inputs for CPT 
code 99183, which assumed a 120-minute treatment interval and adjusted 
them to align with the 30-minute treatment interval of HCPCS code 
G0277. We observed that the quantity of oxygen increased significantly 
relative to the previous inputs for CPT code 99183.
    To better understand why the oxygen supply increased, we reviewed 
the instruction manual for the Sechrist Model 3600E Hyperbaric Chamber, 
which was the model noted on the invoice that was included with the RUC

[[Page 53079]]

recommendations for use in pricing the capital equipment. The 
instruction manual for the Sechrist 3600E model provided guidance 
regarding the quantity of oxygen to be used in furnishing the service 
described by HCPCS code G0277. Based on our review at that time, we 
determined that 12,000 liters, rather than 47,000 liters, was the 
typical number of units for the oxygen gas. Therefore, in aligning the 
direct PE inputs as described in the CY 2016 final rule with comment 
period, we first adjusted the units of oxygen to 12,000 liters for the 
recommended 120 minute time, and subsequently adjusted it to align with 
the 30-minute G-code by dividing by 4. We stated that we agreed that an 
initial high purge flow rate is needed to reach maximum pressure/
O2; however, we still had not seen data that demonstrated 
the need to continue the high purge flow rate throughout the entire 
session. According to the manufacturer's instruction manual for this 
model, ``once the nitrogen has been purged from the chamber and the 
internal oxygen concentration has exceeded 95 percent, high flows are 
no longer needed to maintain the patient's saturation level.'' The 
manual also stated that ``the plateau purge flow can be set to 80 
liters per minute (lpm).'' We calculated that 13 minutes at 400 lpm 
plus 120 minutes at 80 lpm equals 14,800 liters of oxygen. We stated 
that based on information in the manufacturer's manual that was 
publicly available at the time, we believed that this represented the 
typical usage for a 120-minute treatment. That amount represented an 
increase from the interim final amount of 12,000 liters. We aligned 
this total oxygen requirement to the 30-minute G-code by dividing 
14,800 liters of oxygen by 4 and stated we were updating the direct PE 
inputs to 3,700 liters of oxygen for HCPCS code G0277.
    For CY 2018, we received requests from stakeholders to update the 
direct PE inputs for HCPCS code G0277. In the CY 2016 PFS final rule 
with comment period (80 FR 71005), we explained that we had previously 
established values for this service based on information suggesting 
that the Sechrist Model 3600E Hyperbaric Chamber was typically used in 
furnishing the service in the non-facility setting. As we noted in that 
rule, we established the amount of oxygen used in furnishing the 
service based on use of the equipment item described as part of the RUC 
recommendation, instead of the RUC-recommended amount of oxygen, which 
appeared to be based on use of a different equipment product, the 
Sechrist Model 3200. Based on information received from stakeholders, 
we proposed in the CY 2018 PFS proposed rule to update both the 
equipment item and the amount of oxygen so that the amount of oxygen 
conforms to the RUC-recommended value of 47,600 liters of oxygen, which 
we divided by 4 to conform to the 30-minute service period for HCPCS 
code G0277, and that the equipment item is consistent with that 
recommendation. The proposed direct PE inputs for HCPCS code G0277 were 
displayed in the proposed CY 2018 direct PE input database, available 
on the CMS Web site under the downloads for the CY 2018 PFS proposed 
rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    We also proposed to exclude this change in direct PE inputs from 
the calculation of the misvalued code target, since we viewed this 
proposed change as a refinement of a single recommendation over several 
years. Since the initial recommendation (79 FR 67677) was undertaken in 
a year without the misvalued code target, we believed it would be 
consistent with our previously established policy (80 FR 70923) to 
exclude this change from the calculation. We noted that this change 
would represent an increase from the current PE RVUs for this service.
    Comment: Commenters were supportive of our proposal to update the 
equipment item and the quantity of oxygen in the supply items for this 
service.
    Response: We appreciate the commenters' feedback.
    After consideration of the comments received, we are finalizing the 
direct PE inputs for HCPCS code G0277 as proposed. The direct PE inputs 
for HCPCS code G0277 are displayed in the CY 2018 final rule direct PE 
Input database, available on the CMS Web site under the downloads for 
the CY 2018 PFS final rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
(59) Payment Accuracy for Prolonged Preventive Services (HCPCS Codes 
G0513 and G0514)
    Many services paid under the PFS are coded to reflect differential 
resource costs associated with different levels of care. However, this 
level of granularity is not applied evenly across the PFS. For example, 
there are far fewer E/M visit codes than there are codes that describe 
procedures. While not a comprehensive solution to address the 
differential resource costs of certain E/M visits, prolonged services 
codes can be used to report medically necessary E/M visits that require 
additional amounts of time. Like E/M visit codes, many of the Medicare-
covered preventive services codes describe a service that has an 
atypically broad range of potential resource costs, including 
differential amounts of time required to furnish services. However, 
unlike for most E/M visit codes, there are not prolonged services codes 
that apply to Medicare-covered preventive services.
    Some stakeholders expressed concerns to CMS regarding the lack of a 
coding mechanism for practitioners to report the additional time 
sometimes required to appropriately furnish care to a patient receiving 
a Medicare-covered preventive service. We noted that Medicare covers a 
broad range of preventive services, such as a ``Welcome to Medicare 
Preventive Visit'', yearly wellness visits, cancer screenings, and many 
types of counseling. Medicare beneficiary coinsurance and deductible 
payments are not applicable for certain Medicare-covered preventive 
services. Additional information about preventive services covered 
under Medicare, including whether beneficiary coinsurance or deductible 
apply, is available on the CMS Web site at https://www.cms.gov/Medicare/Prevention/PrevntionGenInfo/Downloads/MPS-QuickReferenceChart-1TextOnly.pdf. To more accurately reflect the differential resource 
costs when additional time is required to furnish a Medicare-covered 
preventive service, we proposed to make payment for prolonged 
preventive services using two new HCPCS G-codes that could be billed 
along with the Medicare-covered preventive service codes, when a 
clinician provides a prolonged Medicare-covered preventive service.
     G0513: Prolonged preventive 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 30 minutes (List separately in addition to code for 
preventive service)), and
     G0514: Prolonged preventive 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; each additional 30 minutes (List separately in addition to 
code for preventive service)).
    We proposed that HCPCS codes G0513 and G0514 could only be billed 
with Medicare-covered preventive services. Beneficiary coinsurance and

[[Page 53080]]

deductible would not be applicable for HCPCS codes G0513 and G0514 
because the codes can only be reported to describe prolonged portions 
of services where beneficiary coinsurance and deductible are not 
applicable.
    We proposed to create prolonged services codes in 30-minute 
increments instead of the 60-minute increments that apply for the 
parallel office/outpatient prolonged services codes, since some 
Medicare-covered preventive services have a shorter duration than E/M 
visits. For purposes of valuation for both initial and additional 30 
minute codes, we proposed to use one half of the current work RVUs and 
direct PE inputs for CPT code 99354 (Prolonged evaluation and 
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 
(List separately in addition to code for office or other outpatient 
Evaluation and Management or psychotherapy service)). CPT code 99354 
has a total time of 60 minutes and a work RVU of 2.33. Therefore, we 
proposed a work RVU of 1.17 and 30 minutes of total work time for HCPCS 
codes G0513 and G0514. We proposed to use one half of the direct PE 
inputs for CPT code 99354, which resulted in a proposal of 7 minutes of 
clinical labor type L037D (RN/LPN/MTA) and 15 minutes for equipment 
type EF031 (table, power) for HCPCS codes G0513 and G0514 as the best 
reflection of typical direct PE costs. We understood that these 
specific clinical labor and equipment types may be functioning as proxy 
inputs for some Medicare-covered preventive services.
    We proposed that HCPCS codes G0513 and G0514 be billed for 
prolonged preventive services beyond the typical service time of the 
primary procedure. For preventive services with both physician work and 
PE, we considered the typical service time of the primary procedure to 
be the intraservice work time used for the purposes of PFS ratesetting. 
For Medicare-covered preventive services with no face-to-face physician 
work, the typical time is the service period clinical staff time that 
best represents the face-to-face time with the patient. The counted 
time guidelines (derived from the typical times assumed for PFS 
ratesetting) for all eligible companion Medicare-covered preventive 
services are available in the file called ``CY 2018 Preventive Services 
Billed with Prolonged Preventives Code'' on the CMS Web site under 
downloads for the CY 2018 PFS final rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    Comment: Many commenters supported our proposal to pay separately 
for prolonged preventive services. Commenters stated that by paying 
separately for necessary additional time spent with patients during 
preventive visits, CMS was both improving payment accuracy and 
increasing accessibility to these services. Commenters also agreed with 
our decision to only allow HCPCS codes G0513 and G0514 to be billed 
with the preventive services where beneficiary coinsurance and 
deductible are not applicable.
    Response: We thank the commenters for their support of coding and 
valuation for prolonged preventive services.
    Comment: One commenter urged CMS to continue to work with the 
disability community on innovative solutions as part of a broader 
approach to ensuring equal health care access for people with 
disabilities and suggested additional activities.
    Response: We thank the commenter for the suggestions and look 
forward to collaborating on other steps to improve access for people 
with disabilities.
    Comment: One commenter suggested that CMS allow HCPCS codes G0513 
and G0514 to be billed with HCPCS code G0296 (Counseling visit to 
discuss need for lung cancer screening using low dose CT scan), while 
another commenter recommended that CMS expand use of these codes beyond 
preventive services. One commenter requested that CMS allow HCPCS codes 
G0513 and G0514 to be billed with HCPCS code G0447 (Face-to-face 
behavioral counseling for obesity, 15 minutes). This commenter 
expressed concern that there were very few cognitive services on the 
list of eligible codes, yet the nature of a cognitive service may 
require more time to furnish to a patient.
    Response: We appreciate the commenters' interest in adding to the 
types of services that can be billed with these codes. For many 
services on the PFS, there are already coding mechanisms in place to 
account for extra time spent with patients such as the CPT codes 
available to account for prolonged E/M services (CPT codes 99354 and 
99355). However, as we have previously noted, there continue to be 
areas where we believe that current PFS coding may not accurately 
reflect the differential resource costs associated with certain visits, 
and we remain committed to working with beneficiaries, advocates, and 
practitioners to continue to explore improvements in payment accuracy 
for these services. To continue address this issue and to better align 
coding and payment for prolonged E/M services with prolonged preventive 
services, we proposed the above codes. As Medicare preventive services, 
these codes may only be added on to other Medicare covered preventive 
services for which there is also no applicable cost sharing.
    With regard to HCPCS code G0447, we do not believe that HCPCS codes 
G0513 and G0514 are coded to be applicable to timed services. We 
welcome additional input from stakeholders regarding appropriate coding 
and billing for these services and will consider addressing these 
issues in future rulemaking. Finally, we note that HCPCS code G0296 is 
eligible to be billed with prolonged preventive services.
    Comment: Several commenters made specific suggestions as to the 
format of the file CMS released with the typical times for eligible 
preventive services. One commenter stated that releasing the file as a 
download on the CY 2018 PFS final rule Web page was insufficient, and 
that we should also include the typical times in the text of the CY 
2018 PFS final rule as well. Another commenter stated that they 
appreciated CMS releasing a file with the typical times, and encouraged 
us to incorporate this information into other sources, such as the 
Provider Payment Summary file.
    Response: We appreciate these suggestions. We will make the file 
with the typical times available via the downloads section of the CY 
2018 PFS final rule as this is sufficiently accessible for 
practitioners and stakeholders.
    Comment: One commenter requested that CMS clarify whether it would 
be able to bill the prolonged preventives codes if the additional time 
was distributed across multiple services performed on a single 
encounter.
    Response: We believe that it would be appropriate to bill the 
prolonged preventive services if all of the services performed are un-
timed preventive services with no beneficiary cost-sharing.
    Comment: Several commenters provided suggestions as to how CMS 
could further engage in outreach and guidance for practitioners. One 
commenter provided feedback on the kinds of monitoring and 
incentivizing activities CMS could undertake to advance beneficiary 
access to these services.

[[Page 53081]]

    Response: We thank commenters for their suggestions, and will 
consider them for the future.
    After consideration of comments received, we are finalizing our 
proposal for prolonged preventive services using HCPCS codes G0513 and 
G0514 with the work RVUs, work times, direct PE inputs, and 
requirements for these codes as proposed.
(60) Physician Coding for Insertion and Removal of Subdermal Drug 
Implants for the Treatment of Opioid Addiction (HCPCS Codes G0516, 
G0517, and G0518)
    We met with representatives from the American Society of Addiction 
Medicine (ASAM) in April 2016 to discuss the possibility of making 
separate payment for insertion and removal of buprenorphine 
hydrochloride, formulated as a 4-rod, 80 mg, long-acting subdermal drug 
implant for the treatment of opioid addiction. There are existing CPT 
codes that broadly describe the insertion and removal of non-
biodegradable drug delivery implants (CPT codes 11981 through 11983). 
However, ASAM contended that the resources associated with the 
administration of this particular drug are greater than that of other 
drug delivery implants, stating that the physician must insert four 
rods using a newly designed applicator and obturator and use a 
specially designed clamp to remove the four rods, which in some cases 
requires careful shaving of tissue that has attached to the rods during 
the 6-month period that the rods have been inserted. They noted that 
these procedures can have unique challenges associated with treating 
patients with opioid addiction, who often have complications and/or co-
morbidities. They also noted that the FDA has recognized the complexity 
of the technology and patient needs by establishing regulatory 
standards to adhere to the protocol and imposing special training 
requirements on physicians. ASAM indicated that they would pursue an 
application to the CPT Editorial Panel for new CPT codes.
    ASAM informed CMS that the CPT Editorial Panel did not approve its 
application; therefore, ASAM repeated its request that CMS establish 
separate payment for the insertion, removal, and removal with 
reinsertion of the buprenorphine subdermal implants.
    To improve payment accuracy, for CY 2018, we proposed to make 
separate payment for the insertion, removal, and removal with 
reinsertion of Buprenorphine subdermal implants using HCPCS G codes:
     HCPCS code G0516: Insertion, non-biodegradable drug 
delivery implants, 4 or more.
     HCPCS code G0517: Removal, non-biodegradable drug delivery 
implants, 4 or more.
     HCPCS code G0518: Removal with reinsertion, non-
biodegradable drug delivery implants, 4 or more.
    For HCPCS code G0516, ASAM stated that performing the procedure 
according to the FDA-required Risk Evaluation and Mitigation Strategies 
(REMS) program takes approximately 23-25 minutes for the a physician 
who is not a trainer/proctor for this procedure. They stated that in 
developing crosswalk recommendations for physician work values, they 
used a total time of 35-40 minutes, which is based on a preservice time 
of 10 minutes, an intraservice time of 20-25 minutes, and a postservice 
time of 5 minutes. Based on ASAM's recommendations, we proposed a work 
RVU of 1.82 for HCPCS code G0516, which is supported by a direct 
crosswalk to CPT code 64644 (Chemodenervation of one extremity; 5 or 
more muscles).
    For HCPCS code G0517, ASAM stated that data from physicians who 
perform this procedure indicated that it takes approximately 15-20 
additional minutes compared to the insertion procedure (HCPCS code 
G0516) based on the FDA-required REMS program for removal of the 
implant. ASAM noted that this procedure is of a higher intensity 
compared to CPT code 11982 as this service requires identification and 
removal of multiple subdermal implants. ASAM stated that in developing 
crosswalk recommendations for physician work values, they used a total 
time of 45-60 minutes, which is based on a preservice time of 10 
minutes, an intraservice time of 30-45 minutes, and a postservice time 
of 5 minutes. Based on ASAM's recommendations, we proposed a work RVU 
of 2.10 for HCPCS code G0517, which is supported by a direct crosswalk 
to CPT code 96922 (Laser treatment for inflammatory skin disease 
(psoriasis); over 500 sq cm).
    For HCPCS code G0518, ASAM indicated that there is minimal 
consolidation of effort since the removal of the implants from one arm 
is followed by insertion of a new set of implants in the contralateral 
arm. Physician data from those who have performed this procedure 
indicated that it takes approximately 70 minutes of total intra-service 
time. ASAM stated that in developing crosswalk recommendations for 
physician work values, they assumed a preservice evaluation time of 10 
minutes (7 minutes for removal and 3 minutes for insertion), 
positioning of 4 minutes (2 minutes for each arm), and wait time of 2 
minutes (1 minute for each arm). ASAM stated that using the multiple 
surgical procedure rule, they calculated an intraservice time of 40-58 
minutes based on 100 percent of the intraservice time for HCPCS code 
G0517 (30-45 minutes) and 50 percent of the intraservice time for HCPCS 
code G0516 (0.5 x (20 - 25) = 10 - 13). ASAM used a postservice time of 
8 minutes based on 100 percent of the postservice time for the removal 
arm and 50 percent of the postservice time for the insertion arm, 
equaling a total time of 58-76 minutes. Based on ASAM's 
recommendations, we proposed a work RVU of 3.55 for HCPCS code G0518, 
which is supported by a direct crosswalk to CPT code 31628 
(Bronchoscopy, rigid or flexible, including fluoroscopic guidance, when 
performed; with transbronchial lung biopsy(s), single lobe).
    We proposed to use the direct PE inputs requested by ASAM for HCPCS 
codes G0516, G0517, and G0518, which are reflected in the Direct PE 
Inputs public use files for clinical labor, supplies, and equipment, 
available on the CMS Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
    In addition to seeking comment on the proposal to make separate 
payment for these services using HCPCS codes, we also sought comment on 
the appropriateness and accuracy of our proposed work RVUs and direct 
PE inputs.
    Comment: We received several comments on this proposal, which were 
unanimously supportive. Commenters commended CMS for its ongoing 
efforts to address the national opioid epidemic and ensure that 
patients with substance use disorders have access to medically 
necessary care.
    Response: We appreciate the commenters' support of the proposal. 
After consideration of the public comments, we are finalizing our 
proposal for separate payment for insertion, removal, and removal with 
reinsertion of Buprenorphine subdermal implants using HCPCS codes 
G0516, G0517, and G0518, and the valuation for HCPCS codes G0516, 
G0517, and G0518, as proposed.
(60) Superficial Radiation Treatment Planning and Management (HCPCS 
Code GRRR1)
    In the CY 2015 PFS final rule with comment period (79 FR 67666 
through 67667), we noted that changes to the CPT prefatory language 
limited the

[[Page 53082]]

codes that could be reported when describing services associated with 
superficial radiation treatment (SRT) delivery, described by CPT code 
77401 (radiation treatment delivery, superficial and/or ortho voltage, 
per day). The changes effectively meant that many other related 
services were bundled with CPT code 77401, instead of being separately 
reported. For example, CPT guidance clarified that certain codes used 
to describe clinical treatment planning, treatment devices, isodose 
planning, physics consultation, and radiation treatment management 
cannot be reported when furnished in association with superficial 
radiation treatment. Stakeholders stated that these changes to the CPT 
prefatory language prohibited them from billing Medicare for codes that 
were previously frequently billed in addition to CPT code 77401. We 
solicited comments as to whether the coding for SRT allowed for 
accurate reporting of the associated services.
    In the CY 2016 PFS final rule with comment period (80 FR 70955), we 
noted that the RUC did not review the inputs for SRT procedures, and 
therefore did not assess whether changes in valuation were appropriate 
in light of the bundling of associated services. In addition, we 
solicited recommendations from stakeholders regarding whether or not it 
would be appropriate to add physician work for this service, even 
though physician work is not included in other radiation treatment 
services. As commenters were not in agreement as to whether the service 
should be valued with physician work, we introduced the possibility of 
creating a HCPCS G-code to describe total work associated with the 
course of treatment for these services. The 2016 National Correct 
Coding Initiative (NCCI) Policy Manual for Medicare Services stated 
that radiation oncology services may not be separately reported with E/
M codes. While this edit is no longer active, stakeholders have stated 
that MACs have denied claims for E/M services associated with SRT based 
on the NCCI policy manual language. According to stakeholders, the 
bundling of services associated with SRT, as well as the confusion 
regarding the appropriate use of E/M coding to report associated 
physician work, meant that practitioners were not being accurately paid 
for planning and treatment management associated with furnishing SRT.
    Due to these concerns regarding reporting of services associated 
with SRT, in the CY 2018 PFS proposed rule, we proposed to make 
separate payment for the professional planning and management 
associated with SRT using HCPCS code GRRR1 (Superficial radiation 
treatment planning and management related services, including but not 
limited to, when performed, clinical treatment planning (for example, 
77261, 77262, 77263), therapeutic radiology simulation-aided field 
setting (for example, 77280, 77285, 77290, 77293), basic radiation 
dosimetry calculation (for example, 77300), treatment devices (for 
example, 77332, 77333, 77334), isodose planning (for example, 77306, 
77307, 77316, 77317, 77318), radiation treatment management (for 
example, 77427, 77431, 77432, 77435, 77469, 77470, 77499), and 
associated E/M per course of treatment). We proposed for this code to 
describe the range of professional services associated with a course of 
SRT, including services similar to those not otherwise separately 
reportable under CPT guidance and the NCCI manual. To value this code, 
we included the physician work and time associated with radiation 
management-related services that we think would be typical for a course 
of SRT treatment. These services include: CPT code 77261 (Therapeutic 
radiology treatment planning; simple), CPT code 77280 (Therapeutic 
radiology simulation-aided field setting; simple), CPT code 77300 
(Basic radiation dosimetry calculation, central axis depth dose 
calculation, TDF, NSD, gap calculation, off axis factor, tissue 
inhomogeneity factors, calculation of non-ionizing radiation surface 
and depth dose, as required during course of treatment, only when 
prescribed by the treating physician), CPT code 77306 (Teletherapy 
isodose plan; simple (1 or 2 unmodified ports directed to a single area 
of interest), includes basic dosimetry calculation(s)), CPT code 77332 
(Treatment devices, design and construction; simple (simple block, 
simple bolus)), and CPT code 77427 (Radiation treatment management, 5 
treatments). Therefore, for CY 2018, we proposed a work RVU of 7.93 for 
HCPCS code GRRR1. To develop the proposed direct PE inputs for this 
code, we proposed to use the RUC-recommended direct PE inputs from the 
aforementioned codes with several adjustments. We proposed to apply the 
staff type ``RN/LPN/MTA'' for all of the clinical labor inputs for this 
code because we believe that the typical office performing SRT would be 
staffed with this labor type, rather than with another clinical labor 
type such as radiation therapists, and we sought comment as to the 
appropriateness of the staff type ``RN/LPN/MTA'' for this SRT-related 
service. Some stakeholders have suggested that many services related to 
SRT are personally performed by the billing practitioner rather than by 
clinical staff. We proposed to remove the supply items ``gown, 
patient'' and ``pillow case'' that are associated with CPT code 77280, 
as these items are included in the minimum multispecialty visit pack 
that is associated with CPT code 77427. We did not propose to include 
the equipment items ``radiation virtual simulation system,'' ``room, 
CT'' and ``PACS Workstation Proxy'' that are associated with CPT code 
77280, as we do not believe that a typical office furnishing SRT uses 
this kind of equipment. Instead, we included additional time for the 
capital equipment used in delivering SRT in the proposed direct PE 
inputs.
    For ``radiation dose therapy plan,'' we proposed to apply the 
clinical labor time that is associated with CPT code 77300 to HCPCS 
code GRRR1 for purposes of developing a proposed value, but we sought 
comment as to whether the clinical staff would typically perform the 
radiation dose therapy planning for this service, or if the physician 
would perform this and/or other tasks, and, in the case of the latter, 
what the appropriate physician time would be. Likewise, we solicited 
comment as to whether the clinical labor associated with the 
teletherapy isodose plan would be performed by the physician. We 
proposed to assign 14 minutes each to the equipment items ``radiation 
therapy dosimetry software (Argus QC)'', ``computer workstation'', and 
``3D teletherapy treatment planning'' as these are the times assigned 
to these equipment items for CPT code 77300. We did not propose to 
include inputs related to radiation physics consultation, described by 
CPT code 77336, as we think that a typical course of SRT would not 
require this service, and the typical practitioner providing SRT would 
not be performing physics consultation, and we sought comment as to 
whether inputs associated with this code or other inputs used in 
furnishing analogous services should be included. We did not propose to 
include the post-operative office visits included in the valuation of 
CPT code 77427, as we did not believe that a typical course of SRT 
would require post-operative visits; however, we solicited comment 
regarding the amount of face-to-face time typically spent by the 
practitioner with the patient for radiation treatment management 
associated with SRT. As discussed in the CY 2016 PFS final rule with 
comment period (80 FR 70924 through

[[Page 53083]]

70927), in the case of new codes that describe services that were 
previously included in the payment for other codes, we finalized the 
policy that these new codes are excluded from the misvalued code target 
when they were previously bundled into a set of broadly reported E/M 
codes and services that include E/M visits. We noted that we did not 
believe that the change to separate payment for these kinds of services 
should be counted as increases that are included in calculating ``net 
reductions'' in expenditures attributable to adjustments for misvalued 
codes. Therefore, we proposed to exclude HCPCS code GRRR1 from the 
misvalued code target.
    Comment: Many commenters did not support our proposal to make 
separate payment for HCPCS code GRRR1 for CY 2018. These commenters 
stated that our proposed valuation of HCPCS code GRRR1 would represent 
a significant payment reduction for the associated services as compared 
with the list of services that they are currently billing in 
association with SRT. Many commenters stated that this new coding would 
inhibit access to care for these services, discouraging the use of SRT 
as a non-surgical alternative to Mohs surgery. Many suggested potential 
coding solutions to these concerns, including: Our proposed G-code 
should include inputs associated with more services, such as those 
associated with the intermediate and complex codes for services such as 
clinical treatment planning, simulating-aided field setting, and 
treatment devices; our proposed code should include inputs for fewer 
services; and the code for planning and management services associated 
with SRT should be billable in multiple units such as for once per day 
or once per lesion, rather than once for a full course of treatment as 
proposed. Some commenters expressed preference for multiple G-codes 
specific to each aspect of SRT delivery rather than a single bundle for 
all associated SRT-related services. More specifically, some commenters 
recommended three G-codes, representing treatment planning, treatment 
devices, and treatment management. According to some commenters, our 
proposal to value the planning and management services associated with 
SRT with one code does not recognize variation in services related to 
factors such as tumor type and location, and if the service is for skin 
cancer or keloid scar. Commenters noted a preference that new coding 
for these services should be developed through the CPT/RUC process. 
Commenters also expressed concerns about specific direct PE inputs, 
such as the clinical labor type assigned to HCPCS code GRRR1, stating 
that radiation therapists, not the staff type ``RN/LPN/MTA'' should be 
applied to this code. There was some disagreement among commenters 
about whether or not qualified medical physicists (QMPs) would 
typically be employed by dermatologists for SRT. A few commenters 
supported our proposal to make payment for planning and management 
services associated with SRT using HCPCS code GRRR1.
    Response: We appreciate the comments. Given the various concerns 
expressed by commenters, and the variety of potential solutions 
offered, we are not finalizing our proposed separate payment and coding 
for planning and management services associated with SRT at this time. 
We expect to continue considering alternative solutions. The impetus 
for making this proposal was based on our understanding that there are 
limits to the appropriate reporting of professional services associated 
with SRT, and the intent of this policy was to address gaps in what the 
current coding allows for in relation to SRT. However, commenters have 
indicated concerns with our proposed coding and valuation, including 
access to care concerns; therefore. Therefore we believe additional 
analysis is necessary and will further consider coding and payment for 
professional services associated with SRT in light of commenter 
concerns, and we are not establishing codes related to planning and 
management services associated with SRT in this final rule. We look 
forward to continuing our dialogue with stakeholders regarding the 
appropriate coding and valuation for SRT-related professional services, 
which we expect to address in future rulemaking.
    Comment: Several commenters stated that CPT code 77401 is 
undervalued and that it should be valued with a physician work 
component.
    Response: We note that our proposed G-code was designed, in part, 
to address feedback that has indicated that the current coding, 
including CPT code 77401, does not adequately account for the 
professional services associated with SRT delivery. We did not propose 
to value CPT code 77401, so we decline to do so now. We look forward to 
addressing these potential coding gaps in future rulemaking.
    After consideration of the comments received, we are not finalizing 
our proposal to make separate payment for the planning and management 
services associated with SRT using HCPCS code GRRR1. We will continue 
our dialogue with stakeholders to address appropriate coding and 
payment for professional services associated with SRT.
    We note that we did not propose and are not making any changes to 
the coding or valuation for CPT code 77401 (radiation treatment 
delivery, superficial and/or ortho voltage, per day) in this final 
rule. Providers can continue to bill CPT code 77401 as appropriate. 
However, under the CPT guidance that has been in effect for several 
years, certain codes used to describe clinical treatment planning, 
treatment devices, isodose planning, physics consultation, and 
radiation treatment management cannot be billed in addition to CPT code 
77401. These planning and management codes, however, can continue to be 
billed in addition to other codes involving other types of radiation 
treatment, such as HCPCS code G6003 (Radiation treatment delivery, 
single treatment area, single port or parallel opposed ports, simple 
blocks or no blocks: up to 5 mev) and CPT code 77523 (Proton treatment 
delivery; intermediate) in accordance with applicable guidance and 
requirements.

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I. Evaluation & Management (E/M) Guidelines and Care Management 
Services

    In recent years, we have sought to recognize significant changes in 
health care practice, especially innovations in the active management 
and ongoing care of chronically ill patients. We have been engaged in 
an ongoing incremental effort to identify gaps in appropriate coding 
and payment for care management/coordination, cognitive services and 
primary care within the PFS. This has included working with the CPT 
Editorial Panel (CPT) to develop and value (or revalue) the following 
service codes:
     Transitional care management (TCM) services (2013).
     Chronic care management services (CCM) (2015, 2017).
     Behavioral health integration (BHI) services (2017).
     Assessment/care planning services for cognitive impairment 
(2017).
     Prolonged E/M services without direct patient contact 
(2017).
    In response to public feedback regarding the initial implementation 
of TCM and CCM, in the CY 2017 PFS final rule (81 FR 80225 through 
80256), we finalized significant administrative burden reduction for 
CCM and focused on limiting as much as possible the ways in which 
Medicare's rules differed from the CPT guidance that generally applies 
for all payers. We also worked with the CPT Editorial Panel and other 
stakeholders to develop coding and improve payment accuracy for BHI, 
cognitive impairment assessment/management, and prolonged services. In 
the CY 2017 PFS final rule (81 FR 80255), we also reiterated our 
commitment to addressing disparities for individuals with disabilities 
and advancing health equity, and noted that we will continue to explore 
improvements in payment accuracy for services furnished to individuals 
with disabilities. We look forward to continued work with stakeholders 
to ensure that the coding and valuation of these services accurately 
reflects the resource costs involved in furnishing these services. In 
the CY 2018 PFS proposed rule (82 FR 34078 through 34080), we solicited 
public comments on ways we might further reduce administrative burden 
for these and similar services under the PFS.
1. E/M Guidelines
a. Background
    Most physicians and other billing practitioners bill patient visits 
to the PFS under a relatively generic set of codes that distinguish 
level of complexity, site of care, and in some cases, between new or 
established patients. These codes are called Evaluation and Management 
(E/M) visit codes. For example, there are generally three levels of 
hospital and nursing facility inpatient E/M visit codes, and five 
levels of office or hospital outpatient E/M visit codes, that vary 
based on complexity. The latter also distinguish whether or not the 
patient is new to the billing practitioner.
    Billing practitioners must maintain information in the medical 
record to document that they have reported the appropriate level of E/M 
visit code. CMS maintains guidelines that specify the kind of 
information that is required to support Medicare payment for each 
level. According to these documentation guidelines, there are three key 
components to selecting the appropriate level:
     History of Present Illness (HPI or History);
     Physical Examination (Exam); and
     Medical Decision Making (MDM).
    There are two versions of the documentation guidelines, commonly 
referenced based on the year of their release (the ``1995'' and 
``1997'' guidelines), available under downloads on the CMS Web site at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html. The most substantial differences between 
the two sets of guidelines pertain to requirements for the physical 
exam. The two versions have a slight difference in requirements for 
documenting the history, and no difference in requirements for MDM. In 
documenting a given E/M service, practitioners must use one version of 
the guidelines or the other, with one exception related to extended 
histories (see the Evaluation and Management Services guide available 
on the CMS Web site at https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/eval-mgmt-serv-guide-ICN006764.pdf). These guidelines are very similar to guidelines 
within the CPT codebook for E/M visits. We provide an example of how 
the guidelines distinguish between level 2 and level 3 visits in Table 
17.
    Stakeholders have long maintained that both the 1995 and 1997 
guidelines are administratively burdensome and outdated with respect to 
the practice of medicine, stating that they are too complex, ambiguous, 
and that they fail to distinguish meaningful differences among code 
levels. In general, we agree that there may be unnecessary burden with 
these guidelines and that they are potentially outdated, and believe 
this is especially true for the requirements for the history and the 
physical exam. The guidelines have not been updated to account for 
significant changes in technology, especially electronic health record 
(EHR) use, which presents challenges for data and program integrity and 
potential upcoding given the frequently automated selection of code 
level.
    Although CMS conducts few audits on E/M visits relative to the 
volume of PFS services they comprise, we have repeatedly heard from 
practitioners that compliance with the guidelines is a source of 
significant audit vulnerability and administrative burden. Our prior 
attempts to revise the guidelines met with a lack of stakeholder 
consensus and support, which contributed to the current policy that 
allows practitioners to use either the 1995 guidelines or 1997 
guidelines, resulting in further complexity in determining or selecting 
the applicable requirements.
b. E/M Guidelines Public Comment Solicitation
    We continue to agree with stakeholders that the E/M documentation 
guidelines should be substantially revised. We believe that a 
comprehensive reform of E/M documentation guidelines would require a 
multi-year, collaborative effort among stakeholders. We believe that 
revised guidelines could both reduce clinical burden and improve 
documentation in a way that would be more effective in clinical 
workflows and care coordination. We also think updated E/M guidelines 
coupled with technological advancements in voice recognition, natural 
language processing and user-centered design of EHRs could improve 
documentation for patient care while also meeting requirements for 
billing and population health management. We recognize that achieving 
the goal of reduced clinician burden and improved, meaningful 
documentation for patient care will require both updated E/M 
guidelines, as well as changes in technology, clinician documentation 
practices and workflow. We solicited input from a broad array of 
stakeholders, including patient advocates, on the specific changes we 
should undertake to reform the guidelines, reduce the associated 
burden, and better align E/M coding and documentation with the current 
practice of medicine.
    We specifically sought comment on how we might focus on initial 
changes to the guidelines for the history and physical exam, because we 
believe documentation for these elements may be more significantly 
outdated, and that

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differences in MDM are likely the most important factors in 
distinctions between visits of different levels. We also specifically 
sought comment on whether it would be appropriate to remove our 
documentation requirements for the history and physical exam for all E/
M visits at all levels. We stated that we believed MDM and time are the 
more significant factors in distinguishing visit levels, and that the 
need for extended histories and exams is being replaced by population-
based screening and intervention, at least for some specialties. In 
addition, an increase in the utilization of EHRs, and to some extent, 
shared health information via EHRs, may have changed the character of 
extended patient histories since the guidelines were established. As 
long as a history and physical exam are documented and generally 
consistent with complexity of MDM, we believed there may no longer be a 
need for us to maintain such detailed specifications for what must be 
performed and documented for the history and physical exam (for 
example, which and how many body systems are involved). We sought 
comment on whether clinicians and other stakeholders believe removing 
the documentation requirements for the history and physical exam would 
be a good approach.
    Although we believed that MDM guidelines may also need to be 
updated, we stated our belief that in the near term, it may be possible 
to eliminate the current focus on details of history and physical exam, 
and allow MDM and/or time to serve as the key determinant of E/M visit 
level. We sought public comment on this approach. We also sought 
comment on how such reforms may differentially affect physicians and 
practitioners of different specialties, including primary care 
clinicians, and how we could or should account for such effects as we 
examine this issue.
    We noted that there may still be clinical or legal reasons for 
individual practitioners to document an extended history or physical 
exam (for example, where there are negative findings for certain body 
systems in support of differential diagnosis). We additionally sought 
comment on whether CMS should leave it largely to the discretion of 
individual practitioners to what degree they should perform and 
document the history and physical exam.
    We also welcomed comments on specific ideas that stakeholders may 
have on how to update MDM guidelines to foster appropriate 
documentation for patient care commensurate with the level of patient 
complexity, while avoiding burdensome documentation requirements and/or 
inappropriate upcoding.
    The following is a summary of the public comments received on the 
E/M documentation guidelines, and our responses.
    Comment: We received many comments on potential updates and 
revisions to the E/M documentation guidelines. The comments described 
ways in which the guidelines may be outdated or need to be improved 
upon, for example to better reflect the content of E/M visit work, 
team-based care and the advent of EHRs. The commenters were 
appreciative and generally supportive of CMS undertaking this reform 
effort. Many of the comments reflected agreement with CMS (and other 
payers) that documentation standards are necessary to demonstrate and 
provide a clear record of what was performed in support of payment, as 
well as for legal and clinical reasons. However, commenters did not 
agree on how the current standards should be changed, and different 
specialties expressed different challenges and recommendations 
regarding the guidelines. Many professional specialty associations 
urged CMS to employ a more considered, long-term process such as a task 
force rather than immediate changes.
    There appeared to be some agreement among commenters that the 
documentation requirements for history and physical exam are 
particularly outdated. Commenters stated, for example, that they are 
often required to include or cut-and-paste into the record extraneous 
documentation detail regarding irrelevant history, review of unaffected 
systems, and unnecessary (and in some cases burdensome to the patient) 
physical exam elements, in order to justify an E/M code that most 
adequately reflects their work. They stated that this information 
bloats the medical record unnecessarily, increasing the time it takes 
to find or convey to the reader the most important and relevant 
clinical information at a given point in time. They said this detracts 
significantly from spending time on more important patient care 
activities.
    A few commenters believe that the two elements of history and exam 
could be eliminated entirely, while many commenters believe they needed 
to be retained, but changed or rolled up somehow into MDM. Some 
commenters believe that MDM is under-emphasized or could be assigned 
greater weight, while still recognizing the critical role that history 
and exam continue to play for patients, especially new patients. Some 
commenters believe that new guidelines to support MDM-driven E/M 
documentation need to be in place before requirements for history and 
exam are eliminated. Some specialties (for example, hematology-oncology 
and emergency medicine) explained that ensuring adequate performance 
and documentation of both history and physical exam at every visit is 
critical to their work for clinical, legal, operational, and other 
reasons.
    Some commenters raised the possibility of allowing flexibility at 
the practitioner or organization level. For example, one commenter 
suggested that CMS could encourage the use of unspecified standards, 
while allowing individual physicians to decide what components of a 
history and physical exam are required or should be documented for 
individual patients. Some commenters believe there are clinical reasons 
to include a history and exam in a patient's record, but they are not 
needed to determine the E/M code level. Others advised CMS to eliminate 
all numeric (counted) elements for history and exam in the 
documentation guidelines and allow physicians to document only what is 
relevant to the patient's specific diagnosis.
    There was no consensus among commenters on changes that would need 
to be made to MDM and time rules in order for CMS to rely more on these 
elements (in lieu of history and exam) to justify service level billed. 
Some commenters recommended clarification of ambiguities or more 
uniform interpretation of the current MDM guidelines. Others believe 
the existing criteria for assessing MDM are themselves inadequate, and 
that while MDM should carry the most weight, it is the hardest to 
measure meaningfully and is frequently subjective. Some commenters 
recommended alternatives such as different MDM levels reflecting 
comorbidity or the intensity of a single, highly active medical 
condition. Some believe that MDM was a key determinant but not 
sufficient to stand alone.
    Some commenters sought clarification on what CMS was proposing with 
respect to time. They were unclear how CMS envisioned time coming into 
play in a different way than it currently does. Commenters had 
differing views on the advisable role of time in determining code level 
(alone or in combination with MDM). Some recommended expanding the role 
of time, for example to enumerate time spent with family or spent 
taking extended histories rather than just counseling time. Others 
believe work should not be equated with time, or mentioned that relying 
on

[[Page 53165]]

time alone could create a perverse payment incentive.
    Some commenters recommended, for immediate relief, that history and 
exam should not be audited except where there is uncertainty regarding 
MDM or lack of documentation regarding time. A few commenters suggested 
alternative E/M service components such as the patient's functional 
status, review of medications and care coordination. One commenter 
listed several items they believe deserve CMS' review, even if there is 
not a broad revision to the guidelines, including perceived overly 
comprehensive history and exam requirements for the Level 4/5 
differential; MDM rules that value a new problem higher than an 
existing problem, even when it is clinically more minor; MDM rules that 
do not distinguish medication risk according to how benign the 
medication is; and the level of audit risk or exposure if less 
information (history and exam) would be included in the medical record.
    Some comments discussed the intersection of the guidelines with 
EHRs. Some commenters requested alignment of EHR templates with new 
guidelines, eliminating the need to cut-and-paste medical record 
information, and eliminating information blocking to outside clinicians 
(for example, pharmacists seeking information on patient history). 
There was some support for removing requirements to document social, 
family and past medical history in the medical record at a given visit 
when it is already present within an EHR. Similarly, there was support 
for only requiring full, baseline history and exam at time of first 
visit/consultation, with updates at subsequent visits only to areas of 
changes in condition that affect the treatment plan. There was also 
some support for physicians being allowed to review and cross-
reference, or sign off on, certain documentation entered by ancillary 
staff or technicians, entered directly by patients (such as through a 
patient portal), or captured automatically by devices.
    A number of commenters specified that changes should be effective 
across all E/M codes of all levels. Some specialties requested 
particular consideration of care settings other than just outpatient 
care, such as inpatient or other transitional care settings.
    Many commenters urged CMS to proceed cautiously by making changes 
over a period of multiple years, using a representative task force and 
additional public forums such as open door forums and listening 
sessions prior to implementing broad changes. Some commenters suggested 
that reforming the guidelines is a monumental task that would have a 
far-reaching impact and needs to be done judiciously since, for 
example, commercial payers often follow Medicare rules in this area. 
These commenters stated that, if done correctly, revising the 
guidelines will be a significant undertaking that is likely to last 
several years and require an inclusive, transparent, iterative and 
perhaps transitional process to ensure that all stakeholders across all 
specialties are involved, that a thoughtful examination of options can 
take place, and that the benefits and consequences of any potential 
changes can be identified. Some commenters specified that the CPT 
Editorial Panel, private insurers and EHR vendors should be involved.
    Some commenters recommended clarification and training by CMS of 
unspecified issues on interpretation of current guidelines, but 
requested that CMS seek full input before moving forward with any 
changes, including these clarifications. These commenters stated that 
even minor changes to the codes or their documentation would require 
physicians and practices a great deal of time to understand and 
implement. A number of commenters asked CMS not to make any immediate 
changes for these or similar reasons.
    Response: We thank the commenters for this feedback. We are 
especially appreciative of the commitment from stakeholders to work 
with us on developing and implementing potential changes. We also note 
that commenters frequently suggested that we provide additional avenues 
for collaboration with stakeholders prior to implementing any changes. 
We are currently considering the best approaches for such 
collaboration, and will take the comments into account as we consider 
the issues for future rulemaking.
    In the CY 2018 PFS proposed rule (82 FR 34079), we further noted 
that through letters, meetings, public comment letters in past 
rulemaking cycles, and other avenues, we have heard from many 
stakeholders that the E/M code set itself is outdated and needs to be 
revised. For example, some stakeholders recommend an extensive research 
effort to revise and revalue E/M services, especially the work inputs 
(see 81 FR 46200). In prior rulemaking cycles, we acknowledged the 
limitations of the current E/M code set. In our proposed rule, we 
agreed that the structure of the underlying code set and its valuation 
relative to other PFS services are also important issues that we expect 
to continue to explore, though we stated our immediate focus on 
revision of the current E/M guidelines in order to reduce unnecessary 
administrative burden.
    Comment: Some commenters requested that CMS undertake revision or 
revaluation of the E/M code set itself, without further delay. Some 
commenters expressed that the failure of the current code set to fully 
capture cognitive work is more burdensome than the documentation rules 
and, if addressed, would simultaneously address unnecessary 
administrative burden. They stated that MDM is key to determining level 
of service; however MDM is not just a critical documentation 
requirement. In their view, it is also the critical piece to properly 
define and value E/M services. Some commenters recommended that the 
effort to revise documentation rules should be part of a broader 
initiative to accurately reimburse physicians and other health 
professionals for the work furnished during E/M visits, and that both 
issues are important for transition to value-based payment as 
physicians take on more accountability for their resource utilization. 
Similarly, some commenters believe the code set itself is a separate 
issue from the guidelines, but should be equally addressed by CMS and 
the AMA/CPT Editorial Panel in the longer-term.
    In contrast, other commenters believe that the current valuation of 
all E/M services should be presumed correct, and that the goal of 
reforming the guidelines is to make them consistent with current 
medical practice. Several commenters recommended that CMS consider the 
E/M definitional and valuation issues separate from E/M guideline 
revision. They believe that changes in the guidelines should not 
automatically require a review of current valuation. Also several 
commenters asked CMS to reinstate the specialist consultation codes 
that were discontinued for payment in 2010.
    Response: We thank the commenters for this feedback. We believe the 
public comments illustrate how difficult it is to utilize or rely upon 
such a relatively small set of codes to describe and pay for the work 
of a wide range of physicians and practitioners in many vastly 
different clinical contexts. We also believe the public comments 
illustrate that many of the issues with the E/M documentation 
guidelines are not simply a matter of undue administrative burden. The 
guidelines reflect how work was performed and valued a number of years 
ago, and are intimately related to the definition and description of E/
M work as well as its valuation. Opinions on potential redefinition and 
revaluation of the E/M code set tend to differ by specialty,

[[Page 53166]]

according to the type of work dominating each specialty (for example, 
primary care, so-called ``cognitive'' specialty work, or global 
procedures that have E/M visits bundled in rather than separately 
performed and documented). We expect to continue to work on all of 
these issues with stakeholders in future years though we are 
immediately focused on revision of the current E/M guidelines in order 
to reduce unnecessary administrative burden.
2. Care Management Public Comment Solicitation
    In the CY 2018 PFS proposed rule, we stated our continued interest 
in the ongoing work of the medical community and other stakeholders to 
refine the set of codes used to describe care management services. In 
section II.H of this final rule, we discuss our final policy to adopt 
CPT codes for CY 2018 to replace the G-codes we established for several 
new care management service codes finalized last year, describing 
cognitive impairment assessment and care planning, and behavioral 
health integration services. In CY 2018, these codes will be added to 
the suite of CPT care management service codes we adopted in recent 
years, including transitional care management and chronic care 
management (CCM) services. In our proposed rule, we also reiterated our 
commitment to work with stakeholders on necessary refinements to this 
code set, especially codes that would describe the professional work 
involved in caring for complex patients in additional clinical 
contexts. Also we solicited public comment on ways we might further 
reduce the burden for practitioners reporting care management services, 
including through stronger alignment between CMS requirements and CPT 
guidance for existing and potential new care management service codes.
    We received a few comments on ways CMS might further improve CCM 
services, and approaches that CMS might take more broadly to improve 
payment for care management services. In this section, we discuss the 
comments and respond.
    Comment: We received a few comments requesting a change in the 
coding or payment for CCM services. Several commenters recommended that 
CMS develop add-on codes to break out and pay for smaller clinical 
staff time increments (specifically, breaking out increments of greater 
than 20 minutes of clinical staff time, such as 21-40 minutes and 41-60 
minutes).
    Response: We appreciate the suggestion from commenters. At this 
time, we generally intend to consider pursuing future changes to the 
CPT codes describing chronic care management services, rather than 
create new add-on G codes that would be used alongside current CPT 
codes for CCM services. We urge stakeholders to work through the CPT 
process to make needed changes or create new codes for the CCM code set 
as appropriate.
    Comment: One commenter recommended that CMS not require that a copy 
of the care plan must be given to the patient (or caregiver as 
appropriate). The commenter recommended that CMS instead require that a 
copy of the plan of care must be available to the patient or caregiver.
    Response: In the CY 2017 PFS final rule (81 FR 80250), we revised 
this language to no longer mandate the format in which the care plan 
must be provided (written versus verbal) and, rather, to allow the care 
plan to be provided in a format consistent with patient/caregiver 
preference. We stated that while beneficiaries must be provided a copy 
of the care plan, practitioners may choose to provide the care plan in 
hard copy or electronic form in accordance with patient preferences. We 
believe our current language is more appropriate than the CPT language 
or the language recommended by the commenter because it allows 
flexibility in how the care plan information is transmitted to the 
patient (or caregiver, if appropriate) in accordance with patient needs 
or preference, but ensures to a greater degree that the information is 
actually received by them, whatever the format. We believe a 
requirement merely to make the information ``available'' may not ensure 
that it is actually received and understood. If the patient (or 
caregiver, if appropriate) prefers, the care plan may be provided to 
them via an electronic portal. Also, whatever format is used to provide 
the care plan, we expect that the care plan will be discussed with the 
patient (and/or caregiver as appropriate) as part of the management of 
their care and consistent with the other CCM scope of service elements.
    Comment: One commenter recommended that CMS not require 
documentation of each minute of service provided.
    Response: In addition to CCM, there are many CPT codes that are 
timed codes (having time within their code descriptor). The same rules 
should apply for documentation of time for CCM as for other timed 
services. For program integrity purposes (to ensure timed services are 
actually performed in full, as described and defined by the code(s)), 
we expect practitioners to document in the medical record how they 
spent the qualifying time. In the case of CCM, they must document that 
the required time was spent performing qualifying activities. This is 
routine policy for timed service codes. If practitioners have specific 
questions about the degree to which they must document and time their 
CCM work using the current CPT codes, they should consult their 
Medicare Administrative Contractor.
    Comment: One commenter recommended that CMS reduce the service 
elements for CPT code 99490 to require only one of the following 
service elements to be performed: Comprehensive care management, 
management of care transitions, or home- and community-based care 
coordination.
    Response: The current code descriptors and required scope of 
service elements reflect the results of our notice and comment 
rulemaking with significant contributions from the AMA/CPT Editorial 
Panel. We believe we should continue to require, for each month in 
which the service is billed, all of the service elements that are 
medically necessary for the patient, which we believe is also 
consistent with CPT reporting rules for CCM.
    Comment: One commenter asked CMS to further align its rules with 
CPT reporting rules by removing the requirement to use a certified EHR.
    Response: We continue to believe that use of certified EHR 
technology is vital to ensure that practitioners are capable of 
providing the full scope of CCM services, such as timely care 
coordination and continuity of care (see our prior discussion of this 
issue at 79 FR 67723). The use of certified EHR technology helps ensure 
that members of the interdisciplinary care team have timely access to 
the patient's most updated health information. Also we believe that use 
of certified EHR technology among physicians and other practitioners 
will increase as we move forward to implement the Quality Payment 
Program, including MIPS and Advanced Alternative Payment Models, as 
well as other value-based payment initiatives. Accordingly, we are not 
removing the requirement to use a certified EHR.
    Comment: One commenter recommended that CMS not require an 
initiating visit for any CCM patient. The commenter believes that 
patient consent to receive CCM services could be obtained by a care 
manager verbally by phone.

[[Page 53167]]

    Response: Starting in CY 2017, we removed the requirement for all 
CCM patients to receive initiating visits, instead only requiring it if 
the patient has not been seen within a year prior to commencement of 
CCM. Also we changed the consent requirement to allow verbal consent 
(rather than the written consent we previously required) for all 
patients, including patients who require an initiating visit. In other 
words, consent can already be obtained verbally independent of the 
initiating visit, as long as it is obtained prior to commencement of 
the monthly CCM services. We continue to believe that if the patient 
has not been seen within a year, there should be an initiating visit so 
the billing practitioner can assess or re-assess the patient, gather 
all necessary data to inform the care plan, and perform other 
preparatory work. Therefore we are not changing this requirement. We 
remind stakeholders that consent does not have to be obtained as part 
of an initiating visit and can be done separately, as long as it is 
obtained before the first CCM monthly service commences.
    Comment: We received a few comments on the add-on code (G0506) 
describing practitioner assessment and care planning in conjunction 
with an initiating visit. One commenter said there should not be a 
requirement for the billing practitioner to create the comprehensive 
care plan as part of this code. The commenter believes their role 
should instead be to identify and support patients during the 
enrollment process, and to generally supervise the creation of the CCM 
care plan. Another commenter recommended that CMS allow pharmacists to 
have the care planning in HCPCS code G0506 delegated to them.
    Response: We created HCPCS code G0506 explicitly to separately 
identify and pay for the time and work of the billing practitioner 
reporting the monthly CCM service, to ensure appropriate payment for 
their comprehensive assessment and involvement at the outset of CCM, if 
needed by the patient (81 FR 80245). We did this because we expect that 
much of the subsequent CCM services will be performed incident to the 
professional services of the billing practitioner and we wish to ensure 
appropriate personal involvement of, and payment to, the practitioner 
who is directly reporting CCM. The purpose for adopting this add-on 
code was to describe and provide appropriate payment for work that is 
personally and directly performed by the billing practitioner 
themselves in preparation for furnishing CCM services. Care planning 
that is performed by clinical staff incident to the services of the 
billing practitioner may be counted towards the clinical staff time of 
the monthly CCM service code(s), but cannot be counted towards G0506.
    Comment: One commenter asked CMS to clarify that the CCM planning 
code, HCPCS code G0506, can be billed on a day separate from an E/M 
date of service.
    Response: G0506 is comprised of a face-to-face assessment and care 
planning personally performed only once by the practitioner reporting 
the monthly CCM service, in conjunction with (as an add-on code to) an 
initiating visit. The face-to-face assessment would be performed the 
same day as the initiating visit, but some or all of the care planning 
piece could be performed by the billing practitioner on a subsequent 
day. Accordingly, we would expect the date of service for HCPCS code 
G0506 on the claim to be the same as for the base initiating visit 
code, and we will consider issuing an FAQ specifying this.
    Comment: Several commenters recommended that CMS seek ways to 
eliminate cost sharing for CCM and other care management services. 
These commenters expressed that it is difficult to explain the 
mechanics and benefits of care management to patients, given the added 
cost sharing. They recommended that CMS seek ways to remove the cost 
sharing, for example through designating the services as preventive 
services or working with Congress to accomplish it legislatively.
    Response: As we stated in our CY 2017 PFS final rule (81 FR 80240), 
we appreciate the 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 remove cost sharing 
for care management services. We appreciate the commenters' 
acknowledgement of our current limitations and we will continue to 
consider this issue.
    Comment: We received a few comments recommending ways in which we 
might better involve specialists in the provision of CCM or care 
management broadly (such as payment to emergency department physicians 
when they act as primary care practitioners, or payment to multiple 
practitioners involved in managing a given patient at a given time). 
Also a few commenters recommended that CMS allow more than one 
practitioner to bill CCM per month. They believe there were situations 
where more than one practitioner co-manages a patient, or that 
particularly complex patients who would benefit from CCM services also 
benefit from seeing multiple health care providers.
    Response: At this time, only one practitioner can report CCM per 
month, consistent with both CPT guidance and the authorizing statute 
for payment of CCM services (section 1848(b)(8)(B) of the Act). 
However, we agree there may be circumstances in which more than one 
practitioner expends resources managing or helping manage a CCM 
patient. We will continue to explore ways in which we might better 
identify and pay for costs incurred by multiple practitioners who 
coordinate and manage a patient's care within a given month, and are 
interested in hearing more about the relevant circumstances, potential 
gaps in coding, and the exact nature of the work performed or costs 
incurred.

BILLING CODE 4120-01-P

[[Page 53168]]

[GRAPHIC] [TIFF OMITTED] TR15NO17.079

BILLING CODE 4120-01-C

[[Page 53169]]

M. Therapy Caps

1. Outpatient Therapy Caps for CY 2018
    Section 1833(g) of the Act (as amended by section 4541 of the 
Balanced Budget Act of 1997) (Pub. L. 105-33) 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 are 
permanent, meaning that the statute does not specify an end date.
    The therapy cap amounts under section 1833(g) of the Act are 
updated each year based on the 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 2017 therapy cap of $1,980 by the CY 2018 adjusted MEI of 1.4 
percent and rounding to the nearest $10.00 results in a CY 2018 therapy 
cap amount of $2,010.
    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). It was most 
recently extended by section 202 of the Medicare Access and CHIP 
Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10), and is set to 
expire on December 31, 2017. The MACRA extension of the therapy cap 
exceptions process includes the application of the therapy caps to 
outpatient services furnished by hospitals described at section 
1833(a)(8)(B) of the Act by continuing the temporary suspension under 
section 1833(g)(6)(A) of the Act of the statutory exemption for these 
hospital therapy services that first became effective October 1, 2012 
through the enactment of the Middle Class Tax Relief and Jobs Creation 
Act of 2012 (MCTRJCA) (Pub. L. 112-96).
    CMS tracks each beneficiary's incurred expenses annually and counts 
them toward 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 (effective January 1, 2014). 
As we explained in the CY 2016 PFS final rule with comment period, 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 (effective 
January 1, 2016). 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.
    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, 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.
    The statutory authority for the therapy caps exceptions process 
will expire on December 31, 2017. Under current law, the therapy caps 
will be applicable in accordance with the statute to all outpatient 
therapy settings, except for services furnished and billed by 
outpatient hospitals described under section 1833(a)(8)(B) of the Act. 
Without a therapy caps exceptions process, the statutory limitation 
requires that beneficiaries become financially liable for 100 percent 
of expenses they incur for services that exceed the therapy caps. In 
addition, without a therapy caps exceptions process, the therapy caps 
will be applicable without any further medical review, and any use of 
the KX modifier on claims for these services by providers of outpatient 
therapy services will have no effect.

III. Other Provisions of the Proposed Rule

A. New Care Coordination Services and Payment for Rural Health Clinics 
(RHCs) and Federally-Qualified Health Centers (FQHCs)

1. Overview
    We have been engaged in a multi-year examination of coordinated and 
collaborative care services in professional settings, and as a result 
established codes and separate payment in the Physician Fee Schedule 
(PFS) to separately recognize and pay for these important services. As 
part of this initiative, the CY 2016 PFS proposed rule (80 FR 41708) 
solicited public comments on (1) improving payment for the professional 
work of care management services; (2) establishing separate payment for 
collaborative care, particularly inter-professional consultation 
between primary care physicians, psychiatrists, and other 
practitioners; and (3) assessing whether current PFS payment for 
Chronic Care Management (CCM) services is adequate and whether the 
administrative burden associated with furnishing and billing these 
services should be reduced.
    As a result of the comments we received in response to our request, 
we established in the PFS separate payment for complex CCM services, 
and temporary codes to make separate payment for general behavioral 
health integration (BHI) services and a psychiatric collaborative care 
model (CoCM). We established four G codes to

[[Page 53170]]

describe BHI and psychiatric CoCM services and stated that we would 
consider whether to adopt and establish values for any associated new 
CPT codes being developed under our standard process once those codes 
are active. The separate payment for complex CCM services, general BHI, 
and psychiatric CoCM services were finalized in the CY 2017 PFS final 
rule (81 FR 80225) beginning January 1, 2017, for practitioners billing 
under the PFS. Based on these payments and codes, we proposed revisions 
to the CCM payment for RHCs and FQHCs, and proposed requirements and 
payment for general BHI and psychiatric CoCM services furnished in RHCs 
and FQHCs, beginning on January 1, 2018.
2. Background
a. RHC and FQHC Payment Methodologies
    RHC and FQHC visits are face-to-face encounters between a patient 
and one or more RHC or FQHC practitioners during which time one or more 
RHC or FQHC qualifying services are furnished. RHC and FQHC 
practitioners are physicians, nurse practitioners (NPs), physician 
assistants (PA), certified nurse midwives (CNMs), clinical 
psychologists, and clinical social workers, and under certain 
conditions, a registered nurse or licensed practical nurse furnishing 
care to a homebound RHC or FQHC patient. A Transitional Care Management 
(TCM) service can also be an RHC or FQHC visit, and a Diabetes Self-
Management Training (DSMT) service or a Medical Nutrition Therapy (MNT) 
service furnished by a certified DSMT or MNT provider may also be an 
FQHC visit. Only medically-necessary medical, mental health, or 
qualified preventive health services that require the skill level of an 
RHC or FQHC practitioner are RHC or FQHC billable visits. Services 
furnished by auxiliary personnel (for example, nurses, medical 
assistants, or other clinical personnel acting under the supervision of 
the RHC or FQHC practitioner) are considered incident to the visit and 
are included in the per-visit payment.
    RHCs are paid an all-inclusive rate (AIR) for medically necessary 
medical and mental health services and qualified preventive health 
services furnished on the same day (with some exceptions). In general, 
the A/B Medicare Administrative Contractor (MAC) calculates the AIR for 
each RHC by dividing total allowable costs by the total number of 
visits for all patients. Productivity, payment limits, and other 
factors are also considered in the calculation. Allowable costs must be 
reasonable and necessary and may include practitioner compensation, 
overhead, equipment, space, supplies, personnel, and other costs 
incident to the delivery of RHC services. The AIR is subject to a 
payment limit, except for certain provider-based RHCs that have an 
exception to the payment limit.
    FQHCs were paid under the same AIR methodology until October 1, 
2014, when, in accordance with section 1834(o) of the Act (as added by 
section 10501(i)(3) of the Affordable Care Act), they began to 
transition to an FQHC PPS system in which they are paid based on the 
lesser of the FQHC PPS rate or their actual charges. The FQHC PPS rate 
is adjusted for geographic differences in the cost of services by the 
FQHC PPS geographic adjustment factor (GAF). The rate is increased by 
34 percent when an FQHC furnishes care to a patient that is new to the 
FQHC, or to a beneficiary receiving an Initial Preventive Physical 
Examination (IPPE) or has an Annual Wellness Visit (AWV).
    Both the RHC AIR and FQHC PPS payment rates were designed to 
reflect the cost of all services and supplies that an RHC or FQHC 
furnishes to a patient in a single day. The rates are not adjusted for 
the complexity of the patient health care needs, the length of the 
visit, or the number or type of practitioners involved in the patient's 
care.
b. Current CCM Requirements and Payment for RHCs and FQHCs
    In the CY 2016 PFS final rule with comment period (80 FR 71080), 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. The requirement 
that RHC or FQHC services be furnished face-to-face was waived for CCM 
services.
    In the CY 2017 PFS final rule (81 FR 80256), we finalized revisions 
to the CCM requirements for RHCs and FQHCs. Specifically, we revised 
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 an RHC or FQHC practitioner, 
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. We also revised requirements 
pertaining to the provision of CCM services, consistent with the same 
revisions for practitioners billing under the PFS to reduce the burden 
of furnishing these services and promote beneficiary access to these 
services. These revisions were effective beginning on January 1, 2017, 
and included:
     Revising the requirement that CCM be initiated during a 
comprehensive evaluation and management (E/M), AWV, or IPPE visit, to 
require a separately billable initiating visit only for new patients or 
patients that have not had an E/M, AWV, or IPPE visit within the 
previous year;
     Revising the requirement that CCM services be available 
24/7 with an RHC or FQHC practitioner who has access to the patient's 
electronic care plan, to allow 24/7 access to auxiliary personnel with 
a means to make contact with an RHC or FQHC practitioner;
     Removing the restriction on faxing information, and no 
longer requiring that care plan information be available on a 24/7 
basis;
     Removing the requirement that clinical summaries must be 
formatted according to certified EHR technology, and instead requiring 
that the RHC or FQHC create, exchange, and transmit continuity of care 
document(s) in a timely manner with other practitioners and providers;
     Removing the description of the format of the care plan 
that is given to the patient or caregiver; and
     Revising the requirement that RHCs and FQHCs obtain a 
written agreement that the elements of CCM were discussed, to allowing 
this information to be documented in the medical record.
    In the CY 2017 PFS final rule, we stated that although 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 invited 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. We received a few comments 
regarding mental health services in RHCs and FQHCs and appreciate the 
information that was provided.
    The 2016 and 2017 CCM payment rates for RHCs and FQHCs were set 
annually based on the PFS national non-facility payment rate, and is 
paid when CPT code 99490 is billed alone or with

[[Page 53171]]

other payable services on an RHC or FQHC claim. The 2017 rate for RHCs 
and FQHCs is $42.71 for 20 minutes or more of CCM services. This is the 
only RHC and FQHC service that has been paid in this manner, and RHCs 
and FQHCs are not currently authorized to be paid for any other CCM or 
other care management codes. Also, RHCs and FQHCs cannot bill for CCM 
services for a beneficiary during the same service period as billing 
for TCM or any other program that provides additional payment for care 
management services (outside of the RHC AIR or FQHC PPS payment) for 
the same beneficiary.
    Additional information on CCM requirements is available on the CMS 
Care Management Web page at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Care-Management.html and on the 
CMS RHC and FQHC Web pages at https://www.cms.gov/Center/Provider-Type/Rural-Health-Clinics-Center.html and https://www.cms.gov/Center/Provider-Type/Federally-Qualified-Health-Centers-FQHC-Center.html.
c. Payment for Care Management Codes Under the PFS
CCM Services (CPT Code 99487 and CPT Code 99489)
    As we stated in the CY 2017 PFS final rule (81 FR 80244), the 
initial claims data for CCM services billed under the PFS showed that 
although utilization was increasing steadily, use of CPT code 99490 was 
still relatively low, and interviews with practitioners indicated that 
many believed that they were exceeding the 20-minute time threshold for 
billing this code. To pay as accurately as possible and to encourage 
access to CCM services, the CY 2017 PFS final rule established separate 
payment for two additional CCM codes, CPT code 99487 and CPT code 
99489, effective beginning on January 1, 2017, for practitioners 
billing under the PFS. These codes are for complex CCM services that 
reflect additional clinical staff time, more extensive care planning, 
and higher complexity of the patient.
    CPT code 99487 is for complex CCM services. It requires multiple 
(two or more) chronic conditions expected to last at least 12 months, 
or until the death of the patient; chronic conditions that 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; and 60 minutes of clinical staff time directed 
by a physician or other qualified health care professional, per 
calendar month.
    CPT code 99489 is for each additional 30 minutes of clinical staff 
time directed by a physician or other qualified health care 
professional, per calendar month.
    Practitioners paid under the PFS can bill either complex (CPT code 
99487 and CPT code 99489) or non-complex (CPT code 99490) CCM services 
during a given service period, and can submit only one professional 
claim for CCM services for that service period.
General BHI Services (HCPCS Code G0507)
    The types of chronic conditions that are eligible for CCM services 
are not specified and could include chronic mental health or behavioral 
health conditions or chronic cognitive disorders as long as the CCM 
requirements are met. However, because not all behavioral health issues 
fit into the CCM model, and Medicare beneficiaries with behavioral 
health conditions often require extensive care management discussions, 
information-sharing, and planning between a primary care practitioner 
and a behavioral health specialist, the CY 2017 PFS final rule 
established HCPCS code G0507 for 20 minutes or more of general BHI 
services. Payment for this code was effective beginning on January 1, 
2017, for practitioners billing under the PFS. Effective January 1, 
2018, HCPCS code G0507 is replaced by CPT code 99484.
    BHI is a team-based, collaborative approach to care that focuses on 
integrative treatment of patients with primary care and mental or 
behavioral health conditions. As finalized in the CY 2017 PFS final 
rule, requirements for this code include an 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.
Psychiatric CoCM Services (HCPCS Codes G0502, G0503, and G0504)
    Psychiatric CoCM is a specific model of care provided by a primary 
care team consisting of a primary care provider and a health care 
manager who works in collaboration with a psychiatric consultant. As 
finalized in the CY 2017 PFS final rule, we provide Medicare payment 
for psychiatric CoCM services to practitioners billing under the PFS 
when these services are directed by a treating physician or other 
qualified health care professional. We also finalized that the treating 
physician or other qualified health care professional directs the 
behavioral health care manager, who must be an individual with formal 
education or specialized training in behavioral health, including 
social work, nursing, or psychology, working under the oversight and 
direction of the physician or qualified health care professional. We 
finalized that a psychiatric consultant must be a medical professional 
trained in psychiatry and qualified to prescribe the full range of 
medications. Finally, psychiatric CoCM services may be furnished to 
beneficiaries with any psychiatric or behavioral health condition(s) 
and may include substance use disorders. The three psychiatric CoCM 
codes established in the CY 2017 PFS final rule were G0502, G0503, and 
G0504. Effective January 1, 2018, these codes are replaced by CPT codes 
99492, 99493, and 99494, respectively.
    HCPCS code G0502 is for 70 minutes or more of initial psychiatric 
CoCM services 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. Required elements include: outreach to and treatment of a 
patient as 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 of the patient 
into a registry and tracking patient follow-up and progress using the 
registry (with appropriate documentation), 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.
    HCPCS code G0503 is for 60 minutes of subsequent psychiatric CoCM 
services in a subsequent month and includes: 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

[[Page 53172]]

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.
    HCPCS code G0504 is for each additional 30 minutes of initial or 
subsequent psychiatric CoCM services in a calendar month.
3. Proposed Care Management Requirements and Payment for RHCs and FQHCs
    To ensure that RHC and FQHC patients have access to new care 
management services in a manner consistent with the RHC and FQHC per 
diem payment methodologies, we proposed the establishment of two new G 
codes for use by RHCs and FQHCs. The first new G code, GCCC1, would be 
a General Care Management code for RHCs and FQHCs, with the payment 
amount set at the average of the national non-facility PFS payment 
rates for CCM (CPT codes 99490 and 99487) and general BHI code G0507. 
The second new G code for RHCs and FQHCs, GCCC2, would be a Psychiatric 
CoCM code, with the payment amount set at the average of the national 
non-facility PFS payment rates for CPT codes G0502 and G0503. (We note 
that GCCC1 and GCCC2 were placeholder codes and are replaced by G0511 
and G0512, respectively, effective January 1, 2018). The following is a 
detailed discussion of our proposal, as well as alternatives that we 
considered.
a. Proposed Establishment of a General Care Management Code for RHCs 
and FQHCs
    The RHC AIR and the FQHC PPS rate, which include all costs 
associated with an RHC or FQHC visit, are based on the RHC's and FQHC's 
costs. Although many RHCs and FQHCs have always provided some 
coordination of care within and outside their facilities, the type of 
structured care management services that are now billable under the PFS 
are generally not included in the RHC AIR or the FQHC PPS rate. Because 
CCM services are not required to be face-to-face encounters, and do not 
require the skill level of an RHC or FQHC practitioner, they do not 
meet the requirements for an RHC or FQHC billable visit. In addition, 
RHC and FQHC services cannot be separately billed to the PFS. 
Therefore, in the CY 2016 PFS final rule with comment period, we 
established payment for CCM services at the PFS national non-facility 
rate when CPT code 99490 is billed alone or with other payable services 
on an RHC or FQHC claim to pay for the costs of CCM services that are 
not already captured in the RHC AIR or the FQHC PPS payment.
    When CCM services were first established for RHCs and FQHCs, CPT 
code 99490 was the only CCM code that was billable under the PFS. Now 
that there are additional codes for more complex CCM services and for 
general BHI and psychiatric CoCM services, we believe it is necessary 
to revise our payment approach for payment of care management services.
    RHCs and FQHCs are paid per-visit rates that are not adjusted based 
on the complexity of a service or the time spent furnishing services, 
and the payment rate is not designed to be equal to the payment under 
the PFS for a specific service. We sought to develop a methodology for 
payment of care management services that is consistent with the RHC and 
FQHC payment principles of bundling services and not paying for 
services based on time increments. We also sought to develop a 
methodology that would support the provision of care management 
services without creating additional reporting burdens, while promoting 
beneficiary access to comprehensive CCM and BHI services furnished by 
RHCs and FQHCs.
    Therefore, effective for services furnished on or after January 1, 
2018, we proposed to create General Care Management code GCCC1 for RHCs 
and FQHCs, with the payment amount set at the average of the 3 national 
non-facility PFS payment rates for the CCM and general BHI codes and 
updated annually based on the PFS amounts. The 3 codes are:

 CPT 99490--20 minutes or more of CCM services
 CPT 99487--at least 60 minutes of complex CCM services
 HCPCS G0507--20 minutes or more of BHI services

    RHCs and FQHCs could bill the new General Care Management code when 
the requirements for any of these 3 codes (CPT codes 99490, 99487, or 
HCPCS code G0507) are met. The General Care Management code would be 
billed alone or in addition to other services furnished during the RHC 
or FQHC visit. This code could only be billed once per month per 
beneficiary, and could not be billed if other care management services 
(such as TCM or home health care supervision) are billed for the same 
time period. We note that CPT code 99489 is an add-on code when CPT 
code 99487 is furnished, and is therefore not included as RHCs and 
FQHCs are not paid for additional time once the minimum requirements 
have been met.
    As previously noted, the program requirements for RHCs and FQHCs 
furnishing CCM services were established in the CY 2016 PFS final rule 
with comment period (80 FR 71080) and revised in the CY 2017 PFS final 
rule (81 FR 80256). We did not propose any changes to these 
requirements at this time.
    BHI refers to care management services that integrate behavioral 
health services with primary care and other clinical services. To bill 
for this service using the proposed General Care Management Code for 
RHCs and FQHCs, 20 minutes or more of clinical staff time, directed by 
an RHC or FQHC practitioner, must be furnished per calendar month. We 
proposed the following requirements for RHCs and FQHCs furnishing BHI 
services:
     Initiating Visit: An E/M, AWV, or IPPE visit with an RHC 
or FQHC primary care practitioner (physician, NP, PA, or CNM) occurring 
no more than one-year prior to commencing BHI services. This could be 
the same initiating visit that is used for initiating CCM services, and 
would be billed separately as an RHC or FQHC visit (if the RHC or FQHC 
has not already billed for this visit).
     Beneficiary Consent: Documentation in the medical record 
that the beneficiary has consented to receive BHI services, given 
permission to consult with relevant specialists as needed, and been 
informed that there may be beneficiary cost-sharing, including 
deductible and coinsurance amounts as applicable, for both in-person 
and non-face-to-face services that are provided. The beneficiary 
consent process would also include informing the patient that only one 
practitioner/facility can furnish and be paid for these services during 
a calendar month, and that the patient can stop care coordination 
services at any time (effective at the end of the calendar month). This 
could be obtained at the same time that beneficiary consent is obtained 
for CCM services.
     Billing Requirements: At least 20 minutes of care 
management services

[[Page 53173]]

per calendar month, furnished under the direction of the RHC or FQHC 
primary care physician, NP, PA, or CNM, and furnished by an RHC or FQHC 
practitioner, or by clinical personnel under general supervision. These 
are the same billing requirements as for CCM services. If both CCM and 
BHI services are furnished in the same month, the time would be 
combined and billed as one under the new care coordination code.
     Patient Eligibility: One or more new or pre-existing 
behavioral health or psychiatric conditions being treated by the RHC or 
FQHC primary care practitioner, including substance use disorders, 
that, in the clinical judgment of the RHC or FQHC primary care 
practitioner, warrants BHI services.
     Required Service Elements: An 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.
    Both CCM and general BHI services are intended to provide a 
structured and coordinated approach to care management that is not 
typically included in the RHC's AIR or the FQHC PPS payment 
methodology. Care management services are directed by the RHC or FQHC 
primary care practitioner, who remains involved through ongoing 
oversight, management, collaboration and reassessment, while care 
management services are typically furnished in a non-face-to-face 
setting primarily by a non-RHC or FQHC practitioner working under 
general supervision requirements. Time spent by administrative or 
clerical staff cannot be counted towards the time required to bill 
these services.
    Table 18 compares the proposed requirements for CCM and general BHI 
services. We believe that even though there are some differences in the 
requirements of CCM and general BHI, grouping them together will help 
to promote integrated care management services for Medicare 
beneficiaries who have either or both primary care and behavioral 
health needs. It will also result in the least amount of reporting 
burden for RHCs and FQHCs because once the 20-minute threshold is met 
for either CCM or general BHI, reporting and tracking of additional 
time increments is not required.
    If this policy had been adopted for CY 2017, the payment amount for 
General Care Management for RHCs and FQHCs would have been 
approximately $61 (CPT 99490 at $42.71, + CPT 99487 at $93.67, + G0507 
at $47.73 = $184.11/3 = $61.37). This is more than the CY 2017 PFS 
national non-facility rates for CPT code 99490 and HCPCS code G0507, 
and less than the PFS national non-facility rate for CPT code 99487. We 
believe that this methodology is consistent with the RHC and FQHC 
payment methodology of averaging costs to determine a payment rate 
rather than paying for each individual service.

  Table 18--Comparison of Proposed CCM and General BHI Requirements and
                       Payment for RHCs and FQHCs
------------------------------------------------------------------------
                                                         General BHI
        Requirements             CCM  (CPT codes      (proposed) (HCPCS
                                99490 and 99487)         code G0507)
------------------------------------------------------------------------
Initiating Visit............  An E/M, AWV, or IPPE  Same.
                               visit occurring no
                               more than one-year
                               prior to commencing
                               care coordination
                               services.
                              Furnished by a        Same.
                               primary care
                               physician, NP, PA,
                               or CNM.
                              Billed as an RHC/     Same.
                               FQHC visit.
Beneficiary Consent.........  Obtained during or    Same.
                               after initiating
                               visit and before
                               provision of care
                               coordination
                               services by RHC or
                               FQHC practitioner
                               or clinical staff.
                              Written or verbal,    Same.
                               documented in the
                               medical record
                              Includes
                               information:
                               On the
                               availability of
                               care coordination
                               services and
                               applicable cost-
                               sharing;
                               That only
                               one practitioner
                               can furnish and be
                               paid for care
                               coordination
                               services during a
                               calendar month;
                               That the
                               patient has right
                               to stop care
                               coordination
                               services at any
                               time (effective at
                               the end of the
                               calendar month);
                               and
                               That the     Same.
                               patient has given
                               permission to
                               consult with
                               relevant
                               specialists.
Billing Requirements........  At least 20 minutes
                               of care
                               coordination
                               services per
                               calendar month that
                               is:
                               Furnished
                               under the direction
                               of the RHC or FQHC
                               primary care
                               physician, NP, PA,
                               or CNM; and.
                               Furnished    Same.
                               by an RHC or FQHC
                               practitioner, or by
                               clinical personnel
                               under general
                               supervision.
Patient Eligibility.........  Multiple (two or      Any behavioral
                               more) chronic         health or
                               conditions expected   psychiatric
                               to last at least 12   condition being
                               months, or until      treated by the RHC
                               the death of the      or FQHC primary
                               patient, and place    care practitioner,
                               the patient at        including substance
                               significant risk of   use disorders,
                               death, acute          that, in the
                               exacerbation/         clinical judgment
                               decompensation, or    of the RHC or FQHC
                               functional decline.   practitioner,
                                                     warrants BHI
                                                     services.

[[Page 53174]]

 
Requirement Service Elements  Includes:             Includes:
                               Structured    Initial
                               recording of          assessment or
                               patient health        follow-up
                               information using     monitoring,
                               Certified EHR         including the use
                               Technology and        of applicable
                               includes              validated rating
                               demographics,         scales;
                               problems,             Behavioral
                               medications, and      health care
                               medication            planning in
                               allergies that        relation to
                               inform the care       behavioral/
                               plan, care            psychiatric health
                               coordination, and     problems, including
                               ongoing clinical      revision for
                               care;.                patients who are
                               24/7 access   not progressing or
                               to physicians or      whose status
                               other qualified       changes;
                               health care          
                               professionals or      Facilitating and
                               clinical staff        coordinating
                               including providing   treatment (such as
                               patients/caregivers   psychotherapy,
                               with a means to       pharmacotherapy,
                               make contact with     counseling and/or
                               health care           psychiatric
                               professionals in      consultation); and
                               the practice to       Continuity
                               address urgent        of care with a
                               needs regardless of   designated member
                               the time of day or    of the care team.
                               day of week, and
                               continuity of care
                               with a designated
                               member of the care
                               team with whom the
                               patient is able to
                               schedule successive
                               routine
                               appointments;.
                              
                               Comprehensive care
                               management
                               including
                               systematic
                               assessment of the
                               patient's medical,
                               functional, and
                               psychosocial needs;
                               system-based
                               approaches to
                               ensure timely
                               receipt of all
                               recommended
                               preventive care
                               services;
                               medication
                               reconciliation with
                               review of adherence
                               and potential
                               interactions; and
                               oversight of
                               patient self-
                               management of
                               medications;.
                              
                               Comprehensive care
                               plan including the
                               creation, revision,
                               and/or monitoring
                               of an electronic
                               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 with
                               particular focus on
                               the chronic
                               conditions being
                               managed;
                               Care plan
                               information made
                               available
                               electronically
                               (including fax) in
                               a timely manner
                               within and outside
                               the RHC or FQHC as
                               appropriate and a
                               copy of the plan of
                               care given to the
                               patient and/or
                               caregiver;
                               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;
                               timely creation and
                               exchange/transmit
                               continuity of care
                               document(s) with
                               other practitioners
                               and providers;
                              
                               Coordination with
                               home- and community-
                               based clinical
                               service providers,
                               and documentation
                               of communication to
                               and from home- and
                               community-based
                               providers regarding
                               the patient's
                               psychosocial needs
                               and functional
                               deficits in the
                               patient's medical
                               record; and
                               Enhanced
                               opportunities for
                               the patient and any
                               caregiver to
                               communicate with
                               the practitioner
                               regarding the
                               patient'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.
CY 2017 PFS Non-Facility      CPT 99490--$42.71,    G0507--$47.73.
 Payment.                      CPT 99487--$93.67.
RHC/FQHC Payment for new      Current: $42.71.....  Current: N/A.
 General Care Management G    Proposed: Average of  Proposed: Average of
 code.                         CPT codes 99490,      CPT codes 99490,
                               99487 and G0507 (If   99487 and G0507 (If
                               using the 2017        using the 2017
                               payment amounts,      payment amounts,
                               this would be         this would be
                               $61.37).              $61.37).
------------------------------------------------------------------------

    We expect that utilization of care coordination services will 
continue to increase as more health care practices, including RHCs and 
FQHCs, implement these services. Because the separate payments for the 
complex CCM codes have only been implemented this year for 
practitioners billing under the PFS, we do not have adequate data to 
determine the frequency of billing for CCM codes CPT codes 99487 by 
practitioners billing under the PFS compared with CPT code 99490. 
Although billing practices may vary between physician offices and RHCs 
and FQHCs (and within and between RHCs and FQHCs), we believe that 
utilization patterns under the PFS can provide a reasonable proxy for 
utilization practices in RHCs and FQHCs of care coordination 
utilization. If the PFS data starts to show definitive trends in 
billing certain CCM and BHI codes, or if data becomes available that

[[Page 53175]]

provides information on the extent of these services in RHCs and FQHCs, 
we may consider using a weighted average in determining the payment 
rate in the future. Similarly, if the proposal to create a new care 
management code for RHCs and FQHCs is finalized, and any additional 
care management codes become available on the PFS, we would review the 
new codes to determine if they should also be factored into the RHC and 
FQHC General Care Management Code. Any changes would be undertaken 
through future rulemaking.
b. Proposed Establishment of a Psychiatric CoCM Code for RHCs and FQHCs
    Psychiatric CoCM is a defined model of care that integrates primary 
health care services with care management support for patients 
receiving behavioral health treatment, and includes regular psychiatric 
inter-specialty consultation with the primary care team, particularly 
regarding patients whose conditions are not improving. We recognize 
that the requirements of this model may be challenging for some RHCs 
and FQHCs, especially those who have difficulty maintaining adequate 
primary care and mental health staffing in rural and or underserved 
areas. For those RHCs and FQHCs that choose to offer these services, we 
believe this model may be particularly helpful, especially for patients 
with primary care and mental health conditions who have not benefited 
from standard treatment.
    Effective for services furnished on or after January 1, 2018, we 
proposed to create a psychiatric CoCM code for RHCs and FQHCs, GCCC2, 
with the payment amount set at the average of the 2 national non-
facility PFS payment rates for CoCM codes, to be updated annually based 
on the PFS amounts. The 2 codes are:

 G0502--70 minutes or more of initial psychiatric CoCM services
 G0503--60 minutes or more of subsequent psychiatric CoCM 
services

    RHCs and FQHCs could bill the new psychiatric CoCM code when the 
requirements for any of these 2 codes (G0502 or G0503) are met. The 
psychiatric CoCM code would be billed alone or in addition to other 
services furnished during the RHC or FQHC visit. To prevent duplication 
of payment, this code could only be billed once per month per 
beneficiary, and could not be billed if other care management services, 
including the proposed General Care Management code, are billed for the 
same time period. We note that G0504 is an add-on code when G0503 is 
furnished and is therefore not included as RHCs and FQHCs are not paid 
for additional time once the minimum requirements have been met.
    If this policy had been adopted for CY 2017, the payment amount for 
psychiatric CoCM for RHCs and FQHCs would have been approximately 
$134.58 (G0502 at $142.84 + G0503 at $126.33 = $269.17/2 = $134.58).
    All care management services, including psychiatric CoCM, require a 
separately billable initiating visit (E/M, AWV, or IPPE) for new 
patients or beneficiaries not seen within 1 year prior to commencement 
of care management services. Prior to commencement of psychiatric CoCM 
services, the beneficiary must provide consent for this service, 
including permission to consult with a psychiatric consultant and 
relevant specialists. Advance consent must also include information on 
cost sharing for both face-to-face and non-face-to-face services, and 
acceptance of these requirements must be documented in the medical 
record.
    Patients with mental health, behavioral health, or psychiatric 
conditions, including substance use disorders, who are being treated by 
an RHC or FQHC practitioner, may be eligible for psychiatric CoCM 
services, as determined by the RHC or FQHC practitioner. Psychiatric 
CoCM services, like CCM and general BHI services, are intended to 
provide a structured and coordinated approach to care management that 
is not typically included in the RHC's AIR or the FQHC PPS payment 
methodology.
    The psychiatric CoCM team must include the RHC or FQHC 
practitioner, a behavioral health care manager, and a psychiatric 
consultant. Proposed specific requirements of the psychiatric CoCM team 
are as follows:
Psychiatric CoCM Team--RHC or FQHC Practitioner
    For psychiatric CoCM, the RHC or FQHC practitioner may be a primary 
care physician, NP, PA, or CNM. The psychiatric CoCM requirements of 
the RHC or FQHC practitioner are to:
     Direct the behavioral health care manager and any other 
clinical staff;
     Oversee the beneficiary's care, including prescribing 
medications, providing treatments for medical conditions, and making 
referrals to specialty care when needed; and
     Remain involved through ongoing oversight, management, 
collaboration and reassessment.
Psychiatric CoCM Team--Behavioral Health Care Manager
    For psychiatric CoCM, the behavioral health care manager is a 
designated individual with formal education or specialized training in 
behavioral health such as social work, nursing, or psychology. A 
behavioral health care manager in an RHC or FQHC would be expected to 
have a minimum of a bachelor's degree in a behavioral health field 
(such as in clinical social work or psychology), or be a clinician with 
behavioral health training, including RNs and LPNs. The behavioral 
health care manager furnishes both face-to-face and non-face-to-face 
services under the general supervision of the RHC or FQHC practitioner 
and may be employed by or working under contract to the RHC or FQHC. 
The psychiatric CoCM requirements of the behavioral health care manager 
are:
     Providing assessment and care management services, 
including the administration of 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; provision of brief psychosocial interventions; 
ongoing collaboration with the RHC or FQHC practitioner; maintenance of 
the registry; acting in consultation with the psychiatric consultant;
     Being available to provide services face-to-face with the 
beneficiary; having a continuous relationship with the patient and a 
collaborative, integrated relationship with the rest of the care team; 
and
     Being available to contact the patient outside of regular 
RHC or FQHC hours as necessary to conduct the behavioral health care 
manager's duties.
Psychiatric CoCM Team--Psychiatric Consultant
    For CoCM, a psychiatric consultant is a medical professional 
trained in psychiatry and qualified to prescribe the full range of 
medications. The psychiatric consultant is not required to be on site 
or to have direct contact with the patient and does not prescribe 
medications or furnish treatment to the beneficiary directly. The CoCM 
requirements of the psychiatric consultant are:
     Participating in regular reviews of the clinical status of 
patients receiving psychiatric CoCM services;
     Advising the RHC or FQHC practitioner regarding diagnosis 
and options for resolving issues with beneficiary adherence and 
tolerance of behavioral health treatment; making

[[Page 53176]]

adjustments to behavioral health treatment for beneficiaries who are 
not progressing; managing any negative interactions between 
beneficiaries' behavioral health and medical treatments; and
     Facilitating referral for direct provision of psychiatric 
care when clinically indicated.
    RHCs and FQHCs could bill the new psychiatric CoCM code, GCCC2, 
when the requirements for HCPCS code G0502 or G0503 are met. This code 
could only be billed once per month per beneficiary, and could not be 
billed if other care management services, including the General Care 
Management code GCCC1, are billed for the same time period.
    As with the proposed General Care Management code GCCC1, we would 
monitor PFS data to determine if a weighted average would be more 
appropriate in determining the psychiatric CoCM payment rate for RHCs 
and FQHCs, and whether any additional codes that may be added to the 
PFS in the future should also be factored into the RHC and FQHC 
psychiatric CoCM code. Any changes would be done through future 
rulemaking.
    Table 19 compares the proposed requirements for general BHI, which 
would be billed using the proposed General Care Management code GCCC1, 
and psychiatric CoCM services, which would be billed using the proposed 
psychiatric CoCM code, GCCC2.

    Table 19--Comparison of Proposed General BHI and Psychiatric CoCM
               Requirements and Payment for RHCs and FQHCs
------------------------------------------------------------------------
                                                      Psychiatric CoCM
                                   General BHI       (proposed)  (HCPCS
        Requirements           (proposed)  (HCPCS      code G0502 and
                                   code G0507)             G0503)
------------------------------------------------------------------------
Initiating Visit............  An E/M, AWV, or IPPE  Same.
                               visit occurring no
                               more than one-year
                               prior to commencing
                               care coordination
                               services.
                              Furnished by a        Same.
                               primary care
                               physician, NP, PA,
                               or CNM.
                              Billed as an RHC or   Same.
                               FQHC visit.
Beneficiary Consent.........  Obtained during or    Same.
                               after initiating
                               visit and before
                               provision of care
                               coordination
                               services by RHC or
                               FQHC practitioner
                               or clinical staff.
                              Written or verbal,    Same.
                               documented in the
                               medical record
                              Includes              Same.
                               information:
                               On the
                               availability of
                               care coordination
                               services and
                               applicable cost-
                               sharing;
                               That only
                               one entity can
                               furnish and be paid
                               for care
                               coordination
                               services during a
                               calendar month;
                               That the
                               patient has the
                               right to stop care
                               coordination
                               services at any
                               time (effective at
                               the end of the
                               calendar month);
                               and
                               That the
                               patient has given
                               permission to
                               consult with
                               relevant
                               specialists.
Billing Requirements........  At least 20 minutes   At least 70 minutes
                               of care management    in the first
                               services per          calendar month, and
                               calendar month that   at least 60 minutes
                               is:                   in subsequent
                               Furnished     calendar months of
                               under the direction   psychiatric CoCM
                               of the RHC or FQHC    services that is:
                               primary care          Furnished
                               physician, NP, PA,    under the direction
                               or CNM; and.          of the RHC or FQHC
                               Furnished     primary care
                               by an RHC or FQHC     practitioner; and
                               practitioner, or by   Furnished
                               clinical personnel    by an RHC or FQHC
                               under general         practitioner or
                               supervision.          behavioral health
                                                     care manager under
                                                     general
                                                     supervision.
Patient Eligibility.........  Any mental,           Same.
                               behavioral health,
                               or psychiatric
                               condition being
                               treated by the RHC
                               or FQHC primary
                               care practitioner,
                               including substance
                               use disorders,
                               that, in the
                               clinical judgment
                               of the RHC or FQHC
                               practitioner,
                               warrants BHI
                               services.
Requirement Elements........  Includes:             Includes:
                               Initial      RHC or FQHC primary
                               assessment or         care practitioner:
                               follow-up             Direct the
                               monitoring,           behavioral health
                               including the use     care manager or
                               of applicable         clinical staff;
                               validated rating      Oversee the
                               scales.               beneficiary's care,
                               Behavioral    including
                               health care           prescribing
                               planning in           medications,
                               relation to           providing
                               behavioral/           treatments for
                               psychiatric health    medical conditions,
                               problems, including   and making
                               revision for          referrals to
                               patients who are      specialty care when
                               not progressing or    needed; and
                               whose status          Remain
                               changes.              involved through
                                             ongoing oversight,
                               Facilitating and      management,
                               coordinating          collaboration and
                               treatment (such as    reassessment.
                               psychotherapy,       Behavioral Health
                               pharmacotherapy,      Care Manager:
                               counseling and/or     Provide
                               psychiatric           assessment and care
                               consultation).        management
                              Continuity of care     services, including
                               with a designated     the administration
                               member of the care    of validated rating
                               team.                 scales; 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
                                                     psychosocial
                                                     interventions;
                                                     ongoing
                                                     collaboration with
                                                     the RHC or FQHC
                                                     practitioner;
                                                     maintenance of the
                                                     registry; acting in
                                                     consultation with
                                                     the psychiatric
                                                     consultant;

[[Page 53177]]

 
                                                     Be
                                                     available to
                                                     provide services
                                                     face-to-face with
                                                     the beneficiary;
                                                     having a continuous
                                                     relationship with
                                                     the patient and a
                                                     collaborative,
                                                     integrated
                                                     relationship with
                                                     the rest of the
                                                     care team; and
                                                     Be
                                                     available to
                                                     contact the patient
                                                     outside of regular
                                                     RHC or FQHC hours
                                                     as necessary to
                                                     conduct the
                                                     behavioral health
                                                     care manager's
                                                     duties.
                                                    Psychiatric
                                                     Consultant:
                                                     Participate
                                                     in regular reviews
                                                     of the clinical
                                                     status of patients
                                                     receiving CoCM
                                                     services;
                                                     Advise the
                                                     RHC or FQHC
                                                     practitioner
                                                     regarding
                                                     diagnosis, options
                                                     for resolving
                                                     issues with
                                                     beneficiary
                                                     adherence and
                                                     tolerance of
                                                     behavioral health
                                                     treatment; making
                                                     adjustments to
                                                     behavioral health
                                                     treatment for
                                                     beneficiaries who
                                                     are not
                                                     progressing;
                                                     managing any
                                                     negative
                                                     interactions
                                                     between
                                                     beneficiaries'
                                                     behavioral health
                                                     and medical
                                                     treatments; and
                                                     Facilitate
                                                     referral for direct
                                                     provision of
                                                     psychiatric care
                                                     when clinically
                                                     indicated.
Cy 2017 PFS Non-Facility      G0507--$47.73.......  G0502--$142.84,
 Payment.                                            G0503--$126.33.
RHC/FQHC Payment for New      Current: N/A........  Current: N/A.
 Psychiatric CoCM G Code.     Proposed: Average of  Proposed: Average of
                               CPT codes 99490,      HCPCS codes G0502
                               99487, and G0507.     and G0503. (If
                               (If using the 2017    using the 2017
                               payment amounts,      payment amounts,
                               this would be         this would be
                               $61.37).              $134.58).
------------------------------------------------------------------------

c. Other Options Considered
    We considered allowing RHCs and FQHCs to bill for the complex CCM 
codes, the BHI code, and the psychiatric CoCM codes by allowing the 
individual CPT or HCPCS codes to be billed on an RHC or FQHC claim, in 
the same manner as we currently allow CPT code 99490 to be billed on a 
claim. We do not believe this approach is in the best interest of RHCs 
and FQHCs. There are now 5 separate care management codes that are 
applicable to RHCs and FQHCs, and more codes could be added in the 
future as we learn more about the benefits of non-face-to-face care 
management services. Each of these codes has specific time increments 
that must be tracked and reported for payment under the PFS. We believe 
that grouping the CCM and BHI codes and the psychiatric CoCM codes into 
2 G codes is more consistent with the RHC and FQHC payment methodology 
of averaging actual costs to determine a payment rate and not paying 
for services based on time increments. It also requires less record 
keeping, monitoring, and coding expertise, while maintaining the same 
quality of care standards.
    We also considered grouping all 5 codes together into one G code, 
or developing 3 G codes--one for the CCM codes, one for the BHI code, 
and one for the psychiatric CoCM codes. We did not choose either of 
these approaches because CCM and BHI are similar services that 
complement each other, and grouping them together is consistent with an 
integrated approach to care with reduced reporting requirements. We 
also believe that psychiatric CoCM is different enough from both CCM 
and BHI in its requirements, particularly in staffing and required 
services, that it warrants a separate G code. We believe that our 
proposal of creating 2 new G codes to encompass the 5 care management 
codes is the best option for RHCs and FQHCs now and in the future if 
new care management codes are developed. We welcomed comments on the 
proposal.
    The following is a summary of the public comments received on our 
proposal to revise the CCM payment for RHCs and FQHCs and establish 
requirements and payment for general BHI and psychiatric CoCM services 
furnished in RHCs and FQHCs, beginning on January 1, 2018. As 
previously noted, the following code changes will be effective January 
1, 2018, and are used in the remainder of this rule:

                           Table 20--Comparison of Proposed and Final HCPCS/CPT Codes
----------------------------------------------------------------------------------------------------------------
                                                                              Final HCPCS/CPT code  (effective
        Description of code           Proposed or current HCPCS/CPT code              January 1, 2018)
----------------------------------------------------------------------------------------------------------------
General Care Management for RHCs    GCCC1                                  G0511
 and FQHCs only.
Psychiatric CoCM code for RHCs and  GCCC2                                  G0512
 FQHCs only.
Psychiatric CoCM Services (first    G0502                                  99492
 70 min).
Psychiatric CoCM Services           G0503                                  99493
 (subsequent 60 min).
Psychiatric CoCM Services (add on)  G0504                                  99494
General BHI Services..............  G0507                                  99484
----------------------------------------------------------------------------------------------------------------


[[Page 53178]]

    Comment: Most commenters were supportive of our proposal. Many 
commenters stated that these changes will increase the availability of 
CCM, BHI, and psychiatric CoCM in RHCs and FQHCs and increase access 
for patients who need these services, especially in rural areas. Many 
commented that the proposal will support efforts to integrate medical 
and behavioral health care and encourage more primary care and 
behavioral health care providers to work together and coordinate care 
to better assist patients with complex, chronic conditions. Many 
commented on the role of RHCs and FQHCs as safety net providers serving 
the Nation's most vulnerable populations, and how important care 
management services are, especially for individuals with complex needs 
and few resources. A few commenters expressed their preference for 
billing each service by separate CPT codes, but most stated that the 
proposed methodology is administratively simple, will reduce reporting 
burden, and is in alignment with current RHC and FQHC billing 
practices. Many commenters also noted that this proposal will build 
upon efforts at addressing substance abuse and the opioid epidemic, 
increasing obesity rates, traumatic brain injury, dementia, and the 
health care needs of an aging population.
    Response: We thank the commenters for their support of the 
proposal.
    Comment: Some commenters noted that patients are often unwilling to 
pay the patient share of care management services and requested CMS 
waive cost-sharing or pursue waivers for these codes.
    Response: We are aware that the copayment and/or deductible in RHCs 
and the copayment in FQHCs can be a barrier for some beneficiaries, but 
we do not have the statutory authority to waive these charges. Because 
these services are typically furnished non face-to-face, and therefore, 
are not visible to the patient, it is important that adequate 
information is provided during the consent process on cost-sharing 
responsibilities and the benefits of care management services. RHCs and 
FQHCs should also provide information on the availability of assistance 
to qualified patients in meeting their cost-sharing obligations, or any 
other programs to provide financial assistance, if applicable.
    Comment: Several commenters asked if psychiatric mental health 
nurse practitioners (PMH-NPs) could serve as the psychiatric consultant 
to RHCs and FQHCs that are furnishing psychiatric CoCM, and recommended 
that they be included based on their education and training or board 
certification. Some commenters stated that this is especially important 
in rural areas where specialists are not readily available, and others 
stated that this would make psychiatrists more readily available for 
patients for which a higher degree of training may be required.
    Response: The psychiatric CoCM program requires a psychiatric 
consultant who is a medical professional trained in psychiatry and 
qualified to prescribe the full range of medications. Their 
responsibilities include participating in regular reviews of the 
clinical status of patients receiving psychiatric CoCM services; 
advising the RHC or FQHC practitioner regarding diagnosis and options 
for resolving issues with beneficiary adherence and tolerance of 
behavioral health treatment; recommending adjustments to behavioral 
health treatment for beneficiaries who are not progressing; managing 
any negative interactions between beneficiaries' behavioral health and 
medical treatments; and facilitating referral for direct provision of 
psychiatric care when clinically indicated.
    PMH-NPs are trained to provide a wide range of mental health 
services, including psychiatric diagnosis and medication treatment for 
psychiatric disorders. Although NPs are authorized to prescribe 
controlled substances, their practice authority varies by state and in 
some states they may have additional requirements or restrictions. We 
believe that a board-certified PMH-NP would meet the requirements to 
serve as a psychiatric consultant for an RHC or FQHC that is furnishing 
psychiatric CoCM services and would assist in making this program more 
widely available, especially in rural areas.
    Comment: Several commenters requested clarification or removal of 
the requirement that the psychiatric CoCM behavioral health care 
manager be available to contact the patient outside of regular RHC or 
FQHC hours as necessary to conduct the behavioral health care manager's 
duties. Commenters questioned if this meant that the health care 
manager must be available 24/7, and if so, they noted this was an 
unreasonable expectation that would present a barrier to implementing 
this program.
    Response: RHCs and FQHCs have processes for patients to contact 
practitioners or access care during non-RHC or FQHC hours, and it was 
not our intention to require or imply that the behavioral health care 
manager be available on a 24/7 basis. To avoid any confusion, this 
requirement will be removed.
    Comment: Several commenters requested clarification of the 
qualifications for the behavioral health care manager. One commenter 
questioned whether a social worker could serve in this role or if a 
master level clinical social worker is required. Another commenter 
stated that some of the health care manager's duties, such as 
administering screening tools, scheduling meetings, and entering data 
for the registry, could be conducted by someone with less education, 
under the supervision of a licensed practitioner. Other commenters 
suggested that licensed clinical social workers, licensed clinical 
professional counsellors, licensed or bachelor level social workers, 
nurses who undergo mental health training or have some experience in 
psychiatric interviewing, certified addiction counselors, or 
occupational therapists should be able to serve as the behavioral 
health care manager.
    Response: As noted in the proposed rule, the behavioral health care 
manager is a designated individual with formal education or specialized 
training in behavioral health such as social work, nursing, or 
psychology. A behavioral health care manager in an RHC or FQHC would be 
expected to have a minimum of a bachelor's degree in a behavioral 
health field (such as in clinical social work or psychology), or be a 
clinician with behavioral health training, including RNs and LPNs. 
Therefore, a clinical social worker is not required to have a masters 
degree in social work to serve as the psychiatric CoCM health manager.
    It is the responsibility of the RHC or FQHC to assure that the 
behavioral health care manager meets the stated requirements, and to 
manage any delegation of duties and supervision as appropriate.
    Comment: Some commenters objected to the requirement that general 
BHI and psychiatric CoCM services be furnished only under the direction 
of an RHC or FQHC primary care physician, NP, PA, or CNM, and 
maintained that excluding CPs and CSWs would create a barrier to 
effective team-based care.
    Response: General BHI and psychiatric CoCM are both team-based, 
collaborative approaches to care that focus on integrative treatment of 
patients with primary care and mental or behavioral health conditions. 
General BHI was established to support extensive care management 
discussions, information-sharing, and planning between a primary care 
practitioner and a behavioral health specialist, while psychiatric CoCM 
is a specific model of care provided by a primary care team

[[Page 53179]]

consisting of a primary care provider and a health care manager who 
works in collaboration with a psychiatric consultant.
    CPs and CSWs are RHC and FQHC practitioners and furnish medically-
necessary, face-to-face services that may be stand-alone billable 
visits in RHCs and FQHCs. They can also serve as the behavioral health 
care manager for general BHI and psychiatric CoCM services. In order to 
facilitate the integration and coordination of the patient's primary 
care and mental or behavioral health conditions, these care management 
services are furnished under the direction of the RHC or FQHC primary 
care practitioner.
    Comment: One commenter suggested that the consulting psychiatrist 
on the psychiatric CoCM team should be able to bill separately for this 
service in addition to the payment to RHCs and FQHCs. Other commenters 
suggested that CPs and CSWs, or the entire behavioral health workforce, 
be able to bill directly for these services.
    Response: The consulting psychiatrist is a member of the 
psychiatric CoCM team, and the RHC and FQHC payment reflects the cost 
of their services. If the consulting psychiatrist were to bill 
separately, Medicare would be overpaying for this service, because the 
cost of the psychiatric consultant is included in the rate for the care 
management codes. We also note that services are billed by the RHC or 
FQHC, and that neither RHC, FQHC practitioners (including CPs and 
CSWs), nor any other clinical personnel, bill directly for services 
furnished in RHCs or FQHCs.
    Comment: One commenter supported the proposed methodology but noted 
more needs to be done to create coding options and reimbursement for 
consultation models where a child and adolescent psychiatrist guides a 
primary care physician in treating behavioral and mental health 
conditions. The commenter stated that these models help to ensure that 
more children and youth in need of behavioral or mental health 
interventions receive the care they need and are an efficient way to 
address severe child and adolescent psychiatrist workforce shortages in 
most areas of the country.
    Response: We agree that there are many children and adolescents in 
need of behavioral or mental health interventions and that many areas 
of the country do not have adequate psychiatric services for children 
and adolescents, but this is outside the scope of this proposal.
    Comment: A commenter noted that RHCs and FQHCs would receive a 
higher payment for CPT 99490 services than an office-based practice, 
and as a result, this code should be revalued.
    Response: The proposed payment methodology for general care 
management services furnished by RHCs and FQHCs is similar to the 
payment methodology for other RHC and FQHC services. In general, RHCs 
and FQHCs are paid a per diem rate that is based on average costs, and 
the payment is not adjusted for time or intensity once the requirements 
are met. This results in a payment rate that is sometimes less and 
sometimes more than the payment for the same services when it is billed 
by an office-based practice under the PFS. We respectfully disagree 
that the proposed RHC and FQHC payment for general care management is a 
reason to revalue CPT 99490, and note that if any of the codes that are 
included in G0511 (CPT codes 99490, 99487, and 99484) are revalued, the 
payment for G0511 would adjust accordingly.
    Comment: One commenter expressed concern that RHCs and FQHCs may 
not offer care management services because the care management codes 
can be used only once per month for a beneficiary and cannot be 
combined with other care management codes. This commenter urged us to 
remove these restrictions and instead actively monitor the use of these 
codes to determine whether overuse occurs.
    Response: While we appreciate the commenter's concern, we 
respectfully disagree that limiting the billing of these codes to once 
per month will impede an RHC or FQHC from offering these services. The 
payment methodology is designed to encourage the use of these services 
by making billing and record keeping as simple as possible while 
providing a favorable payment rate. Once the minimum requirements are 
met, RHCs and FQHCs can bill for this service and would be paid at the 
average rate of the applicable codes, whether or not additional time is 
spent furnishing these services. We believe this approach is likely to 
encourage RHCs and FQHCs to offer these services and is preferable to 
actively monitoring for overuse.
    Comment: One commenter agreed with our intention to monitor the 
frequency of PFS billing for CPT 99487 to determine whether a weighted 
average would be more appropriate for future payment years, and 
suggested that we also monitor the extent that complex chronic care 
management services are provided in RHC and FQHCs.
    Response: We appreciate the comment and will review all available 
data to determine if a weighted average would be more appropriate in 
the future. As we noted in the proposed rule, any changes would be 
undertaken through future rulemaking.
    Comment: One commenter noted that for low-income or limited-English 
proficiency Medicare beneficiaries, care management can lead to more 
effective care, better health outcomes and fewer emergency department 
visits. This commenter suggested that the additional costs of providing 
appropriate care for these populations should be acknowledged and 
payments appropriately adjusted in future rulemaking. Another commenter 
was concerned that the proposed methodology may not accurately reflect 
and compensate RHCs and FQHCs for the additional complexity of care 
coordination for patients who have significant primary care needs and 
requested that we consider comments received from health care providers 
and patient advocates and consider alternative approaches if necessary. 
Another commenter encouraged us to monitor the use of the care 
management codes and any related feedback regarding the financial 
sustainability of the model, and address any challenges and concerns in 
future rulemaking.
    Response: We agree that care management can lead to more effective 
care, better health outcomes and fewer emergency department visits and 
appreciate the concern raised by the commenters. As previously noted, 
we will monitor data as it becomes available and consider a weighted 
average if appropriate. We welcome RHCs, FQHCs, and others to 
communicate to us any information regarding the appropriateness of 
their care management payments as more experience is gained in 
implementing these services.
    Comment: One commenter recommended that in order to maintain 
consistency and avoid confusion for providers, RHCs and FQHCs should 
use the PFS CPT codes for care management services. Another commenter 
stated that in order to avoid creating financial advantages for some 
medical settings over others, coding and payment should be the same for 
RHCs and FQHCs as for physicians billing under the PFS. This commenter 
maintained that creating different coding and payment protocols may 
lead to inequitable payments, and makes it difficult to assess 
differences in payment adequacy.
    Response: RHCs and FQHCs differ significantly from office or 
hospital-based physician practices and have specific purposes, 
characteristics, and requirements that generally do not apply to other 
providers or suppliers. As

[[Page 53180]]

part of the nation's health care safety-net, RHCs and FQHCs are paid 
under a different payment methodology that reflects the costs of 
furnishing care in underserved rural and urban areas. We respectfully 
do not agree that the difference in the payment systems may lead to 
inequitable payments, but rather reflect the needs of these communities 
in providing primary health care to underserved rural and urban 
populations.
    Comment: A commenter asked if certified EHR technology would be 
required for billing G0511 when BHI services are furnished.
    Response: Certified EHR technology is a requirement for CCM, but it 
is not a requirement for general BHI or psychiatric CoCM services. To 
bill the new G0511 code, an RHC or FQHC must meet the requirements for 
either CCM (CPT 99490 or CPT 99487) or general BHI (CPT 99484). If the 
requirements for CPT code 99484 are met, the code can be billed and 
certified EHR technology is not required.
    Comment: One commenter requested that we delay the denial date of 
January 1, 2018, for claims submitted with CPT 99490.
    Response: We wish to clarify that claims with CPT 99490 for 
services furnished on or before December 31, 2017, will be processed 
and paid. Service lines reported with CPT 99490 will be denied for 
dates of service on or after January 1, 2018.
    Comment: A few commenters requested additional information and 
training on the use of these new codes for RHCs and FQHCs be made 
available, and that CMS Connected Care Providers receive training 
materials.
    Response: Additional information on the new care management codes 
for RHCs and FQHCs will be available on the CMS Web site for RHCs 
(https://www.cms.gov/Center/Provider-Type/Rural-Health-Clinics-Center.html) and FQHCs (https://www.cms.gov/Center/Provider-Type/Federally-Qualified-Health-Centers-FQHC-Center.html). This will include 
an MLN article for RHCs and FQHCs, and an update to the Medicare 
Benefit Policy Manual, Chapter 13. These changes will also be presented 
on the national CMS Rural Open Door Forum call, and on the Safety Net 
Open Door Forum call (https://www.cms.gov/Outreach-and-Education/Outreach/OpenDoorForums/index.html). Information on becoming a CMS 
Connected Care provider to help raise awareness about the benefits of 
CCM services is available at https://www.cms.gov/About-CMS/Agency-Information/OMH/equity-initiatives/ccm/become-a-partner.html.
    Comment: Some commenters discussed issues that were outside the 
scope of the proposed rule.
    Response: Comments received that are outside the scope of the 
proposed rule are not addressed in this final rule.
    As a result of the public comments, we are finalizing the revisions 
to CCM payment for RHCs and FQHCs and establishment of requirements and 
payment for general BHI and psychiatric CoCM services furnished in RHCs 
and FQHCs, beginning on January 1, 2018, as proposed, except that we 
are removing the requirement that the behavioral health care manager be 
available to contact the patient outside of regular RHC or FQHC hours 
as necessary to conduct the behavioral health care manager's duties.
4. Implementation
    RHCs and FQHCs will continue to receive payment for CCM services 
when CPT code 99490 is billed alone or with other payable services on 
an RHC or FQHC claim for dates of service on or before December 31, 
2017. Beginning on January 1, 2018, RHCs and FQHCs must use the new 
General Care Management code G0511 when billing for CCM or general BHI 
services, and the new psychiatric CoCM code G0512 when billing for 
psychiatric CoCM services, either alone or with other payable services 
on an RHC or FQHC claim. Service lines submitted using CPT 99490 code 
for dates of service on or after January 1, 2018 will be denied.
    Both the current RHC and FQHC payment rate for CCM, and the 
proposed RHC and FQHC payment rates for General Care Management and 
Psychiatric CoCM codes, are based on the PFS national non-facility 
rates. The PFS rates are updated annually, and the new G codes for RHCs 
and FQHCs would be updated accordingly and finalized when the PFS rates 
are finalized for the year. No geographic adjustment will be applied to 
the General Care Management or Psychiatric CoCM G codes. RHCs and FQHCs 
are required to submit claims for care management services on an 
institutional claim (electronically per the HIPAA compliant ANSI X12 
837I or the Form CMS 1450, also known as the UB-04,) and are not 
authorized to bill care management services separately to the PFS.
5. Regulatory Changes
    As previously noted, Sec.  405.2413(a)(5) and Sec.  405.2415(a)(5) 
was revised effective January 1, 2017, to state that services and 
supplies furnished incident to CCM and TCM services can be furnished 
under general supervision of an RHC or FQHC practitioner, 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. Sections 405.2413(a)(5) and 405.2415(a)(5) are now 
revised to state that services and supplies incident to the services of 
a physician, NP, PA, or CNM are furnished under the direct supervision 
of a physician, NP, PA, or CNM, except for TCM, General Care 
Management, and Psychiatric CoCM services, which can be furnished under 
general supervision of a physician, NP, PA, or CNM when these services 
or supplies are furnished by auxiliary personnel, as defined in Sec.  
410.26(a)(1).

B. Part B Drug Payment: Infusion Drugs Furnished Through an Item of 
Durable Medical Equipment (DME)

    Section 303(c) of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (MMA) (Pub. L. 108-173, enacted on December 
8, 2003) revised the payment methodology for most Medicare-covered Part 
B drugs and biologicals by adding section 1847A to the Act, which 
established a new average sales price (ASP) drug payment methodology 
beginning January 1, 2005. Section 303(b) of the MMA specified payments 
for certain drugs using methodologies other than the ASP pricing 
methodology. Specifically, section 303(b) of the MMA added section 
1842(o)(1)(D)(i) of the Act that required that an infusion drug 
furnished through an item of DME covered under section 1861(n) of the 
Act be paid 95 percent of the average wholesale price (AWP) for that 
drug in effect on October 1, 2003.
    Section 5004(a) of the 21st Century Cures Act (Cures Act) (Pub. L. 
114-255, enacted on December 13, 2016) revised sections 1842(o)(1)(C) 
and (D) of the Act, changing the payment methodology for DME infusion 
drugs from being based on AWP to the methodologies in sections 1847, 
1847A, 1847B, or 1881(b)(13) of the Act, as the case may be for the 
drug or biological. To implement the pricing changes required by 
section 5004(a) of Cures Act, which modifies the payment for DME 
infusion drugs to the amount under section 1847A of the Act (ASP drug 
payment methodology), by the statutorily mandated effective date of 
January 1, 2017, we incorporated the ASP-based infusion drug payment 
amounts into the January 2017 quarterly ASP drug pricing files and 
instructed claims processing contractors to use the updated payment 
limits for DME infusion drugs.
    To conform regulations with the new payment requirements in section

[[Page 53181]]

5004(a) of the Cures Act as they pertain to section 1847A of the Act, 
we proposed revising Sec.  414.904(e)(2). Currently, this describes an 
exception to ASP-based payments and requires pricing DME infusion drugs 
at 95 percent of the 2003 AWP. Consistent with section 5004(a) of the 
Cures Act, the proposed revision limits the exception to infusion drugs 
furnished before January 1, 2017. In addition, we proposed at Sec.  
414.904(e)(2) to delete the phrase ``and is not updated in 2006.'' We 
believe this language is not relevant since the statutory language 
required that the pricing of DME infusion drugs be based on the October 
2003 AWP. Therefore, there was no update for pricing DME infusion drugs 
in 2006, and the proposed revision will serve to simplify the language. 
Effective January 1, 2017, payment limits for these drugs are 
determined under section 1847A of the Act.
    Comment: We received one comment in which the commenter expressed 
concern that immune-compromised beneficiaries will experience access 
issues due to the reduction in payment for certain life-saving 
therapies that are paid for under Medicare Part B and administered via 
DME.
    Response: We appreciate the commenters concern about access to 
infusion drugs furnished through an item of covered DME. Section 
5004(a) of the 21st Century Cures Act requires the change in the 
payment methodology to the ASP methodology for these drugs effective 
January 1, 2017. This provision of the Act does not provide us with the 
flexibility to alter the payment methodology, implementation date or to 
select the drugs or patient populations that will be affected by the 
change.
    After consideration of the public comment received, we are 
finalizing our proposal to revise Sec.  414.904(e)(2) to conform with 
the statutory payment requirements of section 5004(a) of the Cures Act. 
We are also finalizing our proposal to revise Sec.  414.904(e)(2) to 
delete the phrase ``and is not updated in 2006.''

C. Solicitation of Public Comments on Initial Data Collection and 
Reporting Periods for Clinical Laboratory Fee Schedule

1. Background on Medicare Clinical Diagnostic Laboratory Tests Payment 
System Final Rule
    In the June 23, 2016 Federal Register (81 FR 41036) we issued a 
final rule entitled, ``Medicare Program; Medicare Clinical Diagnostic 
Laboratory Tests Payment System,'' to implement the requirements of 
section 1834A of the Act, which requires extensive revisions to the 
Medicare payment, coding, and coverage for clinical diagnostic 
laboratory tests (CDLTs) paid under the Clinical Laboratory Fee 
Schedule (CLFS).
    Under the CLFS final rule, reporting entities are required to 
report to us certain applicable information for their component 
applicable laboratories. The applicable information includes, for each 
CDLT furnished during a data collection period, the specific HCPCS code 
associated with the test, each private payor rate for which final 
payment has been made, and the associated volume of tests performed 
corresponding to each private payor rate. In general, the payment 
amount for a test on the CLFS furnished on or after January 1, 2018, 
will be equal to the weighted median of private payor rates determined 
for the test, based on the applicable information that is collected 
during a data collection period and reported to us during a data 
reporting period.
    In the CLFS final rule, we established a data collection period 
that is the 6 months from January 1 through June 30 during which 
applicable information is collected and that precedes the data 
collection period. We established a data reporting period that is the 
3-month period, January 1 through March 31, during which a reporting 
entity reports applicable information to us and that follows the 
preceding data collection period. The first data collection period was 
January 1, 2016 through June 30, 2016. The first data reporting period 
was January 1, 2017 through March 31, 2017. This 6-month data 
collection period and 3-month data reporting period schedule will be 
repeated every 3 years for CDLTs that are not advanced diagnostic 
laboratory tests (ADLTs), and every year for ADLTS that are not new 
ADLTs.
    For the first data reporting period, industry feedback suggested 
that many reporting entities would not be able to submit a complete set 
of applicable information to us by the March 31, 2017 deadline, and 
that entities required additional time to review collected data, 
address any issues identified during such review, and compile the data 
into our required reporting format. As a result, on March 30, 2017, we 
announced that we would exercise enforcement discretion until May 30, 
2017, with respect to the data reporting period for reporting 
applicable information under the Medicare CLFS and the application of 
the Secretary's potential assessment of civil monetary penalties for 
failure to report applicable information.\1\ The enforcement discretion 
applied to entities that were subject to the data reporting 
requirements finalized in the CLFS final rule (81 FR 41036). We noted 
in the announcement that the 60-day enforcement discretion period was 
the maximum amount of time we could permit to still have sufficient 
time to calculate the CLFS payment rates scheduled to go into effect on 
January 1, 2018.
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    The announcement stated that the enforcement discretion period 
would not prevent reporting entities prepared to report applicable 
information from doing so before May 30, 2017. We explained in the 
announcement that we were committed to the successful implementation of 
the new private payor rate-based CLFS and looked forward to working 
with the laboratory industry to ensure accurate payment rates. In 
recent months, we analyzed the applicable information we received, held 
our Annual Laboratory Public Meeting, met with the Advisory Panel for 
Clinical Diagnostic Laboratory tests twice, and posted preliminary CLFS 
payment rates for calendar year 2018.\2\
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2. Solicitation of Public Comments on Medicare Clinical Diagnostic 
Laboratory Tests Payment System Initial Data Collection and Reporting 
Periods: Summary of Public Comments
    In the proposed rule, we solicited public comments from applicable 
laboratories and reporting entities to better understand the applicable 
laboratories' experiences with the data reporting, data collection, and 
other compliance requirements for the first data collection and 
reporting periods. Specifically, we sought public comment on the 
following questions:
     Was the CMS data reporting system easy to use? Please 
describe your overall experience with navigating the CMS data reporting 
system. For example, describe the aspects of the CMS data reporting 
system that worked well for your reporting entity and/or any problems 
the reporting entity experienced with submitting applicable information 
to us.
     Did the applicable laboratory (or its reporting entity) 
request and receive assistance from our Help Desk regarding the CMS 
data reporting system? Please describe your experience with receiving 
assistance.

[[Page 53182]]

     Did the applicable laboratory (or its reporting entity) 
request and receive assistance from the CMS CLFS Inquiries Mailbox 
regarding policy questions? Please describe your experience with 
receiving assistance.
     Did the applicable laboratory (or its reporting entity) 
use the subregulatory guidance on data reporting provided on the CMS 
CLFS Web site? \3\ If so, was the information presented useful?
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     Was the information that the applicable laboratory was 
required to report readily available in the applicable laboratory's 
record systems?
     Did the reporting entity have a manual, automated, or 
semi-automated remittance process for data reporting?
     If the reporting entity used a manual or semi-automated 
remittance process for data reporting, what percentage of the process 
was manual?
     How much time (hours) was required to assemble and report 
applicable information to CMS?
     Is there any other information that will inform us 
regarding the reporting, recordkeeping, and other compliance 
requirements from the first data collection and reporting periods?
    We stated in the proposed rule that we were soliciting comments to 
better understand applicable laboratories' experiences with the data 
reporting, data collection, and other compliance requirements for the 
first data collection and reporting periods under the new private payor 
rate-based CLFS. We believed industry feedback on these issues would 
help inform us regarding potential refinements to the private payor 
rate-based CLFS for future data collection and reporting periods. A 
summary of the public comments we received on our comment solicitation, 
and our response to those comments, appears below.
    Comment: In response to our solicitation, we received approximately 
40 comments from individuals, health care providers, corporations, 
government agencies, and major laboratory organizations. Commenters 
expressed that the CMS Help Desk for the data reporting system and the 
subregulatory guidance on the CMS CLFS Web site were particularly 
helpful. Some commenters mentioned that using the data reporting system 
was challenging at first but became easier to navigate with more 
experience. One commenter stated that its laboratory organization 
incurred significant additional costs in collecting and reporting 
applicable information due to its large number of manual remittances. 
In addition, commenters provided the following specific 
recommendations:
     Improve the accessibility of the CMS data reporting 
system, for example, by removing certain security measures.
     A few commenters indicated that it was administratively 
burdensome for the reporting entity, that is the Taxpayer 
Identification Number (TIN) level entity, to report applicable 
information individually for each of its component applicable 
laboratories. As an alternative, they suggested that we allow the 
reporting entity to aggregate applicable information for its components 
that are applicable laboratories, and enter the aggregated applicable 
information in the designated column on the CMS data reporting 
template.
     Change the proportion of data that applicable laboratories 
are required to report; for example, allow applicable laboratories to 
report 75 to 80 percent, rather than 100 percent, of their applicable 
information.
     Change the requirement that applicable laboratories must 
report data from claims that require manual remittance processes.
     Streamline the identification of user formatting errors 
and permit real-time file edits in the CMS data reporting system.
     Define terms used in the data reporting system; for 
example, a few commenters requested CMS provide a definition for the 
term ``CMS Certification Number (CCN)''.
    Most of the comments received were out of scope because they did 
not address experiences with the initial data collection and reporting 
periods. For example, some commenters recommended that CMS delay 
implementation of the new private payor rate-based CLFS payment system. 
A few commenters recommended that we redefine the term ``applicable 
laboratory'' to include hospitals, specifically to ensure hospital 
outreach laboratory data is included in the calculation of the new CLFS 
rates.
    Response: We thank the commenters for their feedback and will 
consider the comments for potential future rulemaking or publication of 
subregulatory guidance pertaining to the CLFS data collection and 
reporting periods. No CLFS data collection or reporting changes are 
being proposed or finalized within this final rule. We note that a 
hospital outreach laboratory, that is, a hospital based laboratory that 
furnishes laboratory tests to patients other than inpatients or 
outpatients of the hospital, could be an applicable laboratory if it 
meets the definition of an applicable laboratory in 42 CFR 414.502.

D. Payment for Biosimilar Biological Products Under Section 1847A of 
the Act

    In the CY 2016 Physician Fee Schedule (PFS) final rule with comment 
period, we finalized a proposal to amend the regulation text at Sec.  
414.904(j) to make clear that the payment amount for a biosimilar 
biological product is based on the ASP of all National Drug Codes 
(NDCs) assigned to the biosimilar biological products included within 
the same billing and payment code (80 FR 71096 through 71101). In 
general, this means that products that rely on a common reference 
product's biologics license application (that is, FDA's previous 
finding of safety, purity, and potency for the common reference 
product) are grouped into the same payment calculation for determining 
a single ASP payment limit and that a single HCPCS code is used for 
such biosimilar products. The regulation went into effect on January 1, 
2016.
    The comments received on the 2016 PFS proposed rule indicated that 
stakeholders had varying opinions about Medicare payment for biosimilar 
biological products under Part B. The commenters included individuals, 
pharmaceutical manufacturers, patient advocate groups, providers, 
insurers, and members of Congress. A number of commenters opposed a 
single payment amount for all biosimilars that rely on FDA's finding of 
safety, purity, and potency for a common reference product. Most of 
these commenters believed that the proposed regulation would decrease 
incentives for biosimilar development and that grouping payment for 
biosimilar biological products is inconsistent with the statute. Some 
commenters also expressed concerns that prescribers' choices will be 
limited, that tracking or pharmacovigilance activities will be 
impaired, and that innovation and product development will be harmed, 
leading to market consolidation and increased costs for biosimilar 
biological products. Many commenters who opposed this policy suggested 
that we determine a payment amount for each biosimilar biological 
product. These stakeholders have expressed concerns that the finalized 
policy restricts and threatens the viability of their business models 
and expressed support for a new solution. Some of these stakeholders 
believed that determining a payment for each biosimilar product by 
using individual HCPCS codes, would drive and reward innovators, 
producing the potential cost savings of at least 10-15

[[Page 53183]]

percent compared to the reference biologic ASP necessary for biosimilar 
products to compete with the reference biological.
    However, some commenters supported our proposed regulation, stating 
that the potential marketplace for biosimilar biological products is 
large and it is less risky than the marketplace for reference 
biologicals. Commenters also expressed concern that separate payment 
for each biosimilar biological product would result in less competition 
among manufacturers, which in turn could lead to higher payment amounts 
for Medicare and beneficiaries. Some commenters stated that separate 
billing codes could be perceived as a type of price protection and 
could artificially increase prices for biosimilars. Commenters who 
supported the proposed regulation suggested that we remain mindful of 
our policy as the biosimilar biological product marketplace evolves. 
Several commenters requested that policy decisions be delayed while 
issues such as naming conventions and interchangeability standards are 
finalized by the FDA.
    In 2015, biological products accounted for the majority (65 
percent) of part B spending, which totaled $26 billion including 
Medicare and beneficiary payments (MedPAC Report to Congress June 2017, 
page 37). As CMS expected, since the regulation was finalized in 2015, 
the biosimilar product marketplace has continued to grow, and four 
biosimilar biological products that are paid under Part B have been 
licensed, including one product approved in 2017 that is sharing a 
HCPCS code with another previously licensed biosimilar biological 
product. Based on the number of biosimilar biological products that are 
reported to be nearing approval and the approvals made over that past 2 
years, we anticipate that several more biosimilar biological products 
will be licensed for use in the United States during the next year and 
that during the following years, the marketplace will continue to grow 
steadily, provided that the approved products are marketed without 
delay. We also anticipate that biological products will continue to be 
heavily utilized in Part B. At the same time, we are aware of concerns 
that current Medicare policy may discourage development of new 
biosimilars and other innovation in this area potentially resulting in 
higher costs over time due to a lack of competition in the market 
place.
    In the 2016 PFS final rule, we stated that it is desirable to have 
fair reimbursement in a healthy marketplace that encourages product 
development (80 FR 71101). CMS seeks to promote innovation to provide 
more options to patients and physicians, and competition to drive 
prices down, recognizing that even though these two goals may be 
difficult to achieve concurrently, to delink them would be 
counterproductive.
    Although we believe that the United States biosimilar biological 
product marketplace is still in an early phase (because only a few 
products are on the market), we are interested in assessing the effects 
of Medicare payment policy on this important portion of the Part B drug 
marketplace at this time, particularly for fostering a robust, and 
competitive marketplace and encouraging the innovation that is 
necessary to bring more of these products to the marketplace. It is 
essential to take a measured approach that considers all options given 
the significant federal spending by Medicare on Part B drugs, the 
effect of payment policies on program sustainability for taxpayers, 
health care affordability and access for beneficiaries, and the 
considerable investment the biosimilar industry reports to be making in 
the nascent market (the development cost for a biosimilar product is 
reported by commenters to be approximately $100-200 million). Failure 
to consider the available options could potentially restrict innovation 
in the marketplace, increase costs to the American taxpayer, and limit 
treatment options. With that in mind, it is CMS's goal to further 
evaluate our policies to be sure they allow for market forces to 
provide a robust and comprehensive selection of choices for providers 
and patients at a fair price. Additionally, we are interested in better 
understanding if and how the differences in biological products and 
their current regulatory environment should be reflected in Medicare 
payment policy for biosimilars, particularly as it relates to 
biosimilars that are licensed for fewer than all indications for which 
the reference product is licensed or situations where different 
biosimilars may be licensed for different subsets of indications for 
which the reference product is licensed.
    Thus, in the CY 2018 PFS proposed rule we requested comments 
regarding our Medicare Part B biosimilar biological product payment 
policy. This comment solicitation sought new or updated information on 
the effects of the current biosimilar payment policy that is based on 
experience with the United States marketplace. We stated that we were 
particularly interested in obtaining material, such as market analyses 
or research articles that provide data and insight into the current 
economics of the biosimilar market place. This includes patient, plan, 
and manufacturer data both domestic and, where applicable, from 
European markets that may be more established than, and provide insight 
for, the current United States market.
    We also sought data to demonstrate how individual HCPCS codes could 
impact the biosimilar market, including innovation, the number of 
biosimilar products introduced to the market, patient access, and drug 
spending. Finally, we also sought comment regarding other novel payment 
policies that would foster competition, increase access, and drive cost 
savings in the biological product marketplace. These novel options may 
include legislation, demonstrations, and administrative options. The 
comment solicitation did not include a proposal to change the existing 
payment policy.
    The following is a summary of the public comments received 
regarding the effect of payment policies on competition, access, and 
cost savings in the biological product marketplace and our responses on 
this issue. We received more than 200 comments in response to the 
solicitation. In general, comments were very similar to those received 
during the CY 2016 PFS rulemaking period.
    Comment: Most commenters opposed the current Medicare policy. These 
commenters believe that the policy will impair access to biosimilars, 
and could potentially limit the introduction of biosimilars to the US 
market and would fail to maximize competition and savings. Some 
provided updated information to support the position that greater 
savings will result from the use of unique codes for each biosimilar. 
Some commenters also believed that CMS should change its policy 
effective January 1, 2018.
    Commenters who agreed with the current Medicare policy believed 
that grouping biosimilars would provide savings for beneficiaries and 
for the trust fund through increased competition. These commenters 
believe that separate billing codes do not foster price competition. 
The commenters pointed out that ASP-based payments for groups of 
potentially competing Part B drugs and biologicals remained the same or 
increased between 2012 and 2017. The commenters also pointed out that 
the use of separate billing codes would likely lead to high 
introductory prices. These commenters noted that Part B has already 
experienced a situation where the initial, WAC-based

[[Page 53184]]

payment amount for a biosimilar of infliximab exceeded the ASP-based 
payment for its reference product by about 20 percent. Also, commenters 
contended that the size of the United States biological market and 
associated revenue would provide an incentive for manufacturers to 
continue to introduce products in the US (even if biosimilars continued 
to be grouped together). Finally, some commenters believed that making 
a policy change at this time was not advisable because the United 
States marketplace had not changed significantly since 2016.
    Response: We appreciate all the commenters' input, and we will 
discuss specific topics from the comment solicitation in the comment/
response sections below. We considered these comments as we evaluated 
our current policy and considered changes to it.
    Comment: Many commenters discussed the differences between 
biosimilar biological products, such as the complexity of biological 
molecules and how the manufacturing processes that are necessary to 
produce them create small differences between the products. The 
commenters noted that biosimilars are similar, but not identical, to 
their reference products, and that as a result of potentially subtle 
differences, they may have different therapeutic and adverse effects on 
patients, requiring clinical as well as payment distinctions between 
the products. These commenters believed that Medicare payment policy 
that treats biosimilars like generic drugs by grouping them for payment 
would lead to prescribing choices based on cost rather than clinical 
considerations.
    Several commenters also discussed issues related to the differences 
between products in more detail, as well as the interchangeability of 
biosimilar biological products. Although none of the currently 
available biosimilars are approved as interchangeable (and finalized 
FDA guidance on the subject is not yet available), some commenters 
believed that grouping products for payment could be understood by 
clinicians and patients that the products could be interchangeable. 
Some commenters also pointed out that the current biosimilar approval 
process does not compare biosimilar biological products to each other, 
rather, only similarity to a reference product is established and the 
licensing of a biological product under the biosimilar pathway does not 
mean that the products are interchangeable. Also, commenters noted that 
biosimilar biological products may be approved for fewer indications 
than the reference product and that the approved indications within a 
group of biosimilar biological products with the same reference product 
may vary. Some commenters believed that blended payment for biosimilar 
biological products that do not have all the same indications could 
lead to off-label use.
    Many commenters believed that differences between biosimilar 
biological products that share a common reference product exist and 
stated that such distinctions, which may affect the clinical use of a 
product on specific patients, support the need for separate coding and 
payment for biosimilars under Medicare Part B. Some commenters also 
associated these concerns with concerns about payment for biosimilar 
biological products.
    Several comments discussed the relationship between costs, prices, 
and competition in the biologicals and biosimilars market, as follows. 
Because these products are likely to be expensive and may have 
different acquisition costs, blended payment was perceived by many 
commenters as a significant financial risk to the provider because the 
provider could not be highly certain that the products that would be 
the best choice for a patient would also be likely to be paid above 
acquisition cost. These commenters believed that separate codes would 
lead to more certainty about payment amounts for biosimilar biological 
products. Some commenters were concerned that ``race to the bottom'' 
pricing competition would result from shared codes and lead to prices 
that could not sustain educational efforts and other activities 
associated with marketing new and complex biological products, 
ultimately resulting in manufacturers leaving the United States 
marketplace. The commenters also noted that the development costs for 
these products and their manufacturing facilities are estimated to be 
in the hundreds of millions of dollars.
    Commenters also expressed concern about the lack of competition 
between biosimilars and their reference product. Some commenters who 
disagreed with CMS's current approach of grouping biosimilar biological 
products for payment believed that separate codes would lead to 
opportunities for greater and more direct competition between the 
reference product and its biosimilar versions.
    Other commenters who agreed with current Medicare policy, suggested 
that payment for biosimilars should be based on grouping the reference 
product with its corresponding biosimilars in the same billing and 
payment code and suggested that legislative authority for such a change 
should be sought by CMS. These commenters opined that combining 
reference products and corresponding biosimilar biological products 
into the same billing and payment code would maximize competition for 
items with similar effects. In the absence of authority to expand 
grouped payment to include the reference product, most of these 
commenters agreed with the current approach of grouping biosimilar 
biological products of the same reference product into the same billing 
and payment code.
    Response: We appreciate the commenters' wide range of concerns 
about the differences between biosimilar biological products and how 
payment approaches may influence clinical decisions.
    Many of these concerns were brought up in comments on biosimilars 
made in response to the CY 2016 PFS final rule with comment period. We 
discussed these issues, including differences between small molecule 
drugs and biologicals (including biosimilars), generic drugs, and 
interchangeability in the 2016 final rule. However, as we have further 
considered the Part B biosimilar biological payment policy and this 
year's comments, we have become increasingly concerned about the 
relationship between cost, prices and competition; specifically, many 
commenters' continued unease regarding the effects of our payment 
policy on patient and provider choices, as well as the biosimilar 
marketplace. We have also considered how the payment policy could 
affect market entry of new biosimilar manufacturers. If payment amounts 
limit manufacturers' willingness to invest in the development of new 
biosimilars, it could in the long term, decrease the number of 
biosimilar biological products that are available to prescribe and thus 
impair price competition. Given that the United States' biosimilar 
biological product marketplace is still relatively new, we believe that 
it is important to maintain a payment policy innovation as well as 
reasonable pricing for consumers.
    We agree that current statutory authority does not permit the 
inclusion of the reference product in a payment determination 
calculation for biosimilar biological products paid under Medicare Part 
B.
    Comment: Some commenters did not believe that separate coding for 
each biosimilar product would lead to greater competition or savings. 
These commenters noted that ASP-based payment amounts for biological 
drugs, even those with other comparable products on the market, 
continue to

[[Page 53185]]

increase. Also, they provided specific examples where the payment 
amount for reference products filgrastim and infliximab, which are 
currently paid under Part B (and are coded and paid separately from 
corresponding biosimilar products) have not decreased; these commenters 
expressed concern about a potential lack of competition within the Part 
B marketplace. Some of these commenters also expressed concern about 
the United States experience with high launch prices for biosimilars, 
particularly one situation where the Part B payment amount for a 
biosimilar significantly exceeded the payment amount for a reference 
product. The commenters pointed out that in situations where each 
product has a unique code, high launch prices, particularly while a 
product is paid using Wholesale Acquisition Cost (WAC), would lead to 
higher costs for Medicare and beneficiaries. One commenter also stated 
that combining payment for biosimilar products is consistent with the 
concept of similar payment for similar services.
    Response: We note that section 1847A(c)(4) of the Act authorizes 
WAC based payment during the first quarter of sales and this subject 
has been discussed in rulemaking previously (75 FR 73465). In most 
cases WAC exceeds ASP. However, the duration of a WAC based payment 
amount is limited, and generally, once a full quarter of ASP data is 
available, payments made under section 1847A are based on ASP.
    Comment: Several commenters provided materials that were previously 
submitted with comments on the CY 2016 PFS proposed rule, in response 
to our solicitation of new or updated information on the effects of our 
biosimilars payment policy on the United States marketplace.
    One commenter also provided a revised industry estimate from the 
Biosimilars Forum that projected $50 billion in savings to the Medicare 
program over 10 years under the existing policy and an additional $15 
billion in savings over 10 years if separate codes were used. This 
estimate, which was referenced by a number of other commenters, assumes 
higher uptake of biosimilars (up to 65 percent at 10 years, compared to 
35 percent with current policy) if separate codes are implemented. 
Commenters stated that they believe the separate coding approach would 
create competition and lower prices for the long term. The main reasons 
for this were: Increased physician confidence (mainly associated with 
certainty about the payment amount), a number of manufacturers and 
products in the marketplace, and resources (from the manufacturers) 
that would encourage uptake.
    Response: We thank commenters for the updated estimates.
    Comment: Several commenters also discussed the European biosimilar 
product market. Commenters who support current Medicare policy pointed 
out that the European market as a whole has grown and includes nearly 
30 biosimilar biological products. Another commenter referenced a 
report on the European biosimilar market (The Impact of Biosimilar 
Competition in Europe. QuintilesIMS. May 2017) and described the report 
as indicating that competition reduces prices, and that government 
policies could influence both manufacturer participation in a market as 
well as uptake of products. The report and other commenters who do not 
support current Medicare policy pointed out a specific European example 
from Austria where a tiered pricing policy treats biosimilar biological 
products exactly as generic drugs. A significant payment reduction 
associated with this policy is thought to have contributed to low 
biosimilar biological product utilization and limited access in this 
country.
    Response: We appreciate the examples of approaches used to pay for 
biosimilars in Europe. In general, we believe that the European 
examples provided by commenters help confirm that savings can be 
expected in the United States marketplace with a variety of policy 
approaches because payments for biosimilar products used in Europe are 
determined in a several ways. In other words, several payment 
approaches for biosimilars have yielded savings. We also agree that the 
introduction of new products and savings may be influenced by a 
government's payment policies. We note that payment methodologies for 
drugs and biologicals in many European countries differ, sometimes 
significantly, from payment methodologies for drugs and biologicals in 
the United States. For example, a number of European countries utilize 
a single payer system and some have the authority to set prices, so 
some of these examples may not provide information that is fully 
applicable to the United States market. For example, the description of 
Austria's payment policy for biosimilar biological products is not 
similar to our pricing policy for several reasons. First, Austria uses 
a single payer system that we understand to include mandatory payment 
reductions in certain circumstances. We do not use a tiered pricing 
strategy in Part B and, under the payment methodology in section 1847A 
of the Act, we cannot mandate 40 to 50 percent reductions in payment 
for biosimilar biological products by deeming them generic drugs as 
Austria has done. We believe that many commenters continue to 
misunderstand our position on the relationship between biosimilar 
biological products and generic drugs, that is, we distinguish between 
the two. As we noted in the CY 2016 PFS final rule with comment period, 
our payment policy does not address whether a biosimilar is completely 
or partially analogous to its reference product as a clinical matter 
(80 FR 71100). We have communicated that we appreciated the complexity 
of these products and the potential differences in the clinical 
utilization of biosimilar biological products when they are being used 
to treat individual patients. In summary, we believe that most of the 
examples provided by commenters include helpful information to consider 
as the United States marketplace develops.
    Comment: We also sought comment regarding other novel payment 
policies, legislation, demonstrations, and administrative options that 
would foster competition, increase access, and drive cost savings in 
the biological product marketplace.
    As discussed earlier in this section, several commenters discussed 
code consolidation where reference and corresponding biosimilar 
products would be included in a shared code. Commenters also suggested 
that value based purchasing models, including outcomes-based pricing 
and pricing based on negotiations between a vendor and manufacturers, 
be considered for biosimilar biological products (as well as other 
drugs). One commenter also stated that paying differently for 
biosimilars and interchangeable products may create incentives for 
growth in the marketplace. One manufacturer suggested that the ASP add 
on percentage could be increased to the 15-20 percent range to 
encourage uptake.
    We also received comments that encouraged consistency between Part 
B, Part D and Medicaid, and comments that encouraged streamlining and 
simplification of price reporting, as well as comments on HCPCS coding 
schedules and deadlines, the use of NDCs on claims, pharmacy 
substitution activities, coverage, and the FDA naming conventions for 
biosimilars.
    Response: We appreciate these comments and we plan to consider them 
for future policy decisions. Regarding the ASP add-on percentage for 
biosimilar products, we note that the statute requires the ASP add-on 
to be 6 percent of the reference product. We

[[Page 53186]]

note that some of these issues are generally outside the scope of Part 
B payment policy and that statutory requirements may also constrain 
flexibility to modify or conform policies.
    Comment: Some commenters also noted that the use of a modifier to 
track the manufacturer of a biosimilar biological product was perceived 
as burdensome and suggested that unique codes were more desirable and 
more convenient for tracking. However, several commenters stated that 
the use of modifiers is an acceptable method of tracking biosimilars. 
Both groups appeared to agree that tracking the use of these new and 
complex products was necessary.
    Response: We agree that tracking the use of these new and complex 
products is important. We believe that either method, code and modifier 
combinations or unique codes, can be used for this purpose. We plan to 
continue to monitor Part B biosimilar payment and utilization, 
particularly as they relate to access, including the number of products 
available to beneficiaries with Part B and cost savings associated with 
Medicare and beneficiary payments.
    Comment: Many commenters requested that a change in policy be made 
as soon as possible so that manufacturers would be incentivized to 
enter the United States marketplace as soon as possible. Several 
commenters, including most who supported continuing the current policy 
and others who did not explicitly support either changing or not 
changing policy at this time, believed that there is insufficient 
experience with the United States marketplace to warrant making a 
change in policy at this time, but they suggested that CMS continue to 
examine its policy, and that changes should consider effects on 
patients, providers and manufacturers.
    Response: We appreciate the broad range of possibilities that 
commenters have provided during this rulemaking cycle. We agree that it 
is important to consider and effect policy changes early, as this 
portion of the drug marketplace develops, in order to support a robust 
marketplace that provides choices for providers and patients while 
maximizing savings.
    Comment: Several commenters urged CMS to change the regulation text 
to indicate that separate payment for each biosimilar biological 
product is required, and to do so in this final rule. Some commenters 
believe that there is sufficient legal basis to do so despite the fact 
that CMS did not make a proposal.
    Response: We have not proposed to make a regulation change and we 
will not be doing so in this final rule. We continue to believe, as we 
stated in the CY2016 PFS final rule with comment period, that the 
existing regulation text provides flexibility to accommodate policy 
changes in a new and evolving environment. Specifically, we stated in 
the CY 2016 PFS rule that current regulation text at Sec.  414.904(j) 
would not preclude us from separating some, or all, of a group of 
biosimilars for payment (and the creation of one or more separate HCPCS 
codes) should a program need to do so arise (80 FR 71098). As we have 
stated earlier in this rule, we are particularly concerned about the 
commenters' continuing unease regarding the effects of our payment 
policy on patient and provider choices, and the interaction between the 
payment policy, choice, and the marketplace. In an effort to support a 
more competitive marketplace and greater choice and value for 
beneficiaries, CMS is taking immediate action on this issue. We will 
discuss our reasons further in the paragraphs below.
    We appreciate the many responses that we received to our comment 
solicitation. Comments received about the issue of grouping or 
separating payment for biosimilars of the same reference product were 
sharply divided, and information provided as support for a given 
position was also subject to interpretation. For example, a commenter 
who is opposed to the current policy cited a report (Scott Morton F, 
Boller LT. Enabling Competition in Pharmaceutical Markets. Hutchins 
Center. May 2017as evidence that robust competition could reduce costs 
in the long-term; however, another portion of the report supported 
MedPAC's June 2017 recommendation to pay biosimilars and reference 
products under the same code (which CMS does not have the authority to 
do). We are acknowledging that opinions on the issue of how Part B 
should pay for biosimilar biological products vary, however, as 
discussed below, we believe that the solution discussed in the 
paragraphs below is superior to existing policy.
    As we stated previously, we seek to promote innovation, to provide 
more options to patients and physicians, and to encourage competition 
to drive prices down. We also stated that our goal for the comment 
solicitation was to further evaluate our policies to be sure they allow 
for market forces to provide a robust and comprehensive selection of 
choices for patients at a fair price. Based on the review of the 
comments that are summarized above, we are persuaded that changing the 
Part B biosimilar payment policy to provide for the separate coding and 
payment for products approved under each individual abbreviated 
application, rather than grouping all biosimilars with a common 
reference product into codes, will meet the stated goal. We believe 
that this policy change will encourage greater manufacturer 
participation in the marketplace and the introduction of more 
biosimilar products, thus creating a stable and robust market, driving 
competition and decreasing uncertainty about access and payment. First, 
as we have discussed, we anticipate that this policy change will 
provide physicians with greater certainty about biosimilar payment. We 
are persuaded that, in turn, this will affect utilization of these 
products, creating more demand that would help increase competition 
(compared to the policy that is currently in place). As a result of the 
policy change we anticipate greater access to biosimilar biological 
products and we anticipate that more price competition between more 
products will occur because there will be more products available. The 
change in policy could lead to additional savings for Medicare and its 
beneficiaries over the long-term by increasing the utilization of 
products that are less expensive than reference biologicals. Further, 
carrying out this policy change as early as possible, rather than 
waiting, would maximize the benefits described in this paragraph and 
would bring more certainty to the new and developing marketplace 
promptly.
    In summary, we are persuaded that that there is a program need for 
assigning Part B biosimilar biological products into separate HCPCS 
codes, specifically that this policy change will address concerns about 
a stronger marketplace, access to these drugs in the United States 
marketplace, provider and patient choice and competition. We also 
believe that the change in policy will encourage innovation needed to 
bring more products to the market. We remind readers that our preamble 
language in the CY 2016 PFS rule with comment period (80 FR 71096) 
indicated that policy changes could be forthcoming (80 FR 71098).
    Thus, in this final rule, we are finalizing the policy to 
separately code and pay for biological biosimilar products under 
Medicare Part B; we are not changing regulation text at Sec.  
414.904(j). Effective January 1, 2018, newly approved biosimilar 
biological products with a common reference product will no longer be 
grouped into the same HCPCS code. We will issue detailed guidance on 
coding, including

[[Page 53187]]

instructions for new codes for biosimilars that are currently grouped 
into a common payment code and the use of modifiers. Completion of 
these changes, which will require changes to the claims processing 
systems, is planned to occur as soon as feasible, but should not be 
expected to be complete by January 1, 2018. We anticipate that this 
will be done by mid-2018 and we plan to issue instructions using 
subregulatory means, such as change requests/transmittals to 
contractors and the ASP Web site.
    As suggested by commenters who supported both policy approaches, we 
plan to continue to monitor Part B biosimilar payment and utilization, 
particularly as they relate to access, including the number of products 
available to beneficiaries with Part B and cost savings associated with 
Medicare and beneficiary payments. We also appreciate the comments on 
novel payment policies that would foster competition, increase access, 
and drive cost savings in the biological product marketplace.

E. Appropriate Use Criteria for Advanced Diagnostic Imaging Services

    Section 218(b) of the Protecting Access to Medicare Act (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 (80 FR 70886), we established an 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 was posted on the CMS Web site at the end of June 2016 
at which time their AUC libraries became specified applicable AUC for 
purposes of section 1834(q)(2)(A) of the Act. The CY 2017 PFS final 
rule addressed the second component of this program, specification of 
qualified clinical decision support mechanisms (CDSMs). In that rule 
(81 FR 80170), we defined CDSM, identified the requirements CDSMs must 
meet for qualification including an opportunity for preliminary 
qualification for mechanisms still working toward full adherence, and 
established a process by which CDSMs may become qualified. We also 
defined applicable payment systems under this program, specified the 
first list of priority clinical areas and identified exceptions to the 
requirements that ordering professionals consult specified applicable 
AUC when ordering applicable imaging services. The first list of 
qualified CDSMs was posted on the CMS Web site in July 2017.
    The CY 2018 PFS proposed rule proposed the start date of January 1, 
2019 for the Medicare AUC program for advanced diagnostic imaging 
services. It is on and after this date that ordering professionals must 
consult specified applicable AUC using a qualified CDSM when ordering 
applicable imaging services and furnishing professionals must report 
consultation information on the Medicare claim. This rule also proposed 
to modify the policy related to significant hardship exceptions and 
requested public feedback on details regarding how AUC consultation 
information must be included on the Medicare claim. To further this 
iterative process of implementation, we also discussed briefly the 
potential for alignment with other Medicare quality programs.
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 
is 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 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 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 descriptions of clinical decision support 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. 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)(4) of the Act requires ordering 
professionals to consult with a qualified CDSM for applicable imaging 
services 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.
3. Discussion of Statutory Requirements
    There are four major components of the AUC program under section 
1834(q) of the Act, and each component has its own implementation date: 
(1) Establishment of AUC by November 15, 2015 (section 1834(q)(2) of 
the Act); (2) identification of mechanisms for consultation with AUC by 
April 1, 2016 (section 1834(q)(3) of the Act); (3) AUC consultation by 
ordering professionals, and reporting on AUC consultation by furnishing 
professionals by January 1, 2017 (section 1834(q)(4) of the Act); and 
(4) annual identification of outlier ordering professionals for 
services furnished after January 1, 2017 (section 1834(q)(5) of the 
Act). We did not identify mechanisms for consultation by April 1, 2016. 
Therefore, we did not require ordering professionals to consult CDSMs 
or furnishing professionals to report information on the consultation 
by the January 1, 2017 date.
a. Establishment of AUC
    In the CY 2016 PFS final rule with comment period, we addressed the 
first component of the Medicare AUC program 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

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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.
    In the same rule we established a timeline and process under Sec.  
414.94(c)(2) for PLEs to apply to become qualified. Consistent with 
this timeline the first list of qualified PLEs was published at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Appropriate-Use-Criteria-Program/PLE.html (OMB Control 
Number 0938-1288).
b. Mechanism for AUC Consultation
    In the CY 2017 PFS final rule, we addressed the second major 
component of the Medicare AUC program--the specification of qualified 
CDSMs for use by ordering professionals for consultation with specified 
applicable AUC under section 1834(q)(3) of the Act, along with relevant 
aspects of the definitions under section 1834(q)(1) of the Act. This 
included defining the term CDSM and finalizing functionality 
requirements of mechanisms, upon which qualification is based, as 
provided in section 1834(q)(3)(B) of the Act and in the CY 2017 PFS 
final rule. We included an opportunity for mechanisms still working 
toward full adherence to these requirements to receive preliminary 
qualification during the preliminary qualification period that begins 
June 30, 2017, and ends when the AUC consulting and reporting 
requirements become effective. The preliminarily qualified CDSMs must 
meet all requirements by that time. We defined CDSM 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. 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.
    In the CY 2017 PFS final rule we established a timeline and process 
in Sec.  414.94(g)(2) for CDSM developers to apply to have their CDSMs 
qualified. Consistent with this timeline, the first list of qualified 
CDSMs was published at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Appropriate-Use-Criteria-Program/CDSM.html in conjunction with this rule in July 2017 (OMB 
Control Number 0938-1315).
c. AUC Consultation and Reporting
    The third major component of the Medicare 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. Since a list of qualified CDSMs was not available by January 
1, 2017, we did not require ordering professionals to meet the 
consultation requirement by that date.
    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. In the CY 2017 PFS final rule, we identified the 
circumstances specific to ordering professionals under which consulting 
and reporting requirements are not required. These include orders for 
applicable imaging services: (1) For 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; and (3) by ordering professionals who are 
granted a significant hardship exception to the Medicare EHR Incentive 
Program payment adjustment for that year under 42 CFR 495.102(d)(4), 
except for those granted such an exception under Sec.  
495.102(d)(4)(iv)(C). We discuss changes to the significant hardship 
exceptions later in this preamble.
    Section 1834(q)(4)(D) of the Act specifies the applicable payment 
systems for the AUC consultation and reporting requirements, and, in 
the CY 2017 PFS final rule we defined them as: (1) The physician fee 
schedule established under section 1848(b) of the Act; (2) the 
prospective payment system for hospital outpatient department services 
under section 1833(t) of the Act; and (3) the ambulatory surgical 
center payment system under section 1833(i) of the Act.
d. Identification of Outliers
    The fourth component of the Medicare 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. Given that we proposed a program start 
date of January 1, 2019, we anticipate that implementation of the prior 
authorization component would be delayed. We expect to discuss details 
around outlier calculations and prior authorization in the CY 2019 PFS 
proposed rule. However, we did finalize in the CY 2017 PFS final rule 
the first list of priority clinical areas to guide identification of 
outlier ordering professionals 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.
    As established in Sec.  414.94(e)(4) of our regulations, priority 
clinical areas may be used in the identification of outlier ordering 
professionals. By starting to identify these areas now, we believe 
ordering professionals will have the opportunity to become familiar 
with

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AUC within identified priority clinical areas prior to Medicare claims 
for those services being part of the input for calculating outlier 
ordering professionals.
    We did not include proposals to expand or modify the list of 
priority clinical areas in the CY 2018 PFS proposed rule.
4. Proposals for Continuing Implementation
    In the CY 2018 PFS proposed rule, we proposed to amend Sec.  414.94 
of our regulations, ``Appropriate Use Criteria for Certain Imaging 
Services,'' to reflect the following policies.
a. Consultation by Ordering Professional and Reporting by Furnishing 
Professional Timeline
    We proposed that ordering professionals must consult specified 
applicable AUC through qualified CDSMs for applicable imaging services 
furnished in an applicable setting, paid for under an applicable 
payment system and ordered on or after January 1, 2019. We proposed 
this effective date for the consulting and reporting requirements 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. Although there will be an additional 
rulemaking cycle before the consulting and reporting requirement is 
effective, we are establishing the date through rulemaking this year 
because we expect practitioners and other stakeholders to begin 
preparing themselves to report and we want to ensure all impacted 
parties have sufficient time to prepare to meet the requirements of 
this program.
    After proposing the timeline and process for qualification of CDSMs 
in the CY 2017 PFS proposed rule (81 FR 46392), we anticipated that 
furnishing professionals may begin reporting as early as January 1, 
2018. However, we received comments that these timelines did not allow 
enough time to address the needs of different stakeholder groups. Some 
commenters requested that we delay the timeline and process to give 
practitioners sufficient time to obtain a qualified CDSM. Other 
commenters cited insufficient time for CDSMs to incorporate 
requirements between the release of the final CDSM requirements and 
January 1, 2018, and requested that we fully implement the program at a 
later date. Additionally, in the CY 2017 PFS final rule (81 FR 80411) 
we discussed commenters' recommendations that we develop and launch an 
educational campaign, including a Town Hall meeting. Some commenters 
requesting additional time suggested that, for purposes of both CDSM 
vendor readiness and practitioner readiness, consulting and reporting 
requirements should not go into effect for an additional 12-18 months 
after the initial list of CMS-qualified CDSMs is posted.
    By proposing that the consulting and reporting requirements begin 
on January 1, 2019, we intended to allow needed time for education and 
outreach efforts, time for practitioners and stakeholders to prepare, 
and time for CDSMs to continue current strides in being more user-
friendly and less burdensome. We note that the statute required 
publication of qualified CDSMs by April 1, 2016, and required AUC 
consultation and reporting by January 1, 2017; therefore, our proposal 
substantially lags the statutory requirements. As noted earlier and in 
previous rulemaking, a delay in the statutory timeline is necessary to 
maximize the opportunity for public comment and stakeholder engagement, 
which is also a statutory requirement, and allow for adequate advance 
notice to practitioners, beneficiaries, AUC developers, and CDSM 
developers. This delay is also important to allow time to test and 
ensure Medicare claims processing systems are ready to accept and 
process claims that include the necessary AUC consultation information. 
Failure to test our own processes could result in claims being denied 
inappropriately or, conversely, being paid inappropriately.
    The following is a summary of the public comments received on the 
proposed effective date for consulting and reporting requirements:
    Comment: Some commenters strongly supported the proposal to begin 
the AUC consultation and reporting requirement in January 2019 and 
further stated that additional delays beyond 2019 are not warranted. 
They asserted that physicians need certainty that the AUC program will 
move forward on a predictable timeline and will not be subject to 
continued changes. Some commenters stated that they are prepared for 
this program to begin and that others will be prepared within one year. 
In contrast, other commenters do not want this AUC program implemented 
in 2019 or at any point in the future. These commenters wanted the 
program to be delayed indefinitely, discontinued or modified to the 
extent that participation be only voluntary as opposed to mandatory. 
Some of these commenters stated that the quality goals of the AUC 
program are duplicative of the quality goals of the Quality Payment 
Program and that the AUC program runs counter to the agency's goal of 
reducing administrative burden for practitioners and providers. Some 
suggested that the Quality Payment Program could serve as a less 
burdensome approach to achieving the same goals. Commenters disagreed 
with the premise behind the AUC consultation and reporting requirement 
that the furnishing professional claim should not be paid when the 
ordering professional failed to perform an AUC consultation.
    Response: We recognize the interest from commenters in better 
understanding our separate and distinct efforts to improve quality, and 
note that such efforts are the result of the distinct statutory 
requirements for the AUC program required in section 1834(q) of the Act 
as added by section 218(b) of the statute and the Quality Payment 
Program required in section 1848(q) of the Act as added by the Medicare 
Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10). 
We agree that the goals of the Quality Payment Program are consistent 
with those of the AUC program. In addition, the AUC program promotes 
AUC to ensure the patient gets the right test at the right time and 
reduces inappropriate imaging. We are required by separate statutory 
authority provisions to implement the AUC program and the Quality 
Payment Program. Section 1834(q) of the Act requires AUC consultation 
information to be included on the furnishing professional's claim in 
order for that claim to be paid; we do not have discretion with respect 
to that requirement.
    Comment: There are commenters that supported the AUC program but 
suggested that CMS participate in further stakeholder engagement. These 
commenters suggested an advisory panel be created to identify a 
reasonable program start date based on the readiness of practitioners, 
facilities, EHRs and CDSMs. Commenters also recommended listening 
sessions, town hall meetings and open door forums for stakeholders to 
share information with CMS about minimizing burden and communicating 
the state of stakeholder readiness.
    Response: We agree that we would benefit from additional 
stakeholder engagement. Over the coming months we will establish 
opportunities for this type of interaction.
    Comment: Although some commenters very clearly expressed strong, 
clear positions either for or against the proposed effective date for 
the AUC consultation and reporting requirements, as well as the AUC 
program more generally, the majority of commenters were more nuanced in 
their

[[Page 53190]]

comments and gave additional opinions regarding not only the start date 
but options as to how the program should begin.
    Response: We will summarize and respond to these comments in a 
later section of this preamble within the relevant sections that 
discuss the voluntary participation and educational and operations 
testing periods we are finalizing in this rule.
    Comment: Numerous commenters requested clarification regarding who 
is required to perform the consultation of AUC through a qualified 
CDSM. Commenters questioned whether a designee within an ordering 
professional's practice could consult on behalf of the ordering 
professional and whether an ordering professional could delegate 
consultation authority to another individual, a third party vendor or 
contracted agent. Several commenters supported this notion, noting that 
state laws allow professionals to delegate to qualified individuals in 
practice under the supervision of a physician the ability to assist 
advanced imaging orders, and URAC states that an organization 
conducting utilization review must accept information from any 
reasonably reliable source that will assist in the certification 
process. One commenter recommended that CMS reinforce the requirement 
that the ordering professional responsible for the order must 
meaningfully interact with AUC at the time of order, but allow the 
market to develop compliant approaches that ensure the educational 
effect of AUC is achieved. Some commenters supported delegation only to 
the ordering professional's staff while other commenters opposed 
allowing consultation by anyone other than the ordering professional, 
which they understand as the clear requirement under section 1834(q) of 
the Act and the current AUC regulations, and are concerned that other 
types of individuals and stakeholders are preparing to circumvent this 
requirement by performing consultations on behalf of ordering 
professionals.
    Response: Section 1834(q)(4)(A)(i) of the Act requires an ordering 
professional to consult with a qualified CDSM. We appreciate the 
varying opinions presented by stakeholders and the number of commenters 
who raised these questions. We will consider developing policy to 
address this issue.
    Comment: Some commenters requested that we clarify how imaging 
replacement orders, where the furnishing professional or radiology 
technician updates or modifies an order based on new information at the 
time of imaging, are handled under the AUC program. Commenters 
questioned whether the furnishing professional can update the order as 
necessary or if they need to consult with the ordering professional or 
AUC again to generate a new determination of appropriateness. One 
commenter requested that CMS provide guidance for situations where the 
furnishing professional performs different or additional tests than 
ordered in accordance with guidance in Medicare publication 100-02, 
Chapter 15, sections 80.6.2-4. Some commenters recommended that 
furnishing professionals have the flexibility to adjust exam parameters 
or modify orders without consulting AUC, submit orders themselves if 
they have relevant patient clinical information, and occasionally use 
AUC as appropriate to demonstrate that a test was warranted.
    Response: We understand that in certain situations updates or 
modifications to orders for advanced diagnostic imaging services may be 
warranted once the beneficiary is under the care of the furnishing 
professional. As a commenter noted, the Medicare Benefit Policy Manual 
(Pub. L. 100-02) addresses rules around these situations in Chapter 15, 
sections 80.6.2-4. We do not believe it was the intent of section 
218(b) of the PAMA to reverse these rules, and we expect furnishing 
professionals and facilities to continue to adhere to them so as to 
avoid additional burden, workflow interruptions and delays in medically 
necessary services.
    In instances when the furnishing professional must update or modify 
the order for an advanced diagnostic imaging service, the AUC 
consultation information provided by the ordering professional with the 
original order should be reflected on the Medicare claim to demonstrate 
that the requisite AUC consultation occurred. In future rulemaking, we 
expect to establish a means to account for instances when the order 
must be updated or modified. We anticipate addressing this issue in 
rulemaking to develop policies relating to the identification of 
outlier ordering professionals, and in order to inform the prior 
authorization component of this program.
    In response to public comments we are further delaying the 
effective date for the AUC consultation and reporting requirements for 
this program from January 1, 2019 as proposed to January 1, 2020. We 
are also finalizing a voluntary period during which early adopters can 
begin reporting limited consultation information on Medicare claims 
from July 2018 through December 2019. During the voluntary period there 
is no requirement for ordering professionals to consult AUC or 
furnishing professionals to report information related to the 
consultation. On January 1, 2020, the program will begin with an 
educational and operations testing period and during this time we will 
continue to pay claims whether or not they correctly include such 
information. Ordering professionals must consult specified applicable 
AUC through qualified CDSMs for applicable imaging services furnished 
in an applicable setting, paid for under an applicable payment system 
and ordered on or after January 1, 2020, and furnishing professionals 
must report the AUC consultation information on the Medicare claim for 
these services ordered on or after January 1, 2020.
Reporting
    Consistent with section 1834(q)(4)(B) of the Act, we also proposed 
that furnishing professionals report the following information on 
Medicare claims for applicable imaging services, furnished in an 
applicable setting, paid for under an applicable payment system as 
defined in Sec.  414.94(b), and ordered on or after January 1, 2019: 
(1) Which qualified CDSM was consulted by the ordering professional; 
(2) whether the service ordered would adhere to specified applicable 
AUC, would not adhere to specified applicable AUC, or whether the 
specified applicable AUC consulted was not applicable to the service 
ordered; and (3) the NPI of the ordering professional (if different 
from the furnishing professional).
    We believe 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 paid 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 remind readers that, as required under Sec.  
414.94(g)(1)(iii), qualified CDSMs must make available, at a minimum, 
AUC that reasonably address common and important clinical scenarios 
within all priority clinical areas. As discussed in the CY 2017 PFS 
final rule (81 FR 80170), the current list of priority clinical areas 
represents about 40 percent of advanced diagnostic

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imaging services paid for by Medicare in 2014. We also remind readers 
that consistent with section 1834(q)(4)(A) of the Act, ordering 
professionals must consult AUC for every advanced diagnostic imaging 
service ordered. Although section 1834(q)(4)(B) of the statute does not 
prohibit qualified CDSMs to return a response of ``not applicable'' if 
a qualified CDSM does not contain specified applicable AUC for the 
service ordered, we expect these situations to be limited in scope and 
number, and to decrease over time. The ``not applicable'' responses 
should decrease as qualified PLEs continue to build out their AUC 
libraries and qualified CDSMs update their content and potentially 
collaborate with more qualified PLEs so as to make available highly 
comprehensive tools.
    Section 1834(q)(4)(B) requires that payment may only be made if the 
claim for the advanced diagnostic imaging service includes the specific 
information discussed in this final rule. This information, to the 
extent feasible, is required across claim types (including both the 
furnishing professional and facility claims) and across all three 
applicable payment systems (PFS, hospital outpatient prospective 
payment system and ambulatory surgical center payment system). In other 
words, we would expect this information to be included on the 
practitioner claim that includes the professional component of the 
imaging service and on the hospital outpatient claim for the technical 
component of the imaging service. Claims for services for which payment 
is not made under the three identified payment systems would not be 
required to include consultation related information.
    To implement this requirement we proposed to establish a series of 
HCPCS level 3 codes. These G-codes would describe the specific CDSM 
that was used by the ordering professional. Ultimately there would be 
one G-code for every qualified CDSM with the code description including 
the name of the CDSM. However, because the claims processing system can 
only recognize new codes quarterly, we may not be able to update the G-
code descriptors simultaneously with the announcement of any new 
qualified CDSMs which is expected to occur in June of each year. To 
ensure that there is a code available to immediately describe newly 
qualified CDSMs, we proposed to establish a generic G-code that would 
be used to report that a qualified CDSM was consulted, but would not 
identify a specific qualified CDSM; clinicians would only be permitted 
to use this code if a more specific named code did not yet exist for 
that clinician's CDSM. Furnishing professionals would report this code 
temporarily until a specific G-code describing the newly qualified CDSM 
by name becomes available. We also proposed to establish a G-code to 
identify circumstances where there was no AUC consultation through a 
qualified CDSM. The description of this code would indicate that a 
qualified CDSM was not consulted by the ordering professional.
    G-codes would be a line-item on both practitioner claims and 
facility claims. We would expect that one AUC consultation G-code would 
be reported for every advanced diagnostic imaging service on the claim. 
If there are two codes billed for advanced imaging services on the 
claim then we would expect two G-codes. Each G-code would be expected, 
on the same claim line, to contain at least one new HCPCS modifier. We 
proposed to develop a series of modifiers to provide necessary 
information as to whether, when a CDSM is used to consult AUC: (1) The 
imaging service would adhere to the applicable appropriate use 
criteria; (2) the imaging service would not adhere to such criteria; or 
(3) such criteria were not applicable to the imaging service ordered. 
We proposed to create additional modifiers to describe situations where 
an exception applies and a qualified CDSM was not used to consult AUC: 
(1) The imaging service was ordered for a patient with an emergency 
medical condition or (2) the ordering professional has a significant 
hardship exception. Based on this proposal we specifically sought 
comments on any additional HCPCS modifiers that might be needed to 
separately identify allowable scenarios for which a qualified CDSM was 
not consulted by the ordering professional.
    The following is a summary of the public comments received on our 
proposals for the information furnishing professionals must report on 
the Medicare claim:
    Comment: Some commenters agreed with the proposed approach of using 
a combination of G-codes and HCPCS modifiers to capture AUC 
consultation information on Medicare claims. Numerous commenters, 
however, stated that the creation of new G-codes and modifiers will 
excessively burden practitioners and their systems. Practitioners and 
facilities will have to dedicate significant staff time and in some 
cases additional full-time staff positions to translating this new 
information into the appropriate codes and ensuring such information is 
appended to Medicare claims. Others noted that CDSMs, EHRs and systems 
that create electronic orders will require additional programming and 
testing. There was also concern that CMS would not be able to keep up 
with timely issuing of G-codes to keep up with newly qualified CDSMs.
    Commenters provided various recommendations to CMS that would avoid 
the combination of reporting through G-codes and modifiers. A commenter 
suggested that only one G-code be developed to generically identify 
that a CDSM consultation occurred without identifying the specific 
mechanism. Another comment pointed out that when the modifiers for 
consultation exceptions are reported (for example, emergency medical 
conditions or hardship exceptions) that the modifier should be 
reporting on the same line as the CPT code for the imaging service as 
opposed to reporting a G-code.
    Many commenters suggested CMS require the unique consultation 
identifier be appended to the Medicare claim instead of using G-code 
and modifier combinations. They suggested CMS, along with stakeholders, 
standardize the identifier to have embedded meaning that is consistent 
across CDSMs. They further supported the reporting of this identifier 
on claims so CMS can match the claim with the richer, more robust 
consultation data that is collected within the CDSM. It is with this 
more complete information that they suggested that outlier ordering 
professionals be identified rather than rely solely on information 
reported on the claim. Commenters generally supported use of the unique 
identifier as the least administratively burdensome approach to 
collecting AUC consultation information on Medicare claims.
    Other commenters suggested a registry to hold all AUC consultation 
information across CDSMs and that the information be available to CMS 
directly from the registry rather than having furnishing professionals 
report information on the claim. They further suggested that a registry 
would also include information about consultations that do not result 
in imaging.
    Response: We agree with many of the commenters in that a less 
burdensome approach to reporting AUC consultation information on 
Medicare claims should be considered. Reporting the unique consultation 
identifier would still be a new burden on the ordering and furnishing 
professionals; however, we are pleased to learn from commenters that it 
is a less burdensome and preferred approach when compared to the 
proposed G-code and modifier combinations. We also agree that

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capturing this identifier on the claim provides the best opportunity to 
access the robust data contained within qualified CDSMs.
    In response to these comments we will not move forward with the G-
code and modifier combinations for reporting which CDSM is consulted, 
adherence, non-adherence or situations where AUC are not applicable. We 
will further explore and pursue use of the unique consultation 
identifier for reporting on Medicare claims. However, in order to use 
such an identifier we must work with stakeholders to develop a standard 
taxonomy. We expect to conduct stakeholder outreach during 2018 so that 
such standardization can be accomplished and will discuss such changes 
in future rulemaking ahead of the 2020 consulting and reporting 
effective date. We do not anticipate including these identifiers on 
claims before then. We will conduct outreach to better explore options 
of where to place such an identifier on practitioner and facility 
claims for advanced imaging services. We will also explore mechanisms 
for CMS and qualified CDSMs to share data.
    Since we intend to move forward to implement the AUC consultation 
and reporting requirement under section 1834(q)(4) using the unique AUC 
consultation identifier, we will not pursue the use of G-codes to 
identify the consulted CDSM. It is our expectation that the information 
required for Medicare claims processing and, ultimately, identification 
of outlier ordering professionals, will be embedded within a 
standardized unique identifier. AUC adherence, non-adherence and not 
applicable responses should also be embedded. Therefore, we will not 
move forward with the creation of modifiers to identify each of those 
AUC consultation result conditions. We do expect that limited use of 
modifiers will be required in the future to identify certain exceptions 
to AUC consultation requirements.
    In another section of this preamble we discuss the voluntary 
reporting period that we proposed to be available from July 2018 
through December 2018, and we are extending in this final rule through 
CY 2019. During the voluntary reporting period, ordering professionals 
are not required to consult AUC and furnishing professionals are not 
required to report consultation information on their Medicare claims. 
Furnishing professionals and facilities reporting AUC consultation 
information during the voluntary reporting period will have one HCPCS 
modifier available to them to report on the line level with the CPT 
code for the advanced diagnos